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“I’m really excited about the future. If you stick around long enough in this industry, it will turn.” – Rick Puzzitiello (left), CEO, Parkview Homes
Cincinnati firm likely suitor for Parmatown Mall Phillips Edison may add to Parma holdings with eye to a makeover of troubled property By STAN BULLARD sbullard@crain.com
MCKINLEY WILEY
FEELING MORE AT HOME Potential buyers’ interest in new construction is bouncing back By STAN BULLARD sbullard@crain.com
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s the key summer home sales season comes to an end, Rick Puzzitiello, CEO of Strongsville-based Parkview Homes, says this already is the company’s best year in the last six. He counts 42 sales this year through last Thursday, Aug. 23, compared with 24 sales for all of last year. He just upped his sales forecast to 60 homes this year from 50. “I’m really excited about the future. If you stick around long enough in this industry, it will turn,” Mr. Puzzitiello said.
But is it back to normal? Not quite. “We’ll be there if we can maintain this pace for two to three more years,” he said. Feeling good and being busy are sensations some Northeast Ohio home builders are starting to experience again, though the boom times of the previous decade are history. The difference this year is that builders say some consumers are regaining their taste for new homes. In the Northeast Ohio move-up market for housing, more would-be buyers either have sold their homes amid the pickup in existing home sales or believe they can. See HOME Page 21
BY THE NUMBERS Strongsville-based Parkview Homes is seeing increased sales these days; here’s a look at other trends in the housing market here: ■ Dinallo and Wittrup Homes: Sold five homes costing upwards of $600,000 in Bainbridge; may try again on 24-home site in Solon. ■ K. Hovnanian: Acquired 67 North Ridgeville home sites, with land to install 700 more. ■ The Home Builders Association of Akron’s members think new developments soon will be needed, after the inventory of distressed lots is gone.
Like locomotives that once roared into America’s towns to transform them decades ago, a well-heeled suitor is steaming toward acquisition of troubled Parmatown Mall and Shopping Center in Parma. Using a name reeking of revival — Parmatown Station LLC — the Cincinnati-based Phillips Edison & Co. retail real estate concern has emerged as the likely buyer of the massive property, according to a settlement agreement in Parmatown’s receivership case in Cuyahoga County Common Pleas Court. Phillips Edison owns a portfolio of more than 25 millon square feet of retail space. It’s engaged in the creation of mixed-use properties,
which is a likely next step for the high-vacancy Parmatown property dating from the 1960s. Moreover, Phillips Edison already knows the marketplace in Parma, Ohio’s seventh-largest with a population of more than 80,000. A real estate investment trust the firm operates, called Phillips EdisonARC Shopping Center REIT, owns the 100,000-square-foot Snow View Plaza shopping center in Parma. The firm’s website says Phillips Edison since 2011 has raised more than $120 million in a “Strategic Investment Fund” that targets redevelopment of troubled shopping centers as mixed-use properties. A mixed-use makeover would seem ideal for Parmatown. The property had vacancy of more than See MALL Page 22
INSIDE Crain’s publishes first MBA guide Find details on 42 MBA programs in this week’s Ohio MBA Guide 2012. PAGES 13-19 PLUS: ■ Armed with new capital, Central Federal Corp. eyes wider footprint. PAGE 6 ■ Drought eats into area food manufacturers’ bottom lines. PAGE 7
Legislators sneak in more tax loopholes despite added scrutiny Study shows breaks keep piling up even as Columbus talks of reducing them By JAY MILLER jmiller@crain.com
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At the same time politicians, including Gov. John Kasich, verbally are jumping on the bandwagon to close state tax loopholes, more tax breaks continue to be added.
According to a study released this month by Policy Matters Ohio, a labor-backed think tank, state legislators and Gov. Kasich in the last year have approved at least nine new or expanded tax expenditures — government-speak for tax exemptions, deductions and credits.
Beneficiaries of the new loopholes are companies that employ people who work at home, financial institutions, two convention centers and firms that work for direct marketers. In addition, the tax credit for movie makers was raised. That move alone could cost the state $20
million over two years, though a Cleveland State University study contends that money and more comes back to the state. The CSU study offered hard evidence, if not irrefutable proof, that convinced the governor and Legislature to expand the film industry credit. But most tax exemptions — the other 126 followed by the Ohio Department of Taxation — lack that
scrutiny and level of analysis. Yet they remain on the books, some for decades, without any clear picture of their role in tax policy. Zach Schiller, Policy Matters Ohio’s research director, said he could not put a dollar figure on the annual cost of all the new exemptions, but estimated the cost in the tens of millions of dollars. And while See LOOPHOLES Page 21
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Community banks slowly emerging from rut Bottom lines better, but regulatory costs put their independence at risk By MICHELLE PARK mpark@crain.com
If the first half of 2012 is any indication, Northeast Ohio’s publicly traded community banks for the year as a whole should turn some of their best bottom-line performances in five years — though in a number of cases, a better bottom line means losing less money, not posting a
profit. And yet, these institutions are hardly out of the woods, as increasing regulatory costs not only threaten to erode their bottom lines, but also might drive some to seek mergers with larger institutions and other community banks. The improvement at community banks is occurring for many of the same reasons larger banks returned
to profitability earlier. Fewer bad loans mean banks don’t need to reserve as much money to cover losses. Loan growth is happening, albeit not as much as most would like, and cost cutting is on the rise. So, why didn’t community banks rebound as quickly as their bigger brethren? One primary reason: Banks need capital to write off bad loans, and not all community banks have
enough of it to do so; in turn, they’ve kept bad loans on the books for longer. Plus, some community bank executives say they didn’t want to sell their clients’ loans on the secondary market and risk the mistreatment of those clients. “We’ll work with (customers) to help them come out the other end,” said Daniel E. Klimas, president and CEO of LNB Bancorp Inc., the parent company of Lorain National Bank. “By doing that, it takes longer.” Mr. Klimas sent a letter to share-
THE WEEK IN QUOTES
holders this month to reiterate LNB’s “significantly stronger earnings,” despite a one-time expense of $300,000 for a systems conversion and a $200,000 charge for legal and administrative expenses related to the U.S. Treasury’s sale to private investors of the LNB stock it owned through the Troubled Asset Relief Program, or TARP. For the first half of 2012, LNB posted a profit of $2.3 million, almost double the $1.2 million it earned in See RISK Page 9
INSIGHT
Drug buoys local firm’s stem cell aspiration
“Parma is a very solid trade area. The population density and demographics are almost the same as those at Westgate in Fairview Park, and it’s a non-highway location.”
Juventas could have leg up on foes trying to produce actual cells
— David Browning, managing director of CBRE Group Inc.’s Cleveland office and the receiver for Parmatown Mall and Shopping Center. Page One
By CHUCK SODER csoder@crain.com
“(Home buyers are) feeling more secure in their positions at work. They are secure in the values of their resales. And they are tired of waiting to build, so they are going ahead.” — Rick Dinallo, vice president, Dinallo and Wittrup Homes. Page One
“He’s going to take the same process and criteria he used in Congress and he’s going to apply them to the tax (expenditures) in Ohio. There’s some low-hanging fruit out there.” — Rob Nichols, spokesman for Ohio Gov. John Kasich. Page One
“We’ve got the ability, if we have to, to go a year and not be as profitable. In a family business, you can just tighten your belt and get through it.” — Bob Kelly, president, Bil-Jac Foods. Page 7
JANET CENTURY
Daniel Sedor Sr., president and CEO of Cleveland-based Voss Industries LLC, at Voss’ Ohio City plant
VOSS ON THE WAY UP Cleveland aerospace manufacturer increases size of space, staff as demand in commercial aviation sector grows By GINGER CHRIST gchrist@crain.com
I
ncreased demand in the commercial aircraft market is giving a lift to a local company in the supply chain. Voss Industries LLC, a metal fabricator in Cleveland’s Ohio City neighborhood that makes clamps, couplings and ducting for aerospace, defense and industrial clients, is enjoying a banner year thanks to its commercial aerospace work, said Daniel Sedor Sr., president and CEO of Voss. Privately held Voss doesn’t disclose actual sales, but Mr.
Sedor said revenues in 2011 were up 25% over 2010. And through the first half of this year, revenues were 29% ahead of last year’s first-half total, he said. Voss generates 40% of its business from the aerospace sector and is seeing increased orders from big clients such as Boeing Co. and Airbus. The two aviation giants are supplying airlines globally that are replacing older aircraft with newer, more efficient models and also are selling aircraft to nations such as China, which Mr. Sedor said still is developing its commercial fleet. See VOSS Page 20
SKY’S THE LIMIT FOR VOSS While domestic air travel is forecast to grow — the FAA forecasts “available seat miles” to rise 2% to 3% yearly — foreign growth is helping Voss Industries LLC. Michael Heil (right), the CEO of the Clevelandbased Ohio Aerospace Institute, said the growth of the commercial aerospace industry in the past
decade has paralleled the growth of China’s economy. “Aerospace is still an export industry for the U.S.,” he said. “I think the main driver is specific countries; particularly, the big dog there is China. As we all know, China’s economy is booming.”
Juventas Therapeutics Inc. is a drug company competing against stem cell companies. That distinction could give the young Cleveland company a leg up on other businesses trying to hit it big in the regenerative medicine business, according to JuAras ventas CEO Rahul Aras and a few people who follow the industry. Juventas has developed a drug designed to trick the body into sending more stem cells to the site of an injury than it otherwise would, thereby speeding up the healing process. By making a drug, Juventas should be able to sidestep a few big challenges faced by companies developing therapies that use adult stem cells. Drugs are easier to make than stem cells, and they tend to be easier to store, according to Dr. Aras and others interviewed for this story. Plus, investors and regulators are more familiar with drugs, which should make it easier for Juventas to raise cash and get its product to market, they said. “You get the benefits of regenerative medicine without the complexity See DRUG Page 12
CORRECTIONS ■ An Aug. 20, Page 3 story misstated the number of stores operated by Jo-Ann Stores Inc. Jo-Ann has 780 stores nationwide. ■ An Aug. 20, Page 1 story misspelled on a few occasions the name of Will Joliat, the vice president and general manager of AllTech Medical Systems America Inc.
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Third Frontier leaders settle on way forward Plan spares entrepreneur services, IDs four sectors deserving of added attention in future By CHUCK SODER csoder@crain.com
COLUMBUS — The turbulence that has rocked the Ohio Third Frontier program over the last several months has subsided. After a two-day retreat, the commission that runs the technologyfocused economic development program emerged with a plan that would make only minor changes to its Entrepreneurial Signature Program, which is a key source of financing for Cleveland-based JumpStart Inc. and other Northeast Ohio nonprofits that provide services to entrepreneurs. Members of the Ohio Third Frontier Commission also are considering putting extra emphasis on investing in biomedical technology, shale gas exploration technology, information technology and unmanned aerial vehicles, according to a draft document that describes their plans for the Third Frontier program. They came to an agreement on a few other issues, too, which should help the commission work through a huge backlog of awards it was supposed to make during its last fiscal year, which ended June 30. The group to date has awarded about $72 million of the $190 million set aside for that 12-month period. Officials from the Ohio Department of Development have said the awards process has been slow because employees from the department needed extra time to shape several Third Frontier programs that were
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“It’s now been pulled together in a coherent way that has rallied everyone behind it.” – Rick Fearon, member, Ohio Third Frontier Commission created or changed in 2011. Now, however, the direction of the Ohio Third Frontier program is clear, and the people running it are moving in that direction as a group, said commission member Rick Fearon, who also is vice chairman and chief financial and planning officer at Eaton Corp. in Cleveland. “It’s now been pulled together in a coherent way that has rallied everybody behind it,” Mr. Fearon said. “We have buy-in.”
Opening the floodgate? Besides approving the draft document detailing its vision for the Third Frontier program, the commission took a step it originally planned to take in the spring: The group voted to provide a total of $9.5 million to fund for another two years entrepreneurial services offered by Cincinnati-based CincyTech and the Dayton Development Coalition. That vote bodes well for JumpStart and other Cleveland-area organizations that work with entrepreneurs. Through JumpStart, a total of 17 local groups have applied for $15 million that they would use to provide services for another two years. JumpStart, which would receive $9 million of that money, also has applied for another $5 million for an initiative that would involve its counterparts in other regions across the state. Although the commission has spent a lot of time scrutinizing the effectiveness of the Entrepreneurial Signature Program over the last several months, it did little to change it. The biggest potential change has yet to be decided on: The commission is thinking about hiring an independent third party to collect job creation data and other statistics from the companies that work with the nonprofits participating in the program. Today, the nonprofits collect and submit that data, which is used to judge their performance.
Points of emphasis
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Commission members made a few other changes as well: ■ In the draft plan, they singled out four sectors — biomedical, shale gas exploration, information technology and unmanned aerial vehicles — that they believe warrant special attention from the Third Frontier program. The commission previously identified about a dozen technology categories that the group thinks can drive job creation in Ohio; it still will
award money to projects and companies focused on those technologies, but said the four sectors it singled out are primed for even more growth. Focusing more attention on a few technologies should help Ohio make a name for itself in those sectors, according to advisory board member Jim Leftwich, a management consultant who previously was CEO of the Dayton Development Coalition. “We can drive a stake in the ground and say, ‘Ohio is going to be known for this,’” said Mr. Leftwich, who briefly served as director of the Ohio Department of Development in 2011. ■ They are planning to include food and agribusiness in the broader list of technology areas on which the commission will focus. Fuel cell technology also is on that list, but a few members of the commission and its advisory board talked about the possibility of removing it, arguing that the market for fuel cells hasn’t expanded as fast as anticipated. However, a few members of the two boards were hesitant to do so, including advisory board member Tom Waltermire, who is CEO of business attraction agency Team NEO. While the auto industry hasn’t yet adopted fuel cells widely, the technology is used in niche markets and has the potential to impact the electric grid, Mr. Waltermire said. He noted how Korean conglomerate LG in June paid $45 million to buy 51% of Rolls-Royce Fuel Cell Systems (US) Inc. of North Canton. “I think it needs more conversation,” Mr. Waltermire said. ■ They put to rest the idea that they only would fund companies and research projects that would produce significant jobs within three to five years. Gov. John Kasich and commissioner Mark Kvamme, who was appointed by the governor to oversee the state’s job creation efforts, have suggested that the Third Frontier focus more on projects that can provide a fast return on investment. Though the commission talked about removing that timeframe, the group eventually decided to keep it as a soft target that would apply to most of the money it awards. Members said they’ll still make longer-term investments, too, which pleased advisory board member John Huston, founder of Ohio TechAngels, a Columbus-based group of individual investors.
So long, saboteurs Mr. Huston argued that organizations such as his invest Third Frontier money in startups that often take much longer than five years to mature, but which eventually can attract bigger investments from venture capital groups. “We really need to focus on the early stage and not think venture capital is the end all, be all,” Mr. Huston said. A few months ago Mr. Huston joked that the Third Frontier program had been overtaken by “saboteurs from Michigan and Pennsylvania,” but following the retreat he said he was pleased with the direction of the program. So was Mr. Waltermire, of Team NEO. “We’ve made big progress in this program over the past three months,” he said. ■
Volume 33, Number 33 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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NASA Glenn sticks with master plan, if only a delayed version Center will spend $25M annually through 2014, up from $11M previously By CHUCK SODER csoder@crain.com
NASA Glenn Research Center no longer describes the plan to reshape its two campuses as a 20-year effort. Twenty to 30 years is more like it, says center director Ramon Lugo III. NASA Glenn in February announced that budget constraints would force it to delay the construction of several new buildings, in some cases by four or five years. The center instead will focus on rebuilding its utility systems over the next three years, starting this spring. The retooled master plan — which calls for NASA Glenn to demolish nearly a third of the buildings on its campuses and replace them with newer, more centralized buildings that take up less space and use less energy — will help the center make the most of its money, Mr. Lugo said. NASA Glenn can start saving money on its bills right away by replacing its water, gas, sewer, steam and electric systems, Mr. Lugo said. Those savings will help the research center fortify its budget and compete for federal dollars to finance other construction projects, he said. “We get savings right away, and we compound the savings when we put a new building on top of” the new utility systems, he said. Though NASA Glenn will be erecting fewer new buildings, it will spend a lot more on construction related to utilities over the next few years: The center spent an average of about $11 million on infrastructure projects during fiscal years 2005 through 2010. By comparison, the center will spend an average of $25 million per year in fiscal 2012, 2013 and 2014. Those figures include money for road construction and other projects, but the increase is related entirely to the utility work.
back much of that work because the center didn’t receive the significant budget increase it expected to get in fiscal 2010. For instance, construction on the center’s new administration building originally was scheduled to start in fiscal 2015; it now won’t begin until fiscal 2017. Another building will be pushed back two years and several others will be delayed by four or five years, Mr. Morris said.
Already in gear However, some of the work in the master plan already is complete or is under way now. ■ NASA Glenn about a year ago finished building its new main gate and adjoining security building.
■ The center is in the process of building both a shipping and receiving facility next to Brookpark Road and a new warehouse on the west side of its main campus. ■ About a year ago, the center started constructing what it is calling its centralized office building on the east side of campus, next to Cleveland Hopkins International Airport. NASA Glenn’s engineering team will move into the 95,000-squarefoot building late this year or early next year. ■ The federal government on July 2 opened an online auction in an effort to sell two of NASA Glenn’s buildings north of Brookpark Road. The buildings, which housed a variety of employees and contractors, are
outside the center’s main gate. They are in need of renovation and contain asbestos. No bids had been received as of 10 a.m. last Wednesday, Aug. 22. ■ Next year, NASA plans to start building a new main entrance facility on the east side of the Plum Brook Station campus. Doing so will allow incoming traffic to avoid residential areas near the current entrance on the north end of campus and more easily reach Plum Brook’s two main testing facilities. The master plan was introduced in 2007 and was updated in mid2010. It will need to be revised again to reflect these new plans, Mr. Lugo said, joking that master plans often go out of date almost as soon as
UP NEXT FOR GLENN NASA Glenn’s master plan has changed slightly, but at its core remains a goal of becoming more efficient. The agenda going forward includes: ■ rebuilding its utility systems, including water, gas, sewer, steam and electric, over the next three years ■ demolish nearly a third of the buildings on its campuses and replace them with newer, more efficient buildings; Glenn will spend $25 million annually from 2012-14 they’re created. “We need to update our master plan based on our budget realities,” he said. ■
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The squeeze is on The work needs to be done, Mr. Lugo said. NASA Glenn already spends a lot of money repairing broken water lines and fixing problems with its power and sewage systems, he said. The center’s compressed air system also has been known to spring leaks, he said. The new utility systems not only will be more dependable, but they also will be more efficient. The added efficiency is expected to help NASA Glenn save money on its bills and meet its goal for reducing energy and water use. NASA headquarters is asking NASA Glenn to reduce energy use by 3% each year and reduce water consumption by 2% annually, said Joe Morris, chief architect at the center. The federal agency also expects NASA Glenn to reduce the total amount of indoor space it uses at both its main campus in Brook Park and its Plum Brook Station campus near Sandusky. Thus, the center during the next 20 years or so plans to reduce the total amount of physical space on its two campuses by 616,000 square feet, or 17%. New structures at the main campus will be built closer together, making it easier to walk between them. “We’re really trying to condense our campus,” Mr. Morris said. NASA Glenn officials are pushing
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With fresh capital, Central Federal eyes a wider footprint New leadership looks to markets where it’s established contacts, like Cleveland, Cincy
“We’re looking to attack the market. As businesses grow, we grow.”
By MICHELLE PARK mpark@crain.com
– Thad Perry, new president, Central Federal Corp., the parent compant of CFBank
If the vision shared by the new leadership of Central Federal Corp. comes to fruition, the company’s subsidiary, CFBank, will become a community bank that does business in more metropolitan areas in Ohio than most institutions its size, including two markets it really hasn’t tackled: Cleveland and Cincinnati. Appointed formally last Thursday, Aug. 23, by the Central Federal board, Tim O’Dell is now CEO; Thad Perry, president; and Bob Hoeweler, chairman. The men also are three of five new directors added to the company’s board, which now numbers 10. The company’s new leadership was ushered in by last week’s announcement that, at long last, Fairlawn-based Central Federal successfully raised the millions of dollars in capital it had spent two years seeking. In an interview with Crain’s last week, the bank’s new leadership revealed that it aims to grow CFBank by serving more small to midsize businesses and by expanding the bank’s feelers into Cleveland and Cincinnati — markets where some of its new investors do business, and where the new executives themselves have substantial experience
and contacts. “We’re looking at attacking the market,” Mr. Perry said. “As businesses grow, we grow.” The executives plan to increase lending — both commercial and residential mortgages — in the company’s four existing markets, too. They include Fairlawn and, by extension, Akron; Wellsville and Calcutta, both in Columbiana County, where the goal is to capitalize on the growth caused by the Utica shale expansion; and Worthington, just outside Columbus. “That footprint makes us unique and gives us a lot of energy and synergy,” Mr. Hoeweler said. The new leaders’ growth plans for the institution, which counted $225.6 million in assets as of last June 30, contrast starkly with the retrenching and shrinking of the balance sheet that took place in recent years as Central Federal lost millions of dollars and was placed under a regulatory cease-and-desist order because of its weak capital levels. Growth won’t be in the form of stand-alone branches from the get-go, though. Instead, the plan is to build business through bankers in offices and then, if and when business demands it, invest in branches, Mr. Perry said. To that end, Central Federal is in the process of hiring “several” expe-
O’Dell
Perry
rienced bankers, each of whom the new executives expect to bring the company a book of business, Mr. Perry said. At present, Central Federal employs 60 to 65 people across its four locations.
Downstate connections Mr. O’Dell is the former president and CEO of Fifth Third Bank of Central Ohio and founder and principal of Chetwood Group, a strategic business advisory firm. Mr. Perry has worked as a consultant in recent years and previously was a senior partner with Accenture. Early in his career, he said he audited community banks for Arthur Andersen. And Mr. Hoeweler is CEO of a group of companies owned by the Hoeweler family. All three men cited Central Federal’s platform for expansion as the reason they agreed to invest in the company themselves and to lead a group of standby purchasers who invested at least $4.5 million of the $22.5 million in capital that was raised. “Everything was in place other
Hoeweler
Mackus
than capital,” Mr. O’Dell said. None of Central Federal’s new executives live in Northeast Ohio. Mr. O’Dell lives in the Columbus suburb of New Albany and said it’s “to be determined” whether he’ll move closer to the company’s headquarters. Mr. Perry also lives in New Albany, but said he spends a lot of time on the road; and Mr. Hoeweler lives and will remain in Cincinnati. When asked, given where they live, whether there might be a relocation of Central Federal’s headquarters, Mr. O’Dell replied, “Not one that’s contemplated.”
Finally, capital at hand Of the $22.5 million raised, $13.5 million will be invested into CFBank to improve its regulatory capital ratios and to grow it, and $3 million will be used to redeem the Troubled Asset Relief Program (TARP) stock and warrants held in Central Federal by the U.S. Department of the Treasury. The rest will stay with the parent company and can be used for expansion, Mr. O’Dell said. Departing CEO Eloise J. Mackus
With Wi t its ccon th onnve onve veni n ennt lo ni loca cati ca t on ti o and eas asy ac acceess s ibilit ityy too th t hhee hea ear art r t of do down down w ntow own w n Cleeveela land nd,, it nd it’s ’s tim imee to pput ut Burr ke k to wo work rk ffor or yyou ourr co ou comp mpan mp any. an y. Fin indd ou outt mo more re at bu burk rke rk keeaairirpo portt .ccom. om m.
said the fresh capital “will give us an opportunity to expand much more quickly.” “Now, there’s enough money for us to go out and make good, solid loans,” Ms. Mackus said. Though executives said the company wouldn’t proceed with an acquisition until the May 25, 2011, cease-and-desist order is lifted, merger and acquisition activity is still an interest. “If somebody needs to divest a branch or sell a bank and we have capital, we should at least be on the bid list,” Mr. Hoeweler said. Regulators have informed the bank that it needs to pass another regulatory exam before the ceaseand-desist order can be lifted, Ms. Mackus said. “The only thing we weren’t in compliance with was capital,” she noted. Ms. Mackus was to remain with the company as general counsel, which has been one of her roles since joining the bank in 2003. However, last Thursday it was announced that she will leave Sept. 12 to become president and CEO of Security Bank, a slightly smaller institution in Springfield, Ill. ■
B U R K E M E A NS B U S I N E S S.
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Drought eating into NE Ohio food manufacturers’ bottom lines By GINGER CHRIST gchrist@crain.com
Local food manufacturers are feeling the heat as they deal with the effects of one of the country’s worst droughts in a quarter-century. Faced with rising prices for their raw ingredients, companies are forced to accept either lower margins or try to pass along higher prices to consumers in a still-fragile economic recovery. For companies such as Shearer’s Foods, a Brewster-based snack food manufacturer that is dependent on products from potatoes to corn and corn oil, the effects are far-reaching, according to Jim Allan, the company’s vice president of strategic sourcing. “Our business is such a commodity-driven one when it comes to profits, it affects us a lot,” Mr. Allan said. While the drought’s full impact on pricing won’t be realized until the fourth quarter, once all of the pertinent crops have been harvested, Mr. Allan said his company and others already are feeling the pinch. Spot prices for commodities are up, with some products such as peanut oil up as much as 25% from July 2011, according to an August oil crops report by the U.S. Department of Agriculture. As of last Wednesday, Aug. 22, the USDA had designated 1,692 U.S. counties, including 10 in Ohio, as natural disaster areas because of the drought. U.S. corn production is expected to be at a six-year low of 10.8 billion bushels and soybean production is forecast at a nine-year low of 2.7 billion bushels, according to an Aug. 10 USDA report. A shortage of some crops and the accompanying price increases associated with low supply have a trickledown effect on other materials, said Bob Kelly, president of Bil-Jac Foods, a Medina-based pet food company. Bil-Jac, which uses a lot of chicken to make its pet foods, is seeing a 30% to 35% spike in poultry costs compared with last year, Mr. Kelly said. Because the cost of corn used to feed chickens is up, so, too, is the price of chicken — and processors are passing on those cost increases to food manufacturers such as Bil-Jac, he said. “We’re seeing higher prices than we’ve ever seen,” Mr. Kelly said. “It’s so much you can’t pass it all on.” While Bil-Jac hasn’t yet decided to raise consumer prices, the company in the past has increased prices when operating expenses rise, Mr.
Kelly said. However, he said it’s unlikely consumers would accept price hikes that would reflect the degree to which commodity prices have increased, and the company does not want to risk losing customers, he said. “We’ve got the ability, if we have to, to go a year and not be as profitable,” Mr. Kelly said. “In a family business, you can just tighten your belt and get through it.”
What goes up … To minimize the hit it takes on rising prices, Shearer’s is looking for ways to cut costs and is booking futures contracts for longer periods of time. The company, which normally would lock in prices for one
or two quarters for its mainstay — corn oil — now is covered through the third quarter of 2013. “Just because we feel there’s no opportunity for prices to go down, we’re paying a premium for those forward months,” Mr. Allan said. That move protects the company against additional price hikes and gives it some stability, Mr. Allan said. But that step also involves risk, as the company could lock in prices today that could fall in the event of a normal growing season next year. Despite its efforts to keep material costs down, Shearer’s will need to consider raising prices for consumers, Mr. Allan said. “It’s inevitable,” he said. “As commodity prices rise, the cost of
not just the snacks we make, but everything in the grocery aisle rises.”
Pumped-up pumpkins The drought is taking a toll on yields and on prices, but for Nestlé USA, there is a small upside, according to Roz O’Hearn, spokeswoman for the food manufacturer in Solon. She said the lack of rain on some of Nestlé’s non-irrigated pumpkin fields in Morton, Ill., has made the crop “meatier. … They’re really dense.” “It’s going to be a great pumpkin to can,” Ms. O’Hearn said. Still, far more crops are hurt by the drought than are benefiting from it. Even with meatier pumpkins, Nestlé will need to deal with a
much lower yield of the crop, she said. The company hasn’t decided yet if it will raise prices on its Libby’s 100% Pure Pumpkin pie filling. “It’s enough that we’re struggling to hold the prices to last year’s prices,” Ms. O’Hearn said. King Nut Cos. has been able to insulate itself from rising prices through well-timed ordering, according to Martin Kanan, president and CEO of the Solon-based snack food supplier. “The good part is we locked in our prices before the drought hit,” Mr. Kanan said, noting that the company typically secures contracts with suppliers one to two years in advance. “That spared us from any of the ups and downs.” ■
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BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s highlighting positive business news. To submit information, email Scott Suttell at ssuttell@ crain.com. ■ Law firm Baker Hostetler said Cleveland litigation partner Jose Feliciano will be honored with the Community Catalyst Award at the 2012 International Entrepreneur Awards ceremony Sept. 20. The award recognizes Mr. Feliciano for his efforts in creating global connections for Northeast Ohio. The International Entrepreneur, known as TiE, bills itself as the world’s largest organization for fostering entrepreneurship. The Ohio chapter “fulfills a critical niche in Ohio’s business development landscape by focusing specifically on immigrant and minority entrepreneurs within the region, and by encouraging other such entrepreneurs to consider Ohio as a place to launch their new businesses,” according to Baker Hostetler. TiE Ohio provides focused support to entrepreneurs through mentoring, business education programming and a business venture competition. ■ Great Lakes Brewing Co. said
it’s expanding into eastern Pennsylvania next month through a deal with All Star Distributing. The Cleveland craft brewer’s products already are in western and central Pennsylvania, as well as the Philadelphia market. The All Star distribution deal gives Great Lakes blanket coverage throughout the state. Starting Sept. 24, customers in eastern Pennsylvania will be able to buy Great Lakes’ family of beers in bottles and on draft. “Many breweries choose a strategy of being a mile wide and an inch deep. We prefer to penetrate deeper into existing markets,” said Pat Conway, co-owner of Great Lakes with his brother, Dan Conway. Great Lakes’ products are in 13 states and Washington, D.C. ■ Ultra Tech Machinery Inc. and its sister company, Motch & Eichele, a machine tool distributor, recently held an open house to commemorate the grand opening of their new plant in Cuyahoga Falls. The event featured a tour of the 80,000-square-foot plant, which is used for the design and building of precision machinery and automation equipment. Attendees were given the opportunity to view Motch & Eichele’s new Ganesh showroom,
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which features a selection of their turning centers, the company said. Also on the shop floor was a fully automated system featuring four turning machines and super finishing machines.
GOING PLACES
■ Fidelity Voice and Data, a telecommunications company in Beachwood, said it launched a cloud services product offering called InterCloud. InterCloud “provides businesses with a telecommunications option that does not require a large upfront investment and will easily scale to changes in their organization at any time,” according to Fidelity Voice. “The service is reliable, fault tolerant and highly available, to allow business owners full access to their data and keep them up and running.” The cloud product is built on VMware vCloud software. Data is replicated between multiple cities to provide a high level of data integrity, the company said.
AXSIUM GROUP: Thomas Pierce to director.
■ Improv Electronics of Kent said the company and its Boogie Board LCD e-writers received three awards at the recent Learning Express Toys annual convention in Last Vegas. Learning Express, an educational toy retailer, named the Boogie Board its Toy of the Year and Best Science/Whiz Kid Toy. The retailer also honored Improv Electronics as its New Vendor of the Year.
JOB CHANGES CONSULTING
FINANCE FIFTH THIRD BANK NORTHEASTERN OHIO: Andrew Pyros to vice president, health care banking relationship manager.
Pyros
Gibson
Cunix
Neumann
Matticola
Stephens
Lapine
Roth
Erenburg
MEDICAL MUTUAL OF OHIO: Steffany Matticola to executive vice president and chief of staff.
Gudel
Kurtz
Soll
PROFESSIONAL LIABILITY SERVICES INC.: Al Stephens to senior account executive.
SERVICE
KEYBANK: David S. Gibson to vice president, relationship manager, Dealer Services.
FINANCIAL SERVICE APPLE GROWTH PARTNERS: Susan Burnoski to audit manager; Mark Lapikas and John Valle to tax managers; Krista Clark, Meredith Menich and Mike Selzer to senior associates; Brigitta Gut to associate; Eric Nichols and Matthew Savko to tax associates. BOGART, CUNIX & BROWNING LLC: David L. Cunix to managing partner.
HEALTH CARE AKRON GENERAL HEALTH SYSTEM: Thomas R. Neumann to senior vice president, strategy, marketing and communications.
INSURANCE
LEGAL MCCARTHY, LEBIT, CRYSTAL & LIFFMAN CO. LPA: Anne M. Proano to of counsel. MILLER GOLER FAEGES LAPINE LLP: Kenneth M. Lapine to partner.
EVENT SOURCE: Deborah Halkovics to Cleveland area account executive. FLEET RESPONSE: Jeffrey Fender to vice president, sales and marketing; Jeffrey Bonchek to vice president, sales, western region.
TECHNOLOGY
NICOLA, GUDBRANSON & COOPER LLC: Michael J. Bertsch to of counsel; Kathleen E. Gee to associate.
PARAGON CONSULTING: Jordana Revella to director of digital marketing strategy.
TUCKER ELLIS LLP: Jennifer Roth to associate.
UTILITY
WALTER & HAVERFIELD LLP: Kristin R. Erenburg to associate. ZIMON LLC: Jeffrey D. Zimon to founder and principal.
MANUFACTURING PRESTOLITE PERFORMANCE: Aron Beach to chief financial officer. VENTURE LIGHTING INTERNATIONAL: Tim Gehling to East Coast regional sales manager.
MARKETING FAHLGREN MORTINE: Samantha Irons to account associate.
FIRSTENERGY CORP.: James F. Pearson to senior vice president, treasurer; Bennett L. Gaines to senior vice president, corporate services and chief information officer; Steven R. Staub to executive director, assistant treasurer; James Whitley to executive director, corporate security and IT compliance; Gary D. Benz to vice president, supply chain; John W. Judge to vice president, corporate risk and chief risk officer. FIRSTENERGY GENERATION: Raymond L. Evans to vice president, environmental.
KIWI CREATIVE: Maeghan Gorman to marketing maven/sales strategist.
BOARDS
NONPROFIT
ALZHEIMER’S ASSOCIATION CLEVELAND AREA CHAPTER: Brian J. Richardson (SherwinWilliams Co.) to president.
CLEVELAND HEARING & SPEECH CENTER: Kelley Gudel to speech language pathologist; Madelyn Kurtz to outreach specialist; Melinda Soll to sign language interpreter. MUSIC SETTLEMENT: Jim Kozel to director of development. NEIGHBORHOOD ALLIANCE: Dawn Meyer to vice president. ROCKY RIVER PUBLIC LIBRARY: Rebecca Spuhler to fiscal officer. TEAM NORTHEAST OHIO: Paul Boulier to vice president, business attraction; Michael Lalich to research associate.
PURCHASING MANAGEMENT ASSOCIATION OF CLEVELAND: Amy Gress (Ridge Tool Co.) to president; Marlene Strande to vice president; Nick Kousma to secretary/ treasurer.
RETIREMENT FIRSTENERGY CORP.: William D. Byrd, after 35 years, effective Sept. 1.
Send information for Going Places to dhillyer@crain.com.
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Risk: At smaller banks, Auto loans moving up to-do lists generating profitability Number of long-term delinquencies declines as car payments rate ahead of other debts growth is more difficult continued from PAGE 3
the first half of 2011. “There’s no doubt that the community bank industry is healthier than it has been in years,� Mr. Klimas said.
‘More work to do’ Still, sustained profitability remains an elusive goal for a number of institutions. Ohio Legacy Corp, the parent company of Premier Bank & Trust in North Canton, posted a $33,039 profit in this year’s second quarter — its first profitable quarter in more than four years from an operating earnings standpoint, said Rick L. Hull, president and CEO. He makes that distinction because the bank realized a large gain from the sale of two branches in Wooster in the final quarter of 2011. Ohio Legacy in a recent regulatory filing noted that it is generating feebased revenue through the wealth management business it began in April 2010, and that it converted the main system used to process all accounts in April 2012 to reduce costs and expand product offerings. However, Ohio Legacy remained in the red for the first half of 2012 to the tune of $181,935. PVF Capital Corp., the parent of Park View Federal Savings Bank, announced its second consecutive quarterly profit just last week. PVF’s fiscal third quarter, which ended March 31, marked the bank’s first quarterly operating profit since the third quarter of fiscal 2008. Those two quarters of profit didn’t prevent PVF from posting a loss for fiscal 2012 of $1.3 million, though that deficit was much less than the $9.7 million it lost in fiscal 2011. PVF president and CEO Bob King credited the company’s recent success to the management team that joined the bank in late 2009. That team has improved operating efficiencies, “dramatically� reduced the bank’s problem assets and grown commercial loan activity, Mr. King said. Meanwhile, its residential mortgage business remains strong. “I’m very proud of what these people have accomplished, but one quarter does not a trend make,� he said prior to last week’s earnings report. “We’ve got a lot more work to do.� Another still reaching for profit is Central Federal Corp., the parent of CFBank in Fairlawn, which has lost money in all but one year since 2007 — red ink totaling more than $23 million. But Central Federal also revealed last week that it successfully completed a recapitalization two years in the making — something that should mean it will lend more to local businesses, said an adviser to the deal.
Hurdles to clear Fred Cummings said his Pepper Pike investment firm, Elizabeth Park Capital Management, is increasing its community bank positions selectively. While he agrees that the worst is behind community banks, he wants to know: “Where do they go from here? Where do they get growth from? How can they generate respectable returns on equity for investors?
“I don’t think the community banks’ profitability will improve as much as the larger banks because they’re less diversified on the revenue side,â€? Mr. Cummings said. Robert L. Palmer, president and CEO of the Community Bankers Association of Ohio, which counts 221 community banks in the state, also sees challenges. “There’s every indication that (improvement) will continue,â€? he said. “There’s also every indication that it’s not going to accelerate.â€? Mr. Palmer cited a “tremendous amount of apprehensionâ€? about the coming presidential election and uncertainty about taxes, including the pending expiration of the Bushera tax cuts, which are causing businesses to adopt a “wait-and-see attitude,â€? stifling loan growth. Even executives of Middlefield Banc Corp., the only publicly traded community bank in Northeast Ohio that’s been profitable every year since 2007, have concerns for the future. The Federal Reserve has made it clear that interest rates will remain low well into 2014, which will compress banks’ net interest margins, Middlefield Banc president and CEO Thomas Caldwell said. And community banks are impacted disproportionately by the costs of complying with both the DoddFrank Wall Street Reform and Consumer Protection Act and the Consumer Financial Protection Bureau’s initiatives, bank insiders said. “One thing that concerns me greatly for the performance of community banks is the ‌ increasing regulation that is coming down the pike that will only increase overhead costs more for community banks than the larger (institutions),â€? said Jim Heslop, executive vice president and chief operating officer for Middlefield Banc.
More mergers ahead? Mr. Cummings is yearning to see not just a return to profitability, but also increased dividends and a return to 1% return on assets, which some regard as the benchmark for a solidly performing bank. Many community banks are in the 0.65% range, he said, citing data from SNL Financial. “The best ones will get back to 1%,â€? Mr. Cummings said. “That’s going to separate those that should remain independent and those that should sell. “Some banks might say, ‘We’re going to throw in the towel and we’re going to sell to a larger bank that has the ability to grow revenues,’â€? he said. Mr. Palmer of the Community Bankers Association is among the industry insiders who anticipate that mergers and acquisitions will increase as banks seek to boost earnings by becoming larger to better absorb the rising costs of regulation. “I think some community banks will look to take advantage and expand in their markets,â€? Mr. Palmer said, predicting both acquisitions by community banks of other banks and single branches. “I think you’re also going to see community banks becoming more creative in the product area.â€? â–
By JIM HENRY Automotive News
More people are making an effort to pay their automobile loans ahead of other debt, credit bureau TransUnion reports. Nationwide, auto loan delinquencies of 60 days or greater — those that are most likely to be written off — hit a record low in the second quarter of 2012, for the second quarter in a row, TransUnion said. The company has been tracking the data since 1999. TransUnion said the secondquarter delinquency rate was 0.33%, down from 0.36% in the first quarter of this year. Year over year, auto loan delinquencies dropped 25% from 0.44% in the second quarter of 2011. “Consumers are doing a good job handling their obligations,� said Peter Turek, automotive vice president for TransUnion’s financial services business unit, in a statement. Mr. Turek cited a TransUnion study conducted earlier this year
that found that since the recession, consumers that are experiencing trouble paying all their bills are putting car payments ahead of mortgage or credit card debt. That’s because they need their cars to get to work and keep their jobs. In previous downturns, mortgages had come first, Mr. Turek said. In addition, because used-car values are strong, customers are less likely to be upside down in their auto loans — that is, owing more than the car is worth. That’s an additional motivation to keep their auto loans current, Mr. Turek said. However, while customers are falling behind in their payments less, an increase in subprime auto lending has reached the point where delinquencies likely will increase in the second half of this year, Mr. Turek said. “Directionally, they will be up but still pretty low versus the most recent past,� he said. Earlier this month, Melinda Zabritski, director of automotive lending for auto industry data
“It’s impressive to see auto loan delinquencies remain so low despite ... new loans going to nonprime customers.� – Peter Turek, automotive vice president, TransUnion
provider Experian Automotive, voiced a similar opinion. TransUnion data show that the volume of lending to nonprime customers — defined by TransUnion as customers with a credit score below 700 — was 36.6% in the second quarter. That was an increase of about 9% from the first quarter, and a 20% increase from a year ago. The average bank auto debt per borrower was $13,427 in the second quarter, up nearly 6% from $12,689 a year ago, TransUnion said. Noted Mr. Turek: “It’s impressive to see auto loan delinquencies remain so low despite a growing proportion of new loans going to nonprime consumers.� ■Jim Henry is a special correspondent with Automotive News, a sister publication of Crain’s Cleveland Business.
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Boxed in
T
hanks to the inaction of his Republican colleagues in the Legislature, Ohio Secretary of State Jon Husted was left with the thankless job of setting uniform early-voting hours for all 88 Ohio counties in the weeks leading up to the Nov. 6 general election. Before the next election cycle comes around, state lawmakers should craft legislation that would settle the earlyvoting issue so that the secretary of state, whoever he or she is, isn’t put in the position of serving as sole arbiter of what the appropriate hours are. Mr. Husted had wanted to leave his hands off this politically charged process. However, it became apparent that, absent decisive action on his part, a mishmash of early-voting rules would exist across the state as county boards of election set differing hours for the in-person voting that begins Oct. 2. So, amid squawking by Democrats, who professed to be concerned about fairness, that he give all Ohioans equal access to the early-voting process, Mr. Husted made a decision. He set the hours from 8 a.m. to 5 p.m. weekdays the first three weeks, and 8 a.m. to 7 p.m. weekdays the last two weeks, with no weekend hours. It was a case of “be careful what you wish for,” because the howling was immediate from officials in largely Democratic counties where the boards of election already had approved weekend voting hours. The response even was defiant in Dayton’s home of Montgomery County. There, two members of that county’s board of elections continued to press for weekend voting hours even after Mr. Husted’s directive had been issued. He rightly suspended the duo — both Democrats — for their disobedience to his legal authority. Would weekend hours allow more people to vote in person? Of course they would. However, keep in mind that the vast majority of counties had not extended early voting to Saturday and/or Sunday; their boards of election may have made their decisions based on cost, or a lack of manpower, or both. Mr. Husted had to balance the benefits of expanded in-person voting opportunities against the difficulties many counties may have faced in opening the voting much beyond the normal business hours of their boards of election. We believe his choice represents a reasonable compromise, especially with the later weekday hours in the two weeks leading up to Election Day. As for complaints that the hours still don’t do enough to accommodate people with jobs, there always is the option of voting by mail using an absentee ballot. Hundreds of thousands of voters already are choosing this option, and even more likely will do so because this fall every Ohio voter — whether or not they ask for it — for the first time will receive an application for an absentee ballot. These options give anyone who truly is interested in the election process the means to participate in it by exercising their right to vote. From there, individual responsibility kicks in — and that’s something that can’t be legislated.
FROM THE PUBLISHER
It’s time to clear the air — twice over
F
irst things, first: a correction. extra cash laying around looking for a use. I managed, in my recent col“The situation is a perfect rationale for umn item regarding the potential county government and for removing sale of Acacia Country Club, to city boundaries,” John wrote. “I would magically move the old Donald Rossnever write a letter that claims to know designed golf course from Cedar Road in the best use of the property, but I fear for Lyndhurst all the way to Chagrin Boulethe future costs unless someone is able vard in Beachwood. No easy feat, I to endow it now for perpetual care.” understand. But think for a moment So I will repeat the message BRIAN about his point regarding a I passed along (red-faced, if TUCKER county with no boundaries. that’s possible via email) to my Imagine the political influence old friend John Hexter when he of Cleveland (or “Cuyahoga,” for pointed out my mistake: “Argh that matter) as a single entity, … and to think of all the times much like San Francisco. I’ve been there.” Wow. It is indeed in Lyndhurst, near **** the Legacy Village shopping DESPITE ALL THE FUSS by development, and has been the some about the potential envitarget of would-be developers ronmental damage of hydraulic for many years. Most recently, the Confracturing, there has been another upside servation Fund had submitted a bid of raised in addition to the economic nearly $15 million to preserve the land. boon it promises for Ohio. The air is But as John so correctly pointed out to cleaner. me, the challenge then becomes the cost Here was the lead paragraph from an of upkeep, assuming it isn’t just left to be Associated Press storylast week: “In a an overgrown chunk of land. No municsurprising turnaround, the amount of ipality in Ohio seems to have a lot of carbon dioxide being released into the
atmosphere in the United States has fallen dramatically in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.” The story went on to explain that the rapid change caught many global climate scientists by surprise, in part because it was happening as a result of market forces rather than regulatory demands. Certainly, conservation efforts and the sluggish economy contribute. However, a report by the U.S. Energy Information Agency said the presence in our air of carbon dioxide — the greenhouse gas that traps heat in the atmosphere — has fallen to 1992 levels. That will continue, as other energyneedy manufacturers and processors shift to take advantage of cheap natural gas. And Ohio sits atop one of the greatest and richest sources of oil and natural gas in the Utica Shale. It’s another reason to feel hopeful about the Buckeye State, and God knows we’ve long needed a good boost in our economic engine. ■
PERSONAL VIEW
New markets credits have aided Cleveland By JOHN W. WALDECK JR.
A
federal program that has contributed significantly to building up Cleveland expired last December and faces an uncertain
future. The New Markets Tax Credit (NMTC) program is an innovative financing tool supporting development in low-income communities that was created with bipartisan congressional support in 2000. Locally, New Market Tax Credits have been integral to the success of projects as diverse as the Evergreen Laundry Cooperative in Glenville; the Allen Theatre complex at PlayhouseSquare; the Tudor Arms Doubletree Hotel in University Circle; the MidTown Tech Center; the new Museum of Contemporary Art; and the Uptown Project in University Circle.
Mr. Waldeck is a partner and head of the Real Estate Section of Cleveland-based Walter & Haverfield LLP. These projects represent local investments well in excess of $150 million. They likely would not have proceeded — let alone succeeded — without the benefit provided through the NMTC program. Since its inception, the program has aided more than 250 businesses, created in excess of 13,000 jobs and leveraged more than $1 billion in tax credits to generate more than $2.75 billion in project investments in Ohio alone. Nationwide, the program is credited with producing more than $45 billion in new investments and more than 300,000 jobs. Despite its proven success, the future of the program is in jeopardy. While preserving tax dollars is a
worthy goal, it seems difficult to justify not supporting a program that the Treasury Department has found encourages approximately $12 in private capital investment for every $1 of foregone tax revenue. Driven by this capital investment-friendly ratio, Congress passed a two-year extension of the NMTC program for 2010 and 2011. Earlier this year, the Senate Finance Committee passed a bill out of committee that would extend the NMTC program through 2013. In the House, two Ohio Republicans — Steve Stivers and Steve Chabot — have initiated letters of support. However, more support is needed from all members of Ohio’s delegation — especially those from Northeast Ohio, where the impact likely would be the greatest. See VIEW Page 11
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
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No, not when the middle class seems to be shrinking and the opportunities seem to be only for a particular class, which is the higher class, the richer class.
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➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
View: Capital helps city’s needy areas continued from PAGE 10
The NMTC program provides a 39% federal tax credit, which can be claimed over a seven-year period, to investors making qualified equity investments in eligible projects. The credits are used to attract investments in “hard asset� businesses, including real estate, but are neither a subsidy nor a handout for anyone who asks for help. Rather, the program helps inject private capital investment where it is needed most — in communities and neighborhoods with high rates of poverty and unemployment — to stimulate growth and create jobs. Since Cleveland and several surrounding communities fall below the poverty line, the entire city and numerous areas across the region serve as fertile ground for development funded through the NMTC program. The program produces real results for our city and our region. Moreover, tax credits under the program often are paired with other programs, including a state-level NMTC, to further encourage investment and broaden the power and benefit
of such investments. With job growth being such a critical element of our continuing economic recovery, the ability to leverage tax credit dollars into large private capital investments represents efficient and effective use of public dollars. Under the NMTC program, the cost of creating a job in a lowincome community is less than $18,000. Based on that track record, Harvard University has recognized the NMTC program as one of the nation’s most innovative government programs. Without tax credits under the NMTC program, neither the jobs nor the projects would exist. We have come far as a result. We cannot afford to let Cleveland and other cities like it lose one of the best funding programs ever conceived. At the very least, Congress must reauthorize the NMTC program through 2013. Even better would be to make the program a permanent part of the tax code so it is not constantly in flux waiting on reauthorization. A permanent NMTC program could provide greater stability and
LETTERS
Let our free market work ■In his Aug. 20 commentary, “Another blow for nasty, deadly habit,� Brian Tucker has chosen to allow his personal misfortunes at the hand of cigarettes to spill over into the pages of a business newspaper. And, purportedly, the reason we have a business newspaper at all is because we have a free enterprise economic system, which in turn is built upon a philosophy of freedom for which our Founding Fathers fought and died some 200 years ago. And, recall, it was the Crown’s arbitrary and capricious meddling with the economy that precipitated the separation from England oh so long ago. Now Mr. Tucker chooses to use Crain’s Cleveland Business to advocate for his arbitrary and capricious regulation of others’ activities, both in the use of cigarettes and in the business of cigarettes. And I am in 100% agreement with him that cigarettes are an enormous health care problem. But in the United States of
America, people should be free to use and distribute these things. It is clear that the use of paper is bad for our environment, and that despite the logging and pulp industries’ best efforts, an overall harm has been done to our world. And it is clear that other means — less polluting, less destructive — exist for the dissemination of business news and information. And business firms near and far have wholesale begun the move toward the paperless world. So how can we let stand that every time a Cleveland businessperson pulls out a copy of Crain’s, it is a mobile billboard for environmental destruction? Please let’s keep our business newspaper focused on business. Because when it comes to meddling with the economy, allowing an inch allows the whole mile. William C. Ferry Bay Village
encourage investors to maintain their program infrastructure. If the program were made permanent, NMTC equity pricing might increase, providing for greater program efficiency and greater leveraging of government funding. In addition to extending the program or making it permanent, Congress should allow the NMTC to offset alternative minimum tax (AMT) liability. We’ve got a good thing going in Cleveland. Momentum is building. Things are happening. Let’s continue to push our city forward. The NMTC program has been an indispensible part of this momentum. Renew it, and make it permanent. â–
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Drug: Companies that make stem cells face numerous hurdles continued from PAGE 3
of cell therapy,” Dr. Aras said. Dr. Aras cites those advantages when speaking with investors. It seems to be working: Juventas in mid-July closed a $22 million Series B financing round led by Triathlon Medical Ventures of Cincinnati and New Science Ventures of New York. The company has raised a total of $35 million since it was spun out from the Cleveland Clinic in 2007. As part of the Series B round, the company received an investment from Japan’s biggest drugmaker, Takeda Pharmaceutical Co. Dr. Aras described Takeda as a strategic investor that one day could help Juventas take its products to market, possibly via an acquisition or some other partnership. However, the investment didn’t give Takeda any exclusive rights to Juventas’ products. Dr. Aras described the relationship as “a nice way for the two groups to get to know each other better.”
Stayin’ alive Of course, Juventas will need to prove that its product, JVS-100, is effective if it is to succeed. It’s working on that: The company a few weeks ago started enrolling patients
in a Phase II clinical trial designed to test the drug’s ability to treat patients with late-stage heart failure. A few months before, it began a similar trial for patients with critical limb ischemia, which is caused when blocked arteries prevent blood from properly flowing to the extremities, often the legs and feet. In both cases, JVS-100 is delivered to the site of the injury. The drug contains DNA, which is absorbed into cells in the body. The cells then for two weeks make a protein that acts as a beacon, attracting stem cells to the injured area. If Juventas can ace those trials, it will have a big advantage over its competition, according to Jason Napodano, managing director and senior biotechnology analyst for Zacks Investment Research. Though he wasn’t familiar with Juventas, Mr. Napodano follows several stem cell companies. Some are struggling to obtain FDA approval. Others have had trouble setting up a system to mass produce stem cells or raising enough cash to get their products to market. As others in the business noted, both the FDA and investors are more comfortable with drugs than with stem cell products, Mr. Napo-
dano said. Plus, producing a drug “certainly would be a lot cheaper” than making stem cells, he said. Some stem cell therapies involve taking bone marrow from a patient, collecting stem cells from the marrow and injecting them back into the patient’s body. Other methods involve collecting stem cells from a single donor and then replicating them for use in other patients. Dr. Aras said the first method is the most expensive because it involves collecting and purifying stem cells from every patient. While the second method would benefit from greater economies of scale, it is a “much more complicated system” than the one proposed by Juventas, according to Glen Gaughan, a CEO-in-Residence at BioEnterprise Corp., a Cleveland nonprofit that works with health care companies. In addition to the challenge of getting stem cells to replicate, it’s also hard to store them and to make sure they morph into the right type of cell, said Dr. Gaughan, who before joining BioEnterprise spent about 20 years as a drug discovery scientist for the company that became Bristol-Myers Squibb. “It’s hard to make these stem cells,” he said. “It’s hard to make
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sure they are what you think they are. It’s hard to keep them alive.”
Promising trials Drs. Aras and Gaughan expect Juventas’ clinical trials to produce data proving that JVS-100 is an effective drug. They cited previous animal studies and Phase I trial data. In that trial, 17 heart failure patients took the drug. Fifteen were still alive after a year, nearly half improved to class II from class III, and some improved to class I. None experienced serious problems deemed related to the drug. Though the early data is “quite promising,” B.J. Lehmann doubts the drug will be as effective as therapies that use stem cells. Mr. Lehmann is president and chief operating officer of Athersys Inc., a Cleveland company that aims to commercialize a stem cell therapy that would involve taking stem cells from relatively few donors and mass producing them. If the two products turn out to have the same impact on a patient’s health, Juventas would have an advantage, Mr. Lehmann said, but he added that the effectiveness of JVS-100 might be restricted by the supply of stem cells in the body. By contrast, companies such as Athersys choose how many stem cells to use, Mr. Lehmann said, adding that Athersys can double one donor’s cells in less than 24 hours. “You can produce whatever dose level you want to produce,” he said. Although Dr. Aras believes Juventas has an edge over its competition, he said he also sees room in the market for several types of regenerative medicine companies. Juventas in May moved into 6,200 square feet at Tyler Village in
Midtown Cleveland. The new headquarters is many times bigger than the few offices it previously occupied in the Global Cardiovascular Innovation Center, which is across the street from the Cleveland Clinic’s main campus. Although the company has hired six people since April, it still has just 10 employees, who fill about half of the new space. Juventas is planning to keep hiring, but its biggest expense is the clinical trials, which are run by other organizations.
A little help here The Global Cardiovascular Innovation Center is one of several organizations that have provided key resources and assistance to Juventas over the years, Dr. Aras said. Others include JumpStart Inc. of Cleveland and the Center for Stem Cell & Regenerative Medicine, which is comprised of researchers from Case Western Reserve University, University Hospitals Case Medical Center, the Cleveland Clinic, Athersys and Ohio State University. All three of those organizations have received money from the state’s Third Frontier economic development program, which is designed to create jobs by financing technology companies and research projects. Dr. Aras said he expects those investments will lead to more jobs at Juventas, even if the company eventually is acquired. He cited a few situations in which big pharmaceutical companies bought regenerative medicine businesses and decided to keep those companies’ employees on board. That’s because the small companies not only have technology, but they also have expertise in regenerative medicine, Dr. Aras said. ■
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For those seeking an MBA, there are any number of programs to choose from in the Buckeye State. On the following pages, we give a brief breakdown of some programs available in Ohio (only schools with a physical presence are included in the directory). Schools were asked to
provide such information as highlights and details of their programs, class locations and online options. Additional information from the schools — such as admission requirements, financial aid and tuition information — is available online at www.crainscleveland.com/mba.
PUBLIC SCHOOLS THE UNIVERSITY OF AKRON College of Business Administration Akron 330-972-7043; gradcba@uakron.edu Types of MBAs available: The flexible MBA at Akron allows students to attend on a full- or part-time basis. Evening and weekend classes provide flexibility for students who are fully employed. Concentrations that are available are: management; leadership and organizational change; direct interactive marketing; finance; global technological innovation; interdisciplinary; international business; international finance; health care management; supply chain management; and strategic marketing. MBA program highlights: The school launched its first cohort of students in fall 2011 for the Saturday MBA. The next cohort will begin in fall 2012. Students take courses using distance-learning technologies at the Medina County University Center and the University of Akron Lakewood Center, every other Saturday for two years. The in-class experience is supplemented with online technology. Students take three courses per semester using this hybrid format. The same students attend classes together over the two-year period. The current program will be from fall semester 2012 through summer semester 2014. The interdisciplinary concentration provides the most flexibility. A student can customize the concentration by selecting nine graduate credits to use toward the concentration. Students develop their own plan of
study for approval, and it can include graduate courses from outside of business. Class locations: Most classes are held on the main campus. Saturday MBA classes use distancelearning technologies at the Medina County University Center and the University of Akron Lakewood Center. Online options: The economics class is offered online twice a year and is 100% online.
BOWLING GREEN STATE UNIVERSITY College of Business Administration Bowling Green 419-372-2488; mba-info@ bgsu.edu Types of MBAs available: Full-time MBA, an accelerated oneyear program with specializations in accounting and finance; executive MBA, a part-time weekend program; and professional MBA, a part-time evening program. MBA program highlights: The full-time program is a cohortbased, accelerated one-year format open to students from any undergraduate major. BGSU’s MBA programs are accredited by the Association to Advance College Schools of Business (AACSB). According to the school, it received the second-highest ratings in Ohio by The Princeton Review for academic experience and admissions selectivity. Class locations: Full-time and executive MBA classes are held on the main campus. Professional MBA classes are held in Perrysburg and Findlay. Online options: None.
available at the Blue Ash Carver Woods campus. Online options: Up to 25% of program can be conducted online.
UNIVERSITY OF CINCINNATI Carl H. Lindner College of Business Cincinnati 513-556-3546 (Dona Clary); graduate@uc.edu Types of MBAs available: The full-time MBA program includes a 12-month accelerated program and a 15-month accelerated program with an internship. Also available is a dualdegree program, which includes a 21-month MBA/master of science program. There also are joint degrees — MBA/arts administration; MBA/law; MBA/medicine; and MBA/nursing — as well as a parttime option, which is two years with flexible sequencing. The five-year Accelerated Engineering Degree (ACCEND) program allows engineering students to earn an undergraduate engineering degree plus an MBA. MBA program highlights: According to the school, the recently redesigned MBA program allows students to tailor the degree to their needs and interests for a more personalized experience. Students with undergraduate business degrees can waive foundation courses and use available electives to earn transcripted graduate certificates. Students also can add a specialized master’s degree in accounting, applied economics, business analytics, finance, information systems, marketing or tax to an MBA with as few as 18 to 24 additional semester hours of study. The program has been AACSB accredited since 1919; the part-time program was ranked 78th by U.S. News & World Report’s 2013 rankings. Class location: Main campus. The part-time program also is
CLEVELAND STATE UNIVERSITY Monte Ahuja College of Business Cleveland 216-687-3730; d.goga@ csuohio.edu (executive, global accelerated and mobile accelerated MBA, Dian Goga, program coordinator); cbacsu@csuohio.edu (traditional MBA, full time, part time, off campus) Types of MBAs available: The MBA programs available at Cleveland State University include full-time and part-time options. Additionally, there is an off-campus MBA available at the Cleveland Clinic, Progressive Insurance, CSU West and MetroHealth Medical Center. The executive MBA is a full-time weekend program; the mobile accelerated program is a full-time online program; and the global accelerated MBA is a fulltime weekend program. MBA program highlights: Cleveland State touts its flexibility of class offerings and off-campus options in highlighting its MBA programs, which are AACSB accredited. Additionally, 80% of graduates work in Northeast Ohio. Students in the executive MBA program all are individuals who have been out of school for some time and are working in professional and supervisory positions. An international trip is included as part of both the executive and global accelerated MBAs during which students meet with executives from top companies. During weekend classes,
meals are provided. Books and a parking pass also are included as part of the tuition for both the executive and global accelerated programs. For the mobile accelerated MBA, which is 100% online, students receive an iPad, which is used for all courses and textbooks. Class locations: Main campus; Progressive Insurance, Mayfield Heights; Cleveland Clinic, Cleveland; CSU West, Westlake; and MetroHealth Medical Center, Cleveland. Online options: The mobile accelerated MBA is a 100% online program.
KENT STATE UNIVERSITY College of Business Administration Kent 330-672-EMBA, jjanosko@kent.edu (Joan Janosko) for executive MBA and executive MBA for health care professionals; 330-672-2282, gradbus@kent.edu for full-time and professional MBA programs Types of MBAs available: Executive MBA; executive MBA for health care professionals; full-time MBA; and professional MBA (part time). MBA program highlights: The executive MBA and executive MBA for health care professionals both feature an international business trip and lockstep student groups. The executive MBA program has Saturdayonly classes, while the executive MBA for health care professionals meets once monthly with supplemental online content. The full-time MBA is a cohort program that finishes in 22 months. The professional MBA has a flexible curriculum and evening classes. Students can choose from eight concentrations and can be finished in 33 months or less. continued on PAGE 14
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Class locations: Executive MBA, main campus; executive MBA for health care professionals, University Hospitals; full-time MBA, main campus; and the professional MBA, main and Stark campuses. Online options: The executive MBA has one online class weekend per session. The executive MBA for health care professionals has oncemonthly class meetings supplemented with online content. The full-time and professional MBA programs allow students to complete up to 20% of the program online.
MIAMI UNIVERSITY Farmer School of Business
AUGUST 27 - SEPTEMBER 2, 2012
614-292-8511; mba@fisher.osu.edu Types of MBAs available: Fulltime MBA; working professionals MBA; and executive MBA. MBA program highlights: Nationally ranked and accredited; flexible and action-based curriculum; distinguished faculty; small class sizes; close partnerships with local, regional and global business communities; and strong alumni network. Class location: Main campus. Online options: Fisher MBA programs were developed to allow students to benefit from the interaction and collaboration that happens in the classroom. Therefore, the MBA program does not currently offer online classes.
Oxford 513-895-8876; miamipmba@muohio.edu Types of MBAs available: Accelerated part-time program with concentrations in finance, marketing or a blend. MBA program highlights: Casebased learning environment cultivates cross-functional decisionmaking required for positions of broad responsibility. A concierge service provides all course materials, course registration and provides dinner. Limited prerequisites and a schedule of shorter semesters were developed to accommodate working professionals for completion of the program within two years. Class location: West Chester, satellite location. Online options: Prerequisites online options available only.
OHIO STATE UNIVERSITY Fisher College of Business Columbus
“The
virtual classes and online modules with one in-person Saturday residency each month. Through the new online MBA, students will complete their degrees in two years with the same academic requirements as those taking the professional MBA degree, and they can acquire a specialization in finance, health care and executive management. In addition to the online courses, the program includes one mandatory and two optional on-campus professional development workshops. Class locations: Ohio University, Pickerington Center; Ohio University, main campus. Online options: For the online MBA, the entire program is offered online, with the exception of three weekend workshops. For the professional MBA, 60% of the program is offered online through virtual classes and online modules.
OHIO UNIVERSITY College of Business Athens 740-593-2028; mba@ohio.edu Types of MBAs available: Professional MBA; online MBA with concentrations in finance, health care and executive management. MBA program highlights: The professional MBA is a part-time MBA program designed to meet the needs of emerging business leaders, non-managers moving into managerial roles and individuals whose careers are in transition. A class and residency schedule that recognizes the multiple demands of working professionals allows one to remain fully employed while earning an MBA degree in less than two years. Most of the program is offered online through
UNIVERSITY OF TOLEDO College of Business and Innovation Toledo 419-530-2087; COBIadvising@utoledo.edu Types of MBAs available: The University of Toledo offers a selfpaced professional MBA that is delivered with a combination of weeknight and online classes, and a 12-month executive MBA that takes place on campus once per month with the rest of the program delivered online. The professional MBA program has 10 areas of concentration, including marketing, entrepreneurship, leadership,
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finance and health care systems management, among others. MBA program highlights: The executive MBA is provided as a 12-month program with a blend of online and once-a-month oncampus classes. The professional MBA’s program can be taken up to 85% online, which allows students the opportunity to complete the program from a distance, including from the Cleveland area. Class location: Main campus. Online options: About 85% of the professional MBA can be completed online, and students have the choice whether to take courses in person or online.
WRIGHT STATE UNIVERSITY Raj Soin College of Business Dayton 937-775-2437; rscob-admin @wright.edu Types of MBAs available: The MBA is a weekend cohort program for which classes meet every other weekend and can be completed in two years. The class schedule is published two years in advance. There also is an evening program for which classes meet twice per week from 5 p.m. to 6:20 p.m. or once per week from 6:30 p.m. to 9:10 p.m. The program can be completed on one’s own pace within five years. The full-time program can be completed in one year. MBA program highlights: The program is AACSB accredited. There are concentrations in investments; new venture creation; health care management (offered jointly by the Boonshoft School of Medicine); and project management. There are additional concentrations in economics; marketing; finance; international business; management, innovation and change; and interdisciplinary business. Class locations: Mason, main campus and Celina. Online options: Five foundation
courses can be completed online. These courses are designed for students who do not have an undergraduate degree in business and for business graduates who need a refresher in accounting, finance, economics, business statistics or business law and ethics. (Most AACSB-accredited schools will accept transfer credits for other AACSB-accredited MBA programs.)
YOUNGSTOWN STATE UNIVERSITY Williamson College of Business Administration Youngstown 330-941-1889 (MBA program director Tony Kos); 330-941-3069 (MBA program coordinator Monique Bradford) or 330-9413064 (office of the dean); ajkos@ysu.edu or mrbradford@ysu.edu Types of MBAs available: Flexible MBA program. MBA program highlights: Program is AACSB accredited and an emphasis is placed on strategic analysis, leadership skills and management decision-making. In the program, 80% of students work full time and complete the program on a part-time basis. The total program is 49 semester hours. A maximum of 16 hours of Level I courses may be waived depending upon undergraduate preparation. It is designed for both business and non-business undergraduate degree holders. Nine hours of MBA electives are required. Electives can be focused in areas such as accounting, finance, enterprise resource planning, entrepreneurship, health services or management. Concentrations also are available. The emphasis is on applied learning. Projects with the business community are incorporated throughout the curriculum. There also are options for global learning experiences and international study tours. The average class size is 12 and courses meet one evening per week. Class location: Main campus. Online options: There currently are no online courses available for the MBA program.
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PRIVATE SCHOOLS Berea 440-826-2392; graduate@bw.edu
ASHLAND UNIVERSITY Ashland 419-289-5214, 888-MBA-CLAS; mba@ashland.edu Types of MBAs available: Executive management and specializations in accounting, entrepreneurship, finance, global management, human resource management, project management and supply chain management. MBA program highlights: According to the school, the programs are nationally and regionally accredited, while professors possess excellent academic credentials and have business experience. The program has flexibility and convenience, with four delivery methods — one evening per week for 12 weeks, six alternate Saturdays, hybrid online; and online. Class locations: Main campus; Columbus Center; Westlake Center, Corporate College; Medina Center; Massillon/Stark Center, Massillon. Online options: All online and hybrid online (two to six in-class sessions per semester).
BALDWIN WALLACE UNIVERSITY
Types of MBAs available: There is a management MBA, management hybrid (new, online and classroom combo), executive, accounting, health care, entrepreneurship, international, human resources and the sustainability MBA (new). The EMBA, health care and management hybrid MBAs have Friday and Saturday classes. All other programs have Monday through Thursday classes. MBA program highlights: The majority of MBA students are working professionals who have two to 30 years of professional work experience and are pursuing the MBA part-time. The faculty includes an intentionally designed portfolio of full-time PhDs who also are leaders in business and corporate executives, and who have been a CEO, COO, CFO or senior vice president in their careers. The BW MBA program is one of the largest MBA programs in Ohio and has graduates living around the world. Class locations: Main campus and Beachwood. The executive and hybrid programs only are offered in Berea. Online options: The management
hybrid MBA is a two-year program with about 75% delivered online and 25% seated. The seated component is conducted during weekends at the start and completion of each semester. Students have seven weekends of classes at the Berea campus during the twoyear program.
BLUFFTON UNIVERSITY Bluffton 800-488-3257 (Option 4); adulted@bluffton.edu Types of MBAs available: Bluffton graduate students can complete an MBA or an MBA with a health care management concentration in two years, attending class one evening a week. (Additionally, there is a master of arts in organizational management. MBA program highlights: Students complete the degree program in cohorts of about 20 students. Courses emphasize interactive, experiential learning rather than the traditional lecture. The school also provides an optional China business study trip with the objective of this experience to learn about China’s business environment, culture and economy. Class locations: Edison Community College, Piqua; and Northwest State Community College, Archbold. Online options: None available.
the international partner institutions. Class location: Cleveland. (The global MBA program includes semesters in China and India) Online options: None.
CASE WESTERN RESERVE UNIVERSITY Weatherhead School of Management Cleveland 216-368-2030; bizadmissions@ case.edu Types of MBAs available: Fulltime, part-time, executive and global MBAs. MBA program highlights: The school touts its Weatherhead MBA as a “transformative experience.� Class sizes are kept small so as to allow direct access to faculty. During the first year, students complete foundation courses such as finance, operations and marketing, as well as a leadership development course. During the second year, students explore electives while being immersed in the school’s signature curriculum in a year-long design or sustainability practicum. New this year is the global MBA, which brings students from China, India and the United States together in a twoyear, full-time program. Students spend the first semester in Shanghai, China; the second semester in Jamshedpur, India; and the third semester in Cleveland. Each cohort of students in this program is comprised of 20 students from Weatherhead and 20 each from
UNIVERSITY OF DAYTON School of Business Administration Dayton 937-229-3733 (Janice Glynn, MBA program director); mba@udayton.edu Types of MBAs available: Relevant career experience may be eligible for waivers on foundation classes. Whether a student is enrolled full time for one year or part time for three years, the University of Dayton helps customize the program. The University of Dayton also offers a joint JD/MBA degree, as well as post-master’s and certificate programs. Concentrations are available in accounting, cybersecurity, finance and marketing. MBA program highlights: The Princeton Review listed the University of Dayton MBA program in the most recent edition of “The Best 300 Business Schools.� This is the fifth consecutive year the MBA program made the list. The continued on PAGE 16
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University of Dayton’s MBA Program was recently selected as one of 15 graduate schools in business named to The Princeton Review’s “Student Opinion Honors for Business Schools� in the general management category. Class locations: Main campus. Cybersecurity courses are held at the Advanced Technical Intelligence Center in Beavercreek. Online options: Five of the program’s courses will be online this fall. Nine were online this summer.
DEFIANCE COLLEGE Defiance 419-783-2531 or 419-7832565; mcall@defiance.edu (Michelle Call) or mwolfe@ defiance.edu (Michael Wolfe) Types of MBAs available: Concentrations are available in leadership, criminal justice and sports management. MBA program highlights: The MBA program offers courses that are flexible and offered during the evening. Most classes meet in an every-other-week format for eight sessions. Some courses are online and some are conducted in a hybrid manner. The school said that its MBA degree programs seek to provide graduates with a set of skills and abilities with broad application to the workplace. The program was developed to create a curriculum in which businessrelated subjects are taught under the assumption that the student’s own workplace would become the laboratory where theory converts to practice. The curriculum consists of nine courses or 27 semester hours. Class location: Main campus.
AUGUST 27 - SEPTEMBER 2, 2012
Online options: Three of the 12 required courses are available online.
UNIVERSITY OF FINDLAY College of Business Findlay 800-558-9060; gradinfo@ findlay.edu Types of MBAs available: The university offers day, evening and online courses for both full-time and part-time students. Students may choose to focus in a number of areas: certified management accountant or certified public accountant tracks, organizational leadership, health care management, hospitality management and public administration. MBA program highlights: Findlay’s MBA program incorporates SAP (Systems, Applications and Products in Data Processing) practices into its courses. The school also offers a corporate partnership discount and free textbook rental. Class location: Main campus. Online options: The entire program may be completed online.
FRANCISCAN UNIVERSITY OF STEUBENVILLE Steubenville 740-284-5249 (enrollment questions), 740-283-6281 (program specifics); gradadmissions@franciscan.edu Types of MBAs available: Franciscan University of Steubenville’s MBA is a general management degree with an optional area of concentration in accounting. The
MBA offered through the school is a parttime evening program, with two workshopstyle courses that meet three weekends throughout the term. The program is offered in trimesters, and typically takes two years to complete. MBA program highlights: The MBA program requires course work in managerial leadership; managerial communications; and international business. It also is designed to meet the needs of working professionals since almost all courses are offered in the evenings; the degree also may be pursued on a part-time basis. Class location: Main campus. Online options: About half of the course work can be completed online.
FRANKLIN UNIVERSITY Columbus 614-797-4700; gradschl@ franklin.edu Types of MBAs available: The accredited MBA program has weeknight and online classes and it is designed to help students develop into well-rounded, adaptive and strategic-thinking business leaders — and to work around busy lives. Students can earn a master’s degree in 16 months. MBA program highlights: Offered around the world, the Franklin MBA has the distinction of being accredited by the Interna-
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tional Assembly for Collegiate Business Education. The MBA aims to develop leadership skills designed for global application and will challenge students to leverage their strengths and increase their ability to think expansively about how the world of commerce operates. The curriculum emphasizes analytics, contemporary business communication skills and social responsibility. Class locations: Main campus downtown, Delaware and Dublin locations, and it will be available through the university’s new regional location in Beavercreek. Online options: The MBA can be completed entirely online, face-toface or in a hybrid mix of the two formats.
HEIDELBERG UNIVERSITY Tiffin 419-893-1986; aunderwo @heidelberg.edu (Allen Underwood) Types of MBAs available: General management and entrepreneurship tracks are available. MBA program highlights: The Heidelberg University MBA program utilizes discussion pedagogy, rather than the more passive lecture method. This participantcentered learning approach teaches students to implement business theory to solve complex business problems. Heidelberg University’s MBA program is designed for working adults. One night a week for two years is the time it takes to complete the degree. Class locations: Maumee campus, Arrowhead Park. Online options: None.
JOHN CARROLL UNIVERSITY Boler School of Business University Heights 216-397-4391 Types of MBAs available: John Carroll offers the integrated MBA, which is a part-time MBA for working professionals with at least two years of experience, and the accelerated MBA, a fifth-year program open to recent undergraduates. This requires relevant business course prerequisites. MBA program highlights: The integrated MBA allows students to take a block of courses that integrate business tools and concepts into courses that focus on solving real-world business problems from Northeast Ohio companies and making business decisions. The accelerated MBA allows any student to obtain an MBA in one year if they have taken prerequisite business courses. Students are required to complete internship, part-time work experience or project-based experience. Class location: Most courses are taught at the main campus. Online options: Several of the foundation courses are offered online.
LAKE ERIE COLLEGE Painesville 440-375-7075; dbares@lec.edu (Donna Bares) Kent State University, Kent State and KSU are registered trademarks and may not be used without permission. Kent State University is committed to attaining excellence through the recruitment and retention of a diverse student body and workforce. 12-0078
Types of MBAs available: Lake
Erie College’s most popular option, the evening MBA, allows students to take anywhere from one to four classes per semester, with each class meeting one evening per week. Most students complete the program in roughly two years. Evening students also have the option of including accelerated Saturday classes. The accelerated MBA allows students to complete their MBA in as few as 11 months. The concentration in health care administration prepares students for staff, managerial and leadership roles in the health care industry. MBA program highlights: The Lake Erie College Parker MBA is designed to provide a graduate business education that is practical and real-world focused, enabling students from a wide variety of backgrounds to develop managerial and professional competencies. No prior business courses are required. Class locations: New Holden University Center, Lakeland Community College. Online options: Several optional online courses are offered.
LOURDES UNIVERSITY College of Business & Leadership Sylvania 419-824-3517; gradschool@lourdes.edu Types of MBAs available: General MBA degree in a full-time, 12month or parttime, 24-month option. MBA program highlights: The school said it has a distinctive, cutting-edge curriculum and state-of-the-art technology, personalized career guidance, including job search, interview preparation and travel abroad for an international immersion that is part of the curriculum. Class location: Main campus. Online options: None available.
MALONE UNIVERSITY Malone University School of Business and Leadership Canton 330-471-8224; mmcauliffe@malone.edu (Mona McAuliffe) Types of MBAs available: Online or in-classroom MBAs are available. MBA program highlights: The classroom is one night a week for 24 months, with personalized classes of about 15 to 25 students. The format is designed to be easy to manage, with one course at a time in five- to eight-week sequences. Malone University’s MBA program is accredited by the Accreditation Council for Business Schools and Programs. Class location: Main campus. Online options: The online program can be finished in 20 months, in two semesters with nine credit
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hours and three semesters with six credit hours. The tuition is the same as the classroom version (plus $120 technology/materials fee per course).
COLLEGE OF MOUNT ST. JOSEPH Cincinnati 513-244-4233; Mary_Brigham@mail.msj.edu (Mary Brigham) Types of MBAs available: This program only is offered to current undergraduate students, as well as recent alums in certain cases, because it is a program that allows students to earn graduate credit while they still are undergraduates. In this program, undergraduates complete four courses during their senior year for dual credit, a projectbased professional experience and finish with one additional year of graduate courses. It is not yet a standalone graduate program offered to other students. MBA program highlights: Students earn graduate credit while still an undergraduate in this MBA format. Students apply to the program during their junior year, take dual-credit courses their senior year and complete their MBA with one additional year of coursework. Class location: Main campus. Online options: None available.
MOUNT VERNON NAZARENE UNIVERSITY
Types of MBAs available: There is a one-night-a-week option as well as a 100% online option. Both allow the working adult time to complete his or her MBA degree while maintaining a regular schedule, including work and family responsibilities. MBA program highlights: The school said the MBA program is one of the most affordable in Ohio. Either program can be completed within 18 months. Class location: Main campus. Online options: The entire MBA program is available online. Within the standard one-night-a-week delivery option, some of the classes are a hybrid format, with online and in-class components.
OHIO CHRISTIAN UNIVERSITY
gram can be taken online.
Types of MBAs available: A general MBA is available. MBA program highlights: Students can earn their degree online or by attending class once a week. The program does not require prerequisite courses, allowing those from a variety of backgrounds to earn their MBA. Additionally, the school said students get a quality education with courses taught by highly qualified, doctorally prepared faculty. Class locations: Main campus, Dublin. Online options: The entire pro-
Types of MBAs available: The Ohio Dominican University MBA is accelerated and offered in three delivery formats: six-week cohort, eight-week noncohort and online. MBA concentrations are available in accounting, finance, leadership and public administration as well as a graduate certificate in public administration. MBA program highlights: The
OTTERBEIN UNIVERSITY Graduate School Westerville 614-823-1212, 614-823-1095; phohlbein@otterbein.edu Types of MBAs available: There continued on PAGE 18
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UNIVERSITY OF NORTHWESTERN OHIO Graduate College Lima 419-998-3120, 419-998-3269; info@unoh.edu, macallah@unoh.edu
Columbus 614-251-4615; graduate admissions@ohiodominican.edu
three delivery formats allow students to select the program design that works for them. All eight-week courses are offered face-to-face and online. Concentrations allow students to select an area of interest. Emphasis is placed on leadership skills enhancement and ethical decision-making. Class locations: Main campus; and LEAD Building in Columbus. Online options: All eight-week courses are offered online.
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Mount Vernon 740-392-6868, ext. 3323 Types of MBAs available: Concentrations in finance, human resource management, organizational management and health care administration are available. The MBA is a 12-course curriculum, which includes nine core courses in accounting, economics, finance, management, marketing ethics, leadership, organizational behavior, legal issues, global business and strategy. The executive MBA offers an MBA with an organizational management concentration and can be completed in less than a year. MBA program highlights: The MBA is an accelerated program that offers degree completion in 15 months or less. Classes are offered one night a week or online. The tuition is locked in and will not increase as long as students are continuously enrolled. Class locations: Main campus; Columbus, Polaris; Gahanna; Mansfield; and Newark. Online options: The entire program is available online.
OHIO DOMINICAN UNIVERSITY
Circleville 855-OCU-GRAD; ags@ ohiochristian.edu
Monte Ahuja Ah a Coll Collegee of Business Cleveland State University is an AA/EO institution. 12-00791
17
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science. MBA program highlights: There is a part-time program and full-time program, small classes, rolling admissions and flexible scheduling. The MBA can be completed in two years. Otterbein also offers accelerated scheduling that allows a student to complete a degree sooner without sacrificing quality or content. Class location: Main campus. Online options: Some are offered in a hybrid format.
UNIVERSITY OF RIO GRANDE Emerson E. Evans School of Business Rio Grande 800-282-7201, ext. 7352; jwinters@rio.edu (Jason Winters) Types of MBAs available: The University of Rio Grande MBA is a two-year part-time program, which includes one evening per week in the classroom and online assignments. MBA program highlights: The MBA with a concentration in entrepreneurship provides students with an understanding of and experience with the entrepreneurial process. It provides competencies and skills to both launch a new business and function successfully in an established corporation with entrepreneurial management strategies. The program is open to all students with business or non-business undergraduate degrees (students with non-busi-
ness degrees must satisfy five prerequisite courses in accounting, business management, microeconomics, statistics and business law). Class location: Main campus. Online options: The program is hybrid, which means there is a face-to-face and online component.
AUGUST 27 - SEPTEMBER 2, 2012
Types of MBAs available: Fulland part-time MBA programs are available. Class locations: Main campus, Troy. Online options: One class online per semester.
held every other Saturday to complete the 36 credit-hour degree. Class location: Main campus. Online options: Students have an option to take traditional faceto-face courses, hybrid courses and online courses. Ursuline will be launching this fall a new online MBA program in leadership that is 100% online.
TIFFIN UNIVERSITY Tiffin 419-448-3510; grad@tiffin.edu Types of MBAs available: The Tiffin University MBA program includes concentrations in leadership, sports management, general management, finance, international business, human resources management, marketing and health care administration. MBA program highlights: The school says the Tiffin program is distinguished by a focus on developing competencies in communication skills, leadership and teamwork, information technology and problem solving. The faculty leads the student body through current issues in management and technology-driven global workplace. Class location: Main campus. Online options: Complete online option available.
URBANA UNIVERSITY Urbana 937-484-1327; jwalker@ urbana.edu (Jodie Walker)
URSULINE COLLEGE School of Professional and Graduate Studies Pepper Pike 440-646-8119; msteele@ ursuline.edu Types of MBAs available: Ursuline College offers several flexible types of MBA programs, including an evening MBA program for which students have to attend class one night per week, and a Saturday executive MBA program for which students only have to attend class once every other week. Students may enroll full time or part time. The concentration areas are management; leadership; financial planning and accounting; marketing and communications; health services; and ethical and entrepreneurial leadership. Most courses are structured as accelerated five- or seven-week courses. MBA program highlights: One of the newest program options at Ursuline is the executive MBA program in ethical and entrepreneurial leadership. The EMBA program includes an iPad, e-books, a travel abroad study trip and working lunch sessions with professional guest speakers. Students only have to attend a maximum of 24 on-campus class sessions that are
WALSH UNIVERSITY DeVille School of Business North Canton 330-490-7181; adice@walsh.edu (Audra Dice) Types of MBAs available: Students can earn their degrees in management or health care management in 12 months, either online or in the classroom. Entrepreneurship and marketing programs can be completed in 24 months and are offered in a traditional in-class setting or online. Offline MBA programs are in an eight-week format in health care, management, entrepreneurship and marketing. Classes meet one night a week and one Saturday per month. MBA program highlights: The Walsh University MBA program is accredited. Classes are small and meet one evening per week and one Saturday per month in eightweek segments.
Class location: Main campus. Online options: Walsh University offers two online, 12-month MBA programs in health care management and management.
XAVIER UNIVERSITY Williams College of Business at Xavier University Cincinnati 513-745-3525, 800-344-4698, ext. 3525; xumba@xavier.edu Types of MBAs available: The program has concentrations in business intelligence, finance, general business, health industry, international business, management information systems and marketing. MBA program highlights: Xavier University has a 20-month executive MBA, weekend MBA (Saturday classes), momentum MBA for full-time students, accelerated 24-month MBA in West Chester, Deerfield Township and Fort Wright, Ky. According to the school, the program is ranked 22nd in the nation for international business and 23rd in the nation for the executive MBA. Class locations: Main campus, West Chester, Deerfield Township and Fort Wright, Ky. Online options: Five of the 20 MBA classes are offered online.
FOR-PROFIT SCHOOLS DEVRY UNIVERSITY Keller Graduate School of Management Cincinnati, Cleveland, Columbus (two locations), Dayton 216-328-8754 Types of MBAs available: There are 16 career-oriented concentrations available from DeVry: accounting;
e-commerce management; finance; general management; health services; hospitality management; human resources; information security; information systems management; international business; marketing; network and communications management; project management; public administration; security management; and sustainability management. MBA program highlights:
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Students can take classes on site at any of five Ohio locations, online, or a combination of both. Class locations: MBA classes are offered at DeVry University’s Keller Graduate School of Management’s Cincinnati, Cleveland, Columbus, Columbus North and Dayton campuses. Online options: The MBA program is available online. The entire program can be taken online.
According to the school, Herzing University’s online graduate business programs were ranked No. 10 in the country for faculty credentials and training in U.S. News & World Report’s online education survey. There are three full semesters each school year instead of two. Class locations: None in Ohio. Online options: Yes, 100% of the program can be completed online.
UNIVERSITY OF PHOENIX Independence 216-447-8807
HERZING UNIVERSITY Campuses in Akron and Toledo; online campus is headquartered in Menomonee Falls, Wis. 866-508-0748; info@onl.herzing.edu Types of MBAs available: Herzing University offers both accelerated and online programs. For those students looking for the quickest route to completing an MBA degree, the 33-credit MBA degree can be completed in less than one year. Students who would like to further enhance their study in a particular industry for maximum career impact may choose to add a 12-credit specialization in accounting, business management, health care management, human resources, marketing, project management or technology management. MBA program highlights:
Types of MBAs available: The University of Phoenix MBA program has the following concentrations: accounting; energy management; global management; health care management; human resource management; marketing; project management; and technology management. University of Phoenix MBA degrees are offered at more than 200 on-campus locations nationwide and online.
MBA program highlights: The MBA program prepares students in the functional areas of business, allowing them to develop managerial skills necessary to be effective in a rapidly changing business environment. The program is designed for students with an interest in entering or advancing
their careers in business. The program reflects current research of managerial competencies as well as graduate business standards as reflected by existing national standardized graduate business tests. University of Phoenix MBA programs are taught by practitioner faculty — instructors who work in the fields in which they teach. This model allows instructors to bring current, real-world topics into the classroom so students can discuss the challenges and opportunities affecting businesses today. University of Phoenix MBA courses are offered one at a time in sixweek increments, allowing students to concentrate on each course while still maintaining work and personal obligations. University of Phoenix MBA students are assigned a graduation team consisting of enrollment, academic and financial advisers. Class locations: Independence, Beachwood and Westlake. Online options: Students can take all courses necessary to complete all University of Phoenix MBA programs online.
SOUTH UNIVERSITY College of Business sbenko@southuniversity.edu (Sarah Benko) Types of MBAs available: Flexible delivery, no concentrations. MBA program highlights: A student can choose a combination of traditional campus-based classes, online or distance learning.
Program includes flexible class schedules and small classes, all taught by faculty instead of teaching assistants. Class location: Warrensville Heights. Online options: Yes, with roughly 90% available online.
STRAYER UNIVERSITY School of Business Akron, Cincinnati, Columbus, Fairborn, Fairview Park, Mason 888-311-0355 Types of MBAs available: Strayer University offers a widely applicable and marketable skill set through its MBA Administration program, with the following concentrations: accounting; acquisition; finance; health services administration; hospitality and tourism management; human resource management; information systems management; international business; management; marketing; professional studies; project management; and public administration. In addition, the Jack Welch Management Institute at Strayer University offers a leadership-centered online Executive MBA based on the principles and practices of Jack Welch, former chairman and CEO of General
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Electric. MBA program highlights: The Master of Business Administration degree program features a curriculum that prepares adult students for the emerging knowledge economy while emphasizing the latest concepts, practices and skills in today’s rapidly changing marketplace. Strayer University’s MBA is designed to meet the needs of working adults. Most students attend classes part-time, tailoring their course schedule to the demands of their personal and professional lives. Class locations: The MBA program is available at Strayer University’s campuses in Akron, Cincinnati, Columbus, Fairborn, Fairview Park and Mason. Online options: Strayer University’s MBA program can be taken on campus, online or through a hybrid model of online and oncampus courses. Students can choose the course delivery option best suited to their schedule and learning needs.
ON THE WEB Extended MBA guide Crain’s Ohio MBA Guide 2012 is available on our website, but in an extended form. The online version, available at www.Crains Cleveland.com/MBA, in addition to all the information listed here, includes requirements for admission, fees and tuition rates and available scholarships and financial aid.
FULL-TIME MBA PROGRAM Ranked 25th in the nation, and 8th among public universities U.S. News & World Report On campus info session: Saturday, September 29 at 10 a.m. WORKING PROFESSIONALS MBA PROGRAM Ranked 9th in the nation U.S. News & World Report On campus info session: Tuesday, September 18 at 6:30 p.m. EXECUTIVE MBA PROGRAM Ranked 14th worldwide Businessweek Online webinar: Tuesday, September 25 at noon Call (614) 292-8511 or e-mail mba@ďŹ sher.osu.edu to register for one of these events and talk with a member of our recruiting and admissions team.
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Voss: Airlines look for efficient models continued from PAGE 3
The Federal Aviation Administration in its 20-year aviation forecast predicts available seat miles — a standard benchmark of airline activity — to increase 2% to 3% annually in the United States. Air travel is growing at an even faster pace in other countries, especially those that are developing a commercial aircraft industry for the first time — and Voss is positioning itself to handle the demand all that activity will generate, Mr. Sedor said. Voss in the last two years has upped its work force to 335 by adding 80 employees and in 2012 already has invested $1 million in new equipment — namely CNC (computer numerical control) machines. The company plans to hire at least another eight to 10 employees next year for its commercial aircraft division and to invest another $500,000 to $750,000 in new equipment, Mr. Sedor said. In spring 2010, Voss bought a
building adjacent to its 236,000square-foot operation on West 25th Street. It built a connector between the two and added 4,000 square feet, allowing Voss to relocate its fusion welding operation and free up more space for more CNC machines in its main plant, Mr. Sedor said. Although Voss has four floors in its main building, use of the space can be tricky because of the weight of some of the machinery, he said. The success of Voss comes as no surprise to those well-versed in the industry. “The Ohio companies like Voss that are in the supply chain in aviation have been doing well,” said Michael Heil, CEO of the Clevelandbased Ohio Aerospace Institute. While domestic demand is one driver, the industry also gains a lot of its strength from overseas demand, Mr. Heil said. “Aerospace is still an export industry for the U.S.,” he said. Mr. Heil said the growth of the
commercial aerospace industry in the past decade has paralleled the growth of China’s economy. “I think the main driver is specific countries, particularly the big dog there is China. As we all know, China’s economy is booming,” Mr. Heil said.
Easy as (hot apple) pie While Voss already has contracts with most of the big participants in the aerospace industry, it remains aggressive in trying to grow its business with those customers. Mr. Sedor likens this approach to McDonald’s hot apple pie promotion, during which employees at the counter or manning the drive-thru for years suggested customers add an apple pie to their orders. “There’s a good lesson there for anybody,” Mr. Sedor said. “When you’re talking to a customer, think of what you have that is the contemporary component of the hot apple pie. What else can we do for you?” Voss representatives take tours of
AUGUST 27 - SEPTEMBER 2, 2012
their customers’ plants whenever possible in order to see the manufacturing process and to identify areas in which it could provide additional services or could edge out a competitor. Voss’ biggest competitor is Cleveland-based industrial giant Eaton Corp. Looking forward, industry participants mostly see clear skies ahead as the commercial aerospace business continues to expand. Boeing, for one, in its 2012 market report predicts the industry will have demand for 34,000 new aircraft over the next 19 years. Yair Reneir, executive director and senior analyst for aerospace and defense electronics at New Yorkbased investment firm Oppenheimer & Co., said he expects growth in the industry to continue. The backlog of orders for commercial planes is seven years — an all-time high, according to Mr. Reneir — and many airlines are swapping older planes for newer energy-efficient models, he said. “Barring a significant slowdown in global economic activity, that should lead to steady production
growth for at least the next two to three years,” said Mr. Reneir, who is an analyst following Boeing.
Defending against defense Mr. Sedor’s big concern for Voss is in the defense sector, which represents 25% of the company’s sales. The defense industry is bracing for sequestration, a federal policy calling for automatic spending cuts to be enacted. The $109 billion in cuts would go into effect in January and would involve an across-theboard, $54.5 billion reduction of Pentagon spending in 2013, which likely would have a negative passthrough effect on companies in the defense supply chain, Mr. Sedor said. While Voss would take a hit from defense spending cuts, Mr. Sedor remains confident about the future of his company. As the commercial aerospace business has boomed, Voss has shifted its business to that sector, helping insulate itself from the defense industry. “It may lower profitability to a certain extent, but it gives us the opportunity to react quickly to new opportunities,” Mr. Sedor said. ■
HIGHEST PAID PROFESSIONAL ATHLETES RANKED BY SALARY AS OF CURRENT OR MOST COMPLETE SEASON Team
Salary
Contract terms
Contract length (years)
Position
Years - in league
Travis Hafner, 35
Cleveland Indians
$13,000,000
$57,000,000
4
designated hitter
10
Cowley County CC, Kan.
Joe Thomas, 27
Cleveland Browns
$10,500,000
$92,000,000
8
tackle
6
Wisconsin
Cleveland Cavaliers
$8,400,000
$50,000,000
6
center
8
N/A
Ahtyba Rubin, 26
Cleveland Browns
$7,700,000
$27,600,000
4
defensive tackle
5
Iowa State
Luke Walton, 32
Cleveland Cavaliers
$6,091,363
$30,291,363
6
forward
9
Arizona
Joe Haden, 23
Cleveland Browns
$5,765,505
$42,200,000
5
defensive back
3
Florida
Kyrie Irving, 20
Cleveland Cavaliers
$5,530,080
$24,383,764
4
guard
1
Duke
Grady Sizemore, 30
Cleveland Indians
$5,000,000
$5,000,000
1
center fielder
8
N/A
Shin Soo-Choo, 30
Cleveland Indians
$4,900,000
$4,900,000
1
right fielder
8
N/A
Daniel Gibson, 26
Cleveland Cavaliers
$4,792,332
$21,000,000
5
guard
6
Texas
Asdrubal Cabrera, 26
Cleveland Indians
$4,550,000
$21,050,000
3
shortstop
5
N/A
Chris Perez, 27
Cleveland Indians
$4,500,000
$4,500,000
1
pitcher
4
University of Miami
Chris Gocong, 28
Cleveland Browns
$4,500,000
$18,500,000
4
linebacker
7
Cal Poly-San Luis Obispo
Ubaldo Jimenez, 28
Cleveland Indians
$4,200,000
$23,750,000
6
pitcher
6
N/A
Tristan Thompson, 21
Cleveland Cavaliers
$4,006,080
$17,089,431
4
center
1
Texas
Justin Masterson, 27
Cleveland Indians
$3,825,000
$3,825,000
1
pitcher
4
San Diego State
Phil Dawson, 37
Cleveland Browns
$3,810,000
$3,810,000
1
kicker
13
Texas
Dion Waiters, 20
Cleveland Cavaliers
$3,726,600
$16,821,270
4
guard
rookie
Sheldon Brown, 33
Cleveland Browns
$3,700,000
$15,250,000
3
defensive back
11
South Carolina
Scott Fujita, 33
Cleveland Browns
$3,650,000
$14,000,000
3
linebacker
11
California
D'Qwell Jackson, 28
Cleveland Browns
$3,400,000
$42,500,000
5
linebacker
7
Maryland
Cleveland Cavaliers
$3,270,000
$9,800,000
3
forward
3
Alabama
Casey Kotchman, 29
Cleveland Indians
$3,000,000
$3,000,000
1
first baseman
8
N/A
Dimitri Patterson, 29
Cleveland Browns
$2,950,000
$16,050,000
3
defensive back
6
Tuskegee
Benjamin Watson, 31
Cleveland Browns
$2,880,000
$12,000,000
3
tight end
9
Georgia
Roberto Hernandez, 31
Cleveland Indians
$2,500,000
$20,300,000
6
pitcher
7
N/A
Seneca Wallace, 32
Cleveland Browns
$2,400,000
$9,200,000
3
quarterback
10
Iowa State
Omri Casspi, 24
Cleveland Cavaliers
$2,277,306
$6,040,746
4
forward
3
N/A
Rafael Perez, 30
Cleveland Indians
$2,005,000
$2,005,000
1
pitcher
7
N/A
Usama Young, 27
Cleveland Browns
$2,000,000
$4,000,000
2
defensive back
5
Rank
Name, age
1 2 3 4 5 6 7 8 9 10 11 12 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Anderson Varejao, 29
Alonzo Gee, 25
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.
College
Syracuse
N/A RESEARCHED BY Crain's staff.
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Home: Area builders focus on pricier homes continued from PAGE 1
Buyers of new homes can snag low interest rates on mortgages. That has been true for years, but only recently has the time-tested magic for builders returned. Builders across the board say their model centers are busier on weekends than they have been in years. Solon-based builder Rick Dinallo, vice president of Dinallo and Wittrup Homes, said the firm is seeing “a lot more traffic.” “People are actually taking an interest in going forward,” he said. “It takes a lot longer to get to the deal. But we are writing business at a much-improved rate in last year.” In the case of Dinallo and Wittrup, the change in appetite surfaced in Bainbridge at its Brighton Park Estates subdivision. Dinallo and Wittrup since last November has sold five homes costing upwards of $600,000 — on the same pieces of ground where it had not closed a sale since finishing a model in 2008. Of the high-income buyers he primarily serves, Mr. Dinallo noted, “People in this price range already have a nice house. They do not have to move.” The difference, he said, is that his buyers are “feeling more secure in their positions at work. They are secure in the values of their resales. And they are tired of waiting to build, so they are going ahead.”
Big land grab Most local builders who have survived the downturn are concentrating on pricier properties, in the $300,000-plus range. They say it’s difficult to compete with national and regional builders, most pub-
licly traded, that dominate the lower price range, which produces the largest number of home starts in the region. K. Hovnanian, the Red Bank, N.J.based builder, has had a “meaningful rise in traffic and demand in our Northeast Ohio communities,” said Derek Lewallen, marketing manager for its Ohio Division, in an email. The publicly traded builder does not disclose local sales figures or comparisons. However, the firm’s actions speak volumes. Last week it announced that it had acquired the Meadow Lakes property in North Ridgeville, which has 67 home sites available and land to install 700 more. Mr. Lewallen said in the email that the company has had good results in the Lorain County community, so it bought the Meadow Lakes land when it became available. The past few years, Hovnanian vigorously bought home sites from other builders and from banks. But that situation is changing. “It is anticipated that the number of distressed lots will continue to shrink as the housing market recovers,” Mr. Lewallen said in the email. “However, there is no definitive study that indicates the supply of lots and how long it will take to exhaust that supply.”
Confidence grows Consider how Hovnanian fared at Evan Miller Trail in Olmsted Falls, where it bought lots in April 2011 from a land-owning affiliate of First Federal Savings of Lakewood. “We’ve seen continued growth and sustained interest,” Mr. Lewallen said of Evan Miller Trail, though he declined to comment on a report
by a prospective buyer of a $10,000 increase this month in base selling prices there. He noted new homes there start in the $160,000s. Both Parkview Homes and Dinallo and Wittrup see enough of a sustained resumption in the market that they are beginning the timeconsuming process of developing new home sites on locations they have held for years. Mr. Dinallo said his firm has started to look at dusting off plans for Stone Creek Estates, a 24-site home development off Cannon Road in Solon that he put away reluctantly in 2008. “It took a lot of fortitude to put it away after the effort that went into it in 2007,” he said. “The market has more confidence now. I know I do.” Likewise, Parkview has 10 home sites left of 40 it put into the Seidel’s Landing subdivision five years ago, so it is looking at adding seven new lots. The company put in 21 new lots last winter at its Westwood Farms development and sold eight. It also is adding 19 lots in West Chase Landings in Brunswick Hills in Medina County — its first there in four years.
Happy to be busy Still, turning raw land into sites for homes is harder than in the past, though it isn’t the physical work of felling trees and scraping ground that is more difficult. Builders say banks eschew construction and development loans, which are the riskiest of all real estate loans. As a result, builders are financing the projects with private equity from investors or with their own resources. Carmine Torio, executive vice
Loopholes: Kasich long against expenditures continued from PAGE 1
Mr. Schiller’s organization believes some of the tax exemptions make sense, such as an exemption of prescription drugs from the sales tax, he said continuing to create new exemptions generally doesn’t make for sound tax policy. “It continues a pattern of monkeying with the tax code for the benefit of special interests,” Mr. Schiller said. “Policymakers should reverse the trend, use the proceeds from eliminating loopholes to restore public services, and make the tax code fair and level for all Ohioans.” Policy Matters also believes that one group of tax breaks — tax incentives or credits to businesses that create jobs in Ohio — too often reward companies for doing things they would have done without the incentives. One of the new tax breaks Mr. Schiller cites is an exemption from the sales tax of purchases of telecommunications equipment by companies that will use the equipment for direct sales, regardless of the nature of the user’s business. Until now, a telecommunications equipment purchase was exempt from sales tax only for companies considered primarily direct marketers. The Legislative Service Commission, the agency that drafts and assesses the financial impact of legislation for the General Assembly, estimated the cost of this exemption at $2.6 million a year.
Policy Matters questions the value of this tax break in attracting business to Ohio. Mr. Schiller noted that one company that testified in favor of the legislation, the Home Shopping Network, already has an affiliate operating in the state.
Talking the talk Even as elected officials in Columbus keep adding tax breaks, the official word out of the governor’s office is that its occupant wants to reduce them in number. Rob Nichols, Gov. Kasich’s spokesman, told Crain’s last Thursday, Aug. 23, that the governor is targetting candidates for elimination among the tax expenditures. “He’s going to take the same process and criteria he used in Congress and he’s going to apply them to the tax (expenditures) in Ohio,” Mr. Nichols said. “There’s some lowhanging fruit out there.” However, Mr. Nichols would not identify the specific tax breaks the administration will target. In 2000, when he was a congressman and chairman of the House Budget Committee, Gov. Kasich was allied with activist Ralph Nader, who called him the leading congressional crusader against corporate welfare. Earlier this year, Gov. Kasich vetoed a section of the state budget bill that would have granted a salestax exemption for aerospace industry research and development, saying
there was no justification for such a broad tax exemption. In April, the governor proposed a new financial institutions tax that would have eliminated several tax breaks for banks, payday lenders, mortgage brokers and finance companies but lowered rates for the broader industry. That bill languishes in House and Senate committees.
Divergence of goals The objectives of Policy Matters Ohio and Gov. Kasich in advocating for the closing of certain tax loopholes aren’t the same. Policy Matters Ohio sees eliminating tax breaks as a way to raise revenue for needed services. Gov. Kasich’s goal isn’t to boost revenue; he wants to offset the revenue gains from closing loopholes with a broad lowering of business income taxes. The Ohio Department of Taxation calculates the total cost to the state of tax exemptions at the time it issues a two-year budget. In March 2011, the department put the cost of 128 tax exemptions then in effect at $7.4 billion for the fiscal year ending June 30, 2012, and at $7.6 billion in fiscal 2013. Some longstanding tax breaks make some sense and generally are received well. Among the largest not considered controversial are exemptions from the sales tax for prescription drugs and for sales to churches and other nonprofit organizations. Those two account for
president of the Home Builders Association of Akron trade group, said his members believe it won’t be long before the inventory of distressed lots is gone and new developments are needed. He said pressure from subcontractors to raise prices and increasing building costs also have some builders worrying about affordability in the near future. But for now, Mr. Torio looks at the bright side. “Every builder or supplier you talk to in the industry is happy compared to last year,” he said. “They say they are as busy as can be.” However, he notes, they may be busy with a staff of eight today compared with 27 before the downturn. Much of the action stems from people selling their homes or gaining confidence that they can sell their homes at reasonable prices as the existing home market picked up last year. Howard “Hoby” Hanna IV, president of the Ohio unit of the Pittsburgh-based residential brokerage, said he is encouraged when his builder friends tell him the market is improving. Still, a lack of new homes available for immediate occupancy removes from the selling equation the excitement prospective buyers often feel when they can walk through a new property. “A lot of the builders I talk to are having trouble getting financing for speculative homes and models,” he said. “Not a lot of consumers are willing to wait six or nine months for construction of a new house. “ However, Mr. Torio said the sideways recovery in new home construction remains encouraging given the pronounced downturn from 2005 to 2010. ■
$966.7 million in lost tax revenue in fiscal 2012 and $1.14 billion in 2013. In the meantime, new tax breaks continue to crop up.
No laughing matter New this year is a tax break that gives companies that employ at least 200 people at an Ohio location a tax credit for hiring work-at-home telecommuters. Among those testifying in favor of this tax credit was a representative of Convergys Corp., a Cincinnati call center operator. Another tax break exempts convention centers in Columbus and Youngstown from property taxes even if they are run by private operators. The under-construction Cleveland convention center received a similar tax break in 2010. The additions were made even as the Legislature has talked of scaling back exemptions. An April report by state Rep. John Adams, a Republican from Sidney who chaired a legislative study committee on taxes, found tax expenditures “are both poor policy and (a) poor concept” and should be regularly reviewed. State Rep. Mike Foley, a Cleveland Democrat and also a member of the tax study committee, stated on the floor of the House last April that many of the tax breaks “probably help economic development in the state of Ohio.” “But,” he noted, “there are some out there that are fairly silly and have been on the books for a long time.” Added Rep. Foley: “Seven billion dollars, especially in this economy, are not something to laugh about and not do anything about.” ■
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Mall: Potential buyer’s plans for property remain unclear continued from PAGE 1
40% when it was placed in receivership more than a year ago by its current owner and developer, Parmatown One LLC, an asset of RMS Investments. RMS is led by founding family members and heirs of the Ratner, Miller and Shafran families that formed real estate giant Forest City Enterprises Inc. Linda Fatherree, a Phillips Edison spokeswoman, declined comment on the potential acquisition. However, the firm already has a direct link to Parmatown Station: Phillips Edison’s name is on state incorporation records forming Parmatown Station LLC last April. Although he refused to confirm Phillips Edison’s role as potential buyer or details on what may be on tap at Parmatown, Parma Mayor Timothy DeGeeter issued via email a statement to Crain’s saying the city is prepared to use economic development tools and incentives to promote redevelopment of both Parmatown and the heavily commercial Day Drive adjoining it. “This is a real opportunity to develop this property not only in a way that makes economic sense but lends itself to helping promote a transformative effort of the Day Drive corridor,” the mayor wrote in the email. Combined with civic assets from Parma Community General Hospital to city hall and a new Cuyahoga County Public Library nearby, the mayor said, there is synergy that can
Parmatown One and its members would be released from liability for the mortgage. Court documents give no clue as to the next phase for the shopping center and mall, which played a key role in Parma’s post-World War II growth as well as Forest City’s evolution from local to national developer. The receiver for the property, David Browning, managing director of CBRE Group Inc.’s Cleveland office, declined to detail the negotiations. “All I can say is that we have been in discussion with the parties and the settlement is in due diligence,” Mr. Browning said. “We’re optimistic, but it’s premature to discuss.” However, CBRE as receiver has a unique perspective on Parmatown and the Parma area from more than a year of collecting rents and running the property. “Parma is a very solid trade area,” Mr. Browning said. “The population density and demographics are almost the same as those at Westgate in Fairview Park, and it’s a non-highway location.” The old Westgate Mall site is now an open-air shopping center with a contemporary design. Parmatown consists of a mall and attached strip shopping center and is home to multiple retailers that could aid — but also complicate — its redevelopment; among them are Walmart, Dick’s Sporting Goods and Marc’s. ■
STAN BULLARD
David Browning, the managing director of CBRE Group’s Cleveland office, said that from his perspective, Parma mirrors Fairview Park, the home of the open-air Westgate Mall, above. be created to make the Parmatown area a “touch-point” for city residents.
Work to be done The complicated potential transaction involving Parmatown is incomplete.
Judge John O’Donnell last Monday, Aug. 20, gave the parties in the receivership more time to work with a potential buyer, according to the court’s docket. None of the documents for any of the parties in the settlement agreement are signed.
Under the proposed settlement, filed jointly by Parmatown One and US Bank as the trustee for the special servicer on a $65 million mortgage sold to investors, Parmatown Station LLC would acquire the property for an undisclosed amount.
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THEINSIDER
THEWEEK AUGUST 20 - 26 The big story: General Motors Co. will invest $220 million in tooling and equipment to build the next-generation Chevrolet Cruze, an expenditure that will retain more than 5,000 jobs at the automaker’s plants in Lordstown and Parma. GM said the Lordstown complex, with support from its metal center in Parma, has built more than 500,000 of the Cruze, Chevrolet’s top-selling compact passenger sedan, since production began in September 2010. Grabbing a foothold: Tornier N.V., a Dutch medical device company focused on products for orthopedic surgery, signed a definitive agreement to acquire Medina-based OrthoHelix Surgical Designs Inc. for $135 million plus more payments over two years, based on achieving certain revenue milestones. OrthoHelix makes implantable screw and plate systems for the repair of small bone fractures and deformities, mainly in the foot and ankle. OrthoHelix’s central operations will remain based in Medina, as will its 80 employees. Setting their sites: In a sign of an improving new-home construction market, K. Hovnanian Homes acquired land for more than 700 home sites in the Meadow Lakes Subdivision in North Ridgeville. The Red Bank, N.J.-based national builder said 67 sites are available immediately. The rest of the land will require the addition of streets and other infrastructure. Tom Oster, president of the Ohio division of K. Hovnanian, said the acquisition gives K. Hovnanian the largest land position in North Ridgeville of any national home builder.
Better late than never: It took longer to pull off than most bank recapitalizations, but Central Federal Corp. has completed its stock offering. The parent company of CFBank in Fairlawn, Central Federal raised $22.5 million before expenses through the sale of 15 million shares of its common stock at $1.50 per share. The company will invest $13.5 million of the proceeds into CFBank to improve its capital ratios and to support growth and expansion. (See story, Page 6.) 2010 Women of Note honoree Marilyn Chase in the armor court FILE PHOTO/ JANET CENTURY
It suits them: The Cleveland Museum of Art received a $7.5 million gift from the Jack, Joseph and Morton Mandel Foundation to support the museum’s renovation and expansion project, which is scheduled for completion by the end of next year. As a result, the museum’s iconic armor court has been named the Jack, Joseph and Morton Mandel Armor Court.
The human touch: Cleveland-based Human Arc, which offers reimbursement and revenueenhancement services for hospitals and health plans, acquired a Lansing, Mich., company that provides Medicaid eligibility enrollment services to Michigan hospitals. Human Arc will maintain its corporate headquarters on East 40th Street as well as an office in Kansas City, Mo., and L&S Associates will continue to operate from Lansing.
Patients first:
Summa Health System in Akron and two local physicians groups joined forces to form a for-profit venture designed to help reduce administrative costs. The new organization has been dubbed the Patient-Centered Collaborative Network and will be comprised of Summa, Community Health Care and Pioneer Physicians Network.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Veritix still can be the ticket for NBA teams
Give them credit for a toehold in NE Ohio
Pumped up over ParkerStores
■ The NBA and Ticketmaster announced last week that they’d struck a deal to bring every team’s primary and secondary ticket marketplaces under one umbrella website, thus offering teams without a sophisticated secondary site of their own a better way to track data on ticket and game trends. The Cleveland Cavaliers, of course, already had such a portal — FlashSeats, the ticketing marketplace owned by Cleveland-based and Dan Gilbert-owned Veritix — so the new deal didn’t affect them much, except for placing a link to FlashSeats behind a Cavs logo. But we did wonder how the deal would affect Veritix’s pursuit of more NBA clients; in addition to the Cavs, the Utah Jazz, Houston Rockets and Denver Nuggets already use the system. As it turns out, the new partnership does not prevent teams from employing other secondary ticket portals, so Veritix is free to pursue other NBA teams to add to its stable. In turn, the Ticketmaster/NBA site simply would link to those sites, like it will with FlashSeats and the four teams that use it. Veritix currently has 11 teams using FlashSeats, plus the NCAA Final Four, the College Baseball and Softball World Series and Dover International Speedway. — Joel Hammond
■ For the first time since it opened in 1973, a Columbus-area credit union is making loans and issuing credit cards to residents of Northeast Ohio. Ohio HealthCare Federal Credit Union out of Dublin struck an agreement this spring with The Center for Health Affairs, which advocates for Northeast Ohio hospitals and now is marketing the credit union’s products to its members. So far, the credit union has added 27 members from Northeast Ohio to its approximately 8,200 members, 24 auto loans totaling more than $420,000 and more than 10 credit card accounts, according to Jaime Crooks, marketing director. Ohio HealthCare’s charter dictates that it serve a specific trade, industry or profession, not a geographic area. Now that shared branching has taken off among credit unions and the use of online banking has increased, Ohio HealthCare officials felt that it could offer its products to customers in this region more conveniently, Ms. Crooks said. Ohio HealthCare, with about $50 million in assets, has agreed to pay a marketing reimbursement to The Center for Health Affairs in an amount based on the auto loans made and credit cards issued in the region. Officials declined to say how much the credit union has paid the center so far. — Michelle Park
■ Parker Hannifin Corp. may be known for its role as a maker of motion and control technologies. But the Mayfield Heightsbased manufacturer has another, less technology-driven concept it is marketing: ParkerStores. An industrial-retail hybrid store, ParkerStores serve as a marriage of a trade counter and a retail store. The stores feature Parker’s hydraulic components and pumps, hydraulic filters, connectors, pneumatics and compressed air treatment products. Parker launched the concept 19 years ago in Brook Park, and in October it will open its 2,000th store — a 1,600-square-foot store in Chassieu, France. The company is on pace to open a new store daily through the rest of 2012, said Craig Coffey, marketing communications manager for Parker. While stores initially were housed within distributors’ facilities, many of the new stores now are in stand-alone locations. More than 50% of Parker’s distributors run ParkerStores. “Parker’s industrial retail strategy has realized significant worldwide growth since the first ParkerStore opening in 1993 as the ParkerStore concept presents a complete business plan for distributors who are interested in operating a retail location,” said Brad Fischer, director of global retail operations. ParkerStores are in more than 80 countries. — Ginger Christ
MILESTONE
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
Progressive Corp. dented a bit from chirping on Twitter ■ 1,000 customers. That was the Twitter toll of Progressive Corp.’s recent entanglement with a blogger, according to MarketWatch.com
THE COMPANY: Paladar Latin Kitchen & Rum Bar, Woodmere THE OCCASION: Its fifth anniversary The restaurant turned 5 years old last week, but going forward, a couple other numbers — three and four — will occupy management’s focus. Paladar already has its flagship location in Woodmere and another in Annapolis, Md., which opened in 2010. It’s about to open two more restaurants, its third and fourth, in Hallandale Beach, Fla., and North Bethesda, Md. Both are expected to be open by spring 2013. Like the existing Paladar locations, they’ll serve cuisine from Central America, South America, Cuba and the Latin Caribbean. To mark the anniversary, Paladar last Thursday, Aug. 23, offered customers free guacamole and half-price mojitos. The Woodmere location can handle up to 28 people in its private dining room (which is equipped with an LCD monitor for presentations) and up to 40 people in its Terrace Room. For information, visit www.PaladarLatin Kitchen.com. Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.
“More than 1,000 people on Twitter claimed to have dropped Progressive as their insurer in a four-day span (in the week of Aug. 13), an analysis by social-media tracking firm Crimson Hexagon shows,” the website reported. “Another 1,600 or so expressed a desire to not do business with the company, according to the analysis.” For those who missed it, the blogger, Matt Fisher, “ignited an online firestorm” against the company when he complained about the way his family was treated as it sought to collect on his sister’s Progressive insurance policy, MarketWatch.com noted. (The Fisher family sued the other driver in a crash that killed Mr. Fisher’s sister. It’s a sad situation all around.) Crimson Hexagon tracked 3,325 tweets on Aug. 13 about Mr. Fisher’s blog post of that day. Another 3,827 “tweeted about it on Tuesday before the online conversation dropped off considerably over the next two days, with fewer than 900 tweets on both Wednesday and Thursday,” MarketWatch .com said. In its analysis, Crimson Hexagon found that 23% of the tweets were spreading the news about the incident. Another 22% were classified by the analysis as expressing
some variation of “Progressive is an awful insurer.” The analysis found that 19% expressed a desire to disengage with the brand, while 11% claimed the incident already had made them drop Progressive as their insurer. For a bit of perspective on 1,000 lost customers, MarketWatch.com noted that in the past year, Progressive on average has added about 56,000 personal-lines policyholders a month.
Mandel needs work at being an artful dodger ■ Slate.com called attention to a certain campaign trait of U.S. Senate Mandel candidate Josh Mandel. Mr. Mandel “has become my favorite U.S. Senate candidate of 2012,” wrote Slate.com’s David Weigel, tongue in cheek. In one video embedded in the post you can “watch (Mr. Mandel) heroically refuse to respond to the question he’s getting,” Mr. Weigel wrote. “Now, the ‘switch to your talking point’ trick is a useful one, taught to candidates and pundits at every level,” according to the Slate.com post. “It works pretty well on a satellite TV interview or a controlled setting where a reporter won’t get bogged down in follow-ups — see the 2008 Palin-Biden debate. But Mandel has picked up the fascinating, and never effective, tactic of trying to talk past a reporter who has him locked into an in-person interview.” But does it really matter? Mr. Weigel linked to an Aug. 6 Newsweek story about Mr. Mandel’s campaign, which is doing pretty well in the polls lately, thanks to “boatloads of 501c4 and Super PAC money.”
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