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Home starts climb out of rut
INSIDE
Builders who survived worst market in decades find business picking up
Fast and furious ■ Randy Ross (above), president and CEO of Quality Synthetic Rubber Inc., and many auto suppliers rapidly are moving away from the downturn. PAGE 3 ■ Ben Venue closing has increased concerns about cancer drug Doxil’s future. PAGE 3
By STAN BULLARD sbullard@crain.com
The buzz is back in Northeast Ohio home building, at least for survivors of the recession and long housing downturn. Consider Tremont North, a fourtownhouse development built re-
cently in the Cleveland neighborhood of the same name. Some of the buzz is over the minimalist but colorful design. Some is over location, a site along alleys near the one-way Pelton Court at West 11th Street. But much is over the price, as the three units J-Roc Development LLC has transferred
to buyers sold for upwards of $350,000. Gossip is the remaining, prime corner unit with a patio view of downtown may top $400,000. There also is a new, privately built $1 million home a block away. From downtown Cleveland to far-flung suburbs, home building’s rebound has continued this year despite a rise in long-term — though still low — mortgage rates and a shortage of construction help. See HOME Page 6
A look at the number of single-family housing permits issued through the end of August 2013, and how the totals compare to the same period in 2012: Cleveland-Elyria-Mentor metropolitan statistical area Permits 1,530 Increase 22% Akron MSA Permits 340 Increase 11%
Corridor is leading to some anxiety
E-CIGS FIRE UP CONTROVERSY Device’s rise in popularity has many local companies trying to figure out how to handle their use
BUILDING MOMENTUM
INSIDE A look at the rise in total revenue of electronic cigarettes since 2007. It’s now an estimated $1.2 billion business. PAGE 8
By TIMOTHY MAGAW tmagaw@crain.com
Concern about eminent domain arises along path of $331M project By JAY MILLER jmiller@crain.com
C
harlie Lardomita has been an off-and-on smoker since he was about 16 years old. And while it’s only been two months since he lit up, the 38-year-old IT executive thinks this time he’s kicked the habit for good. Forget the patch or nicotine gum. Mr. Lardomita swears by his electronic cigarette, a device that could be described as the lovechild of RoboCop and Joe Camel. He has made believers — or “vapors” — out of a handful of his friends who’ve since dropped traditional smokes. He even has dreamt of opening a vapor lounge — a one-stop shop and haven for e-cig connoisseurs — near his home in Kirtland. See CIGS Page 8
GETTY IMAGES
The specter of eminent domain is haunting Andrew Wright and other property owners along the planned Opportunity Corridor, a $331 million roadway that would connect Cleveland’s University Circle area with Interstate 490. Mr. Wright is general manager of Forge Products Co., a metalworking company along the corridor route that has been expanding. It added on to its offices and moved its machine shop, and then its shipping and receiving department, into a vacant building just north of its longtime home at 9503 Woodland Ave. At the time, it looked like the Opportunity Corridor wouldn’t come to fruition after a decade of talk. Now, though, that building is in the path of what would be an extension of Ohio Route 10. Like many buildings and homes in the neighborhood, it is more than 100 years old.
40
See CORRIDOR Page 17
0
NEWSPAPER
74470 83781
7
SPECIAL SECTION
WHERE THE JOBS ARE In certain fields, employment opportunities will be plentiful in the years ahead ■ Pages 13-16 PLUS: PROFILES IN HIRING ■ FASTEST GROWING OCCUPATIONS
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 40
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INSIGHT
Ben Venue closing adds to Doxil concerns Shuttering of Bedford lab increases questions about future of popular cancer drug By CHUCK SODER csoder@crain.com
It may be a while before ovarian cancer patients here and around the world have the option of being treated with Doxil. Ben Venue Laboratories — the only company in the world that has been approved to make the popu-
lar cancer drug — announced last week it would shut down all production by the end of the year. It will lay off all its 1,100 employees in Bedford, starting this month and continuing into 2014. Doxil’s owner, Johnson & Johnson, already was predicting it would run out of the drug at some point this month because of manufactur-
ing problems at the 75-year-old injectable drug maker, the largest employer in Bedford. Johnson & Johnson filed a lawsuit against Ben Venue in early September, saying the Bedford company breached its contract to make the drug. The announcement that Ben Venue will cease production doesn’t bode well for the future supply
of Doxil. Since 2011 — when Ben Venue announced that it temporarily would stop all manufacturing after inspections by domestic and foreign regulators identified dozens of quality-control issues at the Bedford complex — Johnson & Johnson has been saying it is working to move Doxil production to another
company. That process takes time, though, because the manufacturing process is complex and highly regulated. Officials from a few local hospitals said they are concerned about a shortage of Doxil. However, this shortage should be easier to handle than the previous Doxil shortage that occurred after Ben Venue temporarily stopped production two years ago. See DOXIL Page 18
Ashtabula will receive Texas-size shale boost Pinto Energy hooks up with Columbus firm for $300M processing plant By DAN SHINGLER dshingler@crain.com
Ashtabula is about to benefit from the Utica shale boom, as a Texas energy company and a technology firm from Columbus plan to build a gas-to-liquids processing plant in the city. Houston-based Pinto Energy said it will spend about $300 million to build the plant, which is expected to be completed and online in early 2016. The plant would take processed natural gas from the Uti-
ca and Marcellus shale plays and convert it into diesel fuel, high-end lubricants and industrial waxes used in cosmetics, pharmaceuticals and other products. Once finished, the plant will employ about 30 people, but Pinto said it expects to employ about 400 construction workers to build it. Pinto figures the plant also will support more than 100 jobs among suppliers, contractors and others not directly involved with on-site construction. Three things came together to put the plant into motion: new technology from the Columbusarea company, Velocys; new supplies of cheap gas coming from the shale plays of Ohio and Pennsylvania; and Ashtabula’s proximity to both the gas plays and necessary rail and barge terminals. See ASHTABULA Page 10
THE WEEK IN QUOTES “If you partake in any nicotine product without a prescription, you can’t be employed. It makes sense that e-cigarettes should be included in these situations.” MCKINLEY WILEY
Randy Ross, president and CEO, says Quality Synthetic Rubber Inc. is hiring “as fast and as furiously” as possible.
ZOOMING ALONG Northeast Ohio auto suppliers are benefiting from industry rebound
By DAN SHINGLER dshingler@crain.com
T
he U.S. auto industry has again found traction, and as sales of cars and trucks rebound, it’s taking Northeast Ohio suppliers and some OEM plants along for a welcomed ride. “We’re hiring — as fast and as furiously as we possibly can,” said
Randy Ross, president and CEO of Quality Synthetic Rubber Inc. (QSR) in Twinsburg. Like a lot of auto suppliers that survived the dramatic industry downturn of 2009, QSR has been lifted by both rising sales generally and from gaining market share as a result of competitors disappearing or shedding production capacity. See ZOOMING Page 12
— Dr. Donald Rosenberg, medical director for corporate health, University Hospitals. Page One
“What engenders growth for service firms, especially advisory firms like ours, is referrals from happy clients.” — David C. Fulton Jr., president and chief operating officer (and soon-to-be CEO) of Hartland & Co. Page 10
“The trend in the Cleveland MSA (Metropolitan Statistical Area) is following the state (trend). We’re seeing growth in our professional business services, educational and health services and the leisure and hospitality industry.” — Coretta Pettway, bureau chief for the Ohio Department of Job and Family Services Labor Market Information bureau. Page 13
“We’re still not seeing students choosing engineering as a major to the extent that we need them to do that.” — Judith Crocker, director of work force and talent development, Magnet. Page 14
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CRAIN’S CLEVELAND BUSINESS
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OCTOBER 7 - 13, 2013
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) ASSOCIATE PUBLISHER/EDITORIAL:
John Campanelli (jcampanelli@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Yes on 82
F
ew public bodies can say they haven’t sought a tax increase from voters in their entire existence yet still have done their jobs and done them well. An exception is the ClevelandCuyahoga County Port Authority, which has gone 45 years without a tax hike and is asking voters this Nov. 5 to approve a five-year renewal of its soon-toexpire levy. Voters should say “yes” to Issue 82, a tax that is a bargain relative to the economic benefits the Port Authority provides the region. The 0.13-mill levy is miniscule in terms of its effect on the tax bills of Cuyahoga County residents. It costs the owner of a $200,000 house about $7 for the entire year. However, the $3.2 million the tax yields when those small amounts of money are pooled together accounts for 35% of the Port Authority’s annual budget and produces a big impact for the region. The port is a key part of the success of the ArcelorMittal steel plant in Cleveland. The plant is the giant steelmaker’s most efficient operation in the world, and relies on iron ore shipments delivered through the Port of Cleveland for the raw material it uses to make the metal its customers demand. The port also serves as the entry point for highgrade, flat-rolled steel that is produced by mills in Europe and is transformed into products by America’s auto and appliance makers. Marc Krantz, managing partner of the Kohrman, Jackson & Krantz law firm and chairman of the Port Authority board, provides a great visual image of the port’s role as a vital link in the region’s transportation network. Mr. Krantz told Crain’s editorial board it would take 4,700 miles of semi-trailers aligned end to end to handle the volume of cargo that moved through the Port of Cleveland last year. That’s a line that would extend more than one-and-half times across the United States from coast to coast. But, the Port Authority plays a valuable economic role beyond its maritime operations through its development finance activities. Under Ohio law, port authorities can serve as financing intermediaries by selling bonds on behalf of companies, local governments and nonprofits that are undertaking construction and redevelopment projects. Over the last 20 years, the ClevelandCuyahoga County Port Authority has helped finance projects that have resulted in nearly $2 billion of private investment in Northeast Ohio. The Port Authority also covers the local share of the cost of dredging the Cuyahoga River in order to keep the channel a navigable waterway for freighters and to control flooding in the Flats. It isn’t a glamorous activity, but it’s an important one to ArcelorMittal and the producers of cement, limestone, petroleum products and salt that rely on the vessels that ply those waters to deliver their goods. The November ballot in Cuyahoga County is more crowded than usual with levy issues. The port’s levy, Issue 82, fits the no-brainer category. It isn’t an increase, its cost is small and its benefits are big. We give it a big thumbs up.
FROM THE PUBLISHER
Life isn’t a party in Washington right now support for same-sex marriage. House feel sorry for Dave Joyce. And for Speaker Boehner, a respected lawmaker Rob Portman. I even have some who was known to be able to work across sympathy for John Boehner. I bethe aisle to get things done, lieve that in their hearts — now must deal with what Sen. regardless of what they might BRIAN Harry Reid last week called “babe forced to say publicly — they TUCKER nana Republicans.” (Sen. Reid, must be pretty irritated at their a Democrat who rarely lets the party’s ultra-conservative fac“aim” part get in the way of his tion. You know, the self-promouth’s “ready” and “fire” claimed tea party folks. mechanisms, probably didn’t Rep. Joyce represents the help the shutdown battle much Northeast Ohio congressional with his rhetoric, but that term district once so ably handled by just made me chuckle.) Steve LaTourette, a moderate Even the conservative, proRepublican. That district inbusiness editorial pages of The Wall Street cludes Ashtabula County, a largely DeJournal took to task the Republicans — mocratic base. A successful congressled by Sen. Ted Cruz — who wanted to man must balance the needs and wishes shut down the government in order to deof those folks. The tea party folks, who fund the Affordable Care Act, the health were largely behind the recent, ridicucare legislation known as Obamacare. lous government shutdown, don’t beThis despite the fact that Congress had lieve in bending for any person or any approved the legislation and the Supreme purpose, even if it means moving forCourt has ruled in its favor. ward an important piece of legislation. Apparently, this is the new version of I’m sure that Sen. Portman, a reasonable, conservative Republican from political maneuvering. Lose a vote to the Cincinnati, has been on the blacklist of majority? Why should the majority rule? the tea party ever since he declared his Let’s just find another legislative mech-
I
anism to reverse it! No muss; lots of fuss. Do any reasonable people really think that this country could continue to absorb hefty, yearly increases in health care costs that far outpace inflation rates or wage and price increases? As J.B. Silvers, noted health care expert, said at our recent summit, this country is moving away from an industry-dependent to a consumer-driven model of health care. And the Affordable Care Act is simply hastening a change that was well on its way anyway. Think, for a moment, how much more you and your fellow employees pay as a share of the costs of health insurance that once might have been fully paid by the company. The last presidential election should have prompted the Republican Party to push its leaders to do something to broaden its base with the American people. Then along comes Sen. Cruz and his band of merry men, forcing a government shutdown to bolster their tea party cred. I hope prospective donors remember these antics when the Cruz folks start to raise money for his presidential campaign. ■
TALK ON THE WEB
POLL POSITIONS
Re: The power of print catalogs Yes, print catalogs continue to be a powerful marketing tool. But it is worth pointing out that B2B print catalogs don’t have to be all or nothing. In contrast to the companies making a single, large catalog, there are other businesses creating numerous small catalogs targeted at particular niches. The ultimate niche catalogs are those aimed at a specific customer. These days it is possible to enable individual sales reps or dealer to easily make a custom catalog, which contains just the products that are appropriate to the target prospect. — Tim Hennings
Re: Sewer district’s value We have to take care of our region and pay for the upkeep of our infrastructure while caring for our people, land and water.
Reader responses to stories and blogs that appeared on: www.crainscleveland.com
We are lucky to have the Northeast Ohio Regional Sewer District. It actually wants to help make our region resilient. — Erin Huber
Re: Cleveland’s progress Under Mayor Frank Jackson, Cleveland has in fact imitated the pragmatic, “no broken windows” strategy of New York mayors Rudy Giuliani and Michael Bloomberg, emphasizing safety and clean streets downtown, and public school reform. I don’t think Chirlane McCray (the wife of New York City mayoral candidate Bill de Blasio who paid Cleveland a backhanded compliment as a progressive city) knows whereof she speaks. — Patrick Gallagher
There will be three countywide tax issues on the Cuyahoga County ballot this fall, covering parks, the port, and health and human services. How many of them will you support? All of them.
37.2% One or two of them.
25.6% None of them.
37.2%
Vote in the poll each week at CrainsCleveland.com.
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CRAIN’S CLEVELAND BUSINESS
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COMING NEXT WEEK
OHIO ISN’T KEEPING PACE
We salute the CFOs
From March 2012 to March 2013, employment increased in 282 of the 334 U.S. counties with employment levels of 75,000 or greater, according to federal government data. Fort Bend, Texas, posted the largest increase, with a gain of 7% in the period, compared with national job growth of 1.6%. Midland, Texas, had the second-largest increase in employment (6.9%), followed by Elkhart, Ind. (6%) and Douglas, Colo. (5.6%). Ohio, where 13 counties met the size criteria for the list, was not a stellar performer. Here is how the counties ranked: Change in employment from March 2012 to March 2013
Crain’s takes a look at some of the top financial officers in the region with our annual CFO of the Year section.
CORRECTION The name of aircraft parts maker TransDigm Group Inc. was incorrect in a Sept. 30, page 4 story on the inaugural Midwest Investment Conference organized by CFA Society Cleveland.
REGULAR FEATURES Classified ....................18 Editorial ........................4 From the Publisher ........4 Going Places ...............11
Milestone ....................19 Reporters’ Notebook....19 Talk on the Web .............4 The Week ....................19
1. Delaware
2.3%
7. Mahoning
0.4%
2. Franklin
1.9%
8. Hamilton
0.1%
National average
1.6%
9. Summit
-0.1%
3. Cuyahoga
0.9%
10. Lake
-0.3%
3. Stark
0.9%
10. Lucas
-0.3%
5. Warren
0.8%
12. Montgomery
-0.5%
6. Butler
0.4%
13. Lorain
-1.0%
■ Source: U.S. Bureau of Labor Statistics; www.bls.gov
700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Associate publisher/editorial: John Campanelli (jcampanelli@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editor: Kevin Kleps (kkleps@crain.com) Sports Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Rachel Abbey McCafferty (rmccafferty@crain.com) Manufacturing and energy Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Events manager: Jessica Snyder (jdsnyder@crain.com) Special events coordinator: Kim Hill (kroman@crain.com) Marketing strategist : Michelle Sustar (msustar@crain.com) Advertising director: Nicole Mastrangelo (nmastrangelo@crain.com) Senior account executive: Adam Mandell (amandell@crain.com) Account executives: Dawn Donegan (ddonegan@crain.com) Andy Hollander (ahollander@crain.com) Lindsie Bowman (lbowman@crain.com) John Banks (jbanks@crain.com) Office coordinator: Denise Donaldson (ddonaldson@crain.com) Digital strategy and development manager: Stephen Herron (sherron@crain.com) Web/Print production director: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com)
Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Chris Crain: Executive Vice President, Director of Strategic Operations Brian D. Tucker: Vice president Dave Kamis: Vice president/production & manufacturing Mary Kramer: Group publisher G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation
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Home: Single-family permits are up 22% in Cleveland market in 2013 continued from PAGE 1
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U.S. Census data provided by the National Association of Home Builders — a workaround due to last week’s federal government shutdown — show single-family permits in the Cleveland-ElyriaMentor metropolitan statistical area through the end of August were up 22%, to 1,530 from 1,250 in the like period of 2012. In the Akron MSA, single-family permits posted an 11% rise, to 340 homes from 300. “Everybody I talk to is busy,� said George Davis, president of the Home Builders Association of Greater Cleveland. “This is the recovery. All the signs are there, and it’s primarily because people can sell their existing homes again at good prices.� Mr. Davis, president of ProBuilt Homes Inc. in Mentor, said he’s looking at a record year for his company in 2013 — a possibility that not long ago looked unthinkable. ProBuilt is on track to start 22, and perhaps as many as 25, custom homes costing upwards of $300,000 this year, with signed contracts in place for 19 so far. The firm’s record was 19 in 2007, the year before the 2008 financial crisis put the brakes on many construction projects nationwide. Gross sales volume is up 20% this year at Otero Homes, a custom builder in Chagrin Falls with homes underway that range in price from $600,000 to $2 million. The homes primarily are in Geauga County, but the company is building in an area from Pepper Pike to Hinckley. Ted Otero, owner of Otero Homes, wouldn’t say how many homes the firm has underway, though he counts 2013 as a great year and hopes “2014 is even better.�
The lull has passed Like builders across most of the country, Northeast Ohio homebuilders weathered a pause in sales in the early summer that national analysts blamed on the rise in 30year mortgage rates to about 4% from 3%, as well as labor shortages and price shocks as building material prices climbed. Even at the higher end of the market, Mr. Otero witnessed the
pause. “There was a lull this year,� Mr. Otero said. “We’d be working with people, doing drawings and getting ready to rock. Then things went cold. However, they often came back later.� The result: Mr. Otero said when subcontractors “should have been going gangbusters,� work slowed down. Now, subcontractors who might have put in basements and foundations in the summer are rushing to do them before winter weather arrives. Problems associated with better times are surfacing. Some builders who are short on staff are hiring. Mr. Davis said ProBuilt is preparing to add a sales person and a construction superintendent to its staff of six. Also, supplies of ready-to-go lots are slim in high-demand areas, and builders must pitch less-desirable existing lots in areas further from employment centers than they would like. Carmine Torio, executive vice president of the Home Builders Association of Greater Akron, said builders have gone from too little work to do to too much. “However, the fact is that this is among those people who are left in business,� Mr. Torio said. “The (builders) who made it through don’t have a lot of people to compete against. And they are doing it with crews and office staffs that are greatly reduced.� The availability, or lack thereof, of subcontractors and workers is a widespread worry voiced by many builders and their vendors. “The problem is that everyone, including subcontractors with a one-man crew or a couple workers, reduced staff,� Mr. Otero said. “Now you’re waiting in line for subcontractors to show up. We have loyal painters who can’t do our jobs.� Part of the reason for the tight supply of help is that no one wants to staff up before the winter slowdown or hire if another slowdown hits, Mr. Otero said.
On the ‘road to normal’ Although construction lending for home builders is better than it
has been, Mr. Torio said in general only the strongest builders can get financing. Bank lending is stronger, though, and super-creditworthy builders may be able to get money to build a house or two on speculation. Still, terms of bank loans remain strict, with high equity requirements, and bank loans to buy land and ready it for homes — the riskiest end of the building business — are scarce. “I’ve had more than one builder say, ‘If I have to put 50% down, I may as well do it with my own money,’â€? Mr. Torio said. As a result, more land developers are turning to private equity sources — which require higher returns than banks — to fund projects. Northeast Ohio builders have plenty of company in dealing with the challenge of lining up money. A recent National Association of Home Builders survey found access to credit remains difficult. Indeed, the group said 20% of land developers it surveyed now rely on private equity, compared with just 6% prior to the downturn. The rise in homebuilding activity also requires a strong dose of perspective. Last Wednesday, Oct. 2, during a National Association of Home Builders webinar called “The long road to normal,â€? a panel of economists agreed the housing downturn is over, and the biggest challenge to returning to normalcy — which might not happen until 2019 — now is the strength of the general economy. Mr. Torio agrees, noting that Cleveland-area permit figures still are down about 80% from the housing boom years and 60% from average years. However, he said he believes this recovery has more strength than the one that followed the shock home builders got from double-digit interest rates in the early 1980s. Nick Catanzarite, the attorney for J-Roc Development, which produced Tremont North, said the project selling out in advance of construction at strong prices shows opportunities for well-designed and located projects are afoot again. â–
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Hingetown creates culinary links, adds to Ohio City’s flair Neighborhood is adding to demand for ‘quality artisan food entrepreneurs’
H
ingetown is at the corner of emerging and where it’s at, and its burgeoning artisan food scene is heading down the same road. The percolating Ohio City neighborhood at the geographic hinge of the Market District, Gordon Square and Warehouse District/Flats East Bank is serving as the latest incubator of Cleveland’s entrepreneurial economy by linking existing and emerging businesses with consumers who embrace all things handmade. “We want to cultivate the demand for quality artisan food entrepreneurs and connect these businesses through deliberate development and programming with a strong food component,â€? said Graham Veysey, a small business owner with a real estate, media and political background who also is part of a collaborative partnership to spark Hingetown’s methodical growth. Within the last few months, Beet Jar Juice Bar (which makes vegan cold-pressed juices), Cleveland Tea Revival, (a high-end organic tea cafĂŠ) and Jukebox tavern have spoken for West 29th Street in the renovated Striebinger Block Building, where European-inspired events are taking root. Hingetown’s epicenter is at Mr. Veysey’s mixed-use Ohio City Firehouse at West 29th Street and Church Avenue, within which the nationally respected Rising Star Coffee Roasters brewbar and Mr. Veysey’s North Water Partners video production company are located. Mr. Veysey cites Northeast Ohio Areawide Coordinating Agency studies that estimate about 2 million cars and more than 50,000 cyclists pass through the neighborhood’s corner of West 29th Street and Detroit Avenue. “There’s real density here,â€? he said.
C’est la vie About 2,000 cross-generational consumers from both urban neighborhoods and suburbs flocked last month to Hingetown’s inaugural French-themed market, comprised of 10 craft food vendors, and a mimosa bar. “Every vendor killed it,â€? Mr. Veysey said. “Rising Star had its best day ever, with about 600 transactions. People were lined up out the door and across the street. Elise’s Crepes had a line of about 30 people and ran out of crepes. Cleveland Bagel Co. ran out. There were so many kids, too. It was great.â€? The unique market provided Coquette Patisserie with an opportunity not only to showcase its mousse cakes and macaroons but also quintessential French delicacies such as ĂŠclairs and oysters, the latter two of which most customers aren’t aware that the pastry artisan offers, owner and chef Britt-Marie Culey said. “We thought the oysters would be
KATHYAMESCARR
WHAT’S COOKING an excellent complement to the champagne bar ‌ and yes, we sold out,â€? she said. The participation of the Cleveland Heights bakery represents Hingetown’s goal of bridging Cleveland’s artisan community, Mr. Veysey said. “There’s a radical inclusiveness to what we’re doing,â€? he said. “More is more. Hingetown is a real celebration of quality.â€? Hunter Harlor, whose nascent Forty.One supplies Rising Star Coffee Roasters with his craft vegan almond milk, bolstered his fledgling customer base after serving as a French Market vendor. “Phoenix Coffee on Lee (Road in Cleveland Heights) is testing our milk, and we just started delivering it to the Coventry location,â€? Mr. Harlor said. Mr. Veysey is glad to see such connections. “This little eco-system is developing, where people run into people,â€? Mr. Veysey said. “Those in-person (business and consumer) interactions will continue to fuel momentum around the city.â€?
Coming attraction The second French Market is set for 10 a.m. to 3 p.m. Oct. 20, with 14 artisan food vendors ranging from French-inspired bakeries, local produce stands, an oyster bar and champagne cocktails and a Bloody Mary bar. Hansa House in Ohio City will serve grilled sausage sandwiches, Slovenian ĂŚevapèiĂŚi sandwiches and Lasko beer. Clark Pope Catering, a local jarred goods maker, will dish up coq au vin sandwiches, cheese plates and grilled gruyère sandwiches. Both vendors are new to this month’s market. “I’m really trying to curate a more European brunch setting there,â€? said Cleveland Flea founder Stephanie Sheldon, who helped organize the French market. Neighborhood developers are mulling future monthly programming ideas, such as a snowman fashion show with a dynamic food element, Mr. Veysey said. “We’re going to avoid typical hibernation and embrace the cold climate,â€? he said. Also spearheading Hingetown’s development are Marika ShioiriClark, partner and principal at Cleveland-based design firm Soshl Studio; Fred and Laura Ruth Bidwell, Akron art collectors who invested about $3 million to reimagine the 90-year-old Transformer Station on Church Avenue into a contemporary art gallery; and Christopher Celeste of Hatch, which helps launch startups. For details on Hingetown and coming food events, visit Hingetown.com.
Added morsel Spice of Life Catering Co.’s sev-
ON THE WEB Read Kathy Ames Carr’s What’s Cooking blog at: www.crainscleveland.com enth season of Plated Landscapes culminated on Saturday, Sept. 21, at Killbuck Mushroom Farm, where about 50 guests foraged for fungi that chef Ben Bebenroth skillfully integrated into that evening’s multicourse meal, expertly paired with quality wine. Mr. Bebenroth is adjusting next year’s schedule for the monthly field-to-table alfresco dining experience ($150 per person), explaining that instead of holding one event to each venue, he will double up at each location (Cleveland Botanical Gardens, Mackenzie Creamery, New Creation Farm, Ohio City Farm). “Because of the logistics involved, it makes more sense to have the Plated Landscapes on both a Friday and Saturday night at the venue,â€? Mr. Bebenroth says. â–
CONTRIBUTED PHOTO
Brittany Gonzalez, left, and Alicia Candelario of La Banana Frita sold their products last month at Hingetown’s inaugural French-themed market.
Thursday, October 31 BN t BN - Registration & Networking BN t BN - Panel Discussion Embassy Suites, Rockside Road
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CRAIN’S CLEVELAND BUSINESS
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Cigs: Many employers have banned devices continued from PAGE 1
E-CIG REVENUE: BY THE NUMBERS
“I’m so into them it’s ridiculous,” said Mr. Lardomita, chief technology officer for International Excess Alliance in Richmond Heights, a wholesaler of property, casualty and other types of insurance. “It’s the future of smoking.” Mr. Lardomita surely isn’t alone. Sales of the devices, which use electrically generated heat to vaporize liquids that can emit nicotine into the body, could reach $1.2 billion this year in the United States. Last year, sales were about $475 million, according to the Tobacco Vapor Electronic Cigarette Association, a Georgia-based trade group. But as sales balloon, so have concerns with the devices, particularly by public health advocates who say their long-term effects are unknown. Late last month, Ohio Attorney General Mike DeWine and 39 other attorneys general asked the U.S. Food and Drug Administration to regulate the devices as tobacco products, which would restrict manufacturers’ advertising efforts and ability to sell to minors. Also, at present, the FDA doesn’t sanction e-cigs as a legitimate smoking cessation tool like the patch or gum. Their rise has companies grappling with how to handle the devices — both in terms of their use by employees and patrons. It could be a slippery slope, as Ohio’s smoke-free workplace statute doesn’t refer explicitly to e-cigs, according to John Cernelich, who co-chairs the labor and employment group at law firm Calfee, Halter & Griswold in Cleveland. The law, as he sees it, could be argued both ways as to whether ecigs are included. While he hasn’t dealt with any workplace issues concerning the devices, Mr. Cernelich likened the e-
A look at the annual sales of electronic cigarettes in the United States since 2007, according to the Tobacco Vapor Electronic Cigarette Association:
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Year
Total sales
2007
$10,000
2008
$5 million
2009
$15 million
2010
$45 million
2011
$250 million
2012
$475 million
2013
x-$1.2 billion
■ NOTE: x-Projected total
“My hunch is employers will probably want these to go away.” – Dr. Ronald Golovan, medical director, Be Well Solutions cigs phenomenon to the growing use of social media in the workplace — a trend that has human resources executives scrambling to update their employee handbooks. “This is just another situation that, as technology evolves, it eventually impacts the workplace,” he said.
No butts about it Mr. Lardomita has no issue vaping his e-cig in his office, though others have nixed the practice. Huntington Bank, for one, doesn’t allow the use of tobacco or e-cigs in any of its buildings, parking lots, company-owned vehicles or at company-sponsored events. Lincoln Electric, a Euclid-based maker of welding equipment, won’t hire smokers and specifically notes in its policy that e-cig users fall into that category. While not all employers ban tobacco use, many charge employees who light up higher premiums. Some are unsure whether to rope ecig users into that category, according to Dr. Ronald Golovan, medical director for Be Well Solutions, a Solon-based wellness provider. Dr. Golovan stressed that each company’s situation is different, but given that these devices transmit nicotine and aren’t regulated by the FDA, their proliferation in the workplace isn’t advisable. “My hunch is that employers will probably want these to go away,” he said. Consequently, e-cig users looking to sidestep a company’s non-smoking policy could be out of luck. Because the devices pump nicotine in the system, the urine analysis used by most employers would show trace amounts of the drug. University Hospitals’ non-smoking policy doesn’t outright refer to e-cigs, but that could change soon. “If you partake in any nicotine product without a prescription, you can’t be employed,” said Dr. Donald Rosenberg, the health system’s medical director for corporate health. “It makes sense that e-cigarettes should be included in these situations.” E-cig users such as Mr. Lardomita say the vapor their devices emit is odorless and doesn’t infringe on anyone else’s rights. He occasionally uses his in public, noting that he discretely vaped at the recent West Virginia-Oklahoma State football game.
That said, some big-ticket gathering spots are looking to snuff out the practice. The Browns, Cavaliers and, within the last month, the Indians all have prohibited their use within their facilities. Indians spokesman Joel Hammond said the decision was to ensure “the most safe and family-friendly ballpark as possible.” Solon-based Cleveland Cinemas, which operates the Cedar Lee and Capitol theaters, among others, doesn’t let moviegoers partake of the devices. Cleveland Hopkins International Airport’s smoking policy doesn’t include e-cigs, but airport officials said they’re reviewing the matter.
Ready for prime time While e-cigarettes have been available in some form for decades, they haven’t crept into the mainstream until recently. Last week, “Arrested Development” star Will Arnett took a drag off his e-cigarette during an appearance on a latenight talk show, with host Jimmy Kimmel quipping that he might be the first to vape on network television. A Charlotte-based maker of the devices, blu E-Cigs, announced last week it was sponsoring a crosscountry concert tour encouraging its fans to “embrace their freedoms” by using the devices. The tour will stop Oct. 31 in Cleveland at the House of Blues and offer adult smokers samples of the devices. A news release touted the devices as an alternative for smokers who don’t want to miss performances by their favorite artists while smoking outside. These marketing ploys are a big concern for public health advocates, as many suggest the devices could be a gateway to full-fledged cigarettes or other drugs for young people. “It’s a cool thing right now and being promoted on Internet and in advertisements,” University Hospitals’ Dr. Rosenberg said. “They make them sound as if they’re safe, but their long-term safety really is not known.” Although it’s only been a few months since Mr. Lardomita traded his smokes for the battery-fueled variety, he says he’s already felt the benefits. He coughs less and his taste and smell have returned. Over time, he plans to transition toward an e-cig liquid with less and ultimately no nicotine, then just “puff on the vapor for the taste.” “I really like that sensation of grabbing it and puffing it,” he said. “That’s always been the hardest part for me about quitting.” ■
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WWW.CRAINSCLEVELAND.COM
OCTOBER 7 - 13, 2013
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 Ramode Manufacturing Co. 1400 E. Granger Road, Brooklyn Heights ID: 30-0235028 Date filed: Sept. 6, 2013 Type: Employer’s withholding, unemployment Amount: $71,705 Practice Management Consultants LLC 20006 Detroit Road, Suite 200, Rocky River ID: 75-2995645 Date filed: Sept. 17, 2013 Type: Employer’s withholding Amount: $58,393 Legacy Landscape Co. LLC 5996 Louis Drive, North Olmsted ID: 81-0600651 Date filed: Sept. 6, 2013
Type: Employer’s withholding Amount: $47,488 Sushi Prime LLC 583 Dover Center Road, Bay Village ID: 27-3719874 Date filed: Sept. 24, 2013 Type: Employer’s withholding Amount: $45,760 Nadia 1 Inc. 11316 Euclid Ave., Cleveland ID: 30-0128679 Date filed: Sept. 17, 2013 Type: Employer’s withholding, unemployment, corporate income Amount: $42,346 Clyde Tavern Inc. 2692 W. Saint James Parkway, Cleveland Heights ID: 27-0574787 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $29,872 3283 W117 Inc. T/A Al-Manar Market 3279 W. 117 St., Cleveland ID: 27-0168331 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $27,003 Ramode Manufacturing Co. 1400 E. Granger Road, Brooklyn Heights ID: 30-0235028
Date filed: Sept. 17, 2013 Type: Employer’s withholding Amount: $22,992 McKnight & Associates Ltd. 812 Huron Road E., Suite 421, Cleveland ID: 30-0687506 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $22,566 Styling Tips Inc. 16210 Madison Ave., Lakewood ID: 34-1546447 Date filed: Sept. 24, 2013 Type: Employer’s withholding, unemployment Amount: $22,426 Veritas Vocational Services LLC P.O. Box 470091 ID: 35-2422858 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $21,422 Deloach Orthodontics Inc. 5 Severance Circle, Suite 805, Cleveland Heights ID: 31-1565627 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $9,562 Adventure Team Racing LLC 5247 Wilson Mills Road, 145, Cleveland
ID: 55-0756218 Date filed: Sept. 6, 2013 Type: Employer’s withholding Amount: $6,973 Management & Marketing Vectors Inc. 2706 Lorain Ave., Cleveland ID: 26-4102496 Date filed: Sept. 6, 2013 Type: Employer’s withholding, unemployment Amount: $5,180 GMA Computer Room Services LLC TA Plenum Control 4126 W. 145 St., Cleveland ID: 20-3908720 Date filed: Sept. 6, 2013 Type: Unemployment, employer’s annual federal tax return Amount: $5,179
LIENS RELEASED Alescis Place Inc., Jim Alescis Place 33475 Station St., Solon ID: 34-1691234
$1,265,000 Westlake
This unique landmark property which has an Ohio Historical marker was built in 1838 by Thomas Hurst and was one of the largest farms in Ohio with over 3200 acres. From 1900-1913 US Senator Burton lived here. Supposedly Teddy Roosevelt spent the night here. Steve McQuillin has spent many years painstakingly restoring and completely rehabilitating this home to meet modern codes, yet conserving the period decor.
Westlake
$829,000 Avon Lake
Fabulous New Construction based on the design of the historic Anderson House in Ann Arbor, Michigan, with a 175 year old historic landmark property next door. This one of a kind property was built by Steve McQuillin, a builder using quality materials, like sandstone from the Cleveland Quarries and decorative stones from Kipton Quarry. 5 levels including a walk-out lower level with 3+ car garage, first level living space, second level with 4 bedrooms and an office on the 3rd level with panoramic views.
$933,500
Award winning Manor house on one of Westlake's most favorite cul-de-sac streets. Located on an eco pond filled with rock and exotic flora surrounded by a cathedral of trees. Together with the beautiful patio with waterfall this picturesque setting makes for a relaxing atmosphere! Quality built by Miller Pastel constructed of brick and stone, arch openings, moldings, crowns, cathedral ceilings and walls of windows.
$2,900,000
One of a kind LAKEFRONT French Manor Estate, designed by world famous architect Tony Paskevich and built by Restifo Builders, situated on 2 parcels of land, 1.5 acres, with circular drive, wrought iron fence, 5 car garage. Exterior is stone and cedar with a slate roof, extensive sandstone patio for relaxing and entertaining while taking in beautiful Lake Erie. Watch the boats go by, feel like you are on vacation! First floor Master suite.
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Karin Vonderau 440.871.3050
Check out all of Karin’s listings at www.vonderau.com
vonderau@vonderau.com Westlake Regional Office: 2055 Crocker Road 101, Westlake, OH 44145
Alescis Place Inc., Jim Alescis Place 33475 Station St., Solon ID: 34-1691234 Date filed: March 21, 2011 Date released: Sept. 17, 2013 Type: Employer’s withholding Amount: $11,947 Stec Construction LLC 6507 Luelda Ave., Parma ID: 57-1175189 Date filed: Nov. 5, 2007 Date released: Aug. 27, 2013 Type: Employer’s withholding Amount: $38,533 William E Crowe MD Inc. 6631 Ridge Road, Suite 204, Parma ID: 30-0019966 Date filed: March 23, 2012 Date released: Aug. 27, 2013 Type: Employer’s withholding Amount: $16,789
Ashtabula: Construction could begin early in 2014 continued from PAGE 3
Westlake
Date filed: March 30, 2011 Date released: Sept. 17, 2013 Type: Employer’s withholding, corporate income Amount: $12,321
Velocys’ technology is based on something known as the Fischer Tropsch processes — more commonly referred to as “FT processes” in the gas processing industry. The process is complex, but it involves a series of chemical reactions that form liquid hydrocarbons from the components of natural gas. Essentially, it builds longer chains of hydrocarbons to form diesel fuel and other components, using smaller molecules found in natural gas as its building blocks. The result, say the companies and other scientists familiar with the process, is a form of diesel fuel lower in sulfur and other impurities than the diesel fuel produced by refining. Refiners begin their process with heavy crude oil, and then strip away impurities and unwanted substances until they are left with the gasoline, diesel fuel and other products they need. But refineries don’t remove all the impurities, so they end up with a dirtier form of diesel than is produced by an FT process, said Velocys business development director Tad Dritz. With FT technologies, processors aren’t dealing with any impurities to begin with, he said. “To get it to be diesel fuel you basically have to dirty it up a little,” Mr. Dritz said. Other gas-to-liquids processes exist, but the most common require far larger plants — often costing $10 billion or more to build — and can’t be scaled down the way Velocys’ system can, said representatives of both Pinto and Velocys. The square footage of the plant was not disclosed, but it will sit on an 80-acre site, which developers say is big enough for both the initial plant and future expansions. Pinto said components for that plant are being built in Pasadena, Texas, by Ventech Engineers International. The plant’s design should be completed by the end of this year; construction is scheduled to begin in Ashtabula in the first half of 2014.
A little flare The announcement of the plant
probably says as much about the potential of the Marcellus and Utica plays as it does anything else. Pinto and Velocys say their expectations for the two plays drove the decision to build the plant, and they only expect production to increase, particularly from the Utica. Although drilling in the Utica has yet to take off, recent data from the Ohio Department of Natural Resources show the play’s development is speeding up. A total of 885 horizontal shale drilling permits had been issued by Ohio as of midSeptember and, of that number, 428 permits were issued just this year. Many of those wells are expected to be brought online quickly as pipelines and processing facilities are completed this year and in 2014. Pinto has said it plans eventually to expand the Ashtabula plant, bringing its production capacity up to about 7,000 barrels of liquids per day, and it will consider building additional plants in the Utica region and elsewhere, using Velocys’ technology. Velocys, however, hopes for even more. Because its technology is scalable and relatively portable — its gas-toliquids plants are constructed offsite and then built where they are needed — the company hopes to find more uses for its process, Mr. Dritz said. For example, the technology could be used in places such as the Dakotas, where drillers working in the vast Bakken shale play currently burn off the gas they find right at the wellhead, in a process called flaring. That’s because drillers there are focused on recovering more valuable crude oil and, at its recent low gas prices, the natural gas they find is more a nuisance than an asset. As a result, the Bakken lights up bigger and brighter than Chicago at night, as evidenced by recent satellite photographs in which the play looks like a vast and busy metropolis once the sun goes down. “I am personally very passionate about putting out the flares and that’s a great opportunity for us,” Mr. Dritz said. ■
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CRAIN’S CLEVELAND BUSINESS
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GOING PLACES
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MetroHealth Select offers self-funded employers an innovative, health network option with: ] Quality healthcare ] Expert physicians ] Significant savings ] 17 convenient locations ] Wellness services
Who should we be watching in this area? Crain’s is looking for nominations in sustainability sector Crain’s Cleveland Business in 2013 is continuing its series of “Who to Watch” sections. The next section, slated for publication Nov. 25, will highlight up-and-comers in Northeast Ohio’s sustainability efforts. If you think you know who will be among those leading Northeast Ohio’s green initiatives of the future, drop an email to sections editor Amy Ann Stoessel, astoessel@crain.com, or call 216-771-5155. Send in suggestions
Contact MetroHealth today at 216-778-7362, or email select@metrohealth.org no later than noon on Monday, Oct. 21. An event scheduled for 7 to 10 a.m. Dec. 11 at the Cleveland State University’s Student Center will help highlight those included in the section. For more information, go to www.CrainsCleveland.com/ WhotoWatch. ■
Visit metrohealth.org/select for more information.
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CRAIN’S CLEVELAND BUSINESS
New year will mark start of different era at Hartland & Co. Wealth advisory firm will have change at top for first time in history By MICHELLE PARK LAZETTE mpark@crain.com
Hartland & Co. soon will welcome a new CEO who’s determined to see to it that the Cleveland-based independent institutional and wealth advisory firm executes on its plans to recruit top professionals and keep a keen eye out for potential acquisitions in Northeast Ohio and beyond. David C. Fulton Jr., who joined the firm in 2009 as its president and chief operating officer, will succeed firm CEO Tom Hartland effective Jan. 1. A 28-year veteran of the investment advisory business, Mr. Fulton will be both president and CEO of the 52-employee firm. Mr. Fulton’s promotion will mark the first time Hartland & Co. will have a CEO who isn’t Mr. Hartland since its founding 24 years ago. Mr. Hartland, 62, will continue working full time as executive chairman of the company’s board. The firm considered several candidates before hiring Mr. Fulton four years ago, Mr. Hartland said. “He’s done a fantastic job of real-
ly building the firm into a fastergrowing, more dynamic business,” Mr. Hartland said of his successor. “In the last five years, we have more than doubled the size of the company, more than doubled the number of employees, more than tripled the number of clients.” Hartland & Co., which serves 65 institutions including retirement funds and not-for-profits and more than 200 wealthy families, began implementing its current strategic plan in the second half of this year. One of its aims is to double Hartland & Co.’s revenues by 2018, Mr. Fulton said. He would not disclose current revenues. “What engenders growth for service firms, especially advisory firms like ours, is referrals from happy clients,” Mr. Fulton said. “We have to continue to get the very best people that we can here. We have to invest in technology … and we have to continue to invest in investment research and improve the basics of our product offerings.” Growth by acquisition is attractive to Hartland & Co., Mr. Fulton said. Its last transaction was its 2011 deal for Chess Financial Corp. in Beachwood. “It’s worked out beautifully, so we’re out thinking about acquisitions again,” Mr. Fulton said. “When you acquire a firm, it not only brings growth and growth opportunities for you, it also brings in new people who can be really additive to what you’re doing.” ■
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Zooming: Twinsburg rubber company has added 100 employees in the last four years continued from PAGE 3
Since 2009, when only 10.4 million vehicles were sold, U.S. auto sales have rebounded steadily. In August, sales hit an annual sales pace of 16 million vehicles for the first time since the recession began in late 2007. In September, sales slackened a bit, dropping to a pace of 15.3 million vehicles. But some automakers that are the most important to the Northeast Ohio market, including Ford, still posted gains last month. And even some adversely affected original equipment manufacturers, such as GM, declared that they believed the September slowdown was temporary and that sales would continue to rise. Not only have rising domestic sales and increased market share helped boost QSR’s sales, but one of its chief product lines consists of rubber parts used to house and insulate electronic components and electrical systems on vehicles. As more GPS screens, backup cameras, heated seats, efficiency controls and other electronic systems are built into cars, more of QSR’s products are needed, Mr. Ross said. As a result, sales are up and employment at QSR’s main plant in Twinsburg has risen by about 100 people in the last four years, to about 1,000 full-time employees. “We are far exceeding what we were doing pre-recession,” Mr. Ross said. The sales boost, and a healthy capital base to begin with, has enabled QSR to expand, and it opened a new plant in southern China. “Before that, we had access to maybe 20% of the world’s automotive market. Now, we’ve accessed the other 80% of the market,” Mr. Ross
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The EcoBoost engine that Ford makes at its plant in Brook Park is running three shifts and churning out the motors as quickly as possible. said. Other suppliers are also reporting a good year, including Goodyear Tire & Rubber Co. “Our North American consumer original-equipment volume is definitely up over last year,” said Keith Price, spokesman for the Akronbased tiremaker. Goodyear has not yet put a number on its OEM tire sales gains for the year, but the company sticks by its second-quarter prediction that U.S. auto sales would climb by 5% this year, Mr. Price said.
A more accurate crystal ball In Brooklyn Heights, precision stamper Die-Matic Corp. also is feeling the positive effects of rising U.S. sales, said company president Jerry Zeitler. Die-Matic has been fortunate, Mr. Zeitler said, because it has significant relationships with both Ford and Honda, two automakers that have fared particularly well this year. “Our orders are strong and they’re healthy,” Mr. Zeitler said, noting that employment at his company is back up to 100 people after declining to fewer than 60 during the recession. Mr. Zeitler said he’s seeing some of the same signs of strength on the part of the OEMS that he saw before the recession; for instance, they once again are asking suppliers for price cuts and focusing on reducing the number of suppliers they use in total. Like QSR did, Die-Matic is considering opening up an international plant, in Mexico, to better serve existing customers and remain on their list of preferred suppliers. Improved internal systems and technology also are making auto sales forecasting much more acute, Mr. Zeitler said. That enables suppliers like Die-Matic to do better planning. “It used to be the rule of thumb, even before the recession in ’06 and ’07, a customer would say, ‘I want you to make this part and I’ll need 100,000 a year.’ And we were always off by 15% or 20%,” he said. “Today, when a customer says I need 100,000, we actually make 100,000 parts. Sometimes we end up exceeding it.”
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The positive impact of auto sales also has a multiplier effect. Companies here that don’t make anything that will ever go into an automobile still feel the positive effects of the in-
dustry’s growth. For instance, Drabik Manufacturing in Cleveland doesn’t make a single part that goes into a light vehicle. Instead, the machine and die shop makes parts for other big manufacturers’ assembly lines. But owner and president James Drabik said he has no doubts that increased auto sales are causing his customers to grow, resulting in more business for him. “We supply a lot of foundries, paint and coating makers and other companies that sell into automotive, and they are all growing and expanding their plants. That’s good for us,” Mr. Drabik said. Things might have gotten so good that auto-related manufacturers are facing one of their chief pre-recession challenges — finding enough good employees. “We are still trying to hire and it’s tough,” Mr. Ross said. “There’s a lack of skilled workers out there and it’s hard to find people.” But, as he and others on the hunt for employees pointed out, not being able to easily find people to hire is still an improvement over not being able to find sales.
‘We’re all busy’ Suppliers here are thriving partly as a result of the strong performance of Ford, a star of the industry throughout the downturn and afterward. It was the only U.S. automaker not to require a bailout, and it has been quick to bring to market new engines and vehicles that have been readily accepted by consumers. That includes the EcoBoost engine that Ford makes at its plant in Brook Park, which is running three shifts and churning out the motors as fast as it can, said Mike Gammella, president of the plant’s union, United Autoworkers Local 1250. “We’re very, very busy and we’ll continue to be busy, in Cleveland especially,” he said. “Last week, we were at subcouncil meetings with other UAWs from Ford across the country, and we’re all busy. If anything, Ford’s got a capacity problem. They could grow more, but they’re being cautious and keeping quality up.” Things seem only destined to get better in Brook Park, too. Ford will begin making four-cylinder engines at the site next year, a move Mr. Gammella said should increase his rank and file from about 1,050 to more than 1,800. ■
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WHERE THE JOBS ARE PROFILES IN HIRING Progressive Insurance By MICHELLE PARK LAZETTE mpark@crain.com
T GETTY IMAGES
MODEST IS GOOD, TOO Even with a slow growth curve, Team NEO predicts by 2022, jobs will be at highest level in two decades By JAY MILLER jmiller@crain.com
L
ong term, if the economy doesn’t grow faster and if population loss continues to hamper Northeast Ohio, job growth in the metropolitan area will be sluggish. That’s a Rust Belt reality. But that shouldn’t discourage job seekers. Even the expected slow growth will produce 150,000 new jobs in Cleveland and its regional orbit between 2011 and 2022. Team NEO, which produced that forecast earlier this year, said that by 2022 employment will be at its highest level in 20 years, with employment in the 18 counties of Northeast Ohio it tracks hitting 2.57 million workers. Perhaps more important for job seekers, when you combine even the region’s modest level of growth in regional population with the impact of retirements and the usual job hopping, they can expect to find job openings plentiful in a number of job categories and growing industries — especially if they have the right training. College and advanced academic skills can give a job prospect more options, but for many of the jobs that will be opening up, a four-year degree won’t be needed for success. Instead, some advanced education or skills training will be critical for landing many of the jobs that will be opening up over the next decade. The Ohio Department of Job and Family Services tracks employment and job growth across the state and for its major metropolitan areas. Its most recent report, “Jobs Outlook: 2008-2018,” found dozens of job categories that will grow rapidly, many by at least 17% over the study decade, each generating 200 or more job openings annually.
“The trend in the Cleveland MSA (Metropolitan Statistical Area) is following the state (trend),” said Coretta Pettway, bureau chief for the state jobs agency’s Labor Market Information bureau. “We’re seeing growth in our professional business services, educational and health services and the leisure and hospitality industry.” Midlevel jobs, however, are drying up. “Where we have technology that allows us to do more with (fewer people), we may see some of those occupations, not as many are needed,” Ms. Pettway said.
What’s hot, what’s not Among the jobs that will be hard to find are those in the printing trades, travel agents and payroll and billing clerks and other clerical workers, jobs that the state jobs outlook report says have average wages of as much as $17 an hour. Some of the fast-growing occupations do require a college diploma or maybe more — such as computer systems analysts, physician assistants and mental health counselors. These jobs had an average annual wage in December 2010 that broke down to the equivalent of between about $20 and $40 an hour. Jobs with the most openings at that same high end include registered nurses, sales representatives and truck drivers. Not all jobs that will be in demand will require those years of education, however. Someone who trains as a firefighter, sales representative or truck driver will find openings in the $20-an-hour to $30-an-hour range. High-turnover, entry-level jobs will be plentiful, of course. The jobs, as cashiers or restaurant and hospitality workers, will be the most readily available and pay under $10 an hour. See MODEST Page 16
Occupations with the most annual openings, 2000-2018 Cleveland-Elyria-Mentor metropolitan statistical area Title Annual openings Avg. wage * Cashiers 1,064 $9.13 Waiters and waitresses 908 $8.98 Registered nurses 890 $30.57 Retail salespersons 817 $12.10 Food preparation and serving workers 717 $8.59 Laborers and freight, stock and material movers 682 $12.89 Customer service representatives 664 $15.94 Home health aides 520 $9.92 Nursing aides, orderlies and attendants 420 $11.90 Licensed practical and licensed vocational nurses 381 $21.16 * May ’09 wages statistically aged to December ’10
o staff up for the innovating it wants to do, Progressive Insurance expects in 2013 to again hire some 3,500 people in a single year. Last year, the Mayfield Villagebased auto insurer hired about that many external candidates across its footprint to fill both new and existing positions, and Christy Palfy, talent search leader, believes the insurer is on pace to match that. In September, it announced it would hire more than 900 people by the end of the year. Progressive is hiring, Ms. Palfy said, because it needs “strong talent” to keep new product development going and also because it operated “a little bit leaner” in the years following the economic downturn and now has more confidence. While the jobs are there (roughly 200 in Northeast Ohio), finding qualified candidates is tough, and insurance industry jobs in general tend not to be an easy sell. “We are an insurance company, (and) I think people have the wrong sense of what that means — that we’re stuffy, that everybody sells insurance,” Ms. Palfy said. “It’s sometimes hard for folks to get past the stigma of what they have in their head of an insurance company.” The stigma is something with which the industry as a whole must grapple as it seeks to fill an impending void, insiders say. “All across the insurance industry right now, there’s a lot of talk and a large trend toward everybody realizing that, ‘Hey, we’re going to wake up 10, 15 years from now and there’s not going to be anybody here,’ ” said Arthur Betancourt, the vice president and shareholder who heads the recruiting practice at Willoughby-based MarshBerry. “There’s a talent gap in the industry, and it needs to be filled,” added Mr. Betancourt, whose consulting firm advises on mergers and acquisitions for insurance agents, brokers and carriers. The unprecedented employment challenge prompted the Ohio Insurance Institute to launch the website, insurancecareers.org, last November to illuminate to students the types of insurance careers that exist. See PROGRESSIVE Page 14
Fastest growing occupations, 2000-2018
THE BIG PICTURE
Cleveland-Elyria-Mentor metropolitan statistical area Average wages are from December 2010 Title Pct. change Annual openings Avg. wage Biomedical engineers 55.0% 15 $35.64 Computer and information Scientists, research
43.5%
15
$50.43
Network systems/ data communication analysts
43.4%
139
$35.25
Personal and home care aides
38.4%
150
$10.23
Home health aides
37.3%
520
$9.92
Financial examiners
34.6%
14
$40.03
Computer software engineers/ applications
30.2%
145
$39.64
Biochemists and biophysicists
29.4%
21
$33.13
Computer software engineers/ systems software
26.9%
46
$36.64
Skin care specialists
26.7%
6
$18.23
■ Source: Ohio Department of Job and Family Services, Bureau of Labor Market Information
Information technology is a “huge” area for growth in the insurance industry, said Mitch Wilson, spokesman for the Ohio Insurance Institute. The organization’s members tell it they have a lot of IT positions they need to fill, but face difficulty doing it. Insurance companies also need people for their claims departments: representatives, specialists and adjusters, Mr. Wilson reported. The U.S. Bureau of Labor Statistics projects that between 2010 and 2020, the number of jobs for personal financial advisers, who advise on insurance and investments, will grow 32%, or much faster than average; jobs for actuaries and financial examiners will grow 27%, or faster than average; and jobs for insurance sales agents will grow 22%, also faster than average. — Michelle Park Lazette
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Progressive continued from PAGE 13
Then, the Insurance Industry Resource Council, a collaboration of 13 Ohio insurance companies formed in 2012, launched insuringohiofutures.com in March 2013. Today, the two sites are linked to educate three specific groups — students, people who are mid-career and veterans — about the industry’s careers. “Our industry as a whole is looking to hire many people,” said Mitch Wilson, spokesman for the Ohio Insurance Institute. “Sales is critically important, but there are hundreds of other positions within a company: underwriting, actuarial, accounting, auditing, paralegal. No one ever thinks about that. They can’t get past the sales aspect.” Innovations such as Progressive’s Snapshot device, which motorists plug into their cars to allow for real-time monitoring of their driving behaviors, help drive the insurer’s need for people in information technology and employees who can analyze data and answer product-specific questions for customers, Ms. Palfy said. The reluctance of so many to apply for insurance jobs coupled with the competition out there for candidates means Progressive’s
PROFILES IN HIRING Astro Manufacturing & Design “Our industry as a whole is looking to hire many people.” – Mitch Wilson spokesman, Ohio Insurance Institute recruiting team faces a “very small audience with the skill sets we’re looking for,” when seeking specialized roles, she added. “It’s a very competitive marketplace in general, the insurance industry,” Ms. Palfy said. “We do see a lot of attempts of people trying to take some of our talent.” Progressive’s hiring process begins with an online application, proceeds with a recruiter and manager interview and, for those who are hired, involves an early “class” about the company and its culture, Ms. Palfy explained. The IT and analyst roles at Progressive require bachelor’s degrees. While the customer service jobs do not, the company does require a high school or GED diploma and customer service experience. It is people who have an enthusiasm and excitement for what they are doing, plus the basic resume requirements, who catch recruiters’ attention, Ms. Palfy said. ■
By RACHEL ABBEY McCAFFERTY rmcafferty@crain.com
S
o far this year, Astro Manufacturing & Design has hired 41 new employees, bringing the company’s total to 238. That hiring volume has been pretty steady during the past few years, said Astro’s corporate recruiter, Jackie Abbott. The Eastlakebased contract manufacturer has needed new employees to replace retirees and to grow to keep up with customer demand. The areas with the most growth have been the corporate office, which does contract work for industries as diverse as the military and aerospace, and Astro Medical Devices, she said. “We’re so busy,” Ms. Abbott said. Astro primarily is looking for quality and inspection employees, which are highly skilled jobs, and Swiss CNC machine operators. Ms. Abbott said the company is willing to train for the latter positions, if applicants have experience in CNC, or computer numerical control. The recent hiring hasn’t led to an increase in the number of jobs — in 2010, the company employed 249 — as Astro has been restructuring during the past two years.
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THE BIG PICTURE Some markets within Ohio’s manufacturing sector are poised from 2010 to 2020 to see significant growth, despite the fact that manufacturing employment as a whole is expected to shrink, according to an April 2013 report from the Ohio Department of Job and Family Services. The areas that are expected to see the most growth are fabricated metal products, transportation equipment, plastic and rubber products, wood products, furniture and related products and nonmetallic mineral products. Some of the hottest jobs in manufacturing now are in areas that require technical skills, such as CNC operators and programmers, welders, engineers and maintenance workers. That trend should continue going forward. The report projects an 18% increase in the number of jobs for industrial machinery mechanics and computercontrolled machine tool operators in metals and plastics from 2010 to 2020. — Rachel Abbey McCafferty As a contract manufacturer, the parts that employees work on change often, so employees need to understand how the machining process works overall. It’s not enough to know how to make one particular part. Those skilled employees can be difficult to find, Ms. Abbott said. Companies are all looking for the same candidates. If students don’t get involved in the necessary fields, manufacturers are “really going to be struggling,” she said. Judith Crocker, director of work force and talent development at Magnet, said she is seeing a growing gap between what skills jobs require and what skills applicants have to offer. The most in demand skills are
those in the STEM (science, technology, engineering and math) fields. Manufacturers need people with IT skills, those who understand how different metals and chemicals react, she said. They need employees who can weld and program. Engineers of all specialties — mechanical, electrical, chemical and general manufacturing — are in demand, she said. But it’s a demand without an adequate supply. “We’re still not seeing students choosing engineering as a major to the extent that we need them to do that,” Ms. Crocker said. Ms. Crocker said some of the most in-demand positions are for maintenance workers, who make sure machines are running well, and for employees who can work with CNC machines, from the setup to the programming. Ms. Crocker said the average maintenance worker is in their mid- to late-50s. Companies will need to both replace those employees as they retire and figure out a way to transfer that knowledge. She thinks it’s important to get students interested in manufacturing at younger ages. Hiring has been incremental so far, but Ms. Crocker thinks the industry is on the “cusp” of a big wave in hiring. She thinks companies have been holding back, due to uncertainty around changes in health care or the economy, and instead relying on temps or overtime to fill in the gaps. WorkAdvance, a regional initiative of Towards Employment that is designed to train low-income individuals for jobs in health care and manufacturing, is targeting the in-demand areas of machining and welding, said director Rebecca Kusner. Employers are telling WorkAdvance that those are the technical skills individuals need. A lot of the people that WorkAdvance works with have general labor skills, Ms. Kusner said, but they need training to be able to take on those indemand, high-skills jobs. ■
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WHERE THE JOBS ARE
OCTOBER 7 - 13, 2013
PROFILES IN HIRING Horseshoe Casino Cleveland and Thistledown racino By LAURA STRAUB clbintern@crain.com
E
ven Karen Kaminski, a seasoned human resources executive, has been a bit surprised by the hiring process for the Horseshoe Casino Cleveland and the Thistledown racino. With more than 40,000 people coming to Quicken Loans Arena for a recruiting event, it’s no wonder Ms. Kaminski finds herself in new hiring territory. “I’ve been in human resources for 20 years, and I have never experienced anything like that,” said the vice president of human resources at Horseshoe Casino Cleveland and Caesars Entertainment. The Hard Rock Rocksino Northfield Park — set to open in December — hosted a similar informational job fair on Sept. 12. More than 6,000 interested candidates attended to learn more about the 750 full-time positions being offered, said Michelle Scott, vice president of human resources for the Hard Rock Rocksino. After online applications are reviewed, eligible candidates for the Hard Rock Rocksino are invited to a group interview. That process is causal and perspective employees respond to prompts like, “Talk
TOA Technologies By CHUCK SODER csoder@crain.com
It only makes sense that TOA Technologies would be on a hiring spree. Sales at the Beachwood software company exploded in 2012, jumping to $42 million from about $20 million the previous year. Then, in July, it raised $66 million from Technology Crossover Ventures, a venture capital firm in California’s Silicon Valley. That money will help TOA grow even faster. And hire even more people. TOA — which makes software used by telecommunications companies, utilities and other businesses that need to manage and route workers in the field — has added 75 employees worldwide so far this year and now employs a total of 470 people. That total includes 63 employees in Northeast Ohio, up from 52 at the start of the year. Those numbers are going up, according to Michael McDonnell, vice president of global talent acquisition for TOA. The company plans to add more than 50 employees worldwide by the end of the year, and next year it could hire another 130-plus people, Mr. McDonnell said. Many of those new employees will work in other states and countries as TOA pursues customers worldwide. But all that growth means the company needs more people in
Explorys THE BIG PICTURE “Hospitality is going nuts,” said Greg Forte, hospitality management dean for Cuyahoga Community College. He says the No. 1 concern for people opening restaurants and hotels right now is where are we going to find our workers? Currently the accredited hospitality management degree and certificate program at Tri-C has about 550 students; however 75% of them are already fully employed in the hospitality industry, Mr. Forte said. The program posts between 150 to 300 jobs in the sector every month, he said. Although some of these jobs are entry level positions, Mr. Forte also has posted a number of middle management opportunities including calls for sous chefs and front-of-the-house supervisors. — Laura Straub about your favorite artist and convince us to come to dinner with the two of you,” Ms. Scott said. “We’re really just looking for their personalities,” she said. Those with big smiles, outgoing personalities and guest serviceoriented mentalities advance to interviews with department managers and an assessment of their technical skills. There are more than 100 open positions at the Hard Rock Rocksino, from front-of-the-house posi-
finance, human resources, customer support and inside sales — teams that are based in Beachwood, he said. For instance, TOA is in the process of quadrupling the size of its inside sales team, which will consist of about 15 people in a few months. To get any of those positions, applicants will need more than a strong résumé. The biggest challenge Mr. McDonnell’s team faces is making sure that everyone they hire shares these five traits: Humility, ambition, perseverance, the ability to take responsibility and a passion for lifelong learning. TOA’s applicants typically take online tests, complete a project (they might create a mock sales presentation or mock marketing materials), and go through at least four interviews. They ask a lot of questions that start with “why” or “how.” The company finds about half of its employees through referrals. It also uses LinkedIn’s premium Recruiter product and an applicant tracking system called Jobvite, both of which allow TOA to sift through online social networks to find candidates — even people who might not be actively looking for a job. A few industry trends are helping to accelerate TOA’s growth. For one, the spread of powerful and affordable mobile devices is driving demand for mobile work force management software, he said. The company also is benefiting from the demand for software delivered via the Web. TOA got a head start on that trend, because
THE BIG PICTURE Local tech companies have been hiring like crazy since the start of 2011, according to Brad Nellis, president of the Northeast Ohio Software Association. Of the information technology companies that responded to NEOSA’s second quarter survey, 67% said they plan to add staff over the next 12 months. That figure
CRAIN’S CLEVELAND BUSINESS 15
rarely hit 67% in the years leading up to the stock market collapse in 2008; now it rarely drops lower. Coders are “red hot,” and there’s demand for computer networkers and analysts, too, Mr. Nellis said. But they need soft skills as well, he said, adding that the days of “coders sitting in the corner and not talking to anybody” are gone. — Chuck Soder
tions to upper management, but Ms. Scott said some of the positions in which people are most interested include marketing, management, food and beverage, IT, human resources, sales, accounting and guest services. At the Horseshoe Casino and Thistledown, hiring also remains strong, with more than 2,500 joining the staff over the past year and half. “It’s really hard to identify a specific position that is hot,” Ms. Kaminski said. The human resources team is seeing applications from every industry possible. Although some open positions in management require college degrees or state licensing, many openings are entry level jobs that in part are available due to upward movement of staff within the company. Northeast Ohio colleges with hospitality management programs have taken note of the opportunities in the gaming industry and are preparing students with courses as specific as Kent State University’s casino management and operations class. The class has boasted a full roster and waiting list about six years, said Barbara Scheule, associate professor and coordinator of Kent’s hospitality management program. “The opportunities are out there,” she said. “It’s exciting to see our grads all over Northeast Ohio in a number of really nice positions.” ■ from the beginning its ETAdirect software has been delivered online. So-called “cloud” software is easier to implement and maintain, since it doesn’t have to be installed on individual computers and mobile devices, said Mr. McDonnell, who added that on-premise software is “going the way of the dodo bird.” ■
THE BIG PICTURE
By AMY ANN STOESSEL astoessel@crain.com
I
n just four short years, Explorys has grown from four employees to more than 100 — and the Cleveland Clinic spinoff says it is not done hiring yet. The company, which specializes in harnessing big data for use in health care, has almost doubled its work force each year since its founding, with the greatest growth in numbers occurring since 2011. “There’s an enormous amount of data out there that can be harnessed for the patient’s benefit,” said Charlie Lougheed, a cofounder and the company’s president and chief strategy officer. The company, which recently moved to more than 20,000 square feet of space in the former Museum of Contemporary Art building, today works with more than 200 hospitals and 16 large health care networks. But growing a work force in such a developing sector is no easy task. Mr. Lougheed said there is almost a 0% unemployment rate in hightech and data services industries. “These candidates are all getting offers from national players,” he said. “It’s an intense marketplace.” Mr. Lougheed credits his human resources team with getting the word out — locally and nationally — about Explorys and what it has to offer. The firm also stays active locally, participating in events such as Cleveland GiveCamp, an annual event that donates programming services to nonprofits. A survey by the Healthcare Information and Management Systems Society confirms competition is stiff for talent: 79% of health care providers and IT vendors planned to hire additional staff in 2013. Explorys is hiring for positions across the board: data scientists, analysts, client services, software
Health care in general long has been touted as having strong potential for future job growth. And while that remains true for the most part, recent announcements of future layoffs by major Northeast Ohio health systems show it is a sector facing many of the same challenges as other industries. On top of that, it’s in the midst of adjusting to the new realities of health care reform. But there is one area for which hiring is hot: health care IT. In a 2013 survey by the Healthcare Information and Management Systems Society, more than 85% of respondents (health care providers and vendors) indicated their organization hired at least one IT employee in the past year. Clinical application support and help desk positions were the most popular at health care providers, while sales/marketing and field support employees were the most sought after by vendors and consult— Amy Ann Stoessel ing firms. engineers, sales and account managers and marketing. The growing need for health care IT professionals, like those Explorys is seeking, accelerated the creation of a health informatics concentration at Kent State University. The 2-year-old program, for which the school plans to seek accreditation, currently has 100 students, offering both a master’s degree and a certificate. Christine Hudak, concentration coordinator, said growth in the health care IT field is expected to continue as health care systems and others continue to implement electronic processes. “Now we’ve got it, what do we do with it,” she said of the sentiment regarding the technologies. “There’s so much work to be done.” ■
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Modest: Health care support positions could grow 27% by 2022 continued from PAGE 13
Team NEO is seeing similar trends. Earlier this year, in its quarterly economic review, the business attraction nonprofit reported on research that showed that health care support positions were projected to grow 27% and personal care jobs 22% from 2012 to 2022. It forecast that the only significant jobs losses would come in manufacturing production, with a decline of about 11%. However, its report stated that “while some occupations, such as (manufacturing) production will see an overall decline, they will maintain their integral role in the region’s employment picture as turnover and retirements continue to create many jobs openings.” The state jobs outlook estimates that production jobs will decline by 12.1% over the decade it is tracking, with employment dropping from 101,420 jobs to 89,170 in the seven counties of the Cleveland metropolitan area. Still, job openings, largely because of retirements, will average 1,965 a year. Jacob Duritsky, Team NEO’s director of research, said economists are debating whether the problem is a skill shortage or if
“The reality is, nationally, there hasn’t been a focusing on training people for manufacturing jobs for a long time, and we have to get back to that and get back to it quick.” – Jacob Duritsky director of research, Team NEO wages are high enough to attract job candidates. “There is some debate that says do we have a real skill shortage or are we not paying enough,” he said. “That becomes a little academic, but the reality is, nationally, there hasn’t been a focusing on training people for manufacturing jobs for a long time, and we have to get back to that and get back to it quick.” To Mr. Duritsky, that means that jobs will be available to young high school or junior college graduates who focus on building their manufacturing skills. “We haven’t been pushing young people
into training programs for skilled occupations around machining, welding, and computerized machine tool operators,” he said. “It’s the replacement skill set around manufacturing.”
Supply vs. demand Beyond manufacturing, at the very top of the fast-growing job categories are biomedical engineers, computer and information scientists and personal and home health care aides. Job seekers trained as pharmacy technicians, physical therapy assistants and preschool teachers also will find a lot of opportunities in the next few years. Jobs with the most openings include cashiers and restaurant workers and registered nurses. However, the studies typically don’t estimate the number of job seekers who might be going after particular categories of jobs,
so it’s hard to gauge how stiff the competition will be. But the market for school teachers has left some tracks in reports by the state to the U.S. Department of Education. Ohio schools are expected to need about 4,900 teachers a year through 2020, a big number. However, 6,000 new teachers were graduated by Ohio colleges, 1,100 more than the number of job openings. One wild card in the regional job picture is the burgeoning oil and gas industry in eastern Ohio. Mr. Duritsky said that none of the studies are yet able to gauge the impact of the Utica Shale field in eastern Ohio. “Stark State College (in North Canton) has a six-week welding training program and the industry is hiring them even before they graduate from that program because they need welders so badly,” he said. ■
SHALE PERMITS
BY OPERATOR; RANKED BY 2013 TOTAL PERMITS
SHALE PERMITS
Rank Company name
BY COUNTY; RANKED BY 2013 TOTAL PERMITS
This year County
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Drilled Drilling Permitted Producing 2013 2013 2013 2013
Total permits 2013
Total permits 2012
Total permits 2011
Total permits 2011-Sept. 14, 2013
Carroll
86
12
57
1
156
141
30
327
Harrison
26
18
32
0
76
53
0
129
Noble
13
10
21
0
44
16
4
64
Belmont
0
13
22
0
35
10
0
45
Guernsey
6
6
17
2
31
15
6
52
Columbiana
16
2
11
0
29
51
8
88
Monroe
5
4
10
1
20
18
3
41
Mahoning
1
2
9
0
12
9
6
27
Trumbull
3
3
3
0
9
2
0
11
Washington
1
0
6
0
7
0
0
7
Jefferson
2
0
2
1
5
18
12
35
Tuscarawas
0
0
2
0
2
8
3
13
Ashtabula
0
0
1
0
1
0
0
1
Portage
0
0
1
0
1
10
4
15
Ashland
0
0
0
0
0
0
1
1
Coshocton
0
0
0
0
0
4
1
5
Geauga
0
0
0
0
0
0
1
1
Holmes
0
0
0
0
0
3
0
3
Knox
0
0
0
0
0
2
0
2
Medina
0
0
0
0
0
0
1
1
Muskingum
0
0
0
0
0
2
1
3
Stark
0
0
0
0
0
9
4
13
0 159
0 70
0 194
0 5
0 428
1 372
0 85
1 885
Wayne TOTAL
Source: Information is from the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management, Utica/Point Pleasant shale wells as of Sept. 14, 2013. 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. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com.
STAY CONNECTED ■ Crain’s on Twitter: @CrainsCleveland ■ Crain’s on Facebook: Facebook.com/CrainsCleveland ■ Crain’s on LinkedIn: linkedin.com/company/crain’s-cleveland-business ■ Crain’s daily e-newsletters: CrainsCleveland.com/register
Researched by Deborah W. Hillyer
1 2 3
Total Total Total Total permits Drilled Drilling Permitted Producing permits permits permits 2011-Sept. 2013 2013 2013 2013 2013 2012 2011 14, 2013
Chesapeake Exploration LLC
111
23
70
2
206
241
59
506
Gulfport Energy Corp.
14
17
35
0
66
20
0
86
Antero Resources Corp.
7
9
14
1
31
10
0
41
4 5 6 7 8 9 10 11 12 13 14 15 16 17
Hess Ohio Developments LLC
5
7
10
1
23
6
0
29
CNX Gas Co.
9
2
10
0
21
12
4
37
Hilcorp Energy Co.
2
1
11
0
14
1
0
15
R. E. Gas Development LLC
3
2
8
0
13
8
0
21
PDC Energy Inc.
1
2
6
0
9
3
0
12
Eclipse Resources LP
1
0
6
0
7
1
0
8
Chevron Appalachia LLC
0
0
5
0
5
2
0
7
Atlas Noble LLC
0
0
4
0
4
4
0
8
BP America Production Co.
3
1
0
0
4
0
0
4
Halcon Operating Co.
0
2
2
0
4
1
0
5
Hall Drilling LLC (Oil & Gas)
0
3
1
0
4
1
0
5
Triad Hunter LLC
1
0
3
0
4
0
0
4
EQT Production Co.
1
0
1
1
3
1
0
4
Brammer Engineering Inc.
0
1
1
0
2
0
0
2
18 19 20 21 22 23 24 25
Hess Ohio Resources LLC
1
0
1
0
2
3
0
5
BEUSA Energy LLC
0
0
1
0
1
0
0
1
Carrizo (Utica) LLC
0
0
1
0
1
2
0
3
Enervest Operating L
0
0
1
0
1
13
3
17
Mountaineer Keystone LLC
0
0
1
0
1
7
0
8
Rice Drilling D LLC
0
0
1
0
1
0
0
1
XTO Energy Inc.
0
0
1
0
1
4
0
5
Anadarko E & P Onshore LLC
0
0
0
0
0
4
8
12
26
Chesapeake Appalachia LLC
0
0
0
0
0
0
6
6
27 28 29 30
Devon Energy Production Co.
0
0
0
0
0
11
2
13
HG Energy LLC
0
0
0
0
0
13
3
16
Sierra Resources LLC
0
0
0
0
0
3
0
3
0 159
0 70
0 194
0 5
0 428
1 372
0 85
1 885
Swepi LP TOTAL
Source: Information is from the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management, Utica/Point Pleasant shale wells as of Sept. 14, 2013. 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.
Researched by Deborah W. Hillyer
20131007-NEWS--17-NAT-CCI-CL_--
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OCTOBER 7 - 13, 2013
CRAIN’S CLEVELAND BUSINESS
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Corridor: Construction could begin soon continued from PAGE 1
It was among the buildings that were part of a factory complex built in 1906 by Peerless Motor Car Co. Sometime after Peerless stopped making cars in 1931, it was home to the Model Box Co. It was abandoned when Forge Products’ parent company bought it in 2010. So, Mr. Wright expects the Ohio Department of Transportation will take that building under eminent domain — the right of the state to acquire private property for a public purpose. If it does, Forge Products will need to consider its alternatives, because it needs to expand. “We’ve been here since 1978, give or take, and we like where we are; we’re comfortable here and our employees are comfortable here,” Mr. Wright said in a telephone interview last week. “It would cost a crapload of money to move.” Todd Shaker, owner of The Final Cut, a business that turns raw fruit into bite-size pieces it sells to institutional food service customers, likewise is worried about his building at 8630 Evins Ave., which also is slated for taking under eminent domain. At a public meeting last Tuesday, Oct. 1, to update neighborhood residents and business owners on the Opportunity Corridor and hear their comments, Mr. Shaker tried to explain to an ODOT staffer that he couldn’t use some equipment in his current building in whatever new building he would move into because he couldn’t afford the downtime a move would entail. He would need to buy new. “A new building doesn’t make me whole,” he told a reporter later, adding, “We want to stay in Cleveland.” A study by ODOT estimates the state will need to take 64 residential buildings, including single- and multi-family homes, 25 commercial buildings, some of which are vacant, and a church to clear the path for the corridor.
Suddenly, money Road building — and property taking — on this scale haven’t been undertaken in Cleveland in years, though the rebuilding of the Inner Belt Bridge over the Cuyahoga River did have some fights over property values. In July, Gov. John Kasich told Cleveland Mayor Frank Jackson the state would come through with the lion’s share of the cash needed to build the Opportunity Corridor. The project would carve out a roadway that has been promoted as the foundation on which the city could rebuild a struggling, deteriorating East Side neighborhood, often called the “Forgotten Triangle.” The 3.5-mile road would be a divided, 35-mph boulevard linking Interstate 490 at East 55th Street to University Circle along East 105th Street. It would make it easier to reach the growing health care and employment center at University Circle from the west and, transportation planners believe, relieve congestion on the Inner Belt. The city of Cleveland rejected ODOT’s original plan a decade ago for
a freeway to University Circle, but embraced the idea of a roadway that would spur redevelopment along the route. But the project was on the back burner until a change in state law this spring allowed the Kasich administration to tap the Ohio Turnpike for an infusion of road building money. The Ohio Turnpike and Infrastructure Commission sold $1.1 billion in bonds, and Gov. Kasich said the Opportunity Corridor would share in proceeds of the sale. Construction is expected to start along East 105th as early as next year, though the full project likely won’t be completed until the end of the decade. Once the construction dust settles, it will be up to the city of Cleveland and private developers to as-
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Exerting a ‘heavy hand’? With the ball beginning to roll for the Opportunity Corridor project, some people and businesses along its proposed path now are anxious. At last week’s meeting with ODOT officials, some neighborhood residents and community leaders voiced some of the same concerns expressed by Forge Prod-
can continue negotiating a settlement or can ask a court to determine the property’s fair value. “This is the classic problem for property owners,” said Craig Miller, a Cleveland attorney and former Cleveland law director who represents several clients with property along the corridor. “This heavy hand of eminent domain can be pretty troublesome for property owners.” It also could have a negative effect, at least for the time being, on whatever economic activity still exists along the route. Mr. Wright said while Forge Products would like to stay in the neighborhood, it is exploring its options. “We’ve been a part of this community for a long time,” Mr. Wright said. “We’re trying to be a good corporate citizen because we want to see things succeed, even if we’re in the cross hairs, so it’s a real challenge for us.” ■
¢ ¤§ ¤ £ ¤ ¤ £ ¡ဠ£ ၼၸ ¡ ၼၸဘ 2013 Lynlee Altman, Pinnacle Construction and Devlopment Group
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Brian Muskoff, UrbanCode (an IBM Company)
Bridget Meehan Brennan, United States Attorney’s Office Northern District of Ohio
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semble land along the boulevard into developable parcels for offices, warehouse and light industrial buildings and even new residential communities. A July 2012 land use study estimated that about 29% of the land along the corridor is vacant, “dominated by isolated residences, dilapidated properties and incomplete land uses.”
ucts’ Mr. Wright and Final Cut’s Mr. Shaker about eminent domain. Their worries are economic; they are related to property values that are depressed by the recession, the age of their homes and buildings, and the additional markdown their land faces because of the blight that surrounds them. They fear the price ODOT will put on their properties — what the law calls its fair market value if sold on the open market — won’t be enough for them to afford comparable homes or buildings in other neighborhoods. “Where are you going to find a $5,000 house?” Mr. Wright said later in a telephone interview. Ohio law allows ODOT to take possession of a property before it comes to final terms with the owner. Under this so-called “quick take” process, the transportation department can begin construction work and the property owner either
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Doxil: Generic brand is available, but many prefer big-name product continued from PAGE 3
“Once the supply of one goes down, it greatly impacts the amount available of the next agent.�
Back then, there was no substitute for Doxil, so the U.S. Food and Drug Administration eventually started letting doctors use an imported drug that hadn’t gone through the FDA’s formal approval process. In February 2013, the agency approved a generic version of Doxil. Officials from local hospitals said they still use the brand-name drug, but they also use the generic form, which should help them navigate the latest Doxil shortage. Even so, they’re not getting too comfortable. For instance, the MetroHealth System bought “a fair amount of Doxil� in late September, when Johnson & Johnson announced that it anticipated a shortage, said Jan Cover, pharmacy specialist for oncology at MetroHealth. Even though there is a generic available, Ms. Cover said she’s worried about whether there will be enough of the generic to go around as the supply of Doxil decreases and more doctors turn to the substitute drug. “Once the supply of one goes down, it greatly impacts the amount available of the next agent,� she said.
– Jan Cover, pharmacy specialist for oncology, MetroHealth, on cancer drugs
“The last thing we want to do is cause added distress or emotional concern for the patient.� – Dr. Steven Waggoner, division chief of gynecological oncology, University Hospitals Case Medical Center Pharmaceutical Industries Ltd. of Mumbai. Sun Pharma spokeswoman Mira Desai wouldn’t say last Friday, Oct. 4, how much of the drug the company can produce. However, she noted the company has had time to prepare for the Doxil shortage, given how long Ben Venue has had issues producing it. Sun Pharma makes both the generic version of Doxil and Lipodox, the branded Doxil substitute that was able to skip the FDA’s formal approval process. The company employs 14,000 people and produces drugs at 20 manufacturing sites, according to Sun Pharma’s website. The plant that makes the Doxil generic “is one of the largest injectable drug plants in Asia,� Ms. Desai said. The availability of a generic takes a lot of the sting out of the Doxil shortage, according to Steven Waggoner, division chief of gynecologi-
Reducing the sting The generic is made by Sun
Contact: Phone: Fax: E-mail:
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cal oncology at University Hospitals Case Medical Center. Even so, UH still uses a lot of Doxil. If an ovarian cancer patient at UH still needs treatment after undergoing surgery and chemotherapy with a different drug, they’ll almost always go on Doxil, Lipodox or the generic drug. Most of them go on Doxil, Dr. Waggoner said. Although the other drugs “are probably just as good,� UH doesn’t want to tell patients they no longer can receive the popular product, especially if they’re already being treated with it, he said. “The last thing we want to do is cause added distress or emotional concern for the patient,� Dr. Waggoner said. UH convened a committee to assess the shortage and determined it has a two-month supply of Doxil and its substitutes, Dr. Waggoner said. He “won’t lose sleep� over it,
Sustainability issues As for Ben Venue, the company faces “systemic manufacturing challenges� and “cannot return to sustainable production,� according to a written statement from the company. Ben Venue estimates the company would incur about $700 million in operating losses over the next five years if it were to fix its prob-
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lems and keep making drugs at its Bedford complex. The company cited the age of its manufacturing operations — the company moved to Bedford in 1941, though it has added new facilities since then — as well as other remediation costs it would face for contributing to its decision to close the plant. In 2011, the FDA filed two reports identifying 59 quality control issues at the plant. For instance, at the time, the agency said Ben Venue had failed either to figure out why metallic particles ended up in several batches of two drugs made at the plant or to fix the problem, which generated nine customer complaints between August 2006 and February 2010. Despite the pending shutdown, the Ben Venue statement said the company “will work to help ensure that these critical medicines continue to reach the patients who need them.â€? The written statement indicated that Ben Venue’s parent company, Boehringer Ingelheim of Germany, recognizes the importance of Ben Venue’s generic drug manufacturing division, which does business as Bedford Laboratories. The parent company “is exploring strategic options to try to continue the supply of these products to patients,â€? the statement said. â–
adding that he’s more concerned about a broader trend: Drug shortages are becoming “all too common,� he said. That’s why Chris Snyder’s title at the Cleveland Clinic is “drug shortage pharmacist.� Mr. Snyder said the Clinic did use Lipodox and now is using the generic Doxil, as well as the branded version. The generic costs a lot less than Doxil, but the Clinic still uses the name-brand drug because it can get it at a discount by negotiating, said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. Mr. Knoer said “there’s always a risk� when the supply of one drug runs low, even if a substitute is available. However, now that there is a substitute, the Doxil shortage should be manageable, he said. “If we got really concerned about every drug, we would never sleep,� he said.
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20131007-NEWS--19-NAT-CCI-CL_--
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19
THEINSIDER
THEWEEK SEPTEMBER 30 - OCTOBER 6 The big story: After spending years and hundreds of millions of dollars trying to meet federal regulations, Ben Venue Laboratories announced plans to shut down production by the end of the year, laying off the last of its 1,100 employees soon thereafter. The contract drug manufacturer — the largest employer in Bedford — faces “systemic manufacturing challenges” and would lose about $700 million over the next five years if it were to continue operating, Ben Venue said in a statement. See more, Page One.
A signature property: The long-awaited hotel Geis Cos. will install at the former Ameritrust Corp. office tower will be dubbed a “Metropolitan Hotel” and will be affiliated with Marriott International’s Autograph Collection. Geis revealed other details about its project to remake the former Ameritrust complex, saying the Streetsboro company will move its property division and an urban-focused part of its design group to the adjoining 1010 Euclid Ave. building, which will include 100 market-rate apartments. The hotel will consist of 156 rooms and suites that will be located below 105 luxury apartments in the 29-story skyscraper at 900 Euclid Ave.
The state of things: Case Western Reserve University and the Cleveland Clinic are part of a statewide alliance that has secured $10.2 million in federal money to accelerate the rate at which medical discoveries are brought to market. Cincinnati Children’s Hospital, Ohio State University and the University of Cincinnati also are partnering on the project. Its goal is to accelerate the rate of discoveries that prevent and treat diseases affecting the heart and lung as well as blood and sleep disorders.
Feeling roomy: Jacobs Real Estate Services agreed to sell a four-acre site in Avon to hotel operator and developer Emerald Hospitality Associates Inc. for a 110- to 125-room hotel. Westlake-based Jacobs Real Estate said the project, scheduled for completion in fall 2014, will launch its long-planned mixed-use development in Avon. The company said it plans to announce two more signed land deals in coming weeks. The hotel plan from Westlake-based Emerald calls for a Marriott-branded hotel.
Close to completion?: A $132 million foreclosure case involving nine office buildings owned by Gotham Realty Partners of New York may be nearing a settlement that would put the high-profile portfolio of properties in Cleveland’s eastern suburbs back on the market. A motion seeking conditional dismissal of the case subject to a settlement by the parties was filed in Cuyahoga County Common Pleas Court on behalf of the new owner of the defaulted mortgage on the properties, a unit of Dallas-based Lone Star Funds. The unit bought the debt as part of the purchase of a portfolio of $2.5 billion in failed loans from Orix Capital Markets LLC of Dallas, the special servicer for the properties. Tough call:
Call Henry Inc., a Florida-based technical service company, is laying off nearly 100 employees in Ohio. According to a letter filed Oct. 1 with the Ohio Department of Job and Family Services, Call Henry will lay off 98 employees who had been working at NASA Glenn Research Center in Cleveland. The company was not awarded a follow-up contract to perform facility operations, repair and maintenance at the center, the letter stated. NASA informed the center of the lapse of the contract Sept. 27.
Wright stuff:
Brigadier Construction Services of Cleveland was awarded a $10 million contract by the U.S. Department of Defense for work at Wright-Patterson Air Force Base in Dayton. The company will renovate the 90,000square-foot law office and acquisition building at Wright-Patt.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Not that they’re being anti-social, mind you ■ Kent State University issued a cease and desist order to its students last week, requesting they refrain from using the university’s logos and trademarks on social media platforms such as Twitter and Facebook. The message, which was issued by the university’s Office of General Counsel, said continued use of the trademarks and service marks without written consent from the university may result in disciplinary or legal action. “If you are maintaining a social media account that incorporates a Kent State trademark or service mark without authorization, we ask that you immediately cease use of the mark,” the email said. “We further ask all students to refrain from any future unauthorized use of university trademarks or service marks on any social media site.” In an email, Emily Vincent, a university spokeswoman, said there wasn’t a particular incident that led to the directive. Ms. Vincent said the university’s intent wasn’t to discourage a “positive display of pride or support.” “Our trademarks reflect on our university’s style, character, traditions, strengths and values,” she said. “What we don’t want is the university’s trademarks to be used in poor taste that tarnishes the positive connotations associated with the Kent State
trademarks.” Asked whether Crain’s would be discouraged from publishing the university’s logo in its publication, Ms. Vincent said, “Of course you can use it.” — Timothy Magaw
Wealth manager manages to grow ■ Following a move that cost more than $100,000, BNY Mellon Wealth Management will hire a sales director this quarter to drive new business in Ohio, both for its new Beachwood office and its smaller Columbus location. In total, the Boston-based wealth manager aims to increase its Ohiobased staff by 13% by the end of 2015 to keep up with growth in its assets under management and its retention of existing clients, said Ron Ambrogio, Ohio regional president. Today, the firm employs about 20 people in Northeast Ohio and 23 in the state. A subsidiary of The Bank of New York Mellon, BNY Mellon Wealth established offices in the Cleveland and Columbus areas in 1999. In July, it moved its Northeast Ohio staff from Pepper Pike, where it was at full capacity, to new office space at 3333 Richmond Road in Beachwood — space it spent more than $100,000 building out, according to Mr. Ambrogio. In Ohio, BNY Mellon Wealth has grown assets under management by 27% since Mr. Ambrogio became regional president in 2010. Today, those assets under management total roughly $2 billion. — Michelle Park Lazette
WHAT’S NEW
BEST OF THE BLOGS
COMPANY: Danny Vegh’s Home Entertainment, Cleveland OCCASION: Its 50th anniversary
Excerpts from recent blog entries on CrainsCleveland.com.
It’s only appropriate that this company mark a milestone birthday with a competition. To celebrate 50 years in business, Danny Vegh’s is holding a trick shot contest for 50 entrants at 6:30 p.m. this Tuesday, Oct. 8, at the company’s Crocker Park store in Westlake. Danny Vegh’s says its Swedish-American pool player/resident trick shot artist Ewa Mataya Laurance — nicknamed “The Striking Viking” — will judge the event. The person judged to have this best trick shot will receive a Brunswick pool table valued at $5,000. “This company started as a billiards business 50 years ago with my dad, and today we’ve expanded our offerings to much more, including patio furniture and entire theater rooms,” said Kathy Vegh, the company’s owner and CEO. Danny Vegh’s has grown to five locations: Cleveland, Mayfield Heights, Fairlawn, Westlake and an out-of-state store, in Milwaukee. It sells home entertainment products including air and dome hockey, arcade games, bar accessories, foosball and Ping Pong tables, patio furniture, poker tables, shuffleboard sets and theater rooms. For information, visit: www.dannyveghs.com.
■ Detroit needs all the good ideas it can get these days, and it’s looking to Cleveland as a model for allowing urban animal farming — which could lead to sheep mowing parts of the city. After a presentation about how sheep are used for turf management in a Cleveland pilot program, three members of Detroit’s Planning and Economic Development/Neighborhood and Community Services standing committees voted to move forward with studying the idea, The Detroit Free Press reported. The newspaper said the move came after Laura DeYoung, an environmental planning consultant and head of Urban Shepherds, outlined how sheep are used to mow grass on a five-acre plot of land in Cleveland. “The group’s pilot project is visible from I-90 just east of downtown, near the East 55th Street Marina,” the newspaper noted. “About three dozen sheep and a llama that helps protect them graze the land from May through mid-October. The undeveloped property is in an area void of houses, bordered by an apartment building, Lake Erie and I-90.” Ms. DeYoung says volunteer shepherds are trained to handle the sheep, rotating the animals so they don’t overeat and strip the grass. “It sounds corny, but people flock to the site. Lolly the Trolley goes by. There are people biking and hiking by,” said Ms. DeYoung, who noted Detroit could start a similar project for less than $20,000.
Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.
An idea that’s a cut above
A not-so-hot September, though that’s normal ■ The CBiz Small Business Employment Index, a barometer for hiring trends among companies with 300 or fewer employees, decreased by 2.15% in September following an increase of 1.23% in August. Philip Noftsinger, president of CBiz Payroll Services, the business unit of CBiz Inc. that produces the index, said the September decline was not unusual. “Typically during this period, students are returning to school and deflating the overall employee counts in the businesses and industries that employ them,” Mr. Noftsinger said. Of the companies responding to the survey, 20% increased staffing last month while 31% decreased staffing. The company said the September’s report “is fairly consistent with other past and present data sets and should be taken as an example of a steady labor market, albeit one that continues to remain at overall high levels of under-employment and unemployment.” “Continued fiscal policy chaos is contributing to pessimism among small business owners, who may otherwise invest in potential sales growth,” the company said. On the positive side, Mr. Noftsinger said larger employers “have shown optimism about the fourth quarter retail picture, which is encouraging,” with several announcing plans for increased holiday hiring. “It may represent a path that smaller employers may choose to follow as we enter the November and December months,” Mr. Noftsinger said. — Mark Dodosh
Easy to get that fix ■ It hasn’t taken long for saturation to arrive in the gambling industry. Except for a few places — primarily Texas — “there aren’t many places in the United States where a player can’t drive three hours or less to get to a casino, a panel of gaming industry executives concluded in a wideranging panel on industry issues,” according to a post from VegasInc.com. “New England is saturated,” Penn National Gaming president Tim Wilmott said during the panel. “The market is crowded in Ohio. It’s a little underserved in Florida.” Panelists said the relative saturation of the market means growth will occur by acquisition and mergers and, possibly, by diversification into the online world, the website reported.
First-Glass approach ■ Sherwin-Williams Co. has introduced a free app for Google Glass, called ColorSnap Glass, that’s based on free mobile apps the company offers for smart phones and iPads. Wearers of ColorSnap Glass “will be able to ask Sherwin-Williams to suggest paints that match the colors found in pictures they send the company, which will provide color chips and the locations of nearby stores that sell Sherwin-Williams paints,” The New York Times reported. Ellen Moreau, vice president for marketing communications at Cleveland-based Sherwin-Williams, told The Times that consumers have downloaded “well over a million” ColorSnap smart phone apps and “hundreds of thousands” of ColorSnap Studio apps for iPads. The app for Google Glass, like the others, was developed for Sherwin-Williams by a Columbus firm called Resource.
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