Crain's Cleveland Business by Crain's Cleveland Business

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$1.50/SEPTEMBER 27 - OCTOBER 3, 2010

Vol. 31, No. 3

Manufacturing begins to climb from deep hole Brookings report shows Cleveland No. 2 in 2Q job growth; outlook reveals uphill battle By DAN SHINGLER dshingler@crain.com

MARC GOLUB

ABOVE: Patrick Conway (left) and Daniel Conway, brothers and co-owners of Great Lakes Brewing Co., are investing $6 million into the operation to increase beer production; the expenditures include new fermenters in the tank farm. BELOW: New equipment more than doubles bottling to 240 bottles per minute, from 105.

GROWTH ON TAP AT GREAT LAKES Ohio City brewer creates buzz with $6 million in capital improvements that will bolster production

See JOBS Page 26

Apartment owner grapples with spate of foreclosures

By KATHY AMES CARR kcarr@crain.com

By STAN BULLARD sbullard@crain.com

Debt woes are striking Niederst Management, one of the largest — and, for a time, one of Northeast Ohio’s fastest-growing — apartment ownership concerns. Fannie Mae, the governmentbacked company that underwrites housing debt, on Sept. 3 sued to foreclose on Niederst’s Richmond Park Apartments in Richmond Heights

reat Lakes Brewing Co. has been fulfilling its expansion plans in the same way fans of its carefully crafted beers and ales slake their thirst — by sipping, not gulping down market share all at once. As a result, the brewer in Cleveland’s Ohio City neighborhood has been growing slowly and methodically within its 65,000square-foot brewhouse on Carroll Avenue between West 26th and West 28th streets. The latest installment of its expansion effort involves a $6 million investment that would boost its production capacity to meet heightened demand.

under a $30 million mortgage. Likewise, Minneapolis-based US Bank National Association sued Sept. 9 to foreclose on Niederst’s Highland House Apartments in Lakewood. Both cases are in Cuyahoga County Court of Common Pleas. Those actions follow the decision of Dallas-based investment banker Orix Capital Markets LLC to sue Niederst Aug. 6 in Lorain County Court of Common Pleas in a See LOANS Page 26

INSIDE A closer look at legal software A global law firm with a large Cleveland office is one of a few legal outfits using a new method that allows lawyers to blast through thousands of electronic records. Read Chuck Soder’s story on Page 3.

See BREWING Page 14

Cleveland seems to be digging out of its jobs hole — but, oh, does it have a long way to go. Economic development advocates are touting a new research report by the Brookings Institution that ranked Cleveland No. 2 among the nation’s 100 largest metropolitan areas in manufacturing job growth during the second Zeller quarter. Its 3% increase trailed only No. 1 Youngstown, which saw an 8.9% spurt in manufacturing jobs in the quarter. However, that same report showed that while the Cleveland

market appears to be gaining jobs faster than the country as a whole now, it suffered more job loss over the breadth of the downturn. The nation saw a 5.5% drop in overall employment between its peak in 2006 and the middle of 2010, according to Brookings. By contrast, the Cleveland area saw a 7.3% decline in employment over that period. And the view is worse over the long term, according to local economist George Zeller, who has been saying for years that Ohio and the Cleveland area entered their own recession in 2000 — and never came out. Since 2000, Cuyahoga County has

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LEGAL AFFAIRS Employers make accommodations for nursing mothers ■ Page 19 PLUS: THE INTERVIEW ■ ADA CLAIMS ■ HIRING TRENDS ■ & MORE

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COMING NEXT WEEK Manufacturers eyeing Nov. 2 With Election Day just over a month away, the industry is watching the issues and candidates to identify who and what will affect them. Plus, we look at the opportunities and challenges involved with exporting.

REGULAR FEATURES Best of the Blogs ..........27 Big Issue ......................10 Classified ................24-25 Editorial .......................10 Going Places ..................9

List: Business insurance agencies ...................16 Personal View...............11 Reporters’ Notebook ....27 Tax Liens......................18

WWW.CRAINSCLEVELAND.COM

SEPTEMBER 27-OCTOBER 3, 2010

PROGRESS REPORT U.S. job openings rose in July, which typically is a sign that employers are getting ready to expand. There were slightly more than 3 million jobs open in July, up 6.2% from June and more than 30% higher than July 2009, according to data from the U.S. Bureau of Labor Statistics. This is improvement, to be sure, but in July 2008, there were nearly 4 million jobs open. Here are figures for job openings and the job openings rate during the past eight months:

Time period

Job openings

Job openings rate

July 2010

3,042,000

2.3%

June 2010

2,864,000

2.1

May 2010

2,939,000

2.2

April 2010

3,302,000

2.5

March 2010

2,785,000

2.1

February 2010

2,647,000

2.0

January 2010

2,854,000

2.2

December 2009

2,531,000

1.9

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CRAIN’S CLEVELAND BUSINESS

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Omnova sees bigger, better times ahead Chemical producer’s planned deal to buy French company would extend global reach By DAN SHINGLER dshingler@crain.com

Specialty chemicals producer Omnova Solutions Inc. is about to become a company with $1 billion in annual sales and a broader international reach, assuming it completes a planned acquisition of France’s Eliokem International for $300 million.

SHERROD BROWN U.S. Senator

With similar but complementary products, the same raw material inputs and the same global aspirations as Eliokem, Omnova believes it can be bigger and, beginning in 2012, more profitable as a result of the transaction. Both companies produce specialty chemicals used in the plastics industry, as well as for other sectors such as oil and gas

MARCIA FUDGE U.S. Representative, 11th District

exploration. “It is an excellent fit with all of our previously stated strategies,” Omnova chairman and CEO Kevin McMullen said during a conference call last Thursday, Sept. 23, with securities analysts. Unless revenues drop, the combined company will have annual sales of more than $1 billion, based on total revenues of $1.05 billion for the two companies over the 12 months that ended May 31. During that period, Omnova’s revenues were $785 million — $319 million

DENNIS KUCINICH U.S. Representative, 10th District

2007-2008 staff salaries: N/A; Rep. Fudge joined Congress in Nov. 2008

2007 staff salary (April-Dec.): $1,788,145 2008 staff salary: $2,856,542

2007 staff salary: $988,125 2008 staff salary: $1,017,326

2009 staff salary: $787,404

2009 staff salary: $3,069,286

2009 staff salary: $1,093,100

08-09 % change: 7.5%

PRICEY POLITICS Watchdog groups upset with unwillingness of Ohio senators, representatives to slice costly staff salaries By JAY MILLER jmiller@crain.com

mid clamoring by business people for the federal government to match the belt tightening they’ve undertaken at their companies, one of the few visible signs of congressional costcutting efforts has been the decision of individual members of Congress to turn down the automatic costof-living increases in their own paychecks. But the senators and representatives who serve Northeast Ohio haven’t been willing to take the next, more significant, step of keeping their office budgets down — namely, trimming or freezing the pay of the workers in their own offices, a decision each member could make unilaterally. That attitude has several Washington watchdog groups outraged. “This is one obvious and symbolic gesture Congress could make to show

U.S. Representative, 14th District

BETTY SUTTON U.S. Representative, 13th District

Follow the growth

several levels, Mr. McMullen and other company executives said. For one, it gives Omnova more presence in China, India and other developing markets while diversifying its customer base. Eliokem has been investing heavily abroad in recent years. It opened a new antioxidant plant in China in 2006, bought a specialty chemical plant in India in 2008 and built another in China that opened in September. Those plants will continue to make Eliokem’s existing

The deal works for Omnova on

See OMNOVA Page 8

INSIGHT

‘Predictive’ software eases lawyers’ burden in document searches Technology cuts time of poring over vast records By CHUCK SODER csoder@crain.com

Attorney Howard Nicols tells a man-versus-machine story that sounds a lot like a backward version of the tale of John Henry, the mythical hammer swinger. Squire, Sanders & Dempsey LLP, where Mr. Nicols is global managing partner, is one of a few law firms using an up-and-coming method that allows attorneys to blast through mountains of electronic records to find the documents they need. The process, often referred to as “predictive coding” or “predictive tagging,” uses software that learns from attorneys as they sift through documents marking which ones are relevant to their case and

which ones aren’t. After a while, the software takes over. Predictive coding isn’t broadly accepted yet because it hasn’t yet faced — and, therefore, survived — a major challenge in court. Squire Sanders, a global firm with its largest office in Cleveland, was willing to make the leap after internal tests suggested that such a system could cut in half the time attorneys spend poring through what can be overwhelming numbers of electronic records, said Mr. Nicols, who also leads the firm’s advocacy practice. The test pitted the firm’s attorneys against Equivio’s Relevance predictive coding software. Unlike John Henry, who died after beating a steam-powered See LAWYERS Page 17

THE WEEK IN QUOTES

See POLITICS Page 6

STEVE LaTOURETTE

from its Decorative Products unit, which makes films and laminates used in wallcoverings and upholstery, and $466 million from its Performance Chemical Unit. For the same period, Eliokem’s sales were $268 million. It’s a significant transaction for Omnova, said Dan Rizzo, an analyst who follows Omnova for Sidoti & Co. in New York. “I’m bullish on the deal, but it surprised me how big it was,” he said.

GEORGE VOINOVICH U.S. Senator

2007 staff salary: $918,848

2007 staff salary: $769,499

2007 staff salary: $2,575,947

2008 staff salary: $972,048

2008 staff salary: $813,210

2008 staff salary: $2,778,138

2009 staff salary: $1,048,090

2009 staff salary: $951,499

2009 staff salary: $3,191,670

08-09 % change: 7.8%

08-09 % change: 17.0%

08-09 % change: 14.9%

“This is one sign of how the Northeast Ohio region is getting repositioned to be successful. … We’re extraordinarily wellpositioned in some segments.”

“Sometimes, there are issues ... that really affect a whole group of companies. ... So maybe the first thing we need to do is find out what’s holding our companies back.”

— Brad Whitehead, president, Fund for Our Economic Future. Page One

— Frank Samuel, president, Geauga Growth Partnership. Page 4

“I made it a personal goal to breast-feed until she was about 8 months old. To have that room … was an awesome benefit to coming to work every day.”

“Anytime you put an employee on the street, you face a discrimination case.”

— Colleen Kmetz, a project designer for architecture and design firm Vocon Inc. Page 19

— John Gerak, a shareholder with Ogletree, Deakins, Nash, Smoak & Stewart. Page 22

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SEPTEMBER 27-OCTOBER 3, 2010

Geauga leaders team to retain businesses County awoken by Johnson Rubber closing By JAY MILLER jmiller@crain.com

A loss of jobs — including a factory closing — has united a group of community leaders in Geauga County. Several business executives and public officials have formed the nonprofit Geauga Growth Partnership to tackle business retention in the small, semi-rural county. The goal is to work with the county and its economic development office to

think strategically about stabilizing and growing the employment base in Geauga County. “There is no countywide business leadership group (in Geauga County),” said Frank Samuel, the group’s president. “That’s what we hope to be.” Mr. Samuel, science and technology adviser to former Ohio Gov. Bob Taft, said several communities in the county have chambers of commerce, but they have focused on traditional Main Street retail development. He said no one has been going out to

determine the needs of existing manufacturing, construction or transportation businesses in the county to help them stay competitive and grow. “County and state officials have dealt with issues as they’ve arisen,” Mr. Samuel said. “But we need to develop a sense of what needs to be done to retain jobs.” Mr. Samuel said the group would talk to business owners and operators in the county to learn what financing or infrastructure hurdles they may need to overcome. It also would be an advocate for issues with a broader impact. “Sometimes, there are issues, broadband access maybe, that really affect a whole group of companies in a particular location in the county,” Mr. Samuel said. “So maybe the first thing we need to do is find out what’s holding our companies back.” Mr. Samuel that he eventually would expect to develop a relationship with the business attraction nonprofit Team NEO and play a role in bringing new business to the region. Carin Rockind, marketing vice president for Team NEO, said her organization is aware of the Geauga County effort and is ready to work with it. Geauga County commissioner Tracy Jemison, who has been involved with the creation of the new organization, said the county has lost at least 2,000 jobs over the last few years. In particular, the county was blindsided by the closing of the century-old Johnson Rubber Co. more than two years ago. Johnson Rubber, which made rubber boots for steering columns and brakepedal pads for the auto industry, filed for bankruptcy in December 2007 and abruptly closed in February 2008, ending 470 jobs in Middlefield. The county also was hit this year with the move of the headquarters of KraftMaid Cabinetry, which relocated more than 200 jobs to Ann Arbor, Mich., as part of a restructuring of parent Masco Corp.’s kitchen cabinet businesses. KraftMaid still employs about 2,000 people at its Middlefield plant, Mr. Jemison said. Geauga Growth Partnership will be financed by a three-year, $150,000 grant from the Lake-Geauga Fund of the Cleveland Foundation and from membership dues. The group must raise two dollars for every foundation dollar, giving the organization a three-year target budget of $450,000. Ann Fairhurst, Cleveland Foundation staff officer for its Lake-Geauga Fund, said the foundation at a retreat two years ago sought to identify key issues facing Geauga and Lake counties. “One of the things that surfaced was economic development,” she said. “And the other was partnerships and collaboration.” Geauga County has few large employers. The 2008 U.S. Census Bureau business census recorded only 10 employers with more than 250 employees and 97 with more than 50. That census identified 2,852 businesses in the county employing 31,322 workers. Of those workers, 12,765 were employed by 201 manufacturers, an area on which the group will focus. ■

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Cordray to tout scam protection program Attorney general to remind area small businesses about plan launched last year By TIMOTHY MAGAW tmagaw@crain.com

Janet Long thought she had hit a brick wall when trying to get a Dumpster removed from her family’s shoe shop property in Stow. The Dumpster’s owner — a waste management company Ms. Long alleges had violated its contract — wasn’t returning phone calls and ultimately threatened to charge more than $400 to take the receptacle from the premises. So, Mrs. Long — like hundreds of other small business owners — contacted the Ohio attorney general’s office for help. Mrs. Long said she was a little nervous to make the call. But within a week or so, the issue was resolved. “It was a great experience, and I applaud that office and applaud the attorney general for seeing the need for that particular department to help us out,” said Mrs. Long, who owns Long’s Shoes with her husband, John J. Long. Attorney General Richard Cordray launched a program last year to help small businesses and nonprofits recoup dollars lost to deceptive business practices and scammers — a service previously only offered to consumers. The scams, for example, typically involve spurious charges on company credit cards, bills for products never ordered or hidden fees for services. “Small businesses get cheated, I assume, the same away individuals get cheated and

“They did refund my money because I called every day. I closed my door, and I cussed and I swore.” – Dan Mosher, owner, Mosher Media mistreated,” Mr. Cordray said in an interview last week.

Rooting out scammers Since the program’s inception, about 1,500 small businesses and nonprofits have sought assistance and $230,000 has been recovered. In Northeast Ohio, 223 complaints have been filed and about $7,325 has been recovered. That’s not a slew of cash or complaints, but Mr. Cordray said that’s likely because businesses here aren’t aware of the program. As a result, he’ll be in Cleveland this Thursday, Sept. 30, to publicize his office’s services for small businesses. Mr. Cordray said the program allows his office to do its job better by identifying trends and scams that otherwise might go unreported. If he gets 20 or so similar complaints, he said he’ll likely launch an investigation. “The more that’s coming to us, the better we are able to do our job as well as helping (small businesses) at an individual level,” Mr. Cordray said. Some complaints from small businesses are over relatively small amounts of money, but Mr. Cordray noted that his office doesn’t tell people “your problem isn’t big enough for us to care about.” Sometimes, those small complaints are evidence a larger scam. “There are lots of creditors out there who understand they can stay below the radar screen and nothing is done to them,” Mr. Cordray said.

Typically, it only takes a phone call or a letter from the attorney general’s office to resolve a dispute, but it could go as far as filing a lawsuit. No lawsuits have been filed, but the largest dollar amount recovered through the program is $77,500 after an investment group in Westerville initially couldn’t get a refund on a deposit as promised after a loan fell through. “We get a strong response from people,” Mr. Cordray said. “They don’t want to have a problem with the attorney general’s office.”

Choice words don’t hurt The attorney general’s intervention, for example, saved Mike Leffler, owner of Appalachian Outfitters in Peninsula, $258.50 last year for a purchase of some receipt paper he never authorized from a New York-based company. After unsuccessfully trying to deal with the company, the Better Business Bureau referred him to the attorney general’s office for help. “I was somewhat skeptical going in that it was going to fall into a void, but (the attorney general’s office) didn’t seem like a government agency,” Mr. Leffler said. The whole issue was resolved in a little more than a month, he said. Of course, individual persistence at times can be equally effective. At least that was the case for Dan Mosher, who owns Mosher Media, a video production business in Akron. Mr. Mosher noticed that a $39.95 fee was taken out of his company’s checking account each month for more than a year. He said it was for a legal service for which he never signed up. Mr. Mosher alerted the attorney general’s office, but he ended up resolving the problem himself. “They did refund the money because I called every day,” Mr. Mosher said. “I closed my door, and I cussed and I swore.” ■

ON THE WEB

Story from www.CrainsCleveland.com.

Hyland acquires ailing CSC Group Hyland Software Inc. acquired Computer Systems Co., a document management software provider based in Strongsville that had been in Chapter 11 bankruptcy. Terms were not disclosed. The acquired company, which does business as CSC Group, employs roughly 100 people, most of whom work in Strongsville. Most of its Strongsville employees will move to Hyland Software’s Westlake headquarters next week, said Kaitlin Maurer, public relations specialist for Hyland Software. Prior to the acquisition, Hyland Software had nearly 1,000 employees, making it Northeast Ohio’s largest software company. The firm, like CSC Group, provides document management software. A small number of CSC Group employees who provide document scanning services will remain at the company’s Strongsville headquarters, Ms. Maurer said. Hyland Software might lease out the empty space to other companies in the future, she said, noting that Hyland Software also has a small group that provides document scanning services. CSC Group’s Michigan offices in Midland and Lansing will remain open as part of Hyland Software. The acquired firm filed for bankruptcy in November 2009 after spending more than a year searching for capital to buy out shareholders.— Chuck Soder

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Politics: Officials defend salaries, say top talent costs more continued from PAGE 3

it is serious about keeping the deficit under control,” said Pete Sepp, executive vice president of the National Taxpayers Union, a Washington, D.C.-based taxpayer advocacy group. “Lawmakers tend to underestimate the value of these exercises, but people care.” Citizens Against Government Waste, another Washington nonprofit, reports that the legislative branch’s spending for its own operation rose 6.8% from fiscal 2009 to 2010, to a total of $4.7 billion. Tom Schatz, the group’s president, said the rise of congressional staff budgets flies in the face of the success business has had in trimming staff costs.

“What the rest of the country has done is become more productive,” doing more with less staff, Mr. Schatz said. “In Washington, they seem to think spending more makes them more productive.” Data compiled by the congressional watchdog web site LegiStorm shows that the payrolls of the staffs of some Northeast Ohio House members have passed $1 million and the staff salary budgets of both Ohio senators moved past the $3 million mark. Those budgets have crossed those thresholds because of pay increases, not higher staff counts. The members of Congress defend the pay raises, saying they pay what

it takes for top-notch staffers. Since 2007, payrolls have risen from 3% to 17% annually among Ohio’s senators and representatives. By comparison, the Bureau of Labor Statistics reports that wages and salaries for private industry workers increased 1.4% for the 12 months ended Dec. 31, 2009, and 2.6% for the year ended Dec. 31, 2008.

Lowdown in the House ... The biggest single-year staff salary increase was in the office of Rep. Betty Sutton of Copley Township. Rep. Sutton, a Democrat, came into office in January 2007 and had a relatively modest payroll during the first quarter of that year

and a low total staff budget for 2007. Her office had 14 staffers at the beginning of 2007. Her head count had risen to 20, including four part-timers, at the end of 2009. As a result of starting from a smaller base, her staff payroll rose from $769,499 in calendar year 2007 to $813,210 in 2008 and $951,499 in 2009, annual increases of 5.7% and 17.0%, respectively. Despite that growth, her staff budget in 2009 was smaller than either of the other two members of Congress who served over the full three-year period. Rep. Dennis Kucinich, D-Cleveland, has a bigger payroll than any other Northeast Ohio House member,

but it’s seen little growth. His office employed 22 at the beginning of 2007 and 23 at the end of 2009. Because of that stability, his staff salary increases over the time period studied was the smallest. His staff payroll went from $988,125 in 2007 to $1,017,326 in 2008 (a 3% increase) to $1,093,100 in 2009, making for a 10.6% increase over the two-year span. The salary budget in the office of Rep. Steve LaTourette, a Republican from Bainbridge, rose from $918,848 in 2007 to $972,048 in 2008 to $1,048,090 in 2009, a total increase of 14%. Though staff came and went during the period, he began and ended the span with 18 staffers. Rep. Marcia Fudge, a Democrat from Warrensville Heights, took office in November 2008, replacing the late Stephanie Tubbs-Jones and had a payroll of $787,404 for 2009, her only full year in Congress. The previous year, Rep. Tubbs-Jones had a payroll of $928,171.

... and in the Senate

WITNESS A TOP PERFORMER THAT HASN’T LEFT IN 163 YEARS.

Senatorial staff salary budgets for both Sens. George Voinovich and Sherrod Brown both broke through the $3 million mark in 2009 owing to significant increases in pay. Sen. Brown’s staff budget grew 7.5% from fiscal 2008 to fiscal 2009, his only two full fiscal years reported by the Senate, from $2,856,542 to $3,069,286. The House and Senate present data slightly differently, with the House using a calendar reporting year. The Senate uses a fiscal year that begins on Oct. 1. Sen. Brown, a Democrat, joined the Senate from the House in January 2007. He had a staff of 46 at the end of fiscal 2007. It had grown to 63 two years later. Sen. Voinovich, a Republican, had a bigger staff budget, $3,191,670 in fiscal 2009. That total represented a 14.9% hike over the $2,778,138 paid to staff in fiscal 2008, which was up 7.9% from $2,575,947 in 2007.

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The offices of various members of Congress defended the payroll practices of their bosses. Nichole Francis Reynolds, chief of staff to Rep. Sutton, said her boss has has refused congressional pay raises and used less money than the amount alloted to her in the congressional budget legislation. But, she said, Rep. Sutton “pays staff the salaries required to hire the top-notch people.” In a e-mailed statement, Rep. LaTourette said he returns about $100,000 of the money allotted to his office expenses and defended his staff cost. “I invest in a hard-working, responsive staff and shun costly, taxpayer-funded promotional mailings and try to fly in and out of Baltimore (Washington International Airport) because flights are one-quarter the cost of flying out of (Ronald Reagan Washington) National Airport in D.C.” Allison Preiss, press secretary to Sen. Brown, said part of the reason for the increase in Sen. Brown’s office was the need to build a statewide staff after he took office in January 2007. “Sen. Brown has always worked — and will continue to work — to see that taxpayer funds are spent wisely not only in Congress, but all across the federal government,” she said. Sen. Voinovich’s press secretary did not respond to an e-mail seeking comment. ■

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Omnova: Two product lines complementary continued from PAGE 3

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products, but they also can be ramped up fairly easily to produce Omnova’s proprietary products for the overseas markets, Mr. McMullen said. Omnova wants to increase its sales overseas. About 75% of Omnova’s existing sales are in the United States, while Eliokem derives about 75% of its revenues from Asia and Europe. “It would be a very modest investment for us to make their facilities able to manufacture our products,” said Mr. McMullen, who estimated the upgrades would take 12 to 18 months to complete. Mr. Rizzo said with both companies running at about 70% of their current production capacity, finding new products for existing plants is smart. He also said he agreed that Omnova should do more to pursue overseas markets. “It makes a lot of sense and (the transaction) gives them increased diversification, both geographically and in terms of products,” Mr. Rizzo said. “The markets in Asia make a lot of sense. That’s where the growth in the chemical market is focused.”

Synergies abound In those markets as well as in the

9_9_10 Thank you_The Austin Company.indd 1

9/21/2010 11:39:57 AM

“It really makes sense for us to combine. We’re very excited about it.” – Valerie Bokar, communications manager, Eliokem International United States, Mr. McMullen said the two companies often produce different but similar products that can be cross-marketed. For instance, Omnova makes water-based drilling muds used in oil and gas exploration while Eliokem serves that same market, but with oil-based and synthetic muds designed to withstand higher temperatures in more difficult drilling environments. The two companies also rely heavily on the same key chemical raw materials for their products, and by combining they will have access to those materials in all the markets where each now operates. The difference in prices for those raw materials can vary significantly by location, Omnova said, and the presence of suppliers in more places should allow the combined company to find better prices on a more consistent basis. Lastly, the companies will streamline their operations to achieve operational synergies, Mr. McMullen said. Typically, mergers involve the elimination of identical corporate functions, such as accounting or marketing — which can translate into job losses. Mr. McMullen and other Omnova executives said it was too soon to say how much in administrative costs could be wrung from the combined operations. Both companies have significant local operations — Omnova in Fairlawn with about 300 employees and Eliokem with 75 in Akron. However, the deal isn’t expected to result in

large local job losses because Eliokem’s Akron operations consist almost entirely of production personnel who make products not already manufactured by Omnova, said Valerie Bokar, Eliokem’s communications manager. “It really makes sense for us to combine,” Ms. Bokar said. “We’re very excited about it.”

Halfway home to financing Before the deal can be completed, Omnova needs to secure $200 million in additional financing. It plans to borrow a total of $425 million — $300 million to buy Eliokem and the rest to refinance both companies’ existing debt. It already has secured about $225 million of that financing, said Omnova chief financial officer Mike Hicks. The company will raise the rest either from banks or by selling debt, he said. Sidoti & Co.’s Mr. Rizzo said the level of debt Omnova will take on is probably the deal’s greatest risk. “I’m not in love with it and it bears watching, but I think they can handle it,” he said. Mr. Hicks said Omnova’s debt level still will be lower than it has been historically, relative to its size, after the deal is completed, and the company is comfortable with the amount of debt it will incur to do the transaction. Omnova said if it does not complete the deal, it will pay Eliokem’s owners, including majority owner AXA Private Equity of France, a break-up fee of $9.1 million. ■

UPCOMING EVENTS Crain’s Ideas at Dawn business breakfast series continues with two installments next month. The first, scheduled for Oct. 13, will tackle business succession planning for closely held companies; on Oct. 21, our panel will address pricing structures in a changing economy. More information can be found

:+<

at www.CrainsCleveland.com/ breakfast. Additionally, Crain’s on Oct. 26 will honor Northeast Ohio’s top chief financial officers at LaCentre in Westlake. For more information on that event, visit www.CrainsCleveland .com/marketing/cfo.html or call Christian Hendricks at (216) 7715182.

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Crain, 30, National vision retailer adds Akron to test Northeast Ohio pubs to title By STAN BULLARD sbullard@crain.com

KC Crain, 30, has been named vice president/group publisher at Crain Communications Inc. with responsibility for the company’s Akronbased publications — Plastics News, Rubber & Plastics News, Tire Businessand Waste & Recycling News. Mr. Crain also will supervise the Crain European-based titles of European Plastics News, European Rubber Journal, Plastics and Rubber Weekly and Urethanes Technology International. He also continues as publisher of AutoWeek, the world’s leading automotive enthusiast title. “I am honored that both my sons, Chris and KC, find the same excitement in our company that my brother Rance and I share. They represent the third generation of the Crain family to have leadership roles at the business my dad founded in 1916,” Keith E. Crain, chairman of Crain Communications, said in a statement. KC Crain said the Akron-based publications “represent some of the strongest brands in our company. I am really looking forward to working with their talented staff on a variety of new initiatives.” KC Crain was named a vice president of Crain Communications in May 2008 and publisher of AutoWeek in March 2007. He also has held the roles of associate publisher and advertising director at AutoWeek. ■

Look for eyewear retail competition to increase soon as America’s Best Contacts and Eyeglasses prepares to enter Northeast Ohio with multiple stores. America’s Best Contacts, a unit of National Vision Inc. of Lawrenceville, Ga., plans to open its first store in the region Oct. 29 at Westgate in Fairview Park. In January, it will open at City Centre of Avon in that Lorain County city, according to John Anderson, America’s Best Contact real estate manager. The America’s Best Contacts chain has 267 stores and plans to open 40 nationwide this year. Mr. Anderson said the company is in talks for at least five stores in the region and possibly as many as 12, depending on the reception its stores receive here. He declined to identify specific prospective sites. However, he acknowledged the company is considering sites from Sandusky to Fairlawn and Mentor. “We’re trying to get a good representation of our stores throughout the region to spread the advertising cost of going into a new market,” Mr. Anderson said. “At the same time, we’re trying for enough distance between stores that we can add more if we choose to without cannibalizing our stores.” America’s Best Contacts opened its first store under its own name in Ohio in January in Columbus, where it now has two. National Vision entered Ohio with a Toledo location when it bought the Eyeglass Co. chain in early 2009.

If it sounds like the chain based near Atlanta is marching on Ohio, it is doing so carefully. “Ohio has always been an allor-nothing state for us,” Mr. Anderson said. “There’s obviously a lot of direct competition based in the market. But Ohio is a huge state and was a void in our portfolio.” By direct competitors, Mr. Anderson was referring to Luxottica, the Milan, Italy-based owner of LensCrafters, Pearle Vision and five other eyewear retail chains. Luxottica has 4,700 U.S. locations. By contrast, National Vision has 650 stores, 270 of which are America’s Best Contacts locations. Luxottica ranked as the nation’s largest eyewear retailer with 2009 sales of $2.6 billion, while National Vision ranked fourth with 2009 sales of $558 million, according to trade magazine VisionMonday. In Northeast Ohio, Luxottica has 12 LensCrafters and 10 Pearle Vision stores, as well as eyewear stores inside Sears and Target locations. Luxottica spokesman Luca Biondolillo declined comment on America’s Best Contacts’ plans for Northeast Ohio. Mr. Anderson said America’s Best Contacts usually leases about 3,200 square feet of selling space and hires at least eight employees for each store, depending on how busy it is. One factor in expanding quickly now is competitive rents from hungry shopping center owners. However, Mr. Anderson said the company in this market has not received the 50% discount in rents that retailers nationwide are rumored to be receiving. He declined to disclose rents the chain has secured so far in Northeast Ohio. ■

GOING PLACES JOB CHANGES

LEGAL

FINANCE

BENESCH: Shaun J. Fox to associate.

CHARTER ONE: Jerry Cyncynatus to mortgage loan officer.

THACKER MARTINSEK LPA: Stacy RC Berliner to associate.

KEYBANK: Todd Wade to senior vice president, business banking team leader, Akron; Brad Guess to retail manager, Canton.

MANUFACTURING

FINANCIAL SERVICE

MILLWOOD INC.: Stan Dunton to strategic account manager, national accounts program.

BOBER MARKEY FEDOROVICH: Chad Basquin, Nicole Hughes and Andrew Zinger to supervisors; Shawn Carlson, Christine Chase, Mindy Marsden and Drew McDermitt to senior associates. RETIREMENT SOLUTIONS: Rachel Snyderburn to executive assistant.

GOVERNMENT NASA GLENN RESEARCH CENTER: Jared Reed to facilities architect.

HEALTH CARE METROHEALTH: Dr. Ewald Horwath to chairperson of psychiatry.

INSURANCE DAWSON COS.: Tony Gielty to commercial insurance representative; Valerie Pitts to account relationship manager; Malinda McKinnie to receptionist; Rick Bogucki to sales consultant; Justine Shoener to underwriting analyst. HOFFMAN GROUP: Connie Gennaro to personal lines account manager.

MYERS INDUSTRIES INC.: Melanie S. Bingham to senior vice president, human resources.

MARKETING HOME TEAM MARKETING: Ken Laschinger to vice president, accounts; Sarah Corr to senior account manager; Mike McGrath to production assistant.

NONPROFIT

Fox

Rubanenko Barr

TECHNOLOGY LORICUS INC.: Justin Beard to support engineer.

TRANSPORTATION PEOPLE EXPRESS WORLDWIDE TRANSPORTATION: Tracy Riga to director of marketing; Jaime Pickus to sales manager.

BOARDS HUNTINGTON’S DISEASE SOCIETY OF AMERICA: Donald L. Barr (Donald L. Barr & Co.) to chair.

CUYAHOGA COUNTY BOARD OF DEVELOPMENTAL DISABILITIES: Richard Hoban to director of sales, marketing and entrepreneurial projects, SAW Inc.

YOUNG AUDIENCES: Meredith Weil and Alan Zang to vice chairpersons for development; Paul Olzak to treasurer; Andrew Koonce to secretary.

MANDEL JEWISH COMMUNITY CENTER OF CLEVELAND: Gil Rubanenko to chief operating officer.

AWARDS

VOLUNTEERS OF AMERICA: Ricky Ferguson to program director.

SERVICE

ASSISTED LIVING FEDERATION OF AMERICA: Ross Wilkoff and Sarah Taub (Stone Gardens Assisted Living) received the Champion of Seniors Award.

CHANTEST CORP.: D. Thomas Oakley to president, CEO.

HOLDEN ARBORETUM: Theodore Herrick received the Volunteer of the Year Award.

DIRECT RECRUITERS INC.: Mike Silverstein to director of health care IT; Joshua Olgin to project manager.

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

CRAIN’S CLEVELAND BUSINESS

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SEPTEMBER 27-OCTOBER 3, 2010

PUBLISHER/EDITORIAL DIRECTOR:

Brian D. Tucker (btucker@crain.com) EDITOR:

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

Scott Suttell (ssuttell@crain.com)

OPINION

Mea culpa

e find we owe our readers an apology. For the last 15 months, we’ve repeatedly but erroneously used phrases such as “recession-plagued” and “recessionhobbled” to describe the state of the economy. We deeply regret this mistake — though we have no intention of going back and correcting each of the stories in which the word “recession” or a derivative thereof appeared. It would be way too much work and would cut into our staff’s productivity. So, we hope this blanket mea culpa will do. The National Bureau of Economic Research in Cambridge, Mass., set us straight last week that the recession is over and has been since June of last year. If you are still without a job or sales at your company still haven’t returned to pre-recession levels, that’s too bad. The worst is over, so get over it. If you are a business owner who isn’t hiring because he or she is worried about the cost of the health care legislation that Congress and President Obama approved in the spring, stop wringing your hands and start posting help-wanted ads. We’ve had enough of all you Negative Neds and Nellies out there. Didn’t you see the latest state unemployment report? It says unemployment in Ohio was down to 10.1% in August from 10.3% in July and 10.7% in August of last year. That’s an improving trend (never mind that more people gave up looking for work last month and the number of people employed in nonfarm jobs actually fell by more than 15,000 in August from the month before.) You can stay in a recessionary state of mind if you want. But as for us, we won’t use any form of the Rword when writing about the economy’s condition. “Stagnant” or “lackluster,” maybe. But definitely not the R-word.

Keep it rolling

he quiet man of Cleveland politics, Mayor Frank Jackson, has managed to create a substantial amount of noise with his idea of positioning the city as a center of environmental and energy consciousness. Witness the turnout last Wednesday and Thursday of several hundred people for his second sustainability summit at Public Hall. Last year’s summit sparked so much interest in sustainable business practices that an encore only made sense. And, as we’ve seen over the last 12 months, an exciting aspect of the movement is that isn’t just large companies that are embracing their implementation. To give more small businesses incentive to join the movement, the city of Cleveland has given bid discounts of up to 4% to those local companies that can show they’ve taken steps to conserve energy and reduce waste. Likewise, the Council of Smaller Enterprises is offering grant money to COSE members that complete the Green Plus sustainability certification program and to those that conduct energy audits. The object is to ingrain sustainability into the business culture. It is a goal worth pursuing.

FROM THE PUBLISHER

Heat wave draws a crowd to hot seat

to the state’s economy. While I have ecent media reports indicate little doubt it will create jobs, I wish I had that this has been one of the more faith that the project — designed to hottest summers in a century in take passengers between Cleveland, Northeast Ohio. Columbus and Cincinnati at average Could that explain: speeds of 39 miles per hour — will help A lawsuit by 12 suburban Cleveland reduce our dependence on oil. communities against the regional sewer I wish America still had a train system district for this new fee designed to help that was viable like Europe’s; I mitigate the effects of storm just doubt this investment, if water runoff. As a society, we have BRIAN that’s what you call it, is the anto realize there are unforeseen TUCKER swer. Especially if the estimates costs to relentlessly paving over that the system might need anthe land and erecting buildings. nual operating subsidies from Braylon Edwards’ continued the state as high as $17 million. screw-ups, the latest being his And how about the group’s DUI arrest, which could lead to claim that this project will a probation violation stemming increase each Ohio family’s from his antics at a Cleveland income by $90? Huh? nightclub. And how about that Accusations by the DemocAssociated Press photo from his ratic Governors Association that Fox court appearance? Which was more News violated Ohio election law by laughable — the Paul Bunyan beard or adding the graphic “John Kasich (R) Kathat outrageous diamond earring that sichforOhio.com” under the former conscreamed, “I have more money than all gressman’s name during an interview on of you!”? a network newscast. Don’t get me That new study (used loosely) by the wrong: As a journalist, I think such a hidOhio Public Interest Research Group that den promotional message is offensive at applauds the “3C” rail project as a boost

best. The thing is, television at every level has blurred the lines of oldfashioned “straight news” guidelines for years. How about the interviews at the businesses or organizations that are paying for ad space? Network news shows “interviews” that are nothing more than promotions for new shows. As a locally prominent mayor liked to say in his last campaign, “It is what it is.” Jimmy Dimora continuing to work — albeit in a constrained fashion — and getting paid as a Cuyahoga County commissioner after being led from his house in shackles by FBI agents. It’s not that I don’t believe in our treasured concept of innocence until proven guilty; I just wish he had the good sense to take a leave of absence, especially given that his job will be eliminated in a few weeks as part of the move to a new form of government. And, finally, here’s what might be the most quizzical response from an arrest suspect I’ve ever heard: Bridget McCafferty saying that this will make her a better judge because she will know what it’s like to be a defendant in the criminal justice system. Wow. ■

THE BIG ISSUE According to the federal government, the recession ended more than a year ago. Do you agree?

DAN ROMA

AMY VENESILE

EMILIO NUNEZ

KATYA VYGOVSKAYA

Stow

Avon Lake

Cleveland

Yes and no. Maybe it has from a larger scale, but it’s still affecting people. It’s a tough question, really. It may have (ended), but a lot of the local economies are suffering.

I think (people) are having difficulty finding jobs. I think there’s still a long way to go before we’d be considered out of the recession.

No, because I could see by where I work. Everyone is suffering. I have a job, but I’m definitely not making as much money as I was five years ago.

No, I don’t see significant improvement with the economy, and inflation is still going forward. Jobwise, I’m not sure a significant amount of jobs have been created.

➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.

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PERSONAL VIEW

People key in sustainability effort By CHUCK SODER csoder@crain.com

t would be difficult to stop the massive group behind Sustainable Cleveland 2019 from achieving something significant. Oh, they’re bound to come up short here and there. That’s what happens when you have hundreds of people shooting at more than a dozen different goals, all at once. Still, these people won’t walk away empty handed. Big groups of passionate, well-organized people rarely do. Nearly 600 people packed Public Auditorium last week for the Sustainable Cleveland 2019 summit, the second in a series of annual meetings organized as part of a decade-long effort to reshape Cleveland into an eco-friendly city with a strong, eco-friendly economy. As if that wasn’t enough, there’s a side benefit: Should the effort achieve its goals by the 2019 deadline, the reporters who descend on the city for the 50th anniversary of the Cuyahoga River fire will find a Cleveland that makes their hometowns

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Mr. Soder covers technology for Crain’s Cleveland Business. look dirty. Take that, Forbes! To what degree Sustainable Cleveland 2019 succeeds is questionable, but I doubt the 10-year effort ends up on display in the Unfinished Public Plans Hall of Fame (which is still in the permitting stage). Since last year’s summit, the group has produced a written guide and formed 17 working groups. Many of the groups have met consistently over the past year, trying to come up with and execute projects related to various sustainability goals, such as forming an incubator for sustainability-related businesses and promoting green building practices. Summit organizers plan to devise metrics against which to judge progress made by the groups and the region as a whole. Those, however, are just plans. I expect the people to make it happen. Why? Not only are they numerous (and always looking for recruits to join the cause), but I’ve seen their passion firsthand.

During the first of many brainstorming and planning sessions held at the summit, participants at each table described to others why they attended, what they hope the effort will achieve and what they see as the keys to its success. One person at each table had to prepare to summarize those answers in front of 600 people. I expected these individuals to sink in their chairs, forcing organizers to make good on the threat to call out groups to present. Instead, countless hands were in the air, yearning to talk sustainability. That type of passion spreads quickly. Corporate America is getting passionate about sustainability, too, now that so many consumers, employees and high-level managers are wholeheartedly on board. Corporate Cleveland is joining in as well, and not just by passing out recycling bins. Some local companies — such as those that received Crain’s Emerald Awards last week — are changing their entire cultures. So I suggest you get on the train, too. After all, there’s no stopping it. ■

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Employers sniff out insurers’ pet plans Companies find employees receptive to coverage By MICHELLE PARK mpark@crain.com

Despite the fur flying over health care reform and increased insurance costs, a different breed of insurers says more employers are showing interest in and creating access to pet health insurance. That’s not to say employers are paying for coverage of Garfield or Odie, though some do, industry insiders say. Instead, more companies are negotiating discounted pet insurance rates for their employees, with some arranging payroll deductions for such plans. Pet health insurance is a benefit more employers are realizing they can offer at low or no cost, said Laura Bennett, co-founder and CEO of Embrace Pet Insurance in Beachwood. Employer inquiries and requests for proposals are up enough at Embrace that the company plans to hire a full-time human resources professional in 2011 to handle the demand, Ms. Bennett said. “I think (employers) are realizing it’s a great way to connect with their employees,” she said. “The business is there. There’s absolutely no doubt about that.” Embrace Pet Insurance has “official relationships” with about 100 employers in the United States, Ms. Bennett said. Through one such relationship, the company offers a 10% discount to employees of Skoda Minotti, a Mayfield Village financial services firm. To access the discount, employees must contact Embrace directly. At this point, only a few of Skoda Minotti’s more than 100 employees use the benefit, Ms. Bennett estimated.

tion, also negotiated a discounted rate through Embrace for its employees and the employees of its 1,100 members in Northeast Ohio. The Mayfield Village nonprofit does not track the number of members who use the 12% discount, but Marty Mordarski, director of membership and research, said it is a “nice perk” for its members. In this economy, Mr. Mordarski said, employers are concerned about retaining employees and are looking for low-cost ways to augment their benefits package. “Many employees certainly do appreciate it,” he said of pet health insurance. Skoda Minotti offers the voluntary benefit because it’s aware of people’s relationships with their pets, said firm principal Robert Coode. “More often than not, you’ve heard people refer to their pets as their kids,” he said. Mr. Coode said pet health insurance “potentially could help with (employees’) morale. If a pet is in good health, they can probably be more productive.” All nine member companies of the North American Pet Health Insurance Association, including Embrace, are reporting year-to-date total program growth of about 25% from the like period in 2009, executive director Loran Hickton. The sheer number of pet owners is one reason: More than 60% of U.S. households — or 71.4 million — own at least one pet, according to the 2009/2010 National Pet Owners Survey by the American Pet Products Association. Ms. Bennett of Embrace estimates less than 1% of the country’s cats and dogs currently are insured.

Pet projects

Putting people first

The Employers Resource Council (ERC), a human resources organiza-

Though Pete Ronza doesn’t refute the increases pet insurers are

reporting, he remains skeptical. “I can’t see that there’s a whole bunch of (employers) knocking down (pet insurers’) doors, saying, ‘We need to put in pet insurance this year,’ ” said Mr. Ronza, a member of an ethics panel of the Society for Human Resource Management and president of Pontifex Consulting Group, a human resources consulting firm in Blane, Minn. The Society for Human Resource Management’s 2010 Employee Benefits survey revealed no significant change in the percentage of employers that offered pet health insurance between 2006 and 2010. The nationwide survey found that 4%, or roughly 20, of 534 employer respondents offered pet health insurance this year. Though he acknowledged pet insurance had become a “hot” voluntary benefit in recent years, Mr. Ronza said employers now have bigger fish to fry. Employers don’t have the time to discuss pet insurance, he asserted, when they have information about health care reform to share with employees and when they must shore up existing human health care. While he, too, reports that employers’ interest in pet insurance is up, Dennis Rushovich said he doesn’t think employer-paid pet insurance will ever be the norm. Mr. Rushovich, CEO of Canton-based pet insurer Hartville Group Inc., said less than 5% of his company’s approximately 100,000 policies are bought through arrangements with employers. However, Mr. Rushovich and other pet insurers said the inclusion of employer-paid pet health insurance among employee benefits would become more likely if pet insurance payments became nontaxable. Some industry advocates have pushed to make it so, but the pet association’s Mr. Hickton said the timing for such lobbying is not right in light of recent human health care reform. ■

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Labor Dept. clarifies parts of health reform

BRIGHT SPOTS

Claim disputes, adult children provision cleared up By JERRY GEISEL Business Insurance

WASHINGTON — New guidance from the U.S. Department of Labor regarding the health care law passed last spring eases previous rules on how health care plans handle disputed claims and clears up uncertainty on coverage provided to employees’ adult children. The guidance also suggests that regulators will ease a requirement that now makes it harder for employers to win grandfathered status for their health care plans. Under the health care reform law, employees in self-funded plans can request a “federal external review” after their request for coverage of a claim or benefit is denied through internal reviews by employers and plan administrators. Under previous regulations related to the new law, health care plans are required to contract with at least three independent review organizations and rotate claims assignments among them. The Labor Department last week said self-funded plans do not have to contract directly with independent review organizations, but could access those services through their third-party claims administrator. “Where a self-insured plan contracts with a TPA that, in turn, contracts with an IRO, the standards of the technical release can be satisfied in the same manner as if the plan has contracted directly,” the Labor Department said. The department also clarified a

key provision that requires group plans to extend coverage to employees’ adult children up to age 26 generally as of Jan. 1, 2011. Many plans now stop coverage when a child turns 18 or 19, or 22 or 23 if the child is a full-time college student. Some employers, though, voluntarily extend coverage to employees’ grandchildren, nieces and nephews if certain conditions, such as financial support and residency, are met. The Labor Department said such eligibility restrictions can continue to be imposed on employees’ relatives who are not sons, daughters, stepchildren, adopted children or foster children. For a relative such as a “grandchild or niece, a plan may impose additional conditions on eligibility for health coverage, such as a condition that the individual be a dependent for income tax purposes,” the Labor Department said. The department also said it that will “shortly address” situations under which so-called grandfathered plans may change insurance carriers without losing that status. Previous rules stipulated that a change in insurers automatically would result in a loss of grandfathered status. Grandfathered plans are shielded from certain health care reform law requirements, such as providing full coverage of preventive services. ■ Jerry Geisel is editor-at-large of Business Insurance, a sister publication of Crain’s Cleveland Business.

Adam S. Kaufman

■ Kent State University has signed Pathogen Systems Inc. as the second tenant in Centennial Research Park, the business accelerator located at the intersection of state Routes 59 and 261 in Kent, near the school’s campus. Pathogen Systems, which does business as Crystal Diagnostics, will lease 4,000 square feet with plans to occupy the entire 10,000 square feet of remaining space. The university said Crystal Diagnostics of Boulder, Colo., in partnership with Kent State and the Northeastern Ohio Universities Colleges of Medicine and Pharmacy, has developed a liquid crystal-based biosensor that “could dramatically alter the time required to detect harmful bacteria in water and other substances.” Crystal Diagnostics plans to house manufacturing and commercial operations at Centennial Research Park and will continue to do research and lab work at NEOUCOM in Rootstown. “We are very pleased with the progress Crystal Diagnostics has made in commercializing the biosensor technology jointly developed by Kent State and NEOUCOM,” said Sonia Alemagno, interim vice president for research at Kent State, in a statement. “We welcome them as a tenant in Centennial Research Park as they look to accelerate their growth.” Standard water testing in a lab currently takes 24 to 48 hours to complete. The rapid sensitive real-

$25 Million! in sales for the months of June, July and August of 2010

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Bright Spots is a periodic feature in Crain’s, highlighting positive business developments across Northeast Ohio. To be included, e-mail managing editor Scott Suttell at ssuttell@crain.com

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SEPTEMBER 27-OCTOBER 3, 2010

time device Crystal Diagnostics is developing will cut that time to 30 minutes or less, Kent State said. ■ The Nance College of Business at Cleveland State University was awarded an Ohio Governor’s Excellence in Exporting Award for helping local companies, such as Hyland Software Inc. and food equipment maker Vita-Mix Corp., increase their global exports. Among this year’s 20 recipients, Cleveland State was named the Nonprofit Exporter of the Year. Through the school’s Global Business Center, Cleveland State created the GlobalTarget program designed to help local businesses expand into international markets. This year, the state recognized Cleveland State for its efforts in assisting more than 35 companies in Northeast Ohio increase global exports. “This has been an extremely successful program not just for CSU but for the participating businesses and for the regional economy that benefits from this activity,” said Robert Scherer, dean of the Nance College of Business, in a statement. “We are pleased to share this recognition with our partner organizations, FedEx and U.S. Commercial Services, and the program mentors who help make it a success.” ■ Integrated agency thunder::tech said it has added three clients for which it will provide marketing services that include public relations, campaign creation and web design and development. Cedar Point, the Cedar Fair amusement park in Sandusky, selected thunder::tech for public relations support, social media strategy, web design and development and campaign implementation. Wildwater Kingdom, the largest water park in Northeast Ohio and a sister park to Cedar Point, will work with thunder::tech to develop social media strategy and blogger outreach campaigns. Prestolite Performance, a maker of performance auto parts, chose thunder::tech to launch and market its new Modern Muscle X campaign, a car giveaway and product development initiative. “We chose thunder::tech as our new marketing agency of record because of their portfolio of work, record of success and integrated nature of their services,” said Jill Hepp, marketing manager of Prestolite Performance, in a statement. “Our Modern Muscle X campaign is the first of its kind in company history

and we are happy to have thunder::tech as a partner in this initiative.” ■ The Civic Innovation Lab awarded $5,000 in support of the Cleveland Bike Rack. In addition to the financial support, two mentors from the Civic Innovation Lab — Colleen Gilson of Cleveland Neighborhood Development Corp. and Thomas Mulready of Cool Cleveland — will work with Downtown Cleveland Alliance as project consultants to assist with the search for an operations manager and any necessary additional support. The $5,000 will be used for some initial marketing of the Bike Rack as well as staff training for the operations manager. The city of Cleveland has committed close to $500,000 to the construction of the bike station. Downtown Cleveland Alliance will operate and manage the Bike Rack for the first few years, with the ultimate goal of making it profitable and selfsustaining operation, managed by a private individual or company. Spring 2011 is the planned opening date for the Cleveland Bike Rack, which will offer indoor and secure bike parking for about 60 bikes. ■ Susan Taft, associate professor and director of graduate management programs in Kent State University’s College of Nursing, was awarded a two-year, $410,000 grant from the Partners Investing in Nursing’s Future program, led by the Robert Wood Johnson Foundation and the Northwest Health Foundations. The Cleveland Foundation matched the $200,000 award from the lead foundations, and the Mt. Sinai Health Care Foundation also contributed. The Partners Investing in Nursing’s Future program is a national initiative to find innovative ways to create a nursing work force of appropriate size. The grant is one of nine selected from an original pool of 43 proposals. Dr. Taft’s project is designed to address Northeast Ohio’s nursing shortage by expanding the number of nurse educators, the primary bottleneck limiting nursing school admissions. In addition to Kent State’s College of Nursing, three Northeast Ohio partner schools have joined the initiative: the University of Akron’s College of Nursing, Cleveland State University’s Department of Nursing, and Ursuline College’s Breen School of Nursing.

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E!CLEVELAND

Venue: Beachland Ballroom, Cleveland When: Tuesday, Sept. 28, at 8:30 p.m. Why you might be interested: If you haven’t yet encountered the charms of this Portland, Ore., singer/songwriter. Ms. Veirs has been working the indie music scene for a little more than a decade, and she now produces lovely, elegant songs flavored by older country and folk music. The Washington Post says “July Flame,” her latest release, “may well be one of the best releases of 2010.” This show, with opening act The Watson Twins, is a real bargain, as tickets are $10. On the web: www.BeachlandBallroom.com

Every Thursday, Crain’s sends to more than 20,000 readers an arts and leisure e-mail called e!Cleveland. The e-mail highlights at least 10 events, and often more, that might be worth your time outside work. We’re fortunate in Northeast Ohio to have a vibrant arts community, and each edition of the e-mail features a mix of local music, theater, dance, film and other activities. To sign up for this and all our emails, visit www.CrainsCleveland.com and click the “Register for Crain’s alerts” icon at the top left of the home page. Like just about everything else on the Internet, it’s free. If you have events you’d like us to consider for inclusion in future editions of the e-mail, send information to managing editor Scott Suttell at ssuttell@crain.com. Here’s a taste of what makes it into the e-mail each week:

Around the neighborhood Event: “All That Fall” Venue: Kennedy’s Down Under, PlayhouseSquare When: Now through Saturday, Oct. 16 Why you might be interested: If you want to expand your Samuel Beckett horizons behind “Waiting for Godot.” Cesear’s Forum is performing this Beckett work from 1957, which was written as a one-act radio play. In it, a 70-year-old woman named Maddy Rooney makes her way to a railroad station to meet her blind husband, Dan, as a surprise for him on his birthday. Along the way she meets a comical array of Irish characters who keep their spirits up with a lively banter, sometimes savage, sometimes heartrending. All seats for the Kennedy’s Down under shows are $15. On the web: www.Playhouse Square.org

sculpture and works on paper have earned critical plaudits. This exhibition of his newer work reflects a “maturing taste and visual language” for the artist, Contessa says, and reflects “the visual overload of the everyday life in a big city (New York) that had the biggest influence” on his style. An opening reception takes place Friday from 6 p.m. to 9 pm. Mr. Smith will give a gallery talk at 7:30 p.m. To attend, RSVP by calling 216-382-7800. On the web: www.ContessaGallery .com

She writes the songs Event: Performance by Laura Veirs

Classic sounds Event: All-Beethoven Program by CityMusic Cleveland

Venue: Sites in Cleveland, Cleveland Heights, Willoughby Hills and Youngstown When: Tuesday, Sept. 28, through Sunday, Oct. 3 Why you might be interested: If you just can’t resist a bit of the old Ludwig Van. Conductor James Gaffigan and solo violinist Chee Yun are the headliners for these free performances of Beethoven’s “Coriolan Overture, Op.62, “Violin Concerto in D, Op.61” and “Symphony No.3 in E flat, Op.55, Eroica.” CityMusic does the region a great service by presenting top-quality performances of classical works while eliminating of high ticket prices and unfamiliar venues. On the web: www.CityMusic Cleveland.org

Brick by brick Event: “Roger Waters: The Wall Live”

Venue: Quicken Loans Arena, Cleveland When: Tuesday, Sept. 28, at 8 p.m. Why you might be interested: If you’re old enough to realize that Pink Floyd’s “The Wall” now is 30 years old. Mr. Waters, co-founder and principal songwriter of the archetypal progressive band, is commemorating the 30th anniversary of the original release of “The Wall” with a tour “featuring a full band and a newly mounted state-of-the-art production of his epochal masterpiece of alienation and transformation performed in its entirety,” according to promotional material. We’re getting a relatively early look at this performance, as the tour kicked off Sept. 15 in Toronto. Tickets start at $58 and go up to — no kidding — $202. On the web: www.TheQArena.com

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August 2010

July 2010

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Senior Unsecured Credit Facility

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$360 Million

$500 Million

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Pleased to meet you Event: “Ronnie Wood: Spend or Expend” Venue: The Butler Institute of American Art, Youngstown When: Now through Nov. 21 Why you might be interested: If you want to check out the art of someone you’ve heard of — but not for his art. Mr. Wood is, of course, famous as a singer, guitarist and songwriter with the Rolling Stones. But as any fan of “Behind the Music” knows, there’s more to the story, as Mr. Wood also is a compelling visual artist. The museum notes Mr. Wood has been painting and drawing since age 12, even longer than he has been playing guitar. “As an ongoing part of his multi-career, he paints and draws the musicians with whom he plays, documenting his world tours and recording sessions in vibrant action portraits,” the Butler Institute says. On the web: www.ButlerArt.com; http://gallery.ronniewood.com

Lead Manager

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We know that successful, long-term business relationships depend upon delivering results for our clients. Leading over $15 billion in debt capital markets transactions by August speaks to that unwavering objective. At KeyBanc Capital Markets,® more than 500 professionals leverage extensive industry knowledge, equity and debt capital markets expertise, and a leading merger and acquisition advisory practice to deliver strategic solutions that help our clients capitalize on opportunities. Today, the markets are volatile, but at KeyBanc Capital Markets our dedication to delivering results for clients remains constant.

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City life Event: “Mark T. Smith: Unique Visions” Venue: Contessa Gallery, Cleveland When: Now through Saturday, Oct. 23 Why you might be interested: If you are up for exploring the influence of an urban lifestyle on contemporary art and artists. The gallery in 2009 hosted an exhibit of works by Mr. Smith, whose large paintings,

KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A ©2010 KeyCorp ADL1753

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SEPTEMBER 27-OCTOBER 3, 2010

Veteran real estate brokers team up By STAN BULLARD sbullard@crain.com

Add Davison-West to the list of Northeast Ohio real estate brokerage boutiques. Longtime office broker Dyann Davison and veteran land and commercial broker Cliff West recently launched the firm after Mr. West exited Ostendorf-Morris Co., where he was a vice president and director of the firm’s land unit. He joined Ostendorf-Morris a decade ago after running, and selling his stake in, the Prudential BCG brokerage of Independence. Mr. West said he enjoys brokerage ownership and believes this is a good time to start something new

as his prior assignments were winding down and new ones are starting to bubble up as the economy recovers. Moreover, Mr. West said he wants to invest in land where his purchases will not create a client conflict. He said he believes that’s easier in a brokerage he co-owns rather than following a large brokerage firm’s restrictions and approval process. Ms. Davison said Mr. West’s background in land deals is a good match for her background in office leasing and tenant representation. Mr. West also will help her handle her most recent assignment as the leasing agent for the Leader Building, 526 Superior Ave. The new brokerage established its office in the building.

Both said they have been friends for years and believe their contacts and expertise complement each other. Mr. West, who is not related to Ostendorf-Morris majority owner Bill West, is not the only agent to defect recently from O-M. Kevin J. Riley, an Ostendorf-Morris senior vice president, has joined Grubb & Ellis Co.’s Cleveland office as a vice president in its tenant representation group. Geoff Coyle, Ostendorf-Morris managing partner, said the twin departures are “not a sign” of bigger issues at the Cleveland-based brokerage. Mr. Coyle said Mr. West’s departure came as a surprise to him. He said Mr. Riley would make a go of things wherever he works. ■

Brewing: Demand for beer keeps increasing continued from PAGE 1

When the addition of brewing and bottling equipment is complete at the end of 2013, Great Lakes will be at a capacity of 150,000 to 175,000 barrels per year, up a minimum of 50% from its current capacity of about 100,000 barrels. It brewed 87,000 barrels last year. “We’ve been careful and patient,” said Patrick Conway, co-owner. “We don’t want to compromise our quality. I’d say that’s a good strategy after two decades.” Even with big distributors throughout the nation courting the craft brewer to carry its beer, Mr. Conway said the operation will remain a neighborhood anchor. “We continue to grow because of the quality of our product, and we’re benefiting from the growth of this area and the surrounding restaurants,” he said. “We could go national tomorrow, but that’s not in our best interests.” When it opened in 1988 at the site of its brewpub on Market Avenue, Great Lakes Brewing produced 1,000 barrels per year and was Ohio’s first microbrewery. It moved its brewing operation in 1992 to the nearby Fries & Schuele Building, then sold the structure in 1998 and moved into its current production plant at the Schlather Building, which in the 1870s served as horse stables and kegging facilities for Schlather Brewing Co. “We bought that building with the goal of gradually growing into it, which we’ve done over time,” said Daniel Conway, Patrick’s brother and the company’s other co-owner.

Roll out the barrels Thanks to the latest investment in its brewing operation, Great Lakes Brewing expects to be at a capacity of around 110,000 barrels by the end of 2010. It currently is the nation’s 23rd -largest craft brewer, distributing its product in 13 states. Sales growth for 2010 is expected to be 25% over 2009 levels, Patrick Conway said. And during what was otherwise an anemic year for most companies during the recession, the brewer’s sales rose 18% in 2009 over 2008. The company does not release actual sales figures. To keep up with that growth, the company hired 15 employees over the last year, bringing to 140 its current staff size, and plans to add another nine positions within the next year. To accommodate the increase in demand, Great Lakes Brewing plans

to make maximum use of its plant. It shuttered in July the brewhouse for one month to install new equipment that includes a larger centrifuge, which removes yeast from beer before bottling and kegging and triples processing to 50 to 55 gallons of brew per minute from 15 to 20 gallons per minute. The brewery also invested in new bottling equipment that doubles bottling to 240 per minute from 105 and added a new filler, rinsers and conveyors. Plus, it made packaging efficiency upgrades. The company also just finished installing four fermenters in the “tank farm,” to bring to 28 the total number of 300-barrel stainless steel fermentation tanks. Once eight other tanks are added from 2011 to 2013, Great Lakes Brewing will be able to reach maximum production capacity. The brewer also leased from Lincoln Road Partners about 2,000 square feet at the Culinary Market Building on West 24th Street, behind the West Side Market, for equipment storage. Last year, Great Lakes Brewing quadrupled its merchandise store, which is adjacent to the brewpub, and sales of hats, shirts and the like have spiked 100% so far this year over last year.

Green guys The capital improvements are financed through two $3 million bonds, each payable over 12 years. Cuyahoga County on Aug. 31 issued $3 million in tax-free industrial revenue bonds and another $3 million in Recovery Zone bonds, a creation of the American Recovery and Reinvestment Act designed to encourage economic development in distressed areas. The bonds were secured by a letter of credit from PNC Bank. After 22 years of doing business with Huntington Bank, Daniel and Patrick Conway said they were drawn to PNC’s sustainability principles, which aligned closely with the brewer’s mission. Great Lakes Brewing continues to incorporate sustainable practices into its operations. It is a stakeholder in the nearby new Ohio City Farm and in the Pint Size Farm at Hale Farm & Village in Bath, and uses produce from each farm in its beer and in food at the brewpub. The brewer over the summer also installed 12 solar panels on the roof of the Elton Hotel Building, which houses the gift store, and Patrick Conway said he would like to add

more above the brewhouse. The company recycles everything from cardboard to brewer’s barley, and implemented this year energyefficiency practices that included the renovation of its outdoor beer garden with a retractable “Roman curtain” made of durable canvas, which allows outdoor dining all year. The beer garden facelift includes a radiant heat fireplace and floor and a straw wall bale. Its beer delivery truck runs on vegetable oil reclaimed from its restaurant, and its brewery cooler in the winter blows in the frigid outdoor air to keep the beer cold. Great Lakes also established in 2007 the Burning River Foundation, which has awarded more than $200,000 to local nonprofit organizations such as the GreenCityBlueLake Institute and Western Reserve Land Conservancy.

Energy sources The expansion of Great Lakes Brewing’s production capacity dovetails with Ohio City’s plans to brand itself by 2012 — the year of the West Side Market’s centennial — as a Market District positioned to be the hub of a complete regional food system. Sam McNulty, owner of nearby Bier Markt, Bar Cento and Speakeasy, is planning to open by early 2011 a Market Garden Brewery & Distillery. He said he sees Great Lakes Brewing’s growth as a boon for the area, rather than as a competitor that could affect foot traffic to his new venture. “One of my first calls about the plan was to Pat Conway,” Mr. McNulty said. “He was really excited. The goal of good urban planning is to give people the largest number of choices in the smallest area.” Eric Wobser, executive director of Ohio City Near West Development Corp., said Great Lakes Brewing and the Conway brothers have been “the energy of the neighborhood since the beginning, and their growth shows how committed they are to this area.” Not that the commitment isn’t without challenges. Great Lakes Brewing likely will need more space once it reaches maximum capacity at its current location, but it’s landlocked because there’s only so much space and parking within the neighborhood, Patrick Conway said. “Hopefully we can create a multilevel parking garage at some point, because we’re going to need more dock space,” he said. “It’s a good challenge to have.” ■

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ON THE WEB Crain’s

WHAT’S COOKING To submit business news about Northeast Ohio restaurants, breweries, wineries or agriculture industry, send an e-mail to assistant editor Kathy Carr at kcarr@crain.com. ■ Three breweries based in Northeast Ohio earned top awards for their specialty brews Sept. 16-18 at the Great American Beer Festival in Denver, which drew more than 3,500 beer entries from 516 breweries throughout the U.S. Akron-based Hoppin’ Frog Brewery’s Double Pumpkin Ale won a goal medal in the field beer category, of which there were 28 entries at the largest commercial beer competition in the world. Head Hunter IPA, produced by Fat Head’s Brewery & Saloon in North Olmsted, won silver in the American-style India Pale Ale category, which had the most entries with 142.

And The Brew Kettle’s Red Eye PA earned a silver medal in the Imperial Red Ale category, which garnered 43 entries. The Strongsville brewery and eatery also took home an award for its Jack Hammer, which was the third-best brew among 57 entries and earned a bronze rating in the Barley Wine-Style Ale. The 2010 Great American Beer Festival invites industry professionals from around the world to sit together in small groups and, without knowing the brand name, taste beers in each specified style category. The event, presented by the Brewers Association, awards gold, silver and bronze medals in 75 beer-style categories. This year’s competition drew 3,523 beers vying for medals, up 9% from 3,308 entries last year, along with 151 beer judges from 10 countries.

CRAIN’S CLEVELAND BUSINESS

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who grow our food, minimizing the impact our food choices have on the earth and restoring the pleasures of the table.” Mr. Apthorpe’s menu includes ricotta gnocchi and whole roasted lamb with ratatouille, roasted pink lady apples and wheat berry pilaf, which represent the diverse flavors of Ohio. The company says the event recognizes the importance of eating fresh, local food, while shrinking the distance food travels from farm to plate. Bon Appetit for more than decade has created partnerships between colleges, corporate campuses, chefs, local farmers and artisans as a way to support small businesses and motivate consumers to change the way they eat.

What’s Cooking blog appears on our web site each Monday and at other intervals each week. Visit www.Crains Cleveland.com for the latest news from the restaurant industry.

Show me the wine ■ Corks Wine Bar in downtown Willoughby is expanding operations and will open in late fall at 1415 Euclid Ave. next to the Allen Theatre at PlayhouseSquare. The new location will have a fullservice bar and will serve appetizers and desserts. “We believe with all of the excitement around the PlayhouseSquare District that the timing was right for Corks to add another location,” said owner Greg Bodnar, who also

owns the Market Avenue Wine Bar in Ohio City.

A sweet battle ■ Art Therapy Studio will hold its largest fundraising event — the Sweetest Day Delights dessert competition — from 7 p.m. to 11 p.m. on Saturday, Oct. 16, at the Cleveland Botanical Garden. A $65 ticket will give each guest an unlimited sampling of artistic desserts from 30 of Northeast Ohio’s top pastry chefs, which will be judged by a panel of the area’s top cooking schools and media on best of show, most decadently delicious, most artistic and crowd favorite. Pastry chefs, caterers, bakers, restaurants, culinary school staff and students are eligible to compete. The event’s honorary chair will be chef Roland Mesnier, author and former executive pastry chef

of the White House for five presidents. The dessert competition benefits the Art Therapy Studio’s programs at MetroHealth, Cleveland Clinic and various social service agencies.

Powering up ■ The Battery Park Powerhouse Wine Bar is scheduled to open this Friday, Oct. 1, in the Eveready Powerhouse. The wine bar will offer 150 wines and about 30 hand-crafted beers and appetizers. Wine and beer lovers also will be able to buy the beverages directly. The home of the Eveready Powerhouse — with its identifiable smokestack — is being converted into a restaurant, market and community meeting place and will serve as the cornerstone for the Battery Park community.

Always

Attentive

Indulging the locavores ■ Chefs from Case Western Reserve University this Tuesday, Sept. 28, will prepare a meal made with ingredients sourced from within 150 miles of their kitchen, emphasizing the health, economic and environmental benefits of consuming local food. The chefs will join more than 400 other Bon Appetit restaurants and cafés in preparing the course during the onsite restaurant management company’s sixth annual Eat Local Challenge. Bon Appetit Management Co. offers full food service management to corporations and universities, including CRWU. “I have experienced firsthand how Bon Appétit uses the kitchen to nourish not only our students and guests, but also local economies and the planet,” said executive chef David Apthorpe. “As a chef, I love supporting the farmers and artisans

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SEPTEMBER 27-OCTOBER 3, 2010

BUSINESS INSURANCE AGENCIES RANKED BY LICENSED EMPLOYEES

Name Address Rank Phone/Web site

Licensed Licensed employees employees property/ 7/1/2010 casualty

Full-time equivalent employees

Firm compensation From fees

From commissions

Number of underwriters represented

Major carriers

Year founded Top local executive

Oswald Cos. 1360 E. Ninth St., Cleveland 44114 (216) 367-8787/www.oswaldcompanies.com

170

225

1893

Marc S. Byrnes CEO

The Fedeli Group 5005 Rockside Road, fifth floor, Independence 44131 (216) 328-8080/www.thefedeligroup.com

107

130

25%

75%

100

1988

Umberto Paul Fedeli president, CEO

Dawson Cos. 1340 Depot St., Rocky River 44116 (440) 333-9000/www.dawsoncompanies.com

159

99%

1931

Kyp L. Ross president

Wells Fargo Insurance Services of Ohio LLC 1301 E. Ninth St., Suite 3800, Cleveland 44114 (216) 241-4344/www.wellsfargois.com

1989

John D. Meder managing director

Marsh USA Inc. 200 Public Square, Suite 1000, Cleveland 44114 (216) 937-1700/www.marsh.com

129

1871

William M. Paul managing director

Britton-Gallagher & Associates Inc. 6240 SOM Center Road, Cleveland 44139 (440) 248-4711/www.britton-gallagher.com

10%

90%

110

All major carriers

1942

Bruce H. Ball CEO

Hylant Group Inc. 6000 Freedom Square Drive, Suite 400, Cleveland 44131 (216) 447-1050/www.hylant.com

44%

56%

155

Travelers, Zurich, Chartis, Hartford

1935

John Chaney regional vice president

United Agencies Inc. 1422 Euclid Ave., Suite 900, Cleveland 44115 (216) 696-8044/www.unitedagencies.net

98%

100

State Auto, Anthem, MedPro, Travelers, Westfield, Chubb, Medical Mutual, ProAssurance

1972

James E. Cogan II, CEO John J. Boyle IV, CFO James J. McMahon, COO

Aon Risk Services Inc. 1660 W. Second St., Suite 650, Cleveland 44113 (216) 621-8100/www.aon.com

55%

45%

Todd Associates Inc. 23825 Commerce Park, Suite A, Cleveland 44122 (440) 461-1101/www.toddassociates.com

16%

84%

1939

Edward J. Hyland Jr., president; Randy Cumley, Tim Fitzpatrick, executive vice presidents

Alpha Group Agency Inc. 25000 Center Ridge Road, Westlake 44145 (440) 835-8860/www.thealphaga.com

98%

Westfield, Cincinnati, Travelers, Selective

1988

Kevin O'Brien, Kevin Neitzel, Kevin Mackay principals

Althans Insurance Agency Inc. 543 E. Washington St., Chagrin Falls 44022 (440) 247-6422/www.althansinsurance.com

1925

James C. Althans president

Insurance Partners Agency Inc. 26865 Center Ridge Road, Westlake 44145 (440) 835-9600/www.inspartners.com

Travelers, Westfield, Chubb, State Auto, Hartford

1961

George S. Dadas president

Brunswick Cos. 2857 Riviera Drive, Akron 44333 (800) 686-8080 /www.brunswickcompanies.com

1972

Todd A. Stein, president Michelle Hirsch vice president

The Hoffman Group 2 Berea Commons, Suite 10, Berea 44017 (440) 826-0700/www.thehoffmangrp.com

95%

Travelers, Cincinnati, Westfield, Chubb, Motorist, State Auto, Central

1919

Brian M. Russell president

Neace Lukens 5005 Rockside Road, Suite 1200, Independence 44131 (216) 643-7100/www.neacelukens.com

15%

85%

Travelers, Hartford, Chubb, Chartis, Westfield, Hanover

1991

Dennis J. Vogelsberger partner

Willis 200 Public Square, Suite 3760, Cleveland 44114 (216) 861-9100/www.willis.com

50%

1828

Lee Stacey managing partner

Zito Insurance Agency Inc. 8339 Tyler Blvd., Mentor 44060 (440) 205-7400/www.zitoinsurance.com

Cincinnati, Grange, Travelers, State Auto,Safeco,

1964

Christopher M. Zito president

DRY Insurance Agency Inc. 320 Center St., Unit A, Chardon 44024 (440) 286-3344/www.dryins.com

99%

State Auto, Motorist Mutual, Auto Owners, Western Reserve, Philadelphia, Hartford

1968

Donald R. Yert president, CEO

Fitzgibbons Arnold & Co. Agency 25730 First St., Westlake 44145 (440) 892-3636/www.fitzarn.com

1991

Richard Arnold Clark Fitzgibbons partners

Luce, Smith & Scott Inc. 6860 W. Snowville Road, Suite 110, Cleveland 44141 (440) 746-1700/www.lucesmithscott.com

1925

William M. Killea, chairman; Daniel Skaljac, president

Schneider-Dorsey Inc. 23230 Chagrin Blvd., Suite 420, Beachwood 44122 (216) 831-7272

95%

Chubb, Travelers, Zurich, Fireman's Fund, Motorists, Ohio Casualty

1949

Scott S. Schneider president

The Brooks & Stafford Co. 55 Public Square, Suite 1650, Cleveland 44113 (216) 696-3000/www.brooks-stafford.com

100%

1849

Neil R. Corrigan president

Amer Insurance 3700 Embassy Parkway, Suite 160, Akron 44333 (330) 665-9966/www.amerinsurance.com

1916

Hamilton S. Amer, CEO Charles M. Tennent president

The O'Neill Group 111 High St., Wadsworth 44281 (330) 334-1561/www.oneillinsurance.com

State Auto, Westfield, Auto Owners, Cincinnati, Ohio Casualty, Chubb, Travelers

1924

Patrick O'Neill president, CEO

Jones & Wenner Insurance Agency Inc. 3030 W. Market St., Fairlawn 44333 (330) 867-4434/www.jones-wenner.com

100%

Westfield, Auto Owners, Ohio Mutual, Acuity, Progressive, Philadelphia

1975

Robert M. Jones, president, CEO; Gordon L. Wenner, exec. vice president, COO

Insurance Systems Group Inc. 4500 Rockside Road, Suite 400, Cleveland 44131 (216) 236-7760/www.insurancesystemsgroup.com

1935

Michael G. Herzak president

The Church Agency Inc. 600 E. Cuyahoga Falls Ave., Akron 44310 (330) 733-1800/www,churchagency.com

97%

Cincinnati Ins., Grange, Acuity, Westfield, Travelers, AutoOwners

1950

John E. Mitchell president

The GF Hoch Co. 1301 E. Ninth St., Suite 1430, Cleveland 44114 (216) 861-2727/www.gfhoch.com

95%

1983

Gerald F. Hoch president

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.

Jerry G. Kysela regional managing director; CEO, East Central Region

RESEARCHED BY Deborah W. Hillyer

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Lawyers: Clients could save on review continued from PAGE 3

hammer in a steel-driving competition, the attorneys survived — but lost big time.

The gold standard To set a baseline, the firm judged the predictive coding method against how its own attorneys performed on a previous case that required them to find relevant documents among 3 million pages of records. Even after advanced keyword searches and other methods of filtering out irrelevant documents, they still spent 1,200 hours marking documents related to the case. They could have done the same job in roughly 200 hours using the firm’s predictive coding software, according to calculations Mr. Nicols made based on Squire Sanders’ internal testing. For the test, Squire Sanders attorneys spent just 15 hours looking through about 16,000 pages pulled from the original lawsuit. Then the software knew enough to review the rest of the 350,000-page sample — and score each document on its relevancy along the way. Granted, during the test, attorneys were looking for documents relevant to just two of the 10 issues in the original lawsuit, so Mr. Nicols estimates that it might take 75 to 100 hours to train the software for a more thorough review. He added 100 hours to his estimate to give attorneys the chance to review enough relevant documents to become knowledgeable about the case. Even with those additions, the system would have cut attorney time spent on the case by 84%. Many cases don’t involve so many documents, so Mr. Nicols typically tells clients to expect to save 50% to 60% on attorney review time.

And the software wasn’t just faster than the attorneys: It was more accurate, too, according to the Squire Sanders review. “The gold standard of human review — it ain’t such gold,” Mr. Nicols said. Since June, three Squire Sanders clients have agreed to use the process.

Warming to the technology Another Northeast Ohio company, electronic discovery firm Vestige Ltd. of Medina, just over a year ago created in-house software designed to find relevant documents after studying a sample coded by an attorney. A growing number of Vestige’s clients are requesting the service, said Vestige chief technology officer Greg Kelley. For one, they recognize the savings it provides, even though it’s among the company’s more expensive offerings, he said. “More and more people have warmed up to the idea,” he said. It doesn’t hurt that Vestige calls it the “Defensible Search” service. The company promises to defend the method in court if it is challenged. Squire Sanders, likewise, made sure that Equivio, based in Israel, would do the same, and earlier this year the law firm wrote a white paper detailing how it evaluated the system, Mr. Nicols said. Plus, after running the software, Squire Sanders reviews a sample of documents dubbed irrelevant to make sure they aren’t useful, he said. “We came at this from the defensibility side,” he said. That preparation may prove important, given how new predictive coding is, said Diane Carlisle, certified records manager for ARMA International of Overland Park, Kan. The group used to be called the

Ford drops compact Ranger, will unveil new, bigger model By DAVID PHILLIPS Automotive News

Ford Motor Co., as expected, is dropping the Ranger compact pickup from its U.S. lineup after the 2011 model year. Ford is consolidating its global pickup truck platforms to two from three with the introduction of an all-new Ranger to be sold outside North America next year. The new Ranger in October will be unveiled at the Sydney auto show in Australia. Demand for compact pickups has been shrinking in the United States. Ford spokesman Mark Schirmer said the automaker decided several years ago to invest in and market a

wider range of F-150 pickups, including V-6 versions. The new Ranger is also closer in size to the current F-150 sold in the United States. The compact Ranger debuted in the United States in 1982 and spawned the Explorer SUV. Ranger demand peaked in 1999 at about 348,000 trucks, but sales dropped to 55,600 last year. Ford previously announced plans to close the St. Paul, Minn., plant where the Ranger is assembled but never confirmed whether the Ranger would be continued. ■

Association of Records Managers and Administrators. “They would have to really have their act together in terms of how they ensured the accuracy of the records,” Ms. Carlisle said. Should a judge rule that this or any method of review is unreasonable, the side using the method may need to review the documents again or worse, Mr. Nicols said. If attorneys conduct a particularly sloppy review and hand over documents protected by attorney-client privilege, a judge could decide that a “waiver of privilege” has occurred, forcing the attorneys to reveal documents they otherwise wouldn’t need to disclose. It will take months or years before a legal dispute settles the matter, which would make many clients more comfortable with predictive coding, said Larry “Bud” Conner, a Kirtland-based attorney with Applied Discovery of Bellevue, Wash. The electronic discovery company doesn’t offer a pure predictive coding service, though it does have software that can look for patterns among documents marked relevant and suggest search parameters that would find similar documents. A handful of companies have been promoting predictive coding technology, Mr. Conner said. He cited how Fulbright & Jaworski LLP, a global firm with nearly 900 attorneys, has adopted a system by Recommind that lets the firm review less than 8% of the documents in a case while holding the rest on reserve for later review. The use of predictive coding isn’t yet widespread, but it has potential, Mr. Conner said, adding that he’s glad Squire Sanders, a large, wellknown firm, has been willing to try it out. “It’s exciting that someone is getting out in front of this,” he said. ■

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CRAIN’S CLEVELAND BUSINESS

Amount: $162,941

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

LIENS FILED Neal Thomas Interiors Inc. 3028 Nottingham Drive, Parma ID: 31-1521747 Date filed: Aug. 24, 2010 Type: Employer’s withholding, unemployment Amount: $569,319

WWW.CRAINSCLEVELAND.COM

John Duda Co. 2101 Richmond Road, Suite 2, Beachwood ID: 34-1302671 Date filed: Aug. 31, 2010 Type: Employer’s withholding Amount: $191,314 NRC Staffing Inc. 2120 S. Green Road, Suite 2, South Euclid ID: 20-0461614 Date filed: Aug. 12, 2010 Type: Employer’s withholding, unemployment Amount: $169,810 Martina Marble Co. 3175 Fulton Road, Cleveland ID: 34-1733660 Date filed: Aug. 24, 2010 Type: Employer’s withholding

Housing Advocates Inc. 3214 Prospect Ave. E., Cleveland ID: 51-0141693 Date filed: Aug. 10, 2010 Type: Employer’s withholding Amount: $121,617

SEPTEMBER 27-OCTOBER 3, 2010

ID: 26-1289783 Date filed: Aug. 31, 2010 Type: Employer’s withholding, unemployment Amount: $81,324

Arirang Garden Inc. 5131 Mayfield Road, Mayfield Heights ID: 34-1871892 Date filed: Aug. 31, 2010 Type: Employer’s withholding Amount: $106,358

Mark Lovinger Ph.D. and Associates Inc. 23811 Chagrin Blvd., Suite 310, Beachwood ID: 34-1727159 Date filed: Aug. 12, 2010 Type: Employer’s withholding, unemployment Amount: $77,441

Skok Industries Inc. 26901 Richmond Road, Bedford Heights ID: 34-1149494 Date filed: Aug. 10, 2010 Type: Employer’s withholding Amount: $84,291

J. Gerchak III Inc. 8601 Oakridge Drive, Olmsted Falls ID: 34-1836749 Date filed: Aug. 5, 2010 Type: Employer’s withholding Amount: $69,686

Barney Enterprises Inc. DBA Bass Lake Child Care Center 651 South St., Chardon

Atlantis Co. 105 Ken Mar Industrial Parkway, Broadview Heights

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ID: 34-1634230 Date filed: Aug. 3, 2010 Type: Employer’s withholding Amount: $68,895 Set To Go Inc. 1111 Superior Ave., Cleveland ID: 34-1503839 Date filed: Aug. 31, 2010 Type: Employer’s withholding Amount: $67,127 Daishin Inc. 24545 Center Ridge Road, Westlake ID: 34-1660871 Date filed: Aug. 31, 2010 Type: Employer’s withholding, unemployment Amount: $64,578 Mac Mechanical Corp. 1441 Dille Road, Euclid ID: 34-1507477 Date filed: Aug. 12, 2010 Type: Employer’s withholding Amount: $62,994 Bryce Road Enterprises Inc. DBA Bass Lake Child Care 1970 S. Taylor Road, Cleveland Heights ID: 26-2267663 Date filed: Aug. 19, 2010 Type: Employer’s withholding, unemployment Amount: $60,749 Matrix International Inc. 3196 W. 25th St., Cleveland ID: 04-3717852 Date filed: Aug. 3, 2010 Type: Employer’s withholding, unemployment Amount: $52,410 WRCS Inc. 496 E. 200th St., Euclid ID: 31-1497983 Date filed: Aug. 31, 2010 Type: Employer’s withholding Amount: $50,324 WB Group Inc. 33381 Aurora Road, Solon ID: 20-1788665 Date filed: July 22, 2010 Type: Employer’s withholding Amount: $8,348.83 Davis Grant Agency Inc. of Shaker Heights 16700 Chagrin Blvd., Shaker Heights ID: 34-1616818 Date filed: July 27, 2010 Type: Employer’s withholding Amount: $6,824.91 Corsillo Court Reporting Inc., Corsillo & Grandillo Court Reporter 850 Euclid Ave., Cleveland ID: 34-1641754 Date filed: July 27, 2010 Type: Employer’s withholding Amount: $6,780.37 Global Tracking Services Inc. 1414 S. Green Road, South Euclid ID: 26-1733470 Date filed: July 27, 2010 Type: Employer’s withholding Amount: $6,405.73 Johnny’s Burgess Grand Corp. 1406 W. 6th St., Cleveland ID: 34-1737006 Date filed: July 27, 2010 Type: Employer’s withholding Amount: $5,776.14 NIA Childcare Enterprise Inc. 4020 Verona Road, Cleveland ID: 16-1749820 Date filed: July 20, 2010 Type: Employer’s withholding Amount: $5,700.98

* Results may vary depending on your business situation.

Devina LLC 6200 Som Center Road No. A-21, Solon ID: 26-1077461 Date filed: July 29, 2010 Type: Employer’s withholding Amount: $5,144.14

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INSIDE

22 EMPLOYERS CAN EXPECT DISABILITY CLAIMS TO RISE.

THEINTERVIEW DAVID WATSON Executive director Cleveland Metropolitan Bar Association By AMY ANN STOESSEL astoessel@crain.com

JANET CENTURY

Colleen Kmetz, a project designer for Vocon Inc. who is pregnant with twins, used the architecture and design firm’s mothers’ room with her first daughter, Ava.

COMFORT MEASURES FOR MOTHERS Health care reform requires employers to provide private space for nursing moms, and some firms are a step ahead By MICHELLE PARK mpark@crain.com

others’ room. Lactation room. Room for working moms. Companies across Northeast Ohio are using different names, but the mandate is the same: Employers now must provide private space, other than a restroom, for women to pump breast milk and reasonable unpaid break time for them to do it. Local labor lawyers and employers agree: The new requirements, which took effect in March as part of health care reform legislation, seem more an extension of what employers have been doing than a new hardship. The biggest difference for many employers is needing to have specific

space in which nursing mothers can pump, said labor and employment attorney John Cernelich. Marsha Walker, a certified lactation consultant and co-founder of the National Alliance for Breastfeeding Advocacy, said while the need to pump varies based on a woman’s anatomy and the age of her baby, two 20- to 30-minute breaks during an eight-hour shift should suffice. And the benefits of those breaks, Mrs. Walker emphasized, are not only to the employee, but to the employer as well. “The employers that have already implemented this — and there were many before this law came out — have been reaping financial benefits for years with a big smile on their face,” she said. See MOTHERS Page 20

hen two common pleas court judges were arrested earlier this month, the Cleveland Metropolitan Bar Association was quick to respond. “This is unquestionably a sad day for the Cleveland legal community,” read a bar association statement that also included an explanation of regulations and resources. “The allegations leading to the arrests of two common pleas court judges are appalling. We Watson must keep in mind the presumption of innocence that is afforded to all defendants — and judges are no exception.” David Watson, executive director of the Cleveland Metropolitan Bar Association, said it was his group’s responsibility to provide “information and perspective” in response to the indictments of Cuyahoga County Common Pleas judges Bridget McCafferty and Steven Terry, who were arrested as part of the Cuyahoga County corruption probe. Mr. Watson took over this spring as executive director of the 5,800-member bar association, replacing D. Larkin Chenault, who resigned in late 2009 to become executive director of the Connecticut Bar Association. Mr. Watson recently answered questions regarding his work with the bar association, and other issues facing the legal community. Q: What do you see as the primary role of the bar association — both for the legal community and for Greater Cleveland? A: Outstanding service is important to Mr. Watson, as it relates to both the association’s members and the community. To that point, he believes the bar association should “support small and large businesses as effectively and efficiently as we can,” and commit itself to economic development and fostering relationships with the business community. Mr. Watson stressed that it is important the bar association supports efforts that work toward the region reinventing itself and assist in leveraging existing opportunities and economic drivers, such as those in the medical community. “How can we come together to put a plan together?” he said. Q: What experiences in your professional background have most prepared you for this position? A: “First and foremost, I am from Cleveland. … Cleveland has always been home for me,” he said. Mr. Watson, a Hiram native and a See WATSON Page 20

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Mothers: Accommodations can have benefits continued from PAGE 19

A healthy respect

There is a significant return on investment to employers who support work-site lactation, said Karen Hench, a deputy division director within the Health Resources and Services Administration, an agency of the U.S. Department of Health & Human Services. Since research points to the many health benefits of nursing, companies can save with reduced insurance claims and greater productivity, Ms. Hench said. Healthier babies mean fewer doctor visits and times Mom has to call out of the office. Furthermore, if the process of returning to work is made so uncomfortable that new mothers leave their jobs, employers end up spending resources to fill vacancies, Ms. Hench said.

Colleen Kmetz, a project designer for architecture and design firm Vocon Inc., can speak to the benefits of workplace accommodations for new mothers: She used the Cleveland firm’s mothers’ room for eight months in 2007 after she gave birth to her daughter, Ava. She will use the space again in the not-toodistant future, as she’s expecting twins in February. “It was a huge benefit,” said Mrs. Kmetz, who returned to work six weeks after giving birth. “I made it a personal goal to breast-feed until she was about 8 months old. To have that room where I could go to … was an awesome benefit to coming to work every day and being able to achieve my personal goal.

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“You don’t feel awkward — going into a restroom like you’re an afterthought,” she explained. Vocon built its mothers’ room when it moved into its current space in 2004. The firm is seeing an increase in the number of companies asking it to design mothers’ rooms, design director Richard Dillon said. It had recommended such designated spaces to companies in the past, but knew it was a square footage cost some employers wouldn’t pay, he said. Vocon designed recent renovations to the Independence offices of The Hylant Group, a commercial insurance brokerage headquartered in Toledo. Mindful of the new law, Rebecca Beane, Hylant’s former office manager and current regional talent manager for the company, saw to it that the project included the construction of a mothers’ quiet room. Ms. Beane said she sees no disadvantages to the new requirements. The company, which employs 85 exempt and nonexempt staffers in Independence, wanted to renovate to locate all its employees to one floor instead of two, and a mothers’ room simply was added to the plans. “I think it’s beneficial,” Ms. Beane said of what’s required now. “I think it shows we have a healthy respect for families and our mothers.”

Give them a break Though Mr. Cernelich, who co-chairs the labor and employment department of Calfee, Halter & Griswold LLP in Cleveland, said

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he can imagine some scenarios in which logistical challenges may arise — women who work on construction sites, for example, or production lines — he doesn’t anticipate that the law will create headaches for employers. Also, employers with fewer than 50 employees don’t have to comply if compliance would create an undue hardship. Issues may arise — and case law may develop — from situations where a woman takes breaks at times that are difficult for her employer, Mr. Cernelich said. The new law, he noted, does not address whether women need to ask permission before they break to pump. That’s particularly noteworthy in light of a 2009 decision by the Ohio Supreme Court in the case of a woman named LaNisa Allen. A former employee of Cincinnatiheadquartered Totes/Isotoner Corp., Ms. Allen had been taking regular breaks to pump for about two weeks when she was fired for not following directions after repeatedly taking the extra break without permission. Ms. Allen had claimed the termination discriminated against her for having a medical condition, lactation. The court, however, ruled the firing was legitimate and that it was Ms. Allen’s inability to ask permission and follow directions that led to it, not the act of pumping milk itself. Mr. Cernelich also noted that the new requirement allows for “reasonable break time,” but doesn’t specify what’s reasonable. ■

Watson

NEW MANDATE Signed into law on March 23, the Patient Protection and Affordable Care Act includes a new break time requirement for nursing mothers. The act amends the Fair Labor Standards Act. ■ Who: Only nonexempt employees — generally the hourly workers who can be paid overtime — are entitled to breaks to pump milk. Employers with fewer than 50 employees don’t need to comply if the requirement would create an undue hardship. ■ What: The mandate requires employers to provide reasonable break time for an employee to pump breast milk each time she needs to pump for one year after a child’s birth. In addition, employers must provide a place for pumping breast milk that is not a bathroom and that is shielded from view and free from intrusion. If the space is not dedicated to nursing mothers’ use, it must be available when needed. ■ To pay or not to pay: Employers are not required to compensate nursing mothers for breaks taken to pump milk. However, where employers already provide compensated breaks, an employee who uses such break time to pump milk must be compensated in the same way other employees are compensated for break time. ■ State law: This requirement does not preempt state laws that provide greater protections. Ohio law does not protect the pumping of breast milk in the workplace. Ohio House Bill 488, introduced in April, proposes requiring employers to provide “reasonable, unpaid time” for it. SOURCES: U.S. DEPARTMENT OF LABOR, OHIO LEGISLATURE

graduate of Kenyon College and the Case Western Reserve University School of Law, most recently lived in Indiana and worked in Chicago as a financial adviser for Edward Jones Investments. His previous experience also includes time as an attorney, part of which was as a solo practitioner, as executive vice president of the Commercial Law League of America, as deputy executive director for the Defense Research Institute and as senior director with Lexis-Nexis. The variety of his professional and legal experience, Mr. Watson believes, gives him a good perspective from which to draw. “It’s been a unique career path,” he said.

Cleveland and East Cleveland. “The goal is to expand the programs we have and serve even more people,” Mr. Watson said. The foundation’s budget for 20102011 so far is on pace to match last year’s actual, which was about $200,000 in gross revenue, operating on a July 1 to June 30 fiscal year. Given the economy, Mr. Watson said it makes it all the more important to show donors the value of volunteer and community work being done by the legal community. For example, the Fugitive Safe Surrender program, scheduled for last week, Sept. 22 to 25, at Mount Zion Church in Oakwood Village, was a widely collaborative project. “You have a lot of tough things going on in the legal community but at the same time you have a lot of good things,” Mr. Watson said.

Q: You also serve as executive director of the bar foundation. What are your thoughts on the challenges of raising funds in this economic environment while meeting increased needs? A: The Cleveland Metropolitan Bar Foundation raises funds for the group’s outreach activities, which include pro bono, education and mentoring programs. “The foundation is vitally important to the association,” Mr. Watson said. The 3Rs program, for example, focuses on the U.S. Constitution and the concepts of rights, responsibilities and realities, utilizing more than 500 volunteers from the legal community to work with 10th-graders in

Q: What are the key issues facing the legal community? Do you think the profession has been altered by the recession? A: There’s no question, Mr. Watson said, the legal community has been affected by the economic downturn. Some firms have had to cut jobs, whether it was due to a specialty area or loss of clients. Moreover, law students are struggling to find jobs. He said another of his goals is to try to get students to stay in Cleveland, possibly directing them to nontraditional positions that might require the same analytical thinking. “CMBA’s job is even more critical in helping our members adapt,” he said.

continued from PAGE 19

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Crisis management plan must be thorough, updated

normal business operations as well as during a crisis.

Other factors, such as legal issues, customer relations and reputation, will need consideration and will vary depending upon the event, the organization and the industry. A company should periodically drill to identify plan strengths and limitations and modify accordingly. No business should leave itself vulnerable or risk its bottom line by operating without having performed a thorough risk analysis and drafted an effective crisis management plan. ■

any business owners and company executives are risk takers by nature. However, since these people invest a tremendous amount of time, money and resources, it follows that they should want to protect these assets from the negative consequences of natural and man-made disasters. The terms “business impact analysis,” “business continuity planning,” “emergency planning and preparedness” and “contingency planning” may be used when discussing business interruption. No matter what we call it, the goals after any business interruption are to minimize the negative impact on the business and to return to full operations as expeditiously as possible. Crisis management is the process by which a company responds to a major, frequently unpredictable, event that threatens harm to the organization, its stakeholders or the general public. Pundits equate the appropriateness of actions taken in the first hour or two following an incident with the ability of the business to survive or reopen following a disaster. However, without placing too much emphasis on dramatic, worst-case scenarios, organizations should also prepare for more common threats such as severe weather, fire, influenza, workplace violence and technology failures.

Identifying risk Before your business is able to create an effective crisis management plan, you must first assess areas of potential risk or threat and then identify the best ways to avoid and manage these threats. If the plan to address a particular risk or threat fails, such as when an event occurs which was not anticipated or the magnitude was underestimated, then the crisis management plan is initiated. Certain entities are mandated by the government to have in place a disaster recovery plan. For example, banks and financial institutions including the Federal Reserve, securities dealers and health care providers are required to have a continuity plan. For others, the government is simply suggesting that a plan be put in place. The Occupational Safety and Health Administration requires many employers to draft an emergency action plan and a fire prevention plan. In addition, the U.S. Environmental Protection Agency has passed several rules that have emergency response/risk management components. Operating without an effective crisis management plan presents a significant and frequently indefensible risk to any business. It is in your company’s best interest to have a crisis management plan.

person must be charged with managing the response. ■ A team approach to crisis management likely is going to be more effective than assigning only one person to accomplish what are frequently Herculean tasks. Teams should have clearly defined roles to eliminate overlap and to conserve resources. One team may be tasked with managing the welfare (food, shelter, hygiene) of employees, responders and others while another team may be tasked with maintaining critical operations. ■ Crisis management plans must contain “action guidelines,” which

PATRICIAPOOLE

ADVISER outline the steps or procedures that employees are to follow once the crisis management plan is initiated. Certain guidelines will need to be strictly adhered to — notification of

government authorities in the event of a catastrophic release, for example — while others can be flexible. ■ Crisis communications are critically important. The plan should identify the ways in which employees will be informed and kept informed of the event. In addition, one person should be identified as the media contact. Social networking may work for or against an organization during a crisis. Therefore, companies should consider developing a policy that addresses the use of social networking, e-mail, mobile phones, cameras and personal data assistants during

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Key components Crisis management plans contain several key components: ■ The plan should be in writing and in language that is easily understood. It is possible that someone will be reading the plan for the first time during a crisis. ■ An incident commander must be identified. The person who fills this role may vary depending upon the nature of the incident, but one

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LEGAL AFFAIRS

Discrimination claims filed under ADA likely to rise Act’s expansion means employers increasingly must be cognizant of recognizing worker needs By KATHY AMES CARR kcarr@crain.com

rior to the expansion in 2008 of the Americans with Disabilities Act, employees had a difficult time qualifying as disabled if they were able to keep their conditions under control with medicine or by other means. Then President George W. Bush on Sept. 25, 2008, signed the Amer-

icans with Disabilities Act Amendments Act, which broadened the number of people who could qualify as having a physical or mental impairment. As a result, more people in 2009 filed ADA-related claims against their employers than at any other time in the 20-year history of the ADA. “Employers should expect the number of claims to increase,” said Nicole Monachino, legislative

coordinator with the Cleveland chapter of the Society for Human Resource Management. Originally enacted in 1990, the ADA prohibits discrimination in employment on the basis of disability, and in most cases calls for reasonable accommodations to be made. However, the courts prior to the amendment had taken a narrow view as to what counted as a disability, finding that individuals with serious conditions — such as diabetes and cancer — in some cases were not covered. Now, the ADA takes into account a wider view of what can be considered a

limiting condition. The bad economy coupled with the ADA expansion are expected to generate a continued rise in claims, as more individuals take issue with either the reasons they were laid off or the circumstances surrounding their disabilities within the workplace. “Employers have to be extremely vigilant,” said Jonathan Hyman, partner in the Cleveland office of Kohrman Jackson & Krantz, which advises companies on various issues that include labor and employment law. “The focus of the claims is shifting from proving

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whether the employee is disabled to whether the employer made reasonable accommodations for the employee.” According to the Equal Employment Opportunity Commission, the number of ADA-related claims filed since the recession began in 2007 has surged. Between 2007 and 2008, the year of the amendment, claims rose 10%, from 17,734 to 19,453; the number rose another 11%, to 21,451, in 2009. Claims filed in the Cleveland-ElyriaMentor metropolitan statistical area were up nearly 17%, from 229 in 2007 to 267 in 2008, though they dipped to 240 in 2009. John Gerak, a shareholder with Cleveland-based Ogletree, Deakins, Nash, Smoak & Stewart, said while the labor and employment law firm hasn’t noticed an uptick in the number of disability-related discrimination claims being made since the ADA was expanded, company lawyers are fielding more questions. Organizations shed payroll and staff during the recession, and some former employees with disabilities may feel they were dismissed unfairly because they were perceived to be less productive. “Anytime you put an employee on the street, you face a discrimination case,” Mr. Gerak said. Meanwhile, the ADA amendment potentially expands the employer’s liability, since more employees can file discrimination claims, so businesses more than ever must be cognizant of both their workers’ needs and their privacy. “What we’ve seen is that employers are not properly training supervisors enough about accommodating employees with disabilities, while maintaining their privacy,” Mr. Gerak said. “Supervisors, therefore, aren’t recognizing that requests are being made and sometimes just dismiss them.” Employers are legally required to make reasonable accommodations to employees with disabilities who are able to perform their work duties, without creating an undue hardship to the firm, he said. So if the office of an employee who uses a wheelchair is on the third floor of a building that only has stairs, the firm must try to work out a compromise — such as allowing the individual to work from home or creating a first-floor office — before stating to the employee that installing an elevator is an undue hardship. The circumstances and interpretation of the act can be complex, but local attorneys say employers and human resource departments must re-emphasize to managers the proper way to handle requests through compromise, sensitivity and discretion. Still, not every question or case means a disability challenge is in favor of the employee. While Kohrman Jackson & Krantz’s Mr. Hyman said supervisors should take each request seriously, they also must work with their human resources departments to make sure they’re not being unnecessarily accommodating to employees whose claims are merely complaints. “We’re seeing some really bizarre claims, like employees who are overly sensitive to perfume,” Mr. Hyman said. ■

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LEGAL AFFAIRS

Law firmsâ&#x20AC;&#x2122; hiring model evolves Economy propels shift in employee hierarchy, graduate recruitment By MICHELLE PARK mpark@crain.com

he law firm business model is in the throes of an evolution â&#x20AC;&#x201D; and many predict it will be permanent change. Long a pyramid derived from hiring young associates and placing them on track to join profit-sharing partners at the top, the model is and has been weak, many within the law profession say. Changes were occurring gradually, but the recession quickened their pace. When cost-cutting became necessary because work dried up and clients increased pricing demands, some firms reduced their forces and slowed â&#x20AC;&#x201D; or halted â&#x20AC;&#x201D; their recruitment. The changes â&#x20AC;&#x201D; and the impact they render up the corporate ladder â&#x20AC;&#x201D; have been evident in small and large firms nationwide, said James Leipold, executive director for NALP, a trade association for law school career counselors and law firm recruiters also known as the National Association for Law Placement. The largest firms, he noted, are impacted most because their hiring was more systematic. Recent graduates used to be viewed as the main feeder for large firms. But Michael Ungar, president of the Cleveland Metropolitan Bar Association, said it appears â&#x20AC;&#x153;those days may be permanently behind us.â&#x20AC;? Fact is, law firms are finding they cannot continue to hire unseasoned staff at $160,000 a year and lose twothirds of that talent to attrition within five years, Mr. Leipold said. Why that ever was the business model is a complicated answer, he said, but he did say large firms often shored up their reputations based on the prestigious schools from which they continuously hired. In some ways, this has been the business model â&#x20AC;&#x153;forever,â&#x20AC;? Mr. Leipold said. But, â&#x20AC;&#x153;itâ&#x20AC;&#x2122;s clear,â&#x20AC;? he said, â&#x20AC;&#x153;that thereâ&#x20AC;&#x2122;s going to be a new normal.â&#x20AC;?

â&#x20AC;&#x2DC;Leaner and meanerâ&#x20AC;&#x2122; Law firms are restructuring to become â&#x20AC;&#x153;leaner and meaner,â&#x20AC;? said Gary Munneke, a member of a task force of the New York State Bar Association charged with studying the future of the law profession. Additionally, the balance of hiring recent graduates and lateral talent â&#x20AC;&#x201D; or attorneys who have training, experience and specialization â&#x20AC;&#x201D; is

â&#x20AC;&#x153;I think there were tons of inefficiencies in the old system. It wasnâ&#x20AC;&#x2122;t really the sound business model.â&#x20AC;? â&#x20AC;&#x201C; James Leipold, executive director, National Association for Law Placement changing, Mr. Leipold said. In the past two or three years, most large firmsâ&#x20AC;&#x2122; summer programs have been downsized considerably, Mr. Ungar said. Firms typically would worry about missing out on talent if they didnâ&#x20AC;&#x2122;t have fully involved summer programs, but because of layoffs, lateral talent is more available and such concern has diminished. Ulmer & Berne LLP, the Cleveland firm for which Mr. Ungar works, had consistently hired five to seven students for its summer classes. Now the firm, which employs nearly 200 lawyers in four cities, is hiring two or three, he said. â&#x20AC;&#x153;But weâ&#x20AC;&#x2122;ve been adding a lot of lateral talent,â&#x20AC;? he explained. He noted the firm still is hiring recent graduates, but itâ&#x20AC;&#x2122;s being â&#x20AC;&#x153;much more highly selective.â&#x20AC;? The lock-step advancement model, in which the expectation is that people move up the corporate ladder year by year, is being replaced in many cases by a competency-based framework. The path to partnership also has lengthened to some nine years or longer from what used to be six or seven, Mr. Leipold said. Additionally, more companies are assigning roles aside from the traditional partner-owner and associate positions â&#x20AC;&#x201D; non-equity partners, for example. And pricing pressure has everything to do with the industry changes, many say. Clients are demanding higher degrees of efficiency and value, Mr. Ungar said. In response, many firms are offering alternative fee agreements, such as flat-rate billing in place of traditional hourly rates. â&#x20AC;&#x153;Three or four years ago, law firms may have been in a position to say no or no thank you,â&#x20AC;? Mr. Ungar said of the alternative fees. â&#x20AC;&#x153;Today they are no longer in that same bargaining position.â&#x20AC;?

Forever changed? Whether the law firm business model is changed permanently is an open question, of course. But there are things to consider. For one, corporate clients arenâ&#x20AC;&#x2122;t going to offer to pay higher prices simply because the economy improves. Mr. Munneke, who also is a professor at Pace Law School in White Plains, N.Y., believes the changes will persist and predicts future firms will be more institutional:

fewer owners, more employees. And the changes are not perceived generally as a negative. â&#x20AC;&#x153;I think there were tons of inefficiencies in the old system,â&#x20AC;? Mr. Leipold said. â&#x20AC;&#x153;It wasnâ&#x20AC;&#x2122;t really the sound business model. It didnâ&#x20AC;&#x2122;t make sense; it didnâ&#x20AC;&#x2122;t follow what sort of rational economic behavior would predict.â&#x20AC;? The profession is becoming more experimental, he said: Where there was a time when most every law firm looked the same in terms of structure and compensation, the economic downturn has freed up firms to â&#x20AC;&#x153;not look over their shoulders,â&#x20AC;? to not fear that doing something different equates to misstep. Thatâ&#x20AC;&#x2122;s not to say the change is or will be easy. â&#x20AC;&#x153;A period of change like this produces a lot of confusion and uncertainty and anxiety,â&#x20AC;? Mr. Leipold said. â&#x20AC;&#x153;Compensation models canâ&#x20AC;&#x2122;t be relied on. Recruitment models canâ&#x20AC;&#x2122;t be relied on. Culturally, that makes workplaces hard.â&#x20AC;? Mr. Munneke calls whatâ&#x20AC;&#x2122;s occurring a Darwinian competition. The changes are redefining partnership roles, making associates nervous, frustrating law students. â&#x20AC;&#x153;People who stick their heads in the sand and just donâ&#x20AC;&#x2122;t want to deal with any of this,â&#x20AC;? he predicted, â&#x20AC;&#x153;will find their firms are not around in 10 years.â&#x20AC;? â&#x2013;

Varied strategies can be found locally Not every firm is feeling the full effect of the reworking of the law firm business model, and data reported in recent years to NALP by five Cleveland law offices donâ&#x20AC;&#x2122;t reveal trending changes in their numbers of partners, associate offers or summer associate classes. Numbers fluctuate widely in certain years for some of the five randomly polled firms: Calfee, Halter & Griswold LLP; Jones Day; Squire, Sanders & Dempsey LLP; Ulmer & Berne; and Vorys, Sater, Seymour and Pease LLP. Michael Ungar, president of the Cleveland Metropolitan Bar Association, believes Cleveland offices have not been impacted as significantly as those on the coasts because this market already offers â&#x20AC;&#x153;the same bang for a lower buck.â&#x20AC;? In fact, he estimated some pricing here is 25% less than what it is on the coasts. Though its summer program has become and likely will remain â&#x20AC;&#x153;somewhat smaller,â&#x20AC;? Columbusbased Vorys continues to hire associates and has continued to elevate people to partnership despite the recession, said Anthony J. Oâ&#x20AC;&#x2122;Malley, Cleveland office managing partner. Since Jan. 1, the Cleveland office has hired four lawyers. Cleveland firm Walter & Haverfield LLP never took the large summer associate classes approach and didnâ&#x20AC;&#x2122;t typically hire associates out of law school, so little has changed about its associate hiring, said Carl Dyczek, administrative partner. That said, the firm has increased its hiring of laid-off lawyers, Mr.

Dyczek said. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s just more opportunities for us,â&#x20AC;? he said. â&#x20AC;&#x153;The re-trenching of larger firms has put more qualified people on the streets looking to associate with smaller firms.â&#x20AC;? Thacker Martinsek LPA, a small Cleveland-headquartered firm that opened in January, has added two associates to the 13 attorneys it started with, said Diane Citrino, a shareholder litigator and an attorney with 28 years of experience. As leaders of the new firm, the seven founding partners, including Ms. Citrino, arenâ&#x20AC;&#x2122;t sticking to â&#x20AC;&#x153;the way weâ&#x20AC;&#x2122;ve always done it,â&#x20AC;? she said. Unlike the traditional model that often tasked associates with doing other peopleâ&#x20AC;&#x2122;s work, Thacker Martinsek associates work â&#x20AC;&#x153;shoulder-to-shoulder with partners,â&#x20AC;? and have significant client contact, Ms. Citrino said. Leaner law firms, she noted, require everyone to man the marketing. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s a much more powerful way to be in a business,â&#x20AC;? she said. â&#x20AC;&#x153;People are much more engaged and enjoy what theyâ&#x20AC;&#x2122;re doing rather than feeling like theyâ&#x20AC;&#x2122;re a cog in a machine.â&#x20AC;? A former adjunct professor at Cleveland-Marshall College of Law, Ms. Citrino thinks young people â&#x20AC;&#x201D; with their enthusiasm and technological skills â&#x20AC;&#x201D; should be engaged from the very beginning. As for the path to partnership, Thacker Martinsek isnâ&#x20AC;&#x2122;t taking the â&#x20AC;&#x153;youâ&#x20AC;&#x2122;ve been here seven years, youâ&#x20AC;&#x2122;re partnerâ&#x20AC;? approach; instead, Ms. Citrino explained, theyâ&#x20AC;&#x2122;ll consider promotion in a much more holistic â&#x20AC;&#x201D; Michelle Park way.

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20100927-NEWS--24-NAT-CCI-CL_--

9/24/2010

CRAIN’S CLEVELAND BUSINESS

Contact: Phone: Fax: E-mail:

Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com

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SEPTEMBER 27-OCTOBER 3, 2010

REAL ESTATE

Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card

REAL ESTATE AUCTIONS

LAND AUCTION HENRY COUNTY NAPOLEON, OHIO

408 ACRES ±

in 8 Tracts

THURS., OCTOBER 28 • 6PM

AT THE VFW #8218, 1008 NORTH PERRY STREET, NAPOLEON, OH 43545

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Tues., October 12th • 4PM-6PM Meet a Schrader Rep. on Tract 3. OWNER: Marcella M. & Lyle Brink Trust AUCTION MANAGERS: DALE EVANS, 260-894-0458 & NICK CUMMINGS, 740.572.0756

CALL 800.451.2709

SchraderAuction.com for Photos & Info.

PREMIER ESTATE AUCTION 32700 Jackson Road, Moreland Hills, Ohio

Offered by Rosen and Company, Inc. Bringing Buyers and Sellers Together Since 1917 An opportunity of a lifetime awaits you ... And You Can Name Your Price.

Saturday, October 30, 2010 Registration and hors d’oeuvres at 6:00pm Auction commences at 8:00pm Casa de Kraftmaid was conceived and built by “The Kraftsman” Richard Moodie; the founder of Kraftmaid Cabinetry, known the world over for his hand crafted custom cabinetry. Casa de Kraftmaid sits on 7.5 private rolling wooded acres. The home has over 17,000 square feet of luxury living space and took more than 10 years to build, at an estimated cost of 8 million dollars. Much of the work was performed by the Amish craftsmen, whose unsurpassed workmanship has distinguished Kraftmaid’s facilities and products from all others. Suggested opening bid 3.5 million dollars. Property viewing dates by appointment, Thursday September 30, October 7, 14, 21 and Sunday October 3, 10, 17, 24. Brokers participation is invited. Absentee and proxy bidding will be allowed by prior arrangement. This auction is being offered subject to the terms of sale as stated in the bidders information packet and purchase & sale contract.

For more information visit our site or call Sheila Rosen at 1.877.BID.ROSEN (1.877.243.7673) Rosen and Company, Inc. 2010000107 - Stanley H. Rosen, Broker 152272, Auctioneer 62197925719 Ross Barton III, Auctioneer, Sales Agent 2008000091 - Sheila Rosen-Schiff, Sales Agent, Apprentice Auctioneer 2008000064

www.bidrosen.com & click Casa de Kraftmaid email: srosen@bidrosen.com phone: 1.877.BID.ROSEN (1.877.243.7673) cell 216.990.1831 fax: 888.593.4953

To fill your space, list your industrial, commercial, retail, office or warehouse space here. Contact Genny Donley at (216) 771-5172 COMMERCIAL SPACE Unique Flats Property Adjacent to Nautica Stage & Bascule Bridge. Next to New Aquarium in Powerhouse. Both Riverbed Rd. and Superior Viaduct Addresses. Across from City Park on Cuyahoga River. NO Bulk Head Liability!!!!!! River Ambiance – Passing Freighters, Bridges, Trains, RTA Unexcelled views of Downtown skyline. Across river from Flats East Bank Development 40,000 SQ Ft. $2.8 Mil Immediate occupancy OWNER FINANCED

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SEPTEMBER 27-OCTOBER 3, 2010

CRAIN’S CLEVELAND BUSINESS

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CLASSIFIED BUSSINESS OPPORTUNITY

BUSINESS SERVICES

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LEGAL NOTICE CITY OF WILLOUGHBY, OHIO REQUEST FOR QUALIFICATIONS (RFQ) The City of Willoughby, Ohio is seeking qualification statements from firms interested in the planning and analysis of Osborne & Sunset Parks, along Willoughby’s lakefront. The project is in part funded by State grant and all applicable State of Ohio requirements will apply. The RFQ is available from Willoughby’s Parks and Recreation Department 440953-4200, bkatz@willoughbyohio.com, or the Community Development Department 440-953-4190, pkostelnik@willoughbyohio.com. The selection process is outlined in the RFQ. Qualification statements are due to Willoughby’s Parks and Recreation Department no later than noon on Tuesday, October 5, 2010. For more information or to request the RFQ contact the above. David E. Anderson, Mayor City of Willoughby One Public Square Willoughby, Ohio 44094 (440) 953-4124

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Crain’s Executive Recruiter Office Administrator Jones Day is seeking an Office Administrator (OA) for their Cleveland, Ohio location. The Office Administrator is responsible for ensuring that the Firm’s lawyers have the resources and support necessary to provide excellent service to clients. The successful candidate will coordinate the operation of the office, providing oversight of support personnel, technology, facilities, library and records, and day-to-day activity of the Office. The OA reports to the Partner-In-Charge and receives guidance from the Director of Administration to ensure compliance with firm wide policies and goals, relevant government statutes, and regulations. Will oversee and ensure that human resources functions are properly managed and will implement office-based policies. Responsible for the preparation of the annual office budget, monitoring bank accounts, and controlling office expenditures. Ensures that the Firm’s technology program, policies and procedures are implemented. Adhere to established RFP protocols and manage space planning, design and furnishings, construction, and renovation projects.

•SEALED BID LIQUIDATION• By Order of Court Appointed Receiver COMMERCIAL/RETAIL BUSINESS BUILDING 102,364 Sq. Ft. on 11.24+/- Acres Location: 3700 Williston Road (SR 579) Northwood, OH 43619 Corner of Woodville Rd. & Williston Rd. Sealed Bids are DUE Wednesday, Oct. 13, 2010 @ 5:00PM

Requirements: Four year college degree. Minimum 10 years supervisory experience, reflecting progressive responsibility. Minimum 5 years experience in senior human resources, financial, operations or project management positions. Interested candidates should forward their resume to: jcbasel@jonesday.com. An Equal Employment Opportunity Employer.

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Fore More Info., Terms & Bidding Procedures go to our Website www.wilsonauctionltd.com Or, contact any of the following for more detailed information, Due Diligence Packets & to Register for a Bidders Packet

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GO TO WEBSITE FOR DETAILS, PICTURES & TERMS PLEASE CALL FOR BIDDER PROSPECTUS

For an invitation, please send an email to Elena_mcmichael@ml.com MERRILL LYNCH FALL CAREER NIGHT EVENT SEPTEMBER 30th, 2010 -- 6:30-8:00 p.m. Downtown Office, 14th Floor Conference Room One Cleveland Center 1375 East 9th Street Cleveland, OH 44114-1798

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GIE Media, Inc. is seeking superior sales people to spearhead advertising sales efforts for its growing business. Individuals selected for our team will enjoy a progressive, entrepreneurial work environment, competitive compensation and benefits package, and the opportunity to work on leading products in the markets we serve. Travel required. Two years sales experience recommended. Potential candidates should possess excellent communications skills. If you have the ability to “drive” business, this if for you. Please email resume to salesjobs@gie.net

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SEPTEMBER 27-OCTOBER 3, 2010

Loans: Niederst working out debt Jobs: Report hints at continued from PAGE 1

foreclosure action over a $3 million mortgage on Lakeshore Colonial Apartments in Lorain. David Niederst, CEO and founder of the family-owned real estate company, said he is seeking to reduce loan amounts outstanding in the two Cuyahoga County cases. He said the company has turned over the keys to the lender in the Lakeshore Colonial case, which is pending in the Lorain court. â&#x20AC;&#x153;This does not mean these will not remain my buildings,â&#x20AC;? Mr. Niederst said in reference to the two apartment complexes in Cuyahoga County. â&#x20AC;&#x153;We are working on loan modifications in both cases. Some lenders file automatically in such cases because the foreclosure process is so time-consuming in Cuyahoga County. That way they are not waiting if we donâ&#x20AC;&#x2122;t come to agreement.â&#x20AC;? Mr. Niederst put his problem in its simplest terms. â&#x20AC;&#x153;I have a basket of 22 apples,â&#x20AC;? he said. â&#x20AC;&#x153;There are some bad apples to throw out.â&#x20AC;? In Niederstâ&#x20AC;&#x2122;s case, the apples are the 22 apartment complexes the Fairview Park-based concern owns; they total just shy of 7,000 units. He said he has seven properties that are not performing. The Richmond Heights property, 444 Richmond Park Drive, has 182 units in a six-story tower, and Highland House consists of three buildings with a total of 160 suites at 11738 Lake Road.

Case by case In the Richmond Park case, Mr. Niederst said the company fell behind on the mortgage in part because of a property tax hike in the suburb. He said he is trying to

reduce the loan amount outstanding or slash its interest rate to 5% from 7%. Mr. Niederst said the Richmond Park complex has been hit hard by layoffs in the eastern suburbs. Also, because the complex is a high-end rental, tenants who could afford to take advantage of this yearâ&#x20AC;&#x2122;s firsttime and move-up homebuyer tax credits pulled out. Occupancy slipped to 78% earlier this year, he said, although it is now at 83%. In the case of Lakewoodâ&#x20AC;&#x2122;s Highland House, Mr. Niederst said nearby foreclosures in smaller apartment complexes triggered a reduction in the bankâ&#x20AC;&#x2122;s estimate for his propertyâ&#x20AC;&#x2122;s value, so he sought to slash the mortgage outstanding to $2 million from $3 million. He said he is telling the bank he needs the lower debt payments to compete with dropping rents in the suburb. That complex is 94% occupied, he said. With respect to the Lorain case, Mr. Niederst said it was too hard to make a go of the 112-unit property, so he returned it to his lender. Mr. Niederst said he is not alone among commercial property owners seeking to reduce mortgages or pay down debt by repaying it early to cope with the effects of the economic slump and the real estate downturn. He declined to identify other properties for which his company has received loan modifications or is seeking them. Though lender woes in commercial real estate are as common today as losses by the Cleveland Indians, the Ohio Department of Taxation filed seven cases July 16 against Mr. Niederstâ&#x20AC;&#x2122;s management concern for a total of more than $70,000 in unpaid commercial activity taxes. Mr. Niederst described those cases as an oversight that would be repaid

soon. He said the company has not had a cash flow problem. â&#x20AC;&#x153;Our properties in North Olmsted, Parma and Broadview Heights are performing well,â&#x20AC;? Mr. Niederst said.

Growth hangover Ralph McGreevy, executive vice president of the Northeast Ohio Apartment Association trade group, said Niederstâ&#x20AC;&#x2122;s rapid growth in the freewheeling mid-2000s when loans were readily available accounts for its issues now. â&#x20AC;&#x153;A company doing the things Niederst has done needs other peopleâ&#x20AC;&#x2122;s money to get in the game,â&#x20AC;? Mr. McGreevy said. â&#x20AC;&#x153;The rules have changed from when they started to today, and itâ&#x20AC;&#x2122;s difficult unless you have deep pockets to ride it out.â&#x20AC;? Dan Siegel, an attorney in Beachwood who represents many commercial real estate owners in property tax cases and owns apartments himself, said Niederstâ&#x20AC;&#x2122;s debt woes are different from those of other apartment owners in Northeast Ohio because Niederst owns large complexes with 100 or more suites. â&#x20AC;&#x153;In Columbus itâ&#x20AC;&#x2122;s scary. Thatâ&#x20AC;&#x2122;s where you are seeing a lot of (debt payoff and loan modifications) in apartments, but in Northeast Ohio, itâ&#x20AC;&#x2122;s primarily the small timers with issues,â&#x20AC;? Mr. Siegel said. Most of the apartments in Northeast Ohio with lender woes, he said, belong to out-of-towners â&#x20AC;&#x153;who paid too much in the â&#x20AC;&#x2DC;crazy moneyâ&#x20AC;&#x2122; mid2000s or did not know the apartment business. I know this because Iâ&#x20AC;&#x2122;m looking for apartments to buy.â&#x20AC;? Mr. Niederst said he takes the long view of his companyâ&#x20AC;&#x2122;s woes. â&#x20AC;&#x153;My feeling is that, at the end of the day, this will make us a stronger company,â&#x20AC;? he said. â&#x2013;

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lost more than 16% of its jobs and about $6 billion in annual paycheck earnings, while the state lost nearly 11% of its jobs and an astonishing $22 billion in annual workersâ&#x20AC;&#x2122; earnings, Mr. Zeller maintains. That dire backdrop was not lost on Brookings, according to Jennifer Bradley, one of the reportâ&#x20AC;&#x2122;s two authors and a fellow at the institution. â&#x20AC;&#x153;The challenge for Northeast Ohio, like the challenge for a lot of its peer metros in the Great Lakes, is that a great quarter or a couple of quarters is good, but itâ&#x20AC;&#x2122;s just not enough. Youâ&#x20AC;&#x2122;re going to have to see a lot of great quarters to get back what was lost,â&#x20AC;? Ms. Bradley said. â&#x20AC;&#x153;Whatâ&#x20AC;&#x2122;s good about Northeast Ohio is theyâ&#x20AC;&#x2122;re gaining ground rather than falling further behind,â&#x20AC;? she said. â&#x20AC;&#x153;The challenge is that thereâ&#x20AC;&#x2122;s so much ground that needs to be made up.â&#x20AC;?

Rays of hope Nonetheless, the improvement in local manufacturing employment is hailed as a sign of hope by Brad Whitehead, president of Fund for Our Economic Future, a local economic development group. â&#x20AC;&#x153;Shockingly, on a relative basis, weâ&#x20AC;&#x2122;re actually making improvements,â&#x20AC;? Mr. Whitehead said. â&#x20AC;&#x153;Not only are we making improvements, weâ&#x20AC;&#x2122;re making rapid improvements and arguably we are headed toward the front of the class. â&#x20AC;&#x153;One quarter does not a turnaround make, but this is one of several encouraging signs weâ&#x20AC;&#x2122;re seeing that say that this time, when thereâ&#x20AC;&#x2122;s a national recovery, weâ&#x20AC;&#x2122;re going to recover with it,â&#x20AC;? he said. Besides the improvement in manufacturing employment, the Cleveland areaâ&#x20AC;&#x2122;s unemployment rate of 9.6% in August was better than the 10.1% rate for the state as a whole. Also, Brookings found that the nation as of June had recovered only 10.7% of the jobs it lost during the downturn, while Cleveland had regained 14.5% of its lost jobs. Mr. Whitehead said he hopes Cleveland outperforming the nation as a whole in an important measure of job growth signals that recent economic development efforts â&#x20AC;&#x201D; aimed at, for example, involving more area companies in medical device manufacturing â&#x20AC;&#x201D; are paying off and will continue to do so. â&#x20AC;&#x153;This is one sign of how the Northeast Ohio region is getting

repositioned to be successful in the years ahead â&#x20AC;Ś and weâ&#x20AC;&#x2122;re extraordinarily well-positioned in some segments, like biosciences,â&#x20AC;? he said.

Subject to change? Mr. Zeller, though, isnâ&#x20AC;&#x2122;t sold on whether the job gains Brookings is tracking are real. Brookings used federal â&#x20AC;&#x153;current employment statistics,â&#x20AC;? which are based on a monthly survey of 140,000 employers across the United States. Those numbers from the federal Bureau of Labor Statistics are the only ones available quickly, according to Mr. Zeller, but he takes a longer view of events and generally uses the bureauâ&#x20AC;&#x2122;s more concrete quarterly census data. Mr. Zeller said the current employment statistics numbers are later revised downward more often than not. For example, Mr. Zeller said, when the final state job numbers were out for the fourth quarter of 2009, they had to be revised downward by 85,000 from the initial figures cited in the current employment statistics. â&#x20AC;&#x153;We have no clear evidence that Ohio has gained a single job this year,â&#x20AC;? Mr. Zeller said. Mr. Whitehead said heâ&#x20AC;&#x2122;s focusing on the positive, and he does believe Cleveland is gaining jobs in at least some areas. He said he hopes Northeast Ohio has gone through the pain of losing some of its weakest and least competitive companies.

Writing a new narrative â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re starting to see that we have some pretty exciting survivors,â&#x20AC;? Mr. Whitehead said. â&#x20AC;&#x153;If you go back several years, there was not a sense of what our future was going to be. Now, I think we have a sense of how and where weâ&#x20AC;&#x2122;re going to compete.â&#x20AC;? Mr. Whitehead said one of the most promising aspects of the Brookings data is that Cleveland and the rest of Northeast Ohio for once are outperforming the nation â&#x20AC;&#x201D; and on that point, he might be safely confident, given that all of the nationâ&#x20AC;&#x2122;s regions were measured using the same data and all could be subject to same sort of later revisions. â&#x20AC;&#x153;The part about us being through a lot of pain is the part that everyone already understands â&#x20AC;&#x201D; thatâ&#x20AC;&#x2122;s been the essential narrative all along. I think this report points out that there is a new narrative and it is the future,â&#x20AC;? Mr. Whitehead said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s not time to be a Pollyanna, but it is time to recast the narrative about who we are.â&#x20AC;? â&#x2013;

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SEPTEMBER 27-OCTOBER 3, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK SEPTEMBER 20 - 26 The big story: Omnova Solutions Inc. entered into an agreement with AXA Private Equity granting the Fairlawn-based company what it called “a period of exclusivity” to acquire specialty chemicals maker Eliokem International of France. The producer of specialty chemicals, emulsion polymers and wallcoverings would pay about $300 million for Eliokem at current exchange rates. Omnova intends to raise $425 million of new long-term debt to fund the transaction and the repayment of all existing Omnova and Eliokem debt. The deal is expected to be completed by the end of 2010. See story, Page 3 Outback stake: Cliffs Natural Resources Inc. approved a capital project at its Koolyanobbing iron ore complex in Western Australia that will require an investment of about $303 million. Cliffs indicated that the money for this project will be spent over the next two years, with the bulk of the spending occurring in 2011. The improvements are expected to consist of enhancements to the existing rail infrastructure, an increase in rolling stock and upgrades to what the company called “various other existing operational constraints.” Buyer’s market: If expensive is how you keep track of your home’s value, the Coldwell Banker Real Estate LLC Home Listing Report is disappointing. However, housing bargain hunters will find Cleveland a pleasure. A four-bedroom, two-bath house in Cleveland has an average listing price of $87,240, and the city ranks as the fourth most affordable market in the United States, according to Coldwell Banker’s annual list. Coldwell Banker ranked Cincinnati as the most expensive city in Ohio, with the same house listing for $217,709, or 103rd most affordable. The fourbedroom two-bath lists for $138,788 in Akron, which ranks 18th most affordable nationally. Head’s up:

The Cleveland Clinic is teaming with sporting goods maker Rawlings to conduct research on concussions and other sports-related head and neck injuries. St. Louis-based Rawlings announced the “multiyear interdisciplinary research collaboration” with the Cleveland Clinic Neurological Institute and its Spine Research Laboratory. The Clinic will conduct independent testing using research equipment made and donated by Rawlings. The equipment — initially including a “linear impactor” and an air cannon — will be housed at the newly formed Rawlings Performance Laboratory at the Clinic’s Lutheran Hospital.

New CEO gets in gear: Horsburgh & Scott, a Cleveland-based maker of industrial gears and custom gear drives, named an outsider, Christopher Kete, as president and CEO. Mr. Kete joins Horsburgh & Scott after serving as vice president and general manager of Off-Highway, Specialty and Defense for auto parts maker ArvinMeritor Inc., where be started working last year.

To keep up with local business news as it happens, visit www.CrainsCleveland.com.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

How one library proves its worth ■ Hang out in front of the elevators at the Kelvin Smith Library, and you’ll get a sense of why it exists. Since June, the Case Western Reserve University library has been projecting all sorts of statistics and graphics onto the long, bare stretch of wall above its elevator doors. Now anyone waiting for a lift or standing in line at the nearby circulation desk can see how the library is used at that moment. For instance, one graphic shows all the recent search terms typed in by library users falling from the top of the screen and piling up at the bottom.

many items have been checked out (11,200 last week as of 9:30 a.m. Friday, Sept. 24) and a map that shows which countries are using the electronic card catalog. For some reason, a lot of hits come from the Koreas. “We’re actually trying to figure out what that is,” Mr. Lambert said. The goal of the project is to show people that the library does more than check out books. “The value proposition libraries bring isn’t any one thing,” Mr. Lambert said. The project was financed with $50,000 from a foundation started by Mario Morino, a Rocky River resident who founded a Virginia-based company that was acquired for $1.7 billion by Computer Associates International in 1995. Interactive marketing firm Optiem LLC of Cleveland programmed the display. — Chuck Soder

Bright idea in works at College of Wooster

At 9:30 a.m. on Sept. 24, an identical display on the library’s web site showed people were searching for “Schubert piano sonata,” “Campbells psychiatric dictionary” and, for some reason, “mutilation.” Both the software that runs the display and library employees are trained to prevent bad words from corrupting it, said Nathan Lambert, chief information officer for the library, located just north of Severance Hall. Other graphics include a rundown of how

■ A project development firm in Shaker Heights is building what it says is the largest solar roof on a college facility in the nation. Carbon Vision LLC is tackling the 20,000square-foot project at the College of Wooster’s new student athletic and recreation center. It’s roughly a $1.5 million project, which should start as soon as state grant money starts rolling in. The entire building is scheduled to open in January 2012. “I don’t expect this will be the largest forever by any stretch, but it should be when it’s installed,” Carbon Vision CEO Mike Shaut said about the solar installation.

MILESTONES

BEST OF THE BLOGS

COMPANY: Scott Snow LLC, Westlake THE OCCASION: Its fifth anniversary

Excerpts from blog entries on CrainsCleveland.com.

MICHAEL YEAGER

The independent financial advisory firm has been providing comprehensive wealth management services for high net-worth clients since June 2005. The firm has grown to three employees. It had assets of $210 million under local management with discretion as of Dec. 31, 2009. Snow For information, visit www.s2fa.com.

COMPANY: Brennan, Manna & Diamond LLC THE OCCASION: Its 10th anniversary The full-service corporate law firm in Akron recently hosted an open house to celebrate its anniversary. Brennan Manna has grown steadily over the years and now employs nearly 50 attorneys. It has added offices in Jacksonville and Bonita Springs, Fla., to complement its downtown Akron location.

Even in this job market, youth will be served ■ The Wall Street Journal has asked several college seniors to blog about what it’s like to look to start a career in the difficult job market, and a recent post came from a Clevelander studying at George Washington University. “In pursuit of personal and professional growth, I am cautiously excited for the opportunities that lie ahead in this sobering job market,” wrote Ashley Starks, who is studying economics and public policy, on the paper’s Hire Education — very clever — blog. “While searching for jobs over the coming year will hold many unknowns and uncertainties, I am looking forward to sharing my story and my journey,” she wrote. It will say a lot about the direction of the country if Ms. Starks can’t find a decent

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October 16, 2010 10:00am – 12:30pm Registration starts at 9:30am To learn more, visit weatherhead.case.edu/showcase

The solar roof will generate about 275,000 kilowatt hours of electricity each year, which is enough to power one of the college’s residence halls or about 25 homes, Mr. Shaut noted. Carbon Vision will install and own the project and lease it to the college for 12 and a half years. At that point, the college will get the title. The solar roof should work for about 40 years, and at that time Mr. Shaut there will likely be less-expensive technology to update it. “It should extend the life of the rooftop because the major deterioration in roof life is solar radiation and baking the rooftop,” Mr. Shaut said. “The panels actually protect the roof.” — Timothy Magaw

Carnegie Investment’s southern strategy ■ A Beachwood investment management and planning firm has hired two employees to expand its presence into Columbus and southern Florida. Carnegie Investment Counsel hired Mark Kindberg as a business development executive in Columbus — a market where principal Gary P. Wagner said few traditional money managers operate — and Winnie Coleman as a portfolio manager in Englewood, Fla., a state to which more of Carnegie’s clients are migrating. Both were hired in August and will work from their homes; the goal is to open offices in coming years, Mr. Wagner said. The recent hires represents more than 20% growth to Carnegie, which now has 11 employees. — Michelle Park

job. She is captain of the GW women’s soccer team and Student Association vice president of student affairs. She has held internships in Washington and seeks a career that connects business and government.

Green beer isn’t just for St. Patrick’s Day ■ If you like to live a green lifestyle, and you like beer, Cleveland is a great place to be. So says environmental web site TinyGreenBubble.com, which named Cleveland’s Great Lakes Brewing Co. as one of the country’s three most environmentally friendly breweries. “The beer is all natural, and fuel to power the factory is created with recycled materials used from old factory promotional materials,” the web site noted. “The restaurant at the facility composts all of its food, and, get this, all of the delivery trucks run on biodiesel! Oh, and by the way, they offer beer school. Where was that when we needed an extra credit?”

20100927-NEWS--28-NAT-CCI-CL_--

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