Crain's Cleveland Business

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FOTOLIA

SOMETHING TO SHOUT ABOUT Private equity firms soon can pitch away as ban on their advertising ends Sept. 23

By MICHELLE PARK mpark@crain.com

I

t’s a ban that has kept them tight-lipped for decades. But, thanks to a vote last month, hedge funds, private equity funds and other issuers of certain securities soon can advertise their fundraising efforts to the masses.

The ban lifts Sept. 23, and attorney Howard Bobrow expects some funds to jump into action that very day.

See SHOUT Page 9

33

“It’s as if the whole 20th century bypassed the fundraising industry. So now, it’s being brought into the present.” Charles Stack, CEO and founder, FlashStarts Inc.

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by Crain Communications Inc. Vol. 34, No. 33

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$2.00/AUGUST 19 - 25, 2013

Media outlets wage war vs. vulnerable PD TV, newspapers see opportunity in daily’s shift to digital strategy

By JAY MILLER jmiller@crain.com

They may only be small, early skirmishes, but Northeast Ohio media are attacking the region’s dominant but evolving daily newspaper on land, over the air and online.

The shifting emphasis of Advance Publications Inc.’s Cleveland operations — from the printed and home-delivered Plain Dealer to electronic delivery via cleveland.com — and the rocky

start of its new e-edition have given other media organizations a chance to compete in new ways as they cross over into each other’s traditional turf.

It’s part of what the media industry calls “convergence,” or the practice of presenting content that used to be found on a single delivery system — whether print, broadcasting or digital — over multiple platforms, including smart phones and social media.

Because of their greater interaction with news consumers than newspapers over the course of a day, television stations can use their well-watched news shows to drive viewers to beefed-up websites as they compete with cleveland.com, now Advance’s flagship, for readers moving to online from print.

See MEDIA Page 18

NFL deal opens door for more at Veritix FOTOLIA

SOMETHING TO SHOUT ABOUT Private equity firms soon can pitch away as ban on their advertising ends Sept. 23

By MICHELLE PARK mpark@crain.com

I

t’s a ban that has kept them tight-lipped for decades. But, thanks to a vote last month, hedge funds, private equity funds and other issuers of certain securities soon can advertise their fundraising efforts to the masses.

The ban lifts Sept. 23, and attorney Howard Bobrow expects some funds to jump into action that very day.

See SHOUT Page 9

By KEVIN KLEPS kkleps@crain.com

In 2012, as it closed its fifth year in business, the digital ticketing platform of Cleveland-based Veritix was used to sell 17 million tickets valued at $901 million.

In the eight months that followed, Veritix made history at the NCAA men’s Final Four basketball tournament and joined an even more exclusive group in the ticketing world — a seller of tickets for an NFL franchise.

Soon, the company — which

“We’ve all sort of grown out of this space.”

– Samuel Gerace, CEO, Veritix, on the offices his company shares with Bizdom in the Chase Financial Tower was formed in 2008 after Flash Seats, an electronic ticketing system launched by Cleveland Cavaliers owner Dan Gilbert in 2006, acquired Vertical Alliance — will leave its headquarters in Chase Financial Tower in downtown Cleveland for more space at an undetermined downtown location.

See VERITIX Page 6

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“It’s as if the whole 20th century bypassed the fundraising industry. So now, it’s being brought into the present.” Charles Stack, CEO and founder, FlashStarts Inc.

Digital ticketing company’s pact with Lions lessens Ticketmaster’s grip

Mediation is gaining in popularity as companies seek to cut legal costs ■ Pages 11-17 PLUS: ADVISER ■ WELLNESS PROGRAMS ■ & MORE

Entire contents © 2013

by Crain Communications Inc. Vol. 34, No. 33

Northeast Ohio architects are finding plenty of work, but much of it is outside the region ■ Page 3

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

AUGUST 19 - 25, 2013

COMING NEXT WEEK

A NATION OF QUITTERS

Plotting your next step

More Americans are quitting their jobs — and that’s a good sign for the economy. The government reports that in June, the ratio of “quits per layoffs and discharges� was 1.4. “Quits� are voluntary separations initiated by employees. They tend to rise with an improving economy — it illustrates people are more confident they can find jobs — and fall with a faltering economy. Layoffs and discharges, by contrast, represent involuntary separations. Here’s data on quits for the past six Junes:

Crain’s will publish its second annual MBA Guide, which breaks down the types of Master of Business Administration programs available in the Buckeye State, along with program highlights and contact information for the schools.

REGULAR FEATURES Big Issue .......................8 Classified ....................20 Editorial ........................8 From the Publisher ........8

Going Places ...............10 Reporters’ Notebook....21 The Week ....................21 What’s New..................21

Month

Quits

Layoffs/discharges

Ratio

June 2013

2,160,000

1,537,000

1.4

June 2012

2,148,000

1,786,000

1.2

June 2011

1,864,000

1,774,000

1.1

June 2010

1,891,000

1,995,000

0.9

June 2009

1,742,000

2,135,000

0.8

June 2008

2,645,000

2,009,000

1.3

â– Source: U.S. Bureau of Labor Statistics; www.bls.gov

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Cleveland puts industrial land on block Cresco brokerage gets exclusive contract to deal Midland and Trinity sites that have cost city millions to clean up

By STAN BULLARD sbullard@crain.com

Industrial and commercial land in two, new West Side industrial parks in Cleveland is hitting the market after a long odyssey and

millions in government funds spent on brownfield cleanups.

Mayor Frank Jackson’s economic development department has awarded exclusive sales listing assignments to the Cresco real estate brokerage to sell the properties. Its

task is to find buyers for all or part of the 23-acre former Midland Steel site, now dubbed Midland Commerce Park, at 10615 Madison Ave., and six acres at what’s called the Trinity Development Site at 9203 Detroit Ave.

Tracey Nichols, Cleveland director of economic development, said the city selected Cresco from three brokerage firms that vied Jackson for the work.

She said the city agreed to pay Cresco a 10% commission on a

INSIGHT

sale, which it would split with the buyer’s broker, if the brokerage generates a deal, and 7% if a deal results from a city-referred lead.

Besides the brokerage community’s ability to identify companies in the market for land, Ms. Nichols said the city outsourced the work because it wants to focus its staff on closing deals with businesses rather than hunting prospective buyers.

See PARKS Page 5

New era soon will begin for Great Day Home improvement company’s big store in Broadview Hts. to serve as model

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

insane 2012,” Mr. Maloney said, and the firm has grown to 24 employees in Cleveland as it added 10 in the last 18 months. Another 16 are spread throughout its Baltimore, Charlotte and Key West, Fla., offices.

Building a firm with 40 associates — about six of them registered architects with several preparing for exams this year — has its price. Mr. Maloney spends most of his time traveling as he mines for architecture-related work in different regions.

Great Day Improvements LLC plans to open a 28,000-square-foot store in Broadview Heights by next spring, which would continue the growth the diversified home improvement company has seen since it was formed three-and-a-half years ago.

The company plans to revamp the former Andy Sims Buick dealership on Broadview Road in Broadview Heights. It will turn 6,000 square feet into a showroom that sells products including Stanek windows and Patio Enclosures sunrooms and the rest into a service center, said Steve White, managing director of Great Day. The new location will need 40 to 50 employees, Mr. White said, many of whom come from the company’s Macedonia plant and its Cuyahoga Heights store. The 4,000-square-foot Cuyahoga Heights location, which was a Stanek store, will close. The new store will carry the Great Day Improvements name, reflecting a rebranding effort the company has implemented throughout its footprint.

See DRAWING Page 20

See GREAT Page 18

CONTRIBUTED PHOTO

Scott Maloney, president of mbi | k2m Architecture Inc., says his Cleveland firm had “an insane 2012.”

DRAWING FROM EVERYWHERE Local architects are keeping busy, but much of their work is done outside of Northeast Ohio

By STAN BULLARD sbullard@crain.com

S

cott Maloney, president of mbi | k2m Architecture Inc., recently moved six members of his interior design staff into the last empty space in a building his firm bought in 2009 in Cleveland’s Ohio City neighborhood. He worries he has just two empty seats available for more hires.

Billings at mbi | k2m’s rose dramatically during “an

THE WEEK IN QUOTES “When you find these inefficiencies that you are successfully exploiting … to the benefit of your investors, it’s not as though you want to broadcast what those inefficiencies are to the general public so that others can replicate what you’re doing.”

— John Micklitsch, senior vice president and director of the private client group of Ancora Advisors LLC. Page One

“If you look at the big picture, I think you have an owner in Dan Gilbert who got into pro sports and said, ‘Hey, why do I have to work with Ticketmaster? Why can’t I do it myself?’ ” — Jim Kahler, executive director of the Center for Sports Administration at Ohio University’s College of Business and former Cleveland Cavaliers executive. Page One

“The concept with mediation is, let’s get all of the important players to the table at a much, much earlier stage. The popularity of it, I think, has become greater because the cost of litigation has become greater.”

— Mark Wachter, chair of the alternative dispute resolution section for the Cleveland Metropolitan Bar Association. Page 11

“I was working in a job that was physically, emotionally and mentally exhausting. … and I realized there was no way I was going to be able to do what I was doing when I was 40.”

— Patricia Poole, a registered nurse who now is a partner at BakerHostetler. Page 13

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Steel market cools

“ We are out of town investors who acquired an empty 700,000 square foot warehouse. Terry found every tenant and leased the entire building for us.

We would recommend him to anyone with a challenging assignment. ”

Timken, U.S. Steel, others contend with weakening demand

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It hasn’t been a hot market for steelmakers so far this year, and analysts don’t expect the story to be much different in the second half of 2013 amid sluggish demand in key end markets and steelmaking overcapacity worldwide.

Steelmakers with local ties haven’t had anything to shout about to this point. For example, Canton-based Timken Co.’s overall sales declined 16% in the second quarter compared with the like period last year, and its steel sales fell 29%. The company blamed reduced shipments to the industrial and oil and gas markets for the latter decline.

Pittsburgh-based U.S. Steel Corp., with operations in Lorain, posted a loss of $78 million in the second quarter compared to net income of $101 million in the second quarter of 2012. And Luxembourgbased ArcelorMittal, which operates a Cleveland plant, reported a second-quarter loss of $780 million versus a profit of $1.02 billion in last year’s second quarter and has lowered its earnings guidance for the full year because of weak demand and lower-than-expected raw material prices.

Representatives of U.S. Steel and Timken wouldn’t comment on the results. A representative of ArcelorMittal sent brief comments by email, noting that for the United States, the automotive industry is “robust” and that the construction industry, especially residential construction, was improving. The company did lower its demand growth

“Shipments are expected to increase to support anticipated drilling activity and average realized prices are projected to be comparable.”

– John Surma, chairman and CEO, U.S. Steel forecast by 1%, citing a weak start to the year and government cuts. It also cited weaker steel consumption growth due to caution from distributors and softness in the energy and manufacturing markets, due in part to lower export demand.

Justin Dammel, an equity research analyst for Fifth Third Bank, said analyst expectations for 2013 have been steadily dropping since the year began. There was a downward trend on pricing due to a generally sluggish economy and a drop in demand in the Chinese market, he said. The automotive and oil and gas industries did well, and some companies expected improvement in nonresidential construction, too.

“But strong growth just has not materialized,” Mr. Dammel said.

And that’s significant, because the residential and nonresidential construction industries make up a “decent chunk” of the end-use steel market — about 40%, Mr. Dammel said.

Sheraz Mian, director of research at Zacks Investment Research, said the nonresidential construction market has been the topic of conversation on analyst calls. Mr. Mian tracks the performance of S&P 500 companies, which includes four in the steel industry: Nucor Corp., Cliffs Natural Resources, U.S. Steel and Allegheny Technologies Inc. Mr. Mian said the consensus expectation is that the nonresidential construction market will improve, but he doesn’t expect the steel in-

dustry to see significant growth until 2014. Mr. Mian said he expects the steel industry to improve in coming quarters, “but not materially.”

Phil Gibbs, an equity research analyst at KeyBanc Capital Markets Inc., also mentioned the lagging commercial construction industry as a big problem for the steel industry. It’s one of the one of the most important markets and the one that has been lagging the most in terms of improvement, he said.

Mr. Gibbs also said while steel demand indicates the market is improving a bit, there is still a global excess steelmaking capacity, especially in China and Europe, which gives investors pause. He said the second half of the year is typically weaker for steel, but he expects a slight improvement this year. Many in the supply chain drew from their inventory in the first half of 2013 rather than buy steel, and their inventory levels are becoming low, Mr. Gibbs said.

Andrew Lane, an equity analyst at Morningstar Inc., said he didn’t see a strong “near-term catalyst” that would affect steel sales, but he did note one possible trend worth watching. Some domestic steel companies have signed a petition to keep foreign companies from illegally dumping tubular goods, a practice that dramatically drives down prices.

Also, in the case of U.S. Steel, chairman and CEO John Surma said last month the company expects third-quarter results for its Tubular segment to improve compared to the second quarter. That’s a positive indication for the company’s two pipe mills in Lorain that supply the oil and gas market.

“Shipments are expected to increase to support anticipated drilling activity and average realized prices are projected to be comparable,” Mr. Surma said.

■

NE Ohio grows as base for HQs Team NEO report finds region outpaces nation in attracting corporate outposts

By JAY MILLER jmiller@crain.com

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Though Northeast Ohio has lost many of its marquee corporations, the region continues to be an attractive place from which to run a spread-out business.

A review by Team NEO, the regional business attraction nonprofit, found employment at corporate, divisional and administrative headquarters in 18 counties in Northeast Ohio has grown by nearly 160% from 1990 to 2013, compared with a national average of 22% growth.

That analysis was a part of Team NEO’s second-quarter economic review, which reported only modest growth in economic activity in the April-through-June period of 2013.

The growth in the number of the region’s workers who manage business and other enterprise is valuable to the region. While management workers represent only 3% of the region’s work force, they account for 6% of all wages paid.

Jenny Febbo, Team NEO’s vice president for marketing and communications, said those operations sustain “a lot of great support services here. The financial services and the accounting firms and the legal firms have grown up around the headquarters we have here.”

Tom Waltermire, CEO of Team NEO, noted that John D. Rockefeller, through his Cleveland-based Standard Oil Co., was one of the first of great business accumulators and helped create the need for management talent.

“Good old John D. was one of the first, when he started buying up refineries,” Mr. Waltermire said. “All of a sudden he had far-flung operations and he had to figure out how to run that from Cleveland.”

Looking at the performance of the region’s economy, Team NEO is reporting a slowdown in economic growth.

Total employment in the region rose by only 3,000 jobs from the second quarter of 2012 to the like quarter in 2013, though the unemployment rate, at 7.1%, was unchanged from second quarter of 2012.

Team NEO’s economic consultant, Moody’s economy.com, projects the gross regional product of Northeast Ohio to grow by 0.9% in 2013.

Jacob Duritsky, Team NEO’s managing director of research, noted that the region has seen 12 consecutive quarters of growth.

■

Volume 34, Number 33 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 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. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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CRAIN’S CLEVELAND BUSINESS

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Parks: City spent more than $7.7 million cleaning up the sites continued from PAGE 3

An intermediary also lets the city avoid spending time with parties that might not have the funds to pay for the sites or fit the city’s preferred uses for the land.

George Pofok, a Cresco senior vice president, said he and Cresco principal Kevin Kelly will run the assignment, but they will combine their efforts with other brokers at the firm, which derives more than 60% of its revenue from industrial property transactions.

Cresco also will promote the sites through its network affiliation with the huge Cushman & Wakefield brokerage.

Mr. Pofok expects the firm will find its buyers in the industrial areas of surrounding neighborhoods, which are areas Cresco knows well.

Asked how large or how many buildings the sites might accommodate, Ms. Nichols said the important thing is identifying what buyers want. She said she believes the timing is right to market the property after the economic downturn because industrial vacancy in the region is just 10%, and manufacturers once again are developing a taste for building.

Ms. Nichols said she sees the Midland site as a potential mix of light industrial users with warehouses, while Trinity’s small size will constrain large-truck access.

Mr. Pofok said most of the likely prospects are manufacturers that need smaller buildings rather than the largest ones the sites could accommodate. In the case of the larger Midland site, it could accommodate a 200,000-square-foot user, but Mr. Pofok said a combination of users that need buildings of 10,000 to 50,000 square feet is more likely.

Essential interventions One outspoken industrial expert, Terry Coyne, an executive managing director at the Cleveland office of Newmark Grubb Knight Frank brokerage, likes the offerings. He said the Midland site will be particularly competitive because it is in a strong industrial district and is close to Interstate 90. The Trinity site, he said, is not as well-located and is in a more

The 23-acre former Midland Steel site, located at 10615 Madison Ave. in Cleveland, has been put up for sale by the city.

STAN BULLARD

heavily residential and commercial area.

Mr. Pofok acknowledged that a quasi-retail or commercial use may be the strongest option for the Trinity site due to its size and residential neighbors. However, he said the city wants both sites to land job-rich buyers.

“They don’t want someone to build a 5,000-square-foot building and use the rest of the land for outside storage,” he said.

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$70,000 an acre, which is low for urban or industrial land and does not reflect the vast sums spent on cleaning up the properties.

The city of Cleveland gained control of the properties years ago. In late 2012, it received letters from the Ohio Environmental Protection Agency clearing the sites for industrial or commercial reuse. The sites were approved for commercial and industrial use but are not available for housing, Ms. Nichols said.

The city spent more than $5.3 million in city, state and federal grants cleaning up environmental hazards at the Midland site and more than $2.4 million on Trinity, Ms. Nichols said.

Asked how long it would have taken to get the properties ready to market as sites without the city-led clean-ups and, in Trinity’s case, demolition of a building, Mr. Pofok said with no hesitation, “Decades.”

■

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GETTY IMAGES

Veritix is the primary ticket provider for Detroit Lions games at Ford Field and will serve as the secondary marketplace for all non-football events at the facility.

Veritix: Final Four was historic event continued from PAGE 1

Business Lending Using The Power Of Collaboration

Local Business Financing with Local Credit Unions /RDQV XS WR /RZ À[HG UDWHV \HDU DPRUWL]DWLRQ

Jonathan Mokri

MPRNUL#FEVFXVR FRP

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“We’ve all sort of grown out of this space,� said Veritix CEO Samuel Gerace of the offices his company shares with Bizdom, an accelerator for startup businesses also backed by Mr. Gilbert. “Is there a vibrant place to go together? We’re doing the evaluation now,� Mr. Gerace said.

It’s no surprise Veritix would be sizing up a move in the weeks following its multiyear contract with the Detroit Lions.

The deal is the first NFL agreement for Veritix. It will let the Lions use Flash Seats’ paperless system to sell individual game tickets, and will allow Veritix to handle secondary-market ticket sales for all non-football events at Ford Field, where the Lions play.

Veritix’s contract with the Lions coincides with the start of Ticketmaster’s new five-year, $200 million deal to be the official home of the NFL’s secondary market.

The Los Angeles-based ticketing giant’s dominant relationship with the league extends to the primary marketplace as well. Prior to Veritix’s deal with the Lions, which was announced July 29, all 32 NFL teams also used Ticketmaster as their primary provider of ticketing services.

Ticketmaster’s reign over NFL ticketing showed its first sign of weakening when Veritix made entry into the exclusive club. “I think Ticketmaster has been the big dog for many years,� said Jim Kahler, executive director of the Center for Sports Administration at Ohio University’s College of Business and a former Cavs executive pre-Mr. Gilbert. “But if you look at the big picture, I think you have an owner in Dan Gilbert who got into pro sports and said, ‘Hey, why do I have to work with Ticketmaster?

Why can’t I do it myself?’ �

Lion in wait Once the Lions’ contract with Ticketmaster expired, the door opened for Flash Seats’ digital ticketing system — which allows ticket buyers to get into events by swiping an ID such as a credit card or driver’s license — to be used at Ford Field for a host of events.

Luis Perez, the Lions’ senior vice president and chief financial officer, said one of Veritix’s biggest advantages is its ability to provide its clients with a better profile of the

crowd of 60,000-plus that fills the seats on game day. “It is in the engagement aspect, the ability for us to collect data and understand who is buying our tickets and using our tickets� that are perks of Veritix’s system, Mr. Perez said. “For example, now when I sell you a hard ticket, I don’t know where that ticket ends up. I don’t know who’s there and what they’re doing,� Mr. Perez said. “This gives our fans a much better experience in procuring and using our tickets, and it gives us a much better knowledge base and data around who is using our tickets.�

Calling his company a “full retail platform,� Mr. Gerace said information gleaned from Veritix’s system will be used in the Lions’ advertising and marketing efforts, as well as in the development of mobile apps.

Foot in the door Mr. Gerace’s hope is that as word of Veritix’s value to the Lions spreads, Ticketmaster’s grip on the league will lessen over time. “The Lions aren’t the only team that wants to make sure they are increasing their fan engagement,�

Mr. Gerace said. He said Veritix is “aggressively pursuing every NFL team,� one of which, the Cleveland Browns, plays its games less than a mile away from Veritix at FirstEnergy Stadium. “Like as with any league, it’s helpful for teams to have an example of a team with a partner it trusts,� he said. “We think this is going to accelerate that possibility.�

Mr. Kahler — who during almost 11 years as the Cavs’ senior vice president of sales and marketing was responsible for corporate, ticket and broadcast sales — agrees that Veritix is a legitimate threat to industry behemoth Ticketmaster.

Mr. Kahler said Veritix’s contract with the Lions “falls under two categories — technology and the economics of the deal.� “From the technology standpoint, they can match or exceed Ticketmaster’s capabilities,� Mr. Kahler said. “Economically, certainly they can compete there, too.�

Asked if he thinks other NFL teams soon will follow Detroit’s lead and finally make the break from Ticketmaster, Mr. Perez, the Lions’ CFO, said, “I absolutely believe that.�

That’s the ticket Veritix, an NCAA partner since 2009, took its platform to new heights last April, when the men’s Final Four became the largest digital ticketing event in history.

More than 60,000 fans entered the Georgia Dome in Atlanta for the Final Four and national championship game via Flash Seats, and, according to Mr. Gerace, many fans took advantage of the system’s ability to transfer tickets easily to another user. Some seats changed hands as many as 12 times prior to the event. “I think this is very telling — 98% of the fans who had tickets through Flash Seats were at the event,� Mr. Gerace said of the Final Four. “That is what every venue and team wants — every seat occupied once a ticket has been purchased.�

Veritix’s NCAA partnership includes all sanctioned championship events, including the College World Series for baseball and softball.

The company also has agreements with four NBA teams (the Cavs, in addition to the Denver Nuggets, Houston Rockets and Utah Jazz), the NHL’s Colorado Avalanche, two Major League Soccer clubs (Real Salt Lake and the Colorado Rapids) and four collegiate athletic departments (Texas A&M, Boise State, Duquesne and the University of Texas at Arlington).

In 2010, the Veritix system was used to sell 11 million tickets valued at $585 million. Two years later, those numbers grew by 54.5% and 54%, respectively.

It’s no wonder, then, that the company is searching for new digs.

Mr. Gerace said 20 of the company’s 73 full-time employees are based in Cleveland, and “two more are about to report� to work. That head count doesn’t include Veritix’s call center in Dallas, which varies from “a few to 120 or more� employees during the basketball season.

When Mr. Gerace spoke to Crain’s in the summer of 2011, the company had a dozen full-timers in Cleveland. Soon, there will be 22, which includes a sales force that was recently created to concentrate solely on the colleges. “I think you’ll see us be at 30 fulltimers in the next 12 months — maybe more,â€? Mr. Gerace said. â–

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7

Magnet is finding an approach that sticks Manufacturing advocacy group has shifted its focus to the long term; Prism establishes relationships and grows with business

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

The focus of manufacturing advocacy group Magnet traditionally has been on helping area manufacturers solve specific problems, often on a short-term basis. But as Magnet has come to recognize the long-term potential of its Partnership for Regional Innovation Services to Manufacturers, or Prism, its leaders have started to look toward a new approach.

Prism was created in 2011 with the goal of creating a cohesive network of manufacturing resources in Northeast Ohio. The program aims to connect small to midsize manufacturers with resources, such as universities and economic development agencies, that could help the companies grow.

Before, Magnet focused on selling its consulting services to businesses to help them solve specific issues. Now, its intention is to work with CEOs and create long-term relationships that grow with the companies. Magnet also is looking into offering a fee schedule that would let companies pay as they grow.

The focus is on creating relationships and helping with “the kinds of things that move a company forward,” said Peter Broer, president of Strongsville-based lighting manufacturer Lumitex Inc. and a Magnet board member.

For instance, instead of helping a company implement a cost-savings program on the plant floor with traditional Magnet consulting, the

CONTRIBUTED PHOTO

Manufacturers attend an information workshop during a Jobs for Veterans Program at Magnet.

Prism network could help it move a product to market, Mr. Broer said.

“That’s a pretty profound transition for Magnet, as well,” he added.

The goal is to integrate Prism into the community and make it part of how people do business in Northeast Ohio. If a company sees Prism as the way to get access to that network, “it’s going to keep coming back to the well,” Mr. Broer said.

Magnet president Daniel Berry said expansion of the Prism program is a long-term priority for Magnet. There are 19 companies in Prism’s portfolio today; Mr. Berry wants that number to grow to 50 in

the next two years.

Currently, Magnet has four employees working full-time on Prism and another working on its projects part-time. Magnet has a total of 35 employees. Mr. Berry said he intends to hire at least two more employees in the next few months to work exclusively on Prism.

‘DNA’ test Prism works with companies with annual sales of between $10 million and $500 million in the 18county Northeast Ohio region, Mr. Berry said. He estimated there are 1,000 companies that fit the bill.

Companies that become part of the

“Manufacturing is not only in our past. It’s very much in our future. It’s in our DNA.”

community, but the targeted companies are just the kind of growthoriented businesses the college wants its students to do internships with, she said.

– Brad Whitehead, president, Fund for Our Economic Future

Follow the money

Prism program also need to have an idea for a strategy for achieving double-digit percentage sales growth, he said.

Brad Whitehead, president of the Fund for Our Economic Future, one of Prism’s original funders, wants to see the manufacturing sector and its existing companies enjoy the kind of success often enjoyed by entrepreneurs. He said the Prism program’s goal is to help these companies grow by creating new products and enter new markets. The Fund’s board approved a one-year, $400,000 grant for Prism in June.

“Manufacturing is not only in our past,” Mr. Whitehead said. “It’s very much in our future. It’s in our DNA.” The program’s leaders have a lofty goal regarding jobs: They want to see Prism create 20,000 of them by 2020, Mr. Berry said. This program fills a job-creation niche in Mr. Broer’s eyes. He said much attention goes to big companies and to startups, but “there’s an awful lot that’s missed in the middle.”

Tracy Green, vice president for strategic and institutional development for Lorain County Community College, said there is “absolutely” value in the program. The college was one of the first to partner with Prism in 2012.

Not only does Prism connect companies with resources in the

Shilpa Kedar, the program director for economic development at the Cleveland Foundation, said programs like Prism can help drive innovation at small to midsize companies.

Larger companies have those capabilities in-house, but smaller companies need the shared capabilities that Prism can offer, she said. The Cleveland Foundation began supporting Magnet directly three years ago, Ms. Kedar said, in large part because the Prism program was starting and was becoming a priority. In each of the last two years, the foundation has given Magnet a $400,000 grant.

In the next few years, Mr. Berry said Magnet wants to increase Prism’s $1.7 million annual budget to $2 million. Currently, about 70% of the program’s budget comes from grants, and about 30% comes from program fees to businesses.

Mr. Berry said the goal is to flip that ratio in upcoming years.

Felix Brueck, director emeritus at global management consulting firm McKinsey & Co. and Magnet board member, said Magnet is looking into different potential fee models.

One proposal would help smaller companies, allowing them to forgo upfront payment and instead pay as certain growth milestones are met. Models like that could help Prism become more self-sufficient, he said.

■

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PUBLISHER/EDITORIAL DIRECTOR:

Brian D. Tucker (btucker@crain.com) ASSOCIATE PUBLISHER/EDITORIAL:

John Campanelli jcampanelli@crain.com) EDITOR:

Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

Big bucks

I

t’s discouraging to think that, in a democracy, the outcome of an election that won’t be held until November 2014 has been determined by August 2013. However, if John Kasich doesn’t win re-election as Ohio’s governor next year and Armond Budish doesn’t emerge as the successor to Ed FitzGerald as Cuyahoga County executive, we will be in minor shock.

Gov. Kasich and Mr. Budish, a state representative who formerly was Ohio House minority leader, are popular figures, though it isn’t their voter appeal that makes them clear front-runners in their respective races. Rather, it is the significant stashes of campaign cash the two men already have piled up that give them big head starts on their rivals.

According to campaign finance reports filed late last month, Gov. Kasich’s campaign war chest already holds more than $4.4 million. By contrast, the Republican’s sole Democratic opponent, Mr. FitzGerald, had $544,000 in his campaign kitty.

An even more striking disparity in campaign finance muscle is seen among candidates who’ve announced their desire to fill the void Mr. FitzGerald will leave by not running for a second term as county executive. Rep. Budish as of late last month had $345,000 in campaign money. The combined campaign stashes of his rivals, all Democrats like Rep. Budish, was less than 5% of that total.

Shirley Smith, a state senator from Cleveland who is running for the county’s top job, tried to put a good face on the situation.

“Money is not the key to running the race,” Sen. Smith recently told The Plain Dealer. “The people are the decision makers, not the dollar bills.”

Sen. Smith is a fine legislator, and we would not expect her to walk away from a campaign fight before it has begun. She also is correct in saying that voters are the ultimate decision makers in the election process. But the ability of dollar bills to influence the way voters cast their ballots is undeniable, and candidates who can outspend their competitors by vast amounts tend to enjoy a distinct advantage in their runs for office.

Campaign reform laws have done nothing to take money out of elections. In many ways, because of the emergence of faceless but powerful political action committees, they’ve made the process worse.

The situation calls for voters to cut through the campaign noise by doing their due diligence about the candidates and issues before them. Unfortunately, many don’t invest the time and effort required to inform themselves, which gives the campaigns with the biggest megaphones an edge over those that are limited financially in how often they can shout their message.

So, how are preordained election outcomes prevented? One step would be to stop letting politicians take leftover cash from previous campaigns and use it as seed money in future campaigns for new offices. Mandate the money go to charity, or to school districts in the county where a candidate resides, and let campaign donors take a proportional charitable writeoff. But don’t let politicians treat those funds as their personal campaign starter kits.

FROM THE PUBLISHER

Special tribute to two special people Charlie Wood doubtless will go on, tirehis is a tale of two people we lost lessly overseeing the golf operations at recently. It’s likely you don’t Mayfield and Sand Ridge golf know them, nor will clubs, and he’ll do it with his mix you read a news story BRIAN of Southern gentility, class and about their passing.

TUCKER caring. His friends will know of But their loss deserves our athis sadness, but his members tention. and students probably won’t, Patty Wood, the quiet, because, well, that’s just how he charming, caring wife of longis. And that’s exactly how Patty time local golf professional would want it.

Charlie Wood, passed away af***** ter a long battle with cancer. For Last week, I lost a man who those of us long associated with was as close to a second father the local Ronald McDonald as I’ve ever had. Jim Clancy, my last livHouse, Patty was special and, paired ing uncle, was a testament to all that was with her husband, helped the House in great about The Greatest Generation. He so many ways, always without the recogwas one of countless teenage boys who nition they deserved. left small towns across America to fight If Charlie is the consummate club proin World War II, never thinking about fessional — and he is — then Patty was themselves or the risks they would face the embodiment of the club pro’s spouse once they got “over there.” and partner, willing to endure long hours As I stood by his graveside and lisand ready to help in any way. tened to the 21-gun salute, I thought Patty, like Charlie, always was more about him and my dad (an Army Air interested in you and what was going on Corps signalman in North Africa) and in your life. How’s the job? How’s the how they all enlisted to fight the good family? How’s the golf game? (P.S., hers fight for freedom. was usually better than yours, but you Uncle Jim was a Navy guy, and had the wouldn’t know it unless you were lucky requisite forearm tattoos to remind him, enough to play with her and Charlie.)

T

and us. As I watched his memorial video and saw the pictures of him and his brother, in their uniforms with their mother, I thought about how extraordinary their selfless service was, and what it meant to the world.

And if the adjective “selfless” applied to any man I’ve known, it was Jim Clancy.

Pious Irish Catholic. Devoted husband and father. Hard working and self-reliant, nearly to the end. When he no longer worked for a paycheck, he was a tireless volunteer, often at Conneaut’s railroad museum in our town’s former depot.

This fall, when his beloved Ohio State football team begins playing, I’ll think of Uncle Jim and how he loved to spar with my bride, a native Michigander who’ll always love her Wolverines. When last we saw him, in hospice care, Janet brought a welcome return of that mischievous Irish grin when she entered his room singing the Michigan fight song.

Most of the world won’t know of Jim Clancy’s passing, as he joins his former comrades. But we, his family, will never forget. And as for me, I just want to be like him as much as I possibly can. The world would be far better if we had more men like Jim Clancy.

■

THE BIG ISSUE Do you think downtown could support a full-fledged grocery store, like a Heinen’s or Whole Foods?

JIM JOHNSON

SAMIRA KARIM

CONOR COAKLEY

MICHELE DULL

South Euclid

Cleveland (night manager at Constantino’s)

Cleveland

Elyria

Of course. There’s enough residential, and there’s enough momentum in the office market where a full-service grocery store is almost a necessity to keep the momentum. I think the May Co. would be a great spot. It’s right in the middle.

No. I don’t think that people would be interested in going into a big chain like that. It takes longer to go in and get out.

I would think they could, from what I understand about the number of people that live downtown and the amount of housing that’s going to be opening up. These people have to get their food somewhere … and Constantino’s isn’t what I’d call a full grocery store.

No, I don’t think so. There’s not too many people downtown. It’s not like the suburbs.

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Shout: Funds will be careful not to divulge any key strategies continued from PAGE 1

â&#x20AC;&#x153;Maybe not a commercial for a venture capital fund or a private equity fund, (but) I do think we will see webinars or things on the Internet that you could not have done before go live on that date as if a starting gun went off,â&#x20AC;? said Mr. Bobrow, a business and finance practice partner in the Cleveland office of the Taft law firm. â&#x20AC;&#x153;There are people who are very interested in being first,â&#x20AC;? he said.

One of them is Charles Stack, CEO and founder of Cleveland startup business accelerator FlashStarts Inc. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been chipper since the 10th,â&#x20AC;?

Mr. Stack said, referring to the July 10 vote by the Securities and Exchange Commission to lift the prohibition against general solicitation and general advertising in certain offerings.

FlashStarts raises money to invest in the startups it incubates, and upon seeing the SECâ&#x20AC;&#x2122;s decision moved the date of its â&#x20AC;&#x153;demo dayâ&#x20AC;? â&#x20AC;&#x201D; at which 10 startups will make presentations about their products and businesses â&#x20AC;&#x201D; to Sept. 23 from Aug. 27. That way, Mr. Stack said, FlashStarts can expand the audience of customers and investors to whom its startups can make their pitches.

Companies seeking to raise money through the sale of securities have had two choices: register their offerings with the SEC, or rely on an exemption from registration. Most exemptions prohibit companies from engaging in general solicitation or general advertising related to their offerings.

That prohibition has meant those raising money in an unregistered offering have had to do business the â&#x20AC;&#x153;old-fashionedâ&#x20AC;? way â&#x20AC;&#x201D; asking someone to introduce you to someone he or she knows who might want to hear about your investment opportunity, said David St. Pierre, cofounder and president of real estate private equity firm Legacy Capital Partners in Lyndhurst.

Following a directive of the federal Jumpstart Our Business Startups Act, or the JOBS Act passed in April 2012, the SEC last month in a 4-1 vote eliminated the ban on promoting these investment opportunities.

From Mr. Stackâ&#x20AC;&#x2122;s perspective, itâ&#x20AC;&#x2122;s a positive change. â&#x20AC;&#x153;It is going to be great for capitalism because it allows the money to flow as smoothly as information does today,â&#x20AC;? he said. â&#x20AC;&#x153;While money can be wired at the speed of light, getting investments in any way (other) than manually, in smoky rooms, was left behind. Itâ&#x20AC;&#x2122;s as if the whole 20th century bypassed the fundraising industry. So now, itâ&#x20AC;&#x2122;s being brought into the present.â&#x20AC;?

plan or investor presentation. But then I think you will see things that are off the wall, that are funny, that are attention-grabbing.â&#x20AC;?

John M. Mueller, who founded his own private equity fund, Partners Private Equity LLC, earlier this year, seems to reflect what Mr. Bobrow expects early on. Mr. Mueller wrote in an email, â&#x20AC;&#x153;â&#x20AC;Ś A professional, understated advertising campaign could make sense to reach (investors) in our fundraising efforts.â&#x20AC;?

Still, not everyone accustomed to raising money privately expects to spread the word.

A spokesman with the regionâ&#x20AC;&#x2122;s most prolific dealmaker, The Riverside Co., says the Cleveland private equity firm has no plans to advertise to the masses, in large part because its press releases and participation in industry conferences are aimed at finding investment opportunities, not investors. â&#x20AC;&#x153;Our model is predicated on approaching large pension funds, endowments, funds of funds, in an effort to attract many millions of dollars,â&#x20AC;? Graham Hearns said. â&#x20AC;&#x153;(Weâ&#x20AC;&#x2122;re) not necessarily looking to appeal to individual prospective investors who might be looking to commit a few thousand dollars.â&#x20AC;?

Riversideâ&#x20AC;&#x2122;s position doesnâ&#x20AC;&#x2122;t surprise Mr. Bobrow. He expects funds that raise their capital from highnet-worth individuals and wealthy families to advertise the most. He also predicts smaller, younger funds and established operating companies in need of cash to use advertising to cast a wider net.

Thatâ&#x20AC;&#x2122;s not to say Mr. Hearns doesnâ&#x20AC;&#x2122;t see any benefit in the banâ&#x20AC;&#x2122;s end for Riverside, which raises funds ranging from $200 million to more than $1 billion. â&#x20AC;&#x153;I think the lifting of the ban allows groups like Riverside and other private equity firms in Northeast Ohio and across the country to sleep a little bit easier at night,â&#x20AC;? he said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve always run the risk of one of our colleagues accidently saying something on some panel at some conference in some part of the world on the topic of fundraising that could jeopardize our entire fundraising cycle. The flexibility in the rules now allows us to take a deeper breath in participation at panels, in interac-

tions with journalists.â&#x20AC;?

Those who violate the longtime prohibition on general solicitation and advertising face a range of penalties for doing so, according to Mr. Bobrow. They include a mandatory suspension of fundraising; losing the exemption that allows the raising of a fund thatâ&#x20AC;&#x2122;s unregistered with the SEC (which effectively terminates the fundraising); and civil and criminal penalties.

Minuses with the pluses Though there are potential benefits to general advertising by private equity and hedge funds, there also are risks and limitations, local fund managers and advisers say.

One is accepting so-called â&#x20AC;&#x153;hot moneyâ&#x20AC;? from investors who are chasing the performance a firm may have advertised but who might remove their money if it doesnâ&#x20AC;&#x2122;t happen.

Another downside is exposing to too many eyes the strategies that differentiate a fund. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s not like you want to be out there barking at the moon what your secret is,â&#x20AC;? said John Micklitsch, senior vice president and director of the private client group of Ancora Advisors LLC, a Beachwood registered investment adviser with more than $150 million under management in three hedge funds. â&#x20AC;&#x153;When you find these inefficiencies that you are successfully exploiting â&#x20AC;Ś to the benefit of your investors, itâ&#x20AC;&#x2122;s not as though you want to broadcast what those inefficiencies are to the general public so that others can replicate what youâ&#x20AC;&#x2122;re doing and, over time, remove those inefficiencies from the market,â&#x20AC;? Mr. Micklitsch said.

Fund managers say general advertising also opens the possibility that less sophisticated investors will end up investing in opportunities that are far more risky and illiquid than they knew. â&#x20AC;&#x153;Who verifies them (investors)?

Itâ&#x20AC;&#x2122;s the managersâ&#x20AC;&#x2122; job to verify them,â&#x20AC;? said Wade Massad, co-managing partner of Cleveland Capital Management, a hedge fund in Rocky River. â&#x20AC;&#x153;You could see less sophisticated investors getting information on the web or through advertising that may be from funds or guys who are raising capital who have very speculative investments.â&#x20AC;?

â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a lot of money in the world and a lot of great ideas, and this will dramatically encourage their ability to get together.â&#x20AC;? â&#x20AC;&#x201C; Charles Stack, founder and CEO, FlashStarts Inc., on the securities advertising ban being lifted Sept. 23 For its part, Cleveland Capital Management after Sept. 23 plans to augment the information on its website, which offers little more than contact information now, Mr. Massad said. He expects to provide a more detailed description of the firmâ&#x20AC;&#x2122;s investment process and investment examples.

Shouts from the valley The lifting of the ban on general solicitation and advertising does not affect other securities laws.

Those who want to conduct offerings without the use of general solicitation and advertising may continue to do so and are not subject to a new rule to take â&#x20AC;&#x153;reasonableâ&#x20AC;? steps to verify that investors are accredited investors, or those with a certain net worth or income.

That verification requirement has riled the Angel Capital Association, which argued in a July 16 statement that it will result in many angel investors refusing to invest, hurting startupsâ&#x20AC;&#x2122; access to capital. â&#x20AC;&#x153;Not a single angel I have spoken with is willing to provide personal financial information to an issuer who is asking them for investment,â&#x20AC;? said the organizationâ&#x20AC;&#x2122;s executive director, Marianne Hudson. â&#x20AC;&#x153;This violation of privacy is untenable â&#x20AC;Ś This would be like having your bank demand to know your net worth before you could open a bank account to put money in, or the stock market demanding to know your net in-

come before you can trade securities.â&#x20AC;?

The raised bar for verifying investorsâ&#x20AC;&#x2122; qualifications, Mr. Bobrow said, may drive a â&#x20AC;&#x153;whole new standalone industry.â&#x20AC;? FlashStartsâ&#x20AC;&#x2122; Mr. Stack sure hopes so. One of the startups heâ&#x20AC;&#x2122;s incubating, Crowdentials, is in the business of certifying investorsâ&#x20AC;&#x2122; accredited status. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re sitting pretty, with one of our companies thatâ&#x20AC;&#x2122;s perfectly poised to benefit from this change,â&#x20AC;?

Mr. Stack said.

The banâ&#x20AC;&#x2122;s end, advisers predict, will produce job opportunities for branding experts, who might be hired to freshen logos and related materials before firms go to market, and web developers, whom companies might hire to spruce up websites that, until now, stored most of their investment information behind firewalls.

Mr. Stack said he believes the ability to solicit and advertise generally is particularly significant for Ohio and Cleveland. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s probably oddly much less significant to Silicon Valley than it is to Cuyahoga Valley,â&#x20AC;? Mr. Stack said.

The capital flowing into this region, he said, â&#x20AC;&#x153;should increase dramatically as companies are able to solicit investment as far as they can shout.â&#x20AC;? â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a lot of money in the world and a lot of great ideas, and this will dramatically encourage their ability to get together.â&#x20AC;? â&#x2013;

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WWW.CRAINSCLEVELAND.COM

AUGUST 19 - 25, 2013

GOING PLACES JOB CHANGES

Hurtuk Watts to senior associate.

lead.

EDUCATION

SERVICE

MCPC INC.: Bill L’Esperance to vice president, strategic accounts.

NORTHEAST OHIO MEDICAL UNIVERSITY: Penny R. Smith to executive director, academic services.

ERC: Sue Bailey to senior consultant, compensation and benefits, HR consulting practice.

OECONNECTION: Dave Speck to manager, applications.

MANUFACTURING

MEDIA

DELTA SYSTEMS INC.: Mark J. Fechtel to chief operating officer; Michael R. Jeziorski to senior vice president; William D. Michaels to vice president, sales and marketing.

BABCOX MEDIA INC.: Jason Morgan to managing editor, Fleet Equipment.

DIEBOLD INC.: Stefan E. Merz to senior vice president, strategic projects.

CENTERS FOR FAMILIES AND CHILDREN: Elizabeth Newman to chief operating officer.

PRICE FOR PROFIT: Jennifer Shook-Penick to recruiter: Michael Brenner to consultant; Kairat Kasymaliev to associate; Zachary Morell to analyst; Pete Rollenhagen to business analyst; Scott Sonnenwald to developer; Terry Oblander and Jonathan Konkoly to directors; Justin Bailey and Steve Klein to managers; Cedric Crucke, Benjamin Dussault, Partha Adhikary, Ankur Deora and Heather Monaco to consultants.

MCMANUS, DOSEN & CO.: April M. Herner to senior accountant.

GOODYEAR TIRE & RUBBER CO.: Tom Kaczynski to vice president, investor relations.

HEIGHTS LIBRARIES: Jana Nassif to finance manager.

STAFFING

LEGAL

RPM INTERNATIONAL INC.: Terri Wallace to director, global treasury; Karin Owen to director, corporate secretarial and legal services; Michael Matchinga to director, human resources information systems; Jason Pinizzotto to manager, corporate accounting.

Crosby

ENGINEERING CT CONSULTANTS INC.: Ian A. Garfoli to porject manager.

FINANCE FEDERAL RESERVE BANK OF CLEVELAND: Jenni Frazer to assistant vice president, Supervision and Regulation Department.

FINANCIAL SERVICE

BUCKLEY KING: Elizabeth A. Crosby to partner, labor and employment practice.

DWORKEN & BERNSTEIN CO. LPA: Frank Bartela to associate.

MCDONALD HOPKINS LLC: Richik Sarkar to member, litigation department.

Sarkar

Nassif

WALLOVER OIL CO.: Mark Csikos to regional sales manager.

Tipton

NONPROFIT

HOPEWELL: Peggy Barnes Szpatura to director of development.

MUSIC SETTLEMENT: Tim Kastelic to vice president, finance; Lynn B. Johnson to director of marketing and communications; Patricia Camacho Hughes to manager of annual giving.

REAL ESTATE COLLIERS INTERNATIONAL: Katie

DIRECT CONSULTING ASSOCIATES: Andrew Tipton to project manager, health care IT practice.

TECHNOLOGY BRITESKIES: Robert Baird and Michael Cesen to project managers; Michelle Kowalski to UI/UX designer.

INFORCE TECHNOLOGIES LLC: Maria Stevens to director, business development and strategic alliances; Jeff Burlinghaus to senior software engineer; Luz Ruiz to billing software

PARAGON CONSULTING: Kamran Azam to staff developer; James Kiel to senior developer; Stacey Zur to account development director.

STREAMLINK SOFTWARE: Sarah Yeager to sales associate; Jeff Sobieraj to strategic sales manager.

AWARDS AMERICAN ACADEMY OF NURSING: Margaret O’Bryan Doheny (Kent State University College of Nursing) to Fellow.

HUMAN RIGHTS CAMPAIGN: Henry Ng, M.D., MetroHealth System) received Doheny the 2013 Leadership Award.

RETIREMENT VALLEY ART CENTER: Ann Chaney (executive director), effective in September.

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

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INSIDE

14 ADVISER: WHEN BEING FRIENDS GETS COMPLICATED.

11

LEGAL AFFAIRS Wellness programs often are rewarding Regulations that take effect Jan. 1 have employers reassessing plans

By CHRISSY KADLECK clbfreelancer@crain.com

R

mediation was not as widespread.

“There’s no doubt about it: It will sustain itself,” predicted Ms. Foley Jones, who chairs the alternative dispute resolution practice at Cleveland-based law firm, Giffen & Kaminski. “It’s just growing by leaps and bounds. Corporations are trying to save money.”

Mediation joins disputing parties with a mediator, who commonly is paid by both sides and facilitates discussions between them.

ather than tie its wellness program to premium discounts, excluding those who might not take part in its insurance benefits, Great Lakes Brewing Co. offers employees their own pathway to improved health through a reward-based virtual program called Vitality.

Nearly 65% of Great Lakes’ fulland part-time employees took part during the first year of the formal programming, which ended in April, said Michelle Belviso, human resources manager for the local brewer.

“It’s a really well-rounded program. They make sure that everything is verified so we’re not getting any health results or having to worry about information that is coming through the HR department that maybe shouldn’t,” she said about Vitality, the featured product from Wellness IQ, a wellness company based in Independence.

“If we would have tried to roll something out in house, it would have been very difficult for us to create a program that could have been customized to the individual level like this is,” she said.

Not only that, Vitality also handles all of the administrative demands and keeps the company compliant with all regulations, including the new rules announced in June by the U.S. Department of Labor, Health & Human Services and the IRS that take effect Jan. 1, said Mary Bencze, director of operations for Wellness IQ. The new regulations governing employer-sponsored programs to promote health and disease prevention have companies either waistdeep in plan redesign or backing off plans to roll out more aggressive wellness programs with their 2014 benefits packages, according to wellness and legal professionals.

“It’s top of mind for everybody,” said Andy Carr, health management services product leader at Cleveland-based Oswald Companies, an insurance brokerage that regularly assists companies in developing wellness plans.

See DISPUTING Page 16

See WELLNESS Page 17

MARC GOLUB

Ron Isroff spent 45 years with Cleveland law firm Ulmer & Berne LLP before opening Isroff Mediation Services LLC in Beachwood. The company launched June 1.

NO DISPUTING THIS As companies attempt to curb their legal costs, mediation becomes a popular tool

By MICHELLE PARK mpark@crain.com

A

fter 45 years with Cleveland law firm Ulmer & Berne LLP, Ron Isroff has hung his proverbial shingle as a mediator — and he’s got company.

Isroff Mediation Services LLC officially opened for business June 1 in Beachwood.

In 2011, another litigator, Peter J. Krembs, launched a mediation website, resolveandmoveon.com,

through which he does work for clients as a partner at Hermann, Cahn & Schneider LLP in Cleveland.

A year earlier, Porter Wright added mediation as an official service on its website, though its people had offered it previously.

And others, too, are working to enter the profession, according to Peggy Foley Jones, who began offering mediation after 12 years of working as a trial judge with Cuyahoga County.

“It is taking off,” Ms. Foley Jones said. “When I was still on the bench,

INSIDE: Commercial court is here to stay. Page 12; Practice of mediation gains traction.

Page 16

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AUGUST 19 - 25, 2013

Commercial court is here for good Proponents say the docket will be good for business, serve as attraction tool

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three-and-a-half-year pilot of a commercial court in Cuyahoga County has earned a permanent presence in the Common Pleas Court General Division, much to the approval of some local attorneys, judges and business entities.

So what will this ultimately mean for Northeast Ohio and those doing business here?

Proponents of the commercial court say the venue acts as a business expansion tool, attracting companies looking for an efficient, sophisticated way of handling complex business disputes.

The courts are relatively new, gaining traction within the last 10 years, and in Ohio only those counties with a population of more than 300,000 and six or more common pleas judges can establish a commercial docket.

Regardless of whether a case involves complaints about antitrust claims, business creation, liquidation, contract violations, fraud, insurance coverage, liability, noncompete agreements, shareholder lawsuits or trade secrets, the new permanent court will streamline business-oriented litigation in Cuyahoga County.

The purpose of a commercial docket, said Andrew S. Pollis, an assistant professor in the Milton A. Kramer Law Clinic Center at the Case Western Reserve University School of Law, is to create an avenue for judicial resolution of commercial disputes that doesn’t get clogged up with all the other things on the general docket, including criminal cases and civil disputes.

Not only that, an Ohio Supreme Court rule regarding the commercial dockets sets a timeline of no longer than 18 months for dispute resolution. The typical timeline for common pleas court cases is two years.

“It really is a way of creating an efficient mechanism to resolve business disputes to permit the parties to go back to what they want to do, which is business,” Mr. Pollis said.

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Mark J. Sundahl, an associate professor and associate dean for administration at Cleveland-Marshall College of Law at Cleveland State University, said the end result of the commercial docket experiment should be reduced costs for companies due to expertise, efficiency and consistency.

He added that a commercial docket is another attraction that may lure companies from outside of the county — or state — to Cuyahoga County.

Indeed, the support of the commercial docket by the Association of Corporate Counsel — whose members serve as in-house counsel to local corporations — is the

best perspective, Mr. Sundahl said, on its impact and that the court is moving in the right direction.

“The quick resolution of disputes and the ability of a business to have confidence in the consistent and fair application of the law allows for businesses to operate in an environment of certainty and predictability,” he said. “All of this lowers the cost of doing business and increases the profit margin.”

Cuyahoga County Common Pleas Court judges voted this summer in favor of making the commercial docket a permanent presence, prior to which the Cleveland Metropolitan Bar Association had formed a subcommittee to express its interest in continuing the commercial docket and to be a resource to the courts on how to proceed in the future.

Tim Collins, a partner at Collins & Scanlon LLP, a business law firm in Cleveland, and an active member of the CMBA Litigation Section, said he believes the commercial court will continue to be a positive venue for the region’s business community.

“The overwhelming majority of attorneys that had experience with the commercial docket found it very positive,” Mr. Collins said, adding that the Ohio Supreme Court requirement that commercial court judges publish their opinions provides guidance to attorneys and businesses.

“Everyone likes some predictability. If you have some direction to give to businesses, written by commercial docket judges, it’s more predictable.”

Creating a permanent fixture Commercial dockets have been operating in Cuyahoga, Franklin, Hamilton and Lucas county common pleas courts since January 2009. Locally, the court had been under the sole jurisdiction of Judges Richard McMonagle and John P. O’Donnell.

In the coming months, the Cuyahoga County Common Pleas Court will create a local rule to address operational details, but the permanent court will include some tweaks from the pilot, said Judge John J. Russo of the Cuyahoga County Common Pleas Court.

■ The number of judges will increase from two to four; Judges McMonagle and O’Donnell will retain their duties, with additional judges added by January 2015; ■ Judges will serve three-year terms instead of having indefinite appointments; ■ The Cuyahoga County Common Pleas Court will make recommendations to the Ohio Supreme Court on judges to be considered for open seats on the commercial court.

Judge Russo said there are 34 judges on the Common Pleas Court bench representing a wealth of talent, and many are qualified to handle commercial cases. He said the bench also wanted to have a say in appointing judges to the commercial docket without giving that decision up to a task force in Columbus.

“We wanted to say we know our judges better than you do,” Judge Russo said. “With that input we’ll be able to share our list of judges qualified to go and run the docket.”

■

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Nurse-lawyers bring rare skill, perspective to legal field Organizations value knowledge of health system, patient care issues

By EILEEN BEAL clbfreelancer@crain.com

B

ack in the mid-1980s, when she was working in the medical oncology unit at Fairview Hospital, Patricia Poole, a registered nurse, had what’s called, in health care, a sentinel moment.

“I was working in a job that was physically, emotionally and mentally exhausting,” said Ms. Poole, who now is a partner at BakerHostetler, “and I realized there was no way I was going to be able to do what I was doing when I was 40.”

She thought about getting a master’s degree — an advanced nursing degree that would have prepared her to become a clinical nursing specialist or nurse educator or go into research or administration.

However, she decided that a law degree ultimately would allow her to have a broader impact on health care.

After her first year at ClevelandMarshall College of Law, she quit her full-time job at Fairview and went to work in the litigation department at BakerHostetler, where her first project was reviewing the medical records of asbestos claimants.

“Everything we were learning in law school was so theoretical,” she said, “so I thought getting a job in a law firm would give me the chance to put all that theory I was getting to practice.”

“And,” she added, “the hours were better, too.”

In Ohio, where there are nine law schools and 115 schools of nursing, nurse-lawyers are hard to find.

According to The American Association of Nurse Attorneys, five practice in the Cleveland-Akron area and a total of 21 are practicing in the state.

With general enrollment trending downward at law schools, and movement for nurses to seek career advancement in other — and increasingly entrepreneurial — areas, those numbers aren’t necessarily on track to grow.

However, health care reform and the federal and state policy, regulatory and compliance issues that will come with it may change that picture, according to some observers.

The right prescription As for Ms. Poole, after graduating in 1991, she moved up the ladder at BakerHostetler, and she currently works in the areas of occupational safety and health, federal and state regulatory compliance and class action litigation. “I go out into the trenches and investigate things,” she said, “so I’ve got a hard hat and steel-toed boots and a respirator in the trunk of my car.”

For Cheryl O’Brien, an MD had been her goal from the moment she started nursing school at what is now Ursuline College’s Breen School of Nursing.

“It was going to be my springboard to a medical degree,” she explained. “But as I looked around at the interns and residents and their long hours and inability to balance home and work, and heard all the talk about medical law and legal issues, I decided to go to law school, become a trial lawyer and practice in Cleveland.”

So, after graduating from law school in 1988, and specializing in

medical malpractice, that’s what she did, until she joined the Cleveland Clinic’s legal team in early 2011.

She now works in the areas of medical defense and civil litigation, focusing on hospital, physician, nursing and health care personnel claims.

“It (a law degree) wasn’t my original plan,” she said, “but I love what I’m doing.”

Lawyers like Ms. Poole and Ms. O’Brien are considered secondcareer lawyers, and most who hire them are glad to have had them transition into the legal profession.

“Nurses (who get law degrees) don’t leave nursing, they just take it to another level.”

– Browne C. Lewis, Cleveland-Marshall College of Law, Cleveland State University And not just because these lawyers know how the health care system — especially the local system — works. And how to mine medical records, charts and documents for relevant information.

And speak fluent medicalese.

“Whether we are dealing with a legal or business issue, they bring a very unique perspective — a patient care perspective — to the table,” said Janet L. Miller, chief legal officer at University Hospitals.

Browne C. Lewis, director of the Center for Health Law and Policy and an associate professor at Cleveland State University’s Cleveland-Marshall law school, put it this way: “Nurses (who get law degrees) don’t leave nursing, they just take it to another level.”

Hitting the ground running Currently, only two nurses are enrolled at Cleveland-Marshall (as opposed to the double-digit enroll-

ments the school had in the 1980s and 1990s) and only one at Case Western Reserve University School of Law. Cleveland State’s Ms. Lewis, who keeps her thumb on the pulse of health care law, anticipates growth in the field.

One reason is law firms and other organizations will be looking to hire people with health care experience. Another is that she expects more law schools will be recruiting nurses and more health care institutions will be sending nurses back to school for in-counsel expertise.

“They (nurses) will hit the ground running,” she said.

■

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14 CRAIN’S CLEVELAND BUSINESS

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AUGUST 19 - 25, 2013

Being Facebook ‘friends’ often is complicated Supervisors might be forced to report an employee who is violating policy

ALEXGERTSBURG

C

ADVISER

amaraderie in the workplace makes for a more pleasant and often more productive work environ-

ment.

When supervisors attempt to build this camaraderie by “friending” their employees on Facebook, however, personal and legal risks may outweigh any advantages.

Here are some areas of concern: ■ From a personal perspective, if a supervisor “friends” an employee and learns from a Facebook post that the employee is violating a company policy, the supervisor, who is now also the employee’s “friend,” may find herself in the uncomfortable position of needing to report a friend to another manager or to take disciplinary action on her own.

■ From a legal perspective, if a supervisor “friends” an employee, he may acquire access to the employee’s personal posts and online discussions.

Such access can lead to legal liability if an employee claims the discovery led to her discipline or discharge. Employees could, for instance, claim the adverse action was discriminatory, possibly because of a disability of which the supervisor became aware from the employee’s Facebook posts.

Similarly, an employee could claim any adverse employment action is based on a right protected by the National Labor Relations Act, a law that prohibits employer retaliation for employees’ discussions about the terms and conditions of their employment.

Supervisors are therefore well advised to refrain from “friending” their employees to avoid uncomfortable personal situations and legal liability.

If a supervisor nonetheless feels the need to be “friends” with an

employee on Facebook — say because the friendship existed before the employment relationship began — here are some tips for the supervisor that may mitigate some potentially negative consequences: ■ As the supervisor is in a position of authority over the employee, the supervisor should avoid initiating the friend request because the employee may feel obligated to accept.

■ If the employee does make the request, the supervisor should talk candidly with the employee about the potential implications of accepting, including the fact that the supervisor owes obligations to the company and may have to report malfeasance.

■ The supervisor should maintain appropriate boundaries, taking care to refrain from making any comments on Facebook that could possibly be construed as inappropriate, unprofessional, discriminatory or harassing, even during non-working hours.

Many say that social networking has completely altered the legal landscape of employer-employee relations. Others say that it has simply created more channels for the same types of communications, and therefore simply proliferated that which already existed.

Whichever philosophy is true, folks should be aware of the new applications of old avenues of liability.

■ Alex Gertsburg has been in private practice for more than a decade, serving as both in-house general counsel and outside counsel to business clients. His firm, The Gertsburg Law Firm, is in Chagrin Falls.

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CRAIN’S CLEVELAND BUSINESS 15

BEST OF THE BLOGS

O

n July 11, Gov. John Kasich signed into law a bill modifying unemployment compensation practices and procedures. Two of these changes will impact the way employers in Ohio manage the unemployment application process.

SharedWork Ohio The first change allows employers to reduce workers’ hours while permitting the workers to collect unemployment compensation benefits. Twenty-five other states have already adopted similar programs.

Under SharedWork Ohio, an employee can continue working with reduced hours rather than being laid off and also collect unemployment benefits to make up the difference for the hours that were cut. This benefit allows the potential for employees to maintain their existing health care and retirement benefits.

To qualify, participating employers must submit a plan to the director of the Ohio Department of Job and Family Services (ODJFS). The plan must be in lieu of layoffs and cannot exceed the total unemployment cost of a traditional layoff.

Legislators who support this measure believe that the program will be less costly for employers.

They argue that traditional layoffs often result in higher unemploy-

ment premiums. In addition, it is anticipated that the SharedWork plan will cost less for employers due to reimbursements Weisberg from the federal government until 2015.

During the two-year period, the federal government will reimburse Ohio for SharedWork benefit payments. These benefit payments will, therefore, not be charged to employer’s accounts.

It’s important to note that the program will not occur automatically. Employers must take affirmative steps to participate in SharedWork Ohio plan.

New penalty for employer’s failure to cooperate with ODJFS The new law allowing for the SharedWork Ohio plan makes other changes to Ohio’s unemployment laws. One of the significant changes is that Ohio law will now require an employer’s account to be charged in the event the employer engages in a pattern of failing to timely or adequately respond to requests for information regarding a claim, thus resulting in an improper overpayment.

In the past, for various reasons, many employers opted not to provide information to an initial or subsequent request from ODJFS regarding a former employee’s application for unemployment benefits.

It is now even more important to cooperate with (the Ohio Department of Job and Family Services) and provide the necessary information in a timely manner. In some situations, it will be more prudent to consult with legal counsel as to how and when to respond to these requests.

Now, if an employer engages in a pattern of failing to timely or adequately respond to these requests, the employer’s account will not be credited if OJDFS decides that it erroneously paid unemployment benefits to a claimant.

As a result, in general, it is now even more important to cooperate with ODJFS and provide the necessary information in a timely manner. In some situations, it will be more prudent to consult with legal counsel as to how and when to respond to these requests.

If there are other issues and special circumstances giving rise to the employee’s separation from employment, legal counsel should be sought before taking any other action.

■ Patricia F. Weisberg is a partner at Walter & Haverfield LLP in Cleveland. Her areas of practice include employment and labor law, and litigation services.

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Nominations are open for the 2013 General & In-House Counsel Awards. The nomination deadline is 5 p.m. on Friday, Sept. 13.

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Disputing: Mediation aids relationships

EARNING ‘A GOOD NAME’ Mediation is not new. Its popularity has ebbed and flowed throughout the years, according to the Ohio Mediation Association’s James Petas, and there are pioneers who can be credited with giving the process its “good name,” said Peter J. Krembs, a Cleveland-area litigator-turned-mediator.

“Lawyers like myself who have had 30 to 40 years of an advocacy practice, where they’ve been an adversary on one side of the dispute or another and, like me, have taken advantage of mediation ... they’ve found that it is successful,” he said.

“There are a lot of lawyers in Cleveland now that have established a meaningful mediation practice, which is my goal. It just takes time. You have to get your name out there.”

To that end, he’s upgrading his website and seeking to market himself through organized talks with trade associations.

Some attorneys distrust mediation, maybe because they’re concerned that the more people who use it, the fewer people who use litigators, Mr. Petas said. But, he thinks its growth is a positive for attorneys and mediators alike.

“When you have a mediation, the mediation agreement usually ends up in a resolution,” he said. “That

creates happy litigants, and happy litigants are great for attorneys. I think, in a community sense, it’s wonderful when you can resolve a problem and change the energy of a conflict between people. I think that resonates.”

Plus, others noted, mediation often involves counsel.

“I hope to serve them (litigators),” said Ron Isroff, who observed in his final years of litigating that mediation was suggested in “virtually every case. Those are the people who, in all likelihood, will call upon me to act as a mediator in disputes for which they are representing their clients.”

Two months into doing business as a one-man shop, Mr. Isroff has a mediation scheduled, another tentatively scheduled and one in discussion stage, he said. Like Mr. Krembs, he’s working to spread the word among lawyers that his business is up and mediating.

“I think, overall, mediators are getting better,” Mr. Isroff said. “I’ve attended a few training courses and sessions in the past few months ... and the level of, the art of, mediation has increased. I think mediation is more effective today than it was years ago because people are better at it.” — Michelle Park

continued from PAGE 11

Unlike arbitration, in which an arbitrator or panel doles out a binding ruling, mediation does not entail a mediator dictating what the sides must do. Instead, if the parties reach no agreement, they still may pursue litigation.

“The concept with mediation is, let’s get all of the important players to the table at a much, much earlier stage,” said Mark Wachter, chair of the alternative dispute resolution section for the Cleveland Metropolitan Bar Association and member of the Pepper Pike law firm, Wachter Kurant LLC. “The popularity of it, I think, has become greater because the cost of litigation has become greater.”

Cost of doing business One reason for that escalating expense is the amount of information available electronically, Mr. Wachter said. Discovery and the costs associated with it have climbed because “no attorney wants to be caught off guard,” Mr. Wachter explained.

They “want to see every piece of paper, talk to every witness.”

The cost of mediation, which often lasts a day or two, pales in comparison to the cost of litigation, which can languish for months or

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years, local mediators and attorneys say, and mediation’s emphasis on parties coming to their own agreement is attractive to companies that are locked in discord with someone they don’t want to alienate completely.

“Businessmen don’t like to sue their suppliers or their customers,” said Mr. Krembs, who has litigated for nearly 40 years and has found the mediation marketplace quite competitive since launching the Resolve and Move On mediation services website with a partner.

“It (mediation) is a better way ... to maintain control and relationships,” he added. “They’re not sitting there letting someone else make the decision for them.”

An increased number of business contracts are being written to require companies to mediate before litigating, too, and more judges — under pressure by the Ohio Supreme Court to reduce the size of their dockets — are sending cases to mediation, according to local attorneys.

“More and more, you are seeing these contracts that have these mediation provisions,” said Richik Sarkar, a member of McDonald Hopkins LLC in the law firm’s Cleveland office. “It’s an obligation that the parties have already agreed to. “(In the) last two or three years, for sure, it’s been growing,” Mr. Sarkar added. “People are looking to minimize their legal costs. I’m seeing it in almost all of my cases.

Before things even get started, we try to figure out: Can we mediate this dispute?”

Mediation movement The escalating popularity of mediation is evident not only in the number of professionals offering it, but also in the increased marketing of it, the number of groups organized around it and more law school curricula that teaches it, mediators and attorneys say.

“There was a perception in the business community (that it) wasn’t really very good for big business, that all arbitrators and mediators did was come to simple compromises,” said the local bar’s Mr. Wachter. “It’s taken some time, but many of these industries are starting to recognize that that’s not the case.”

It was only in recent years that

the Cleveland bar’s alternative dispute resolution section became an actual section rather than a committee, Mr. Wachter noted.

Nationwide, the American Bar Association’s Dispute Resolution Section, which boasts 18,000 members, has been one of the fastest-growing sections of the association, said David Moora, the section’s director who noted, “We do continue to see a large interest in the increased use of mediation.”

And the leader of the Ohio Mediation Association said he sees anecdotal evidence statewide of a more recent uptick, both in a new court-connected mediation program in Oregon, Ohio, and a recently launched law firm in Toledo that specializes in mediation only.

Association president James Petas expects the number of mediation practices to continue to grow, driven by more awareness of the process itself, and by judges.

“Our cases are driven by the bench,” he said. “If somebody is elected, and they believe in mediation, we’re in great shape.

“The process kind of sells itself,” Mr. Petas added. “It sounds kind of touchy-feely, but it (mediation) is just a safe place to talk. That is extremely rare in the legal system.”

That’s one of the reasons lawyers cite for the expansion of it: Unlike court proceedings, which are public, mediation is confidential.

“Anything that is said during the course of mediation cannot later be used in litigation unless all parties agree that it can be used subsequently,” Mr. Krembs said.

“They (the parties) go into it with no fear that what they say is going to come back and bite them in the fanny,” he added.

Another plus for mediating, according to Mr. Krembs, is having the power to choose a mediator who has some expertise in a particular type of dispute. To the contrary, litigants can be assigned a judge who’s unfamiliar with legal statutes relevant to their case, he asserted.

And even if mediation fails, parties tend to emerge from it with a better feel for what the core of the dispute is, he noted.

“Even though you don’t settle it, you know what you’re up against,” Mr. Krembs said. “To learn that early in litigation is as valuable as gold.” ■

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LEGAL AFFAIRS

AUGUST 19 - 25, 2013

CRAIN’S CLEVELAND BUSINESS 17

Wellness: Biggest changes involve incentives, reasonable alternatives continued from PAGE 11

Jim Pshock, CEO and founder of Bravo Wellness in Cleveland, which designs, coordinates and administers wellness programs for close to 300 companies, said he has very few clients who are able to renew their 2014 wellness plans with no changes.

“We are completely entrenched in changing employee communications now and making sure screenings are done consistently and that everyone is given adequate notice of their rights to an alternative if a company is saying its premium contributions are going to vary based on (an employee’s) blood pressure, cholesterol, BMI and tobacco use,” he said.

Alternative arrangements The new rules have clarified what employers can do to lower health insurance costs and set forth significant changes, the first of which outlines three distinct categories of wellness programs: participatory; health-contingent activity-only; and health-contingent outcome based, said Karen D. Youngstrom, partner in the employee benefits and executive compensation practice group at Thompson Hine.

“There is some confusion out there because a lot of employers don’t understand exactly what type of wellness program they have, such as a participatory versus health contingent,” she said. “I have heard a lot of employers say that they have a participatory plan (open to all employees), but actually it is health contingent because you have to achieve an outcome.

The terminology isn’t really well understood.”

A participatory wellness program is open to all employees regardless. This program has the least amount of legal risk for an employer but also nets the least amount of return in terms of employee wellness, Ms. Youngstrom said.

The new terminology splits health-contingent wellness plans into activity-only programs and outcome-based programs that involve an employee earning a reward or incentive if he or she satisfies a particular health standard.

For instance, in activity-only programs, employees might be asked to participate in a walking program but they don’t have to achieve a specific goal. In an outcome-based program, employees may be rewarded for keeping their total cholesterol number under 200.

Julia Ann Love, also a partner in the employee benefits and executive compensation practice group at Thompson Hine, said there are several things a wellness plan needs to do in order to satisfy the new regulations, but the two most significant changes involve incentive amounts and reasonable alternatives.

Currently, an employee’s reward for satisfying a wellness program cannot exceed a 20% discount off the premium cost of coverage.

That percentage discount was increased to 30% under the Affordable Care Act, except for tobacco cessation programs, which can receive an incentive up to 50%, Ms. Love said. If certain circumstances make it unreasonably difficult or inadvisable for individuals to complete the program, an employer must provide a reasonable alternative to earn a reward.

“So you can’t make a pregnant woman do a walking program if that would be dangerous for her in her condition or you can’t make a hemophiliac take a blood draw to determine their blood cholesterol level,” she said, adding that employers also must publicize that reasonable alternatives are available.

All about the journey The issue of reasonable alternatives has many employers who were considering implementing more aggressive wellness plans shelving the idea for another year or two, Mr. Carr said.

“In the past we’ve had great success with our clients in the outcome-based incentives around biometrics (blood pressure, cholesterol, BMI). We have seen fewer groups that want to take that on now because of the complexity around this. The alternatives have been their main concern,” he said.

Ms. Love agreed, saying that more companies are staying with

CONTRIBUTED PHOTO

The Great Lakes Brewing Co. encourages its staff to participate in wellness programs. Here, employees are shown at the 2013 Ohio City Run & Crawl. participatory wellness programs — discounted gym memberships, health fairs and health education — that they offer to all employees because they can easily satisfy the federal regulations and not worry about wellness compliance issues.

“Because one of the things that is causing a lot of concern in the employer community is the final regulations make it clear that if (an

individual doesn’t) satisfy the alternative until halfway through the year, the employer has to go back and apply incentives retroactively if they achieve their goals within the plan year,” she said.

Indeed, the new rules do adopt more of a journey rather than destination approach to wellness, establishing a structure in which employees who take steps to im-

prove their health can earn rewards even if they aren’t quite “there” yet.

“What we are seeing being adopted as the best practice is to set progress goals or improvement goals instead of just straight passor-fail metrics,” Mr. Pshock said.

“Our standard client who two years ago may have said you can earn $50 per paycheck if your BMI is under 30, are now saying you can earn $50 per paycheck if your BMI is under 30 or if it’s two points less than last year.”

Messrs. Carr and Pshock said the companies they work with that already have committed to outcome-based incentives are staying on their current wellness course.

“The overall intent of these regulations, when you boil it down and what the government has really said is they want to make sure that individuals weren’t necessarily just being risk rated so we weren’t just shifting more premium to somebody because they had a higher BMI or a higher blood pressure,” Mr. Carr said. “They wanted individuals to also be rewarded if they were working toward a health status.”

■

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CRAIN’S CLEVELAND BUSINESS

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Media: TV has big advantage in video continued from PAGE 1

“Our bread and butter is video and the digital platforms are becoming more and more video-centric,” said Greg Easterly, general manager of WJW-TV, Channel 8.

“That plays to our advantage if we do our job well.”

Jill Manuel, news director at WEWS-TV, Channel 5, said her station’s owner has invested heavily in building digital platforms, including mobile apps for news, weather and traffic. WEWS is owned by E.W. Scripps Co., which has a long history owning both newspapers, including the former Cleveland Press, and television stations.

In addition to broadcast reporters and videographers who contribute online, the station has six staffers focused solely on digital platforms; that team includes a social media producer.

“Broadcast channels are still the primary source of revenue for television stations,” Ms. Manuel said.

“But digital is a growing piece of the revenue picture. We know you’ve got to create products for people wherever they are.”

Big self-promoters Another advantage for television stations in the digital realm is their use of video, which is more extensive

and sophisticated than a website such cleveland.com that is grounded in text and still photography. WEWS, for example, also streams video live across its digital platforms. Ms. Manuel said the live stream of the sentencing of kidnapper Ariel Castro had more than 500,000 views.

Television stations also can cross-promote their content better than newspapers. Not only do they have larger audiences than newspapers, they can use their broadcasts to tout their websites to viewers, especially those multitaskers who watch television news and surf the web at the same time.

“That’s the strength of what we do,” Mr. Easterly said. “We’re trying to be available when and where consumers need us, and that’s a great opportunity for businesses who want to advertise.”

WJW also has added a 4 p.m. newscast to its broadcast schedule to beef up its news offerings.

The combined news operation that serves television stations WOIO and WUAB — Channels 19 and 43, respectively — has been running spots reminding viewers of the changes at The PD and inviting them to do choose 19actionnews.com over cleveland.com.

More substantively, it has added at least five online news producers

over the last six months in anticipation of the growing battle with The Plain Dealer and cleveland.com for online readers, said Bill Applegate, vice president and general manager of the two stations.

“We will compete just as when they were hard print,” said Mr. Applegate, who started his media career as a newspaper reporter in Ft. Wayne, Ind. “It just shifts to different platforms, online and mobile.”

Fit to print Other daily newspapers are advancing into PD territory by adding coverage and subscribers where their traditional territories meet.

Suburban dailies are competing online as well, but they also compete more directly in print because, unlike The PD, they still will deliver a newspaper to subscribers’ homes seven days a week. On Aug. 5, The PD stopped home delivery on Mondays, Tuesdays and Thursdays.

Those days, the paper is available only at news boxes and retailers.

Jeff Sudbrook, president and publisher of The Morning Journal in Lorain and The News-Herald in Lake County, said both papers have picked up a modest number of subscribers in Cuyahoga County in recent weeks.

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in Cuyahoga County communities such as Bay Village, Euclid and Westlake that border the traditional coverage areas of his two newspapers.

Mr. Sudbrook said last week the papers have been running in-paper promotions that say, “Yes, we’re still home delivered seven days a week” and has received calls asking about home delivery. However, he couldn’t say how many of the net increase of 150 subscribers at each newspaper in just the first week of August were conversions of PD readers.

The two newspapers also are improving their websites with more video and additional reporting, Mr. Sudbrook said.

“We’re trying to give (readers) new reasons to come to our websites,” he said. “We’re all trying to drive more traffic and more unique visitors.”

The Akron Beacon Journal also is moving onto the PD’s turf. In July, it said it would begin seven-day home delivery to Brecksville, Broadview Heights, Brunswick, Hinckley, North Royalton and Strongsville. Editor Bruce Winges referred a reporter to publisher Andrea Mathewson, who did not return three telephone calls

by Crain’s deadline last week.

News in the public space Even the area’s public broadcasters are getting in on the competition. Although station executives said the timing was coincidental, both WKSU-FM, 88.7, in Kent and ideastream in Cleveland have bulked up their news and public affairs offerings.

Changes in the way radio is broadcast allow both WKSU and

WCPN-FM, 90.3, which is part of ideastream, to operate multiple over-the-air channels. So, they can broadcast separate channels for music and educational programming, leaving more time available on their prime channels for news and public affairs.

Ideastream recently merged with Civic Commons, a regional online public affairs forum. Civic Commons’ move to ideastream’s home at the Idea Center in downtown Cleveland will expand the broadcaster’s online news and public affairs footprint.

Jerry Wareham, president and CEO of ideastream, said the move to combine with Civic Commons was not related to the changes at The PD, but he recognizes his organization must adapt to compete for the attention of public affairs consumers.“What we’re trying to do here is aggregate programs that apply technology to education and public service in a way they can share resources and do a better job for the community,” Mr. Wareham said.

At WKSU, classical music was removed from the weekday schedule in favor of several new hours of news and talk programming.

“There is a strong demand for news in the public radio space and we wanted to respond to that,” said Dan Skinner, the station’s executive director, who described his news operation’s use of text, audio and video online as a convergence.

“We’re not just a radio station in terms of the way we distribute our product,” Mr. Skinner said. “We’re shipping it out in all the ways it makes sense.”

■

Great: Biz keeps growing continued from PAGE 3

“We are thrilled to have them coming to town,” said David Schroedel, director of economic development for Broadview Heights.

Great Day plans to shrink the parking lot, plant trees and grass, and better align the entrance and exit with the traffic light leading into a shopping plaza across the street, Mr. Schroedel said.

This is just the latest expansion for Great Day, which has been buying up Ohio manufacturers since February 2010, starting with aluminum extruder Central Aluminum Co. in Columbus.

Mr. White said the original plan was to buy distressed companies to turn around through its parent company, GDIC Group LLC. After the second deal, though, a different plan fell into place. Great Day bought Patio Enclosures in January 2011, setting its sights on becoming a home improvement company and changing its name from GDIC Management Services LLC to Great Day Improvements.

The purchase of SoftWall Finishing Systems, a producer of interior finishing, followed in fall 2011, with the acquisition of the Stanek Windows product line coming last January. The manufacturing lines, aside from the aluminum business, were consolidated in Macedonia, and many of the Stanek and Patio Enclosures employees were retained.In the past two years, Great Day has more than doubled the number of company-owned stores to 23 from 10 by acquiring some franchisees and reopening stores that had been closed by the previous companies, Mr. White said. The new Broadview Heights store will be Great Day’s largest yet, and will serve as a model for future stores in other markets, Mr. White said.

He said sales for sunrooms have

risen 32% this year from 2012 levels, and overall store sales are up about 25%. While Mr. White declined to share the company’s revenue, he said Great Day as of June 10 of this year already had matched 2012 revenue.

The hard sell The company has about 500 employees, with about 60 at Central Aluminum, 135 in the Cleveland area and the rest at the 23 company-owned stores from Detroit to Baltimore. Mr. White expects Great Day to continue to grow. He said the company always is looking to acquire more businesses, especially those with products in home improvement that can be made in the 150,000square-foot plant in Macedonia.

Bill Goddard, the company’s vice president of sales, said Great Day has a focus on “quality and value, rather than price.” Products are custom-made at the plant in Macedonia per customers’ specifications.

Mr. White said while Great Day offers Stanek, Patio Enclosures and SoftWall products, it also contracts with other companies to offer complementary services, such as concrete work. Those arrangements allow the company to be a one-stop shop for home improvements, he said.

Mr. Goddard said the individual brands come first for Great Day in its marketing. A local marketing presence is important, and Mr. Goddard said local branch managers have control over the advertising in their regions. Mr. White said the approach of giving local managers more autonomy over advertising has been an evolution over time, but there’s a big push for it this year at the company.

There are even incentives for any employee who brings in a sale, regardless of their job title.

“It doesn’t matter what your job is: you’re a salesman in our company,” Mr. Goddard said.

■

20130819-NEWS--19-NAT-CCI-CL_--

8/16/2013

1:42 PM

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AUGUST 19 - 25, 2013

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

19

Value Place will build $6 million inn at Emerald Corporate Park

By STAN BULLARD sbullard@crain.com

Value Place, a deep discounter among national extended-stay hotel chains, plans to build a 124-unit inn at Emerald Corporate Park on the far West Side of Cleveland at a cost of more than $6 million.

The chain also may build more

properties in Northeast Ohio.

Luke White, a real estate analyst at Wichita-based Value Place, said the company is excited about the two-acre site near Grayton Road because it has visibility from Interstate 480 and is near Cleveland Hopkins International Airport.

The four-story building will be corporate-owned, Mr. White said,

and the hotel will charge about $239 for a one-week stay. Some of its locations go for as little as $169 a week.

The chain is known for a oneprice policy: Customers pay for a week even if they want to stay for a single night in order to keep its focus on long-term customers.

Cleveland City Planning Commission approved Value Place’s plans

last Friday, Aug. 16, with a single proviso. As Value Place has changed its exterior finishes and colors since the city’s Far West Design Review Committee approved the plan, the commission told the hotel operator’s consultants they can proceed with the plan if the Far West committee approves the new exterior design.

The company is projecting the

hotel’s opening for January if it begins work soon.

Mr. White said Value Place is expanding again nationally after receiving a $100 million private equity investment by Lindsay Goldberg LLC of New York. Under its recently updated designs, Value Place added flat- screen TVs, wood-look flooring and better beds.

■

HIGHEST PAID PROFESSIONAL ATHLETES RANKED BY SALARY AS OF CURRENT OR MOST COMPLETE SEASON Team

Salary

Contract terms

Contract length (years)

Position

Nick Swisher, 32

Cleveland Indians

$11,000,000

$56,000,000

4

first baseman

9

Ohio State

Joe Thomas, 29

Cleveland Browns

$10,000,000

$80,500,000

8

tackle

7

Wisconsin

Cleveland Cavaliers

$8,368,182

$48,300,000

6

center

9

N/A

Chris Perez, 27

Cleveland Indians

$7,300,000

$7,300,000

1

pitcher

5

University of Miami

Michael Bourn, 30

Cleveland Indians

$7,000,000

$48,000,000

4

center fielder

7

Houston

Brett Myers, 32

Cleveland Indians

$7,000,000

$7,000,000

1

pitcher

10

N/A

Joe Haden, 24

Cleveland Browns

$6,936,429

$42,737,166

5

defensive back

3

Florida

Asdrubal Cabrera, 27

Cleveland Indians

$6,500,000

$16,500,000

2

shortstop

6

N/A

Cleveland Cavaliers

$6,091,363

$30,291,363

6

forward

10

University of Arizona

Ahtyba Rubin, 27

Cleveland Browns

$6,000,000

$26,500,000

4

defensive tackle

6

Iowa State

Ubaldo Jimenez, 29

Cleveland Indians

$5,750,000

$10,000,000

4

pitcher

7

N/A

Justin Masterson, 28

Cleveland Indians

$5,678,500

$5,678,500

1

pitcher

5

San Diego State

Kyrie Irving, 21

Cleveland Cavaliers

$5,375,760

$16,127,280

3

guard

2

Duke

Daniel Gibson(1), 27

Cleveland Cavaliers

$4,792,332

$21,000,000

5

guard

7

Texas

Marreese Speights(1), 26

Cleveland Cavaliers

$4,200,000

$11,896,095

5

forward

5

University of Florida

Tristan Thompson, 22

Cleveland Cavaliers

$3,894,240

$11,682,840

3

center

2

Texas

Cleveland Browns

$3,732,000

$14,600,000

5

center

5

University of California

Cleveland Cavaliers

$3,726,600

$7,620,840

2

guard

2

Syracuse

Cleveland Browns

$3,600,000

$42,500,000

5

linebacker

8

Maryland

Cleveland Cavaliers

$3,500,000

$9,750,000

3

forward

3

Alabama

Joe Smith, 29

Cleveland Indians

$3,150,000

$3,150,000

1

pitcher

6

Wright State

Drew Stubbs, 28

Cleveland Indians

$2,825,000

$2,825,000

1

outfielder

4

Texas

Davone Bess, 27

Cleveland Browns

$2,633,334

N/A

3

wide receiver

6

Hawaii

Omri Casspi(1), 25

Cleveland Cavaliers

$2,277,306

$6,040,746

4

forward

4

N/A

CJ Miles, 26

Cleveland Cavaliers

$2,225,000

$4,450,000

2

guard

2

N/A

Wayne Ellington(1), 25

Cleveland Cavaliers

$2,083,042

$5,319,442

4

guard

4

University of North Carolina

Desmond Bryant, 27

Cleveland Browns

$2,000,000

$34,000,000

5

defensive end

5

Harvard University

Mike Aviles, 32

Cleveland Indians

$1,750,000

$6,000,000

2

infielder

5

Concordia

Rank Name, age

1 2 3 4 5 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28 30 31 32 33 34 35 36 36 36 36 36

Anderson Varejao, 30

Luke Walton(1), 33

Alex Mack, 27 Dion Waiters, 21 D'Qwell Jackson, 29 Alonzo Gee, 26

Years - in league College

Matt Albers, 30

Cleveland Indians

$1,750,000

$1,750,000

1

pitcher

7

San Jacinto Community College

Tyler Zeller, 23

Cleveland Cavaliers

$1,563,120

$3,196,560

2

center-forward

2

North Carolina

Jason Campbell, 31

Cleveland Browns

$1,500,000

$3,750,000

2

quarterback

9

Auburn

Shawn Lauvao, 25

Cleveland Browns

$1,323,000

$3,300,000

4

guard

4

Arizona State

Trent Richardson, 23

Cleveland Browns

$1,321,354

$20,489,796

4

running back

2

Alabama

Phil Taylor, 25

Cleveland Browns

$1,110,750

$8,093,250

4

defensive tackle

3

Baylor

Marc Rzepczynski, 27

Cleveland Indians

$1,100,000

$1,100,000

1

pitcher

3

California-Riverside

Lou Marson, 27

Cleveland Indians

$1,000,000

$1,000,000

1

catcher

5

N/A

Rich Hill, 33

Cleveland Indians

$1,000,000

$1,000,000

1

pitcher

4

University of Michigan

Scott Kazmir, 29

Cleveland Indians

$1,000,000

$1,000,000

1

pitcher

8

N/A

Chris Owens, 26

Cleveland Browns

$1,000,000

$1,000,000

1

cornerback

5

San Jose State

5

South Florida Community College

Ryan Raburn, 32

Cleveland Indians

$1,000,000

$1,000,000

1

outfielder

Source: Information from www.nba.com, www.espn.com, www.clevelandbrowns.com, cleveland.indians.mlb.com, www.baseballprospectus.com, www.spotrac.com, www.hoopshype.com. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.

(1) Not on the 2013-2014 roster.

RESEARCHED BY Crain's staff.

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Drawing: RDL Architects estimates 75% of its work is national a reawakened hotel market. For example, it is at work on big-ticket renovation projects ranging from the Embassy Suites in Beachwood to a 50,000-square-foot ballroom at the Dallas Renaissance Hotel and a substantial renovation of the 500room Hyatt Regency Cincinnati.

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He isn’t alone. As the architecture business has revived and several firms have resumed hiring in a significant way this year, many Northeast Ohio firms are finding much of their work outside the region.

It’s a situation that had Paul Voinovich, a principal in the Vocon Inc. architecture firm in Cleveland, returning last week from a business trip to London, where he worked with a design partner on landing commissions across the pond.

Paul Westlake, managing principal of Westlake Reed Leskosky in Cleveland, oversees a firm that just added to projects in China its first project in Africa. That job is an assignment from global contractor Bechtel Corp. to build a $40 million public plaza, banquet and conference center in Liberville, Gabon, for the 2015 meeting of the African National Congress.

Northeast Ohio architects eager to grow after the long real estate downturn generally do so with a big slice of work from out of town on top of their diet of local assignments. With the local construction market constrained by a lack of population and business growth, they seek more robust building environments in which to apply their specialties, connections and design talent.

Debbie Donley, founding principal of Vocon, said her firm would be “much smaller” if it based its business plan on local work. Instead, Vocon targets work for large companies that want to align their physical operations with their strategic business needs, she said. As a result, it works across all 50 states.

Ms. Donley estimates 60% of Vocon’s revenues are in town and 40% across the nation. She said Vocon “very cautiously” added six people, three of them registered architects, in the last 90 days to take its staff to 100. Vocon’s quest to grow outside the region meant it added 20 registered architects with the acquisition of Conant Architects of New York City in a transaction it announced last week.

After the megaprojects

CONTRIBUTED PHOTO

A look at a conference room at mbi | k2m’s Cleveland headquarters.

In Shaker Heights, architect Ronald Lloyd estimates 75% of the work at his RDL Architects Inc. is national. RDL added five people this year to bring its staff to 25, with about half the hires holding architecture licenses.

“If you’re a local outfit that wants to survive on local activity, you might have challenges, although things are picking up here,” said Mr. Lloyd, the firm’s president and founder. “We have several projects in Texas and Virginia.”

As RDL weathered the recession and kept its staff intact with a plethora of multifamily low-income housing projects in multiple states, it also positioned itself for work in the commercial, residential and senior-living sectors to immunize itself from future downturns.

Now, to Mr. Lloyd’s pleasant surprise, all three practices are busy.

“In the last three months, commercial has really picked up,” Mr. Lloyd said. He said part of that increase is from a rise of apartment projects as demand for rental properties surges across the nation, though renewed activity by shopping center developers and retailers also helps.

So long, double whammy Darrin Kotecki, president of

Akron-based GPD Group, which does architectural, engineering and planning work, said the regional market is changing, and not all for the best. He said spending on school work, which maintained many firms through the downturn, is starting to slow.

“But we’re seeing an uptick, primarily from the private side of the business,” Mr. Kotecki said. “There is a lot of private money out there now. It is really just business responding to a better economy.”

Mr. Kotecki noted the big hits retailers sustained in the recession created a “double whammy” for designers who did commercial work for individual retail chains as well as shopping center owners.

The rebound in retail is particularly noticeable, he said, as GPD is seeing more construction projects for big-box and smaller retailers; renovation work from filling empty stores first surfaced last year.

Other contributors to the improved prospects for architects are designs for new corporate headquarters, plans for new hospitals in the region, a rejuvenated office leasing market, and more senior housing projects.

In mbi | k2m’s case, it benefits from renewed high-end home building in Key West and feasts on

On the flip side, completion of downtown Cleveland megaprojects such as the Global Center for Health Innovation and Cleveland Convention Center is impacting local firms that won pieces of those plum assignments.

At the Cleveland office of construction and engineering giant URS Corp., which served as the construction architect for the convention center and designed the new, 23-story Ernst & Young Tower in Cleveland’s Flats, its design staff has dropped with four departures, including the long-planned exit Aug. 9 of creative director Christopher Diehl by mutual agreement.

Dana Mitchell, the Diehl Cleveland-based office manager of URS’ Akron, Cleveland and Toledo offices, said his company is chasing a proposed, 600-plus room hotel tied to the Cleveland convention center “for sure, but I see the market slowing down a little.”

Mr. Diehl, who has taught as well as practiced architecture, said he knew the market would soften in the region after the convention center was built, and that his exit “would help URS and help me.”

Mr. Diehl said that at 51 he wants to “bite into big and interesting work” and is interviewing in Chicago, Dallas and San Francisco for what he calls his “next great chapter.” He acknowledged, “It’s the wrong economy to pursue the dream of every architect and hang out your own shingle to stay in Cleveland.”

Architectural firm owners also note unemployment among building designers remains high. GPD Group’s Mr. Kotecki said last year he received 75 resumes for any architecture opening; he now has 50 for one in Columbus.

On the homefront …

The improving — but still-slim — prospects for future work in Northeast Ohio are such that many local architects again are critical of major local commissions going to out-of-town firms for clients craving celebrity.

RDL Architects’ Mr. Lloyd freely discusses the problem, which many local architects only air in private.

“I’m really disappointed in institutions that feel they have to go to Uruguay for architectural services,” Mr. Lloyd said. “There is great talent here, wonderful architects. You are starting to see a little of it in the work they are getting elsewhere.”

Favoritism for the outside expert factors into Mr. Diehl’s decision as well.

“There is less opportunity for someone like me in the region,” Mr. Diehl said. “We hire a lot of outside firms as our design help. I applaud that in the right situation. It’s a funny thing: to know we have quality, we go shopping for it elsewhere.

There is a feeling that if you buy local, you get what you get. We need to buy local and demand a lot.”

Vocon’s Ms. Donley dismisses such concerns as “sour grapes.”

She noted her firm learns when it partners with larger firms, and she and her brother, Paul Voinovich, take losing to an out-of-towner as a message to work harder.

Mr. Maloney of mbi | k2m sees it pragmatically. He used the real estate downturn to build business relationships in Northeast Ohio and beyond for the moment when the spigot for construction spending opened again. He said his perseverance is easily explained, noting, “I never wanted to do anything else but run an architecture firm.”

■

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THEINSIDER

THEWEEK AUGUST 12 - 18 The big story: Omnova Solutions Inc. may be exiting Fairlawn for Beachwood. The producer of emulsion polymers and specialty chemicals said it’s considering building a headquarters in Beachwood after two years of extensive analysis.

“Because our plans remain subject to various approvals at the local level, however, we continue to consider other possible locations in Northeast Ohio,” Omnova said. The company said it would not provide details on the possible move until it has a final agreement. Omnova said its lease at 175 Ghent Road expires in late 2014.

By the numbers: Fifty-seven Park View Federal Savings Bank employees will lose their jobs in layoffs that will begin Oct. 11, according to a letter sent to the state of Ohio by the Pennsylvania company that’s acquiring the Solonbased bank’s parent. That number represents 30% of the 188 full-time-equivalent employees reported by PVF Capital Corp. as of the first quarter. The deal by F.N.B. Corp. of Hermitage, Pa., to buy PVF is expected to close in October.

F.N.B. owns First National Bank, which sent the layoff notice to Ohio’s Office of Workforce Development.

Long-term helper: Torrey Pines Investment in San Diego agreed to invest alongside Cleveland-based BioMotiv LLC for the next seven years. Together, BioMotiv and Torrey Pines plan to finance the development of medicines that have yet to be tested in humans. Torrey Pines committed to investing up to $20 million in projects financed by BioMotiv, though it wouldn’t be obliged to join BioMotiv in any particular investment. BioMotiv recently raised $25 million from Nationwide Mutual Insurance Co. and several individual investors

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

The beat goes on, 40 years later ■ John Adams, believe it or not, has interests that don’t involve the Cleveland Indians and his bass drum.

Mr. Adams is a senior special technical architect for AT&T. He builds websites, he instructs a class (for which he doesn’t get paid) at Cleveland State University on teaching behavior modification and motor deAdams velopment to the disabled, and he is president of the Cleveland Blues Society.

He’s busy, but he always — or almost always — finds time for the Tribe.

On Saturday, Aug. 24, Mr. Adams, 61, will be honored prior to the Indians’ 7:05 p.m. game against the Minnesota Twins at Progressive Field. The occasion: His 40th year of banging his 26-inch bass drum during Tribe games — a tenure in which he has been present for all but 38 games.

The Indians will have video tributes and a pregame ceremony for Mr. Adams. He insisted on a twist for the latter.

“The only thing I know (about the tribute) is they said, ‘Do you want to do anything on the field?’ I said, ‘Yeah.’ I told them I wanted to get the first hit of the game, like I did for my 3,000th game (in 2011). There’s a million people who get to throw the first pitch.

I want to get the first hit.”

After he takes his cut in the batter’s box, he’ll assume his regular spot at the top of the

WHAT’S NEW

Shopping spree: A DDR Corp. joint venture formed with an affiliate of Blackstone Real Estate Partners VII L.P. closed on a deal to acquire for $332 million a portfolio of seven shopping centers totaling 2.4 million square feet. Beachwood-based DDR, a real estate investment trust that specializes in shopping centers, said the assets are in Cincinnati, Los Angeles, Portland, San Diego and Washington, D.C. The purchase price includes assumed debt of $207 million and $28 million of new mortgage debt. Blackstone owns 95% of the common equity of the joint venture; a DDR affiliate owns the rest.

On notice: Canton-based Republic Steel was cited by the U.S. Department of Labor’s Occupational Safety and Health Administration for 24 safety violations that carry fines of $1.14 million, the department announced in a statement that alleges the company has a “long history” of violations. Fifteen willful violations of OSHA’s fall protection standards were found at the company’s Canton steel manufacturing plant. Among them were lack of fall protection while working on runway girders that were 66 feet above the ground, and falls of 30 feet due to missing and damaged guardrails.

Build it, and they definitely will come ■ MetroHealth had hoped its new, $23 million health center in Middleburg Heights would see, on average, about 250 patients per day by the end of its first year in business.

Well, it didn’t quite take that long. While its doors have been open a little more than a month, its November Family Health Center in the southwest suburb is seeing about 400 patients a day.

The unexpected — but welcome — surge in activity isn’t necessarily because of curious patients looking to check out the neighborhood’s latest health care digs, according to Dr. Akram Boutros, MetroHealth’s CEO. Instead, he suggested the rapid influx of patients is evidence of pent-up demand for more health care services in the southwestern tip of Cuyahoga County.

“There’s this notion by other providers in the area that we didn’t need to be there,” Dr. Boutros said. “Well, patients speak for themselves. If we didn’t need to be there, why would they come?”

The “other providers” to which Dr. Boutros refers is Southwest General, the dominant health care force in that part of the county. Southwest General’s CEO

Numbers never lie

COMPANY: Impact Armor Technologies, Cleveland PRODUCT: Line of bulletproof school safety products This is surely a sign of the times.

Impact Armor, which began in 2006 as a producer of high-purity alumina ceramics for use as strike faces in heavy armor, for years has made products that protect police officers and soldiers.

Now it’s using the technology to protect teachers and students, too.

The company says its new school safety line includes a bulletproof desktop calendar, whiteboard and backpack insert “that can stop a bullet at pointblank range.” Products come in standard sizes or can be custom-made, Impact Armor says.

All products are made of the same material as the company’s bulletproof clipboards that police officers use to protect themselves on the streets, as well as Impact Armor door inserts that soldiers use for protection on the battlefield against IED roadside explosive devices, Impact Armor says.

For information, visit: impactarmortech.com.

Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.

Thomas Selden blasted MetroHealth last month for building in his hospital’s backyard.

At the time, Mr. Selden told Crain’s, “I’m irritated by the fact that this country’s cost of health care is being driven by overbuilding and construction. This is not McDonald’s versus Burger King, where you have McDonald’s on one corner, then Burger King building on the other.” — Timothy Magaw

Survey seeks to reveal pathways to success ■ A Shaker Heights research firm wants to find out what it takes for manufacturers to be successful — and to tell companies how they compare to others.

The MPI Group, along with the American Small Manufacturers Coalition and the Association for Manufacturing Excellence, is conducting its biennial Next Generation Manufacturing survey this month. The survey aims to “take the temperature of U.S. manufacturing” and identify paths to improvement from which others can learn, said John Brandt, CEO of MPI. He said they hope to get about 1,000 to 1,500 participants.

The survey covers six areas of interest, from human resources to supply chain management. It gauges how aware manufacturers are of trends and how successful their efforts are. The aggregate results are published, like many surveys, but there is a twist — participants also can receive a custom report that compares their results to that of other companies.

“It’s hard to get that kind of data anywhere else,” Mr. Brandt said.

— Rachel Abbey McCafferty

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

Freeze!: A federal district judge froze the assets of a Richfield hedge fund and its manager on Aug. 13 — the same day the Securities and Exchange Commission sued for a temporary restraining order and other emergency relief, alleging that Anthony J. Davian misappropriated more than $1 million in investor money. Mr. Davian promoted Davian Capital Advisors LLC as a successful investment management firm managing a portfolio of profitable hedge funds, “but Davian Capital is nothing more than Davian’s personal piggy bank,” the SEC alleged. Assets to be frozen are those in at least 24 accounts listed in the order signed by U.S. District Judge David D. Dowd Jr.

bleachers in left field.

Mr. Adams knows not every fan likes what he does. What he doesn’t get is all the attention he has received.

“I appreciate that someone would take the time to say hello,” he said. “But I’m just a guy cheering the team on. I never set out to do this for 40 years.” — Kevin Kleps

■ It’s a data-mad world, and more companies are expanding the C-suite with the additions of chief analytics officers, a position Forbes.com says “transcends business groups and divisions.”

One big player in the CAO movement is KeyBank.

“The bank had steadily increased its use of analytics over the course of several years, with teams embedded in various departments,” Forbes.com noted. “In 2012, the president of the Community Bank division decided to centralize the function in order to institutionalize data-driven decision making, and brought on David Bonalle as head of a centralized Client Insights function.”

Mr. Bonalle’s role “started with leading an Insights group that teams with all Community Bank departments including Risk,” according to the story. The marketing team also reports to Mr. Bonalle and “sits sideby-side with the Insights team.”

This year, Mr. Bonalle’s responsibility expanded to include supporting the Corporate Bank division, Forbes.com reported.

He told the website that before KeyBank centralized analytics, it used to make a lot of decisions by committee, with less focus on the numbers. Now, everything is numbers-based.

“People have to make their case in data terms,” he said. “We use analytics to force discipline in how to think about the right answers for our customers and for the bank.

The data doesn’t lie.”

Family ties ■ Cleveland law firm Thompson Hine once again earned kudos from Working Mother magazine.

For the third straight year, the firm earned a spot on the publication’s list of “Best Law Firms for Women.”

Working Mother described the firms on the list as those that are “leading the way in attracting, retaining and promoting women lawyers.”

The magazine said 31% of Thompson Hine’s lawyers are women. The firm has an 18% rate of female equity partners and a 28% rate of female nonequity partners.

“Mentoring circles, professional development programs and a business-leader luncheon series help female associates advance here (this year, 25% of all new equity partners are women),” Working Mother said. “New moms get 14 paid weeks off, plus special career guidance.”

The state of things ■ Fortune profiled Mark Kvamme — the California venture capitalist-turnedJobsOhio head-turned Ohio venture capitalist — and his Drive Capital partner, Cincinnati native Chris Olsen, who have big plans in the Midwest.

Kvamme Drive Capital, which recently announced investments in companies from Columbus and Cincinnati, “already has raised $181 million for a debut fund that is targeting a total of $300 million,” Fortune reported.

The plan is to invest that money in tech startups based in Ohio and other Midwestern states.

“At the beginning I was working four days a week in Ohio and then flying back to San Francisco, and had never considered starting something permanent here,” Mr. Kvamme told the magazine.

“But it became clear that there were so many great young companies here — particularly with the fundamental shift to the cloud — but once they begin to grow they almost are required to find funding on the coasts,” he said. “We are coming into a very underserved market.”

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