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$2.00/NOVEMBER 7 - 13, 2011

Brownfield grant programs may lapse By JAY MILLER

State funds enable distressed property cleanup, urban redevelopment

Two state economic development grant programs that help businesses and communities resurrect distressed properties may expire in the next eight months, and the Kasich administration so far has no plan in place to continue them.

Both programs — the Clean Ohio Fund and the Job Ready Sites program — have strong support statewide, particularly in urban areas that have little or no undeveloped land. With outright grants, the programs help cover part of the

cost of cleaning up chemically contaminated land or vacant, asbestosfilled buildings. Authorization for the Job Ready Sites program is set to expire Dec. 31. The deadline for the final round of grants was Nov. 1. Observers say

the Clean Ohio Fund may end by June 30, 2012, when winners will be announced for the round of money for which communities now are applying. Ohio Department of Development spokeswoman Katie Sabatino

said the state considers these successful programs, but is evaluating its options for assisting with the redevelopment of brownfield sites. Of the Clean Ohio Fund in particular, she said, “The Ohio Department of Development is working with the (Kasich) administration to chart a path to assist with brownfield issues.” See GRANTS Page 21

Specialty chemicals industry preps for natural gas windfall Plastics producers will benefit with extraction of ‘liquid’ raw materials By DAN SHINGLER


Michael Churney, president of Churneys’ Truck Center in Cleveland, aggressively pursued a loan to refinance debt and even wrote to his congresswoman about his inability to obtain financing. In July, he received an SBA loan from a local bank.

LENDING SPIGOT OPENS UP Small Business Administration’s Cleveland district particularly benefits as more credit-worthy borrowers receive loans

They drilled more than a mile beneath the soil and bedrock of eastern Ohio, into millions of years of cooked dinosaur carcasses and found … polyethylene? Well, not exactly. What the drillers found, as just about everyone knows by now, is billions of dollars of natural gas and oil. But along with the oil and gas is billions of dollars of other “liquids,” as the industry calls “If we’re the bakers, them. They are the raw natural gas is the materials that go into flour.” plastic resins and many other specialty chemicals – Cal Dooley, president, American Chemistry — and they might be as Council much a boon to Ohio’s economy as the gas and oil itself, experts say. “It’s huge for our industry,” said Cal Dooley, president of the American Chemistry Council in Washington, D.C. “There’s just been a dramatic shift in the conversations in the boardrooms of U.S. chemical companies because of shale gas.” The talk has turned to gas, Mr. Dooley said, because See GAS Page 8


G 45

overnment-backed small business lending is up this year — an increase that’s occurring not because lenders are easing their standards, but because more small businesses are creditworthy today than have been in recent years, say those doling out the dollars.

The Cleveland district of the U.S. Small Business Administration backed more dollars to more borrowers during fiscal 2011 than it has in any year since fiscal 2008. In the 12 months ended Sept. 30, the district’s loan dollars totaled $363.6 million, up 66% from $218.6 million in fiscal 2010. The number of borrowers receiving SBA loans in the district climbed 37%, to 1,434 in fiscal 2011

A lofty project Plans are under way in Beachwood for a hotel that could carry the Aloft name, a chic brand that will make its debut in Northeast Ohio as part of the Flats East Bank Neighborhood in downtown Cleveland. But whether the $12 million project reaches fruition depends on whether Beachwood City Council approves a rezoning in the face of substantial and well-organized resident opposition. Read Stan Bullard’s story on Page 4.

See LENDING Page 9



74470 01032



FINANCE Busy executives take advantage of financial counseling services through employer ■ Page 15 PLUS: HOUSING MARKET ■ ADVISER ■ & MORE

Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 45




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Median weekly earnings of the nation’s 101.4 million full-time wage and salary workers were $753 in the third quarter, up 1.8% from the like quarter of 2010, according to the Bureau of Labor Statistics. The problem is that in the same timeframe, the Consumer Price Index has risen 3.8%. Here are data for the most recent quarter, broken down along demographic lines:

Tapping into technology Some small businesses are expanding their digital capabilities by creating mobile apps. But for which businesses does it make sense to invest in the technology and why? We talk to some proprietors about how apps enhance their operations.

Median weekly earnings, third quarter 2011

Going Places................13 Letters.........................10 List: Hospitals .............20 Reporters’ Notebook ....23 The Week.....................23

October 2011

September 2011

an investment of

an investment of

$300 Million

$460 Million




Female-to-male earnings ratio



























REGULAR FEATURES Best of the Blogs ..........23 Bright Spots .................14 Classified .....................22 CFO event photos...........6 Editorial .......................10

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Third Frontier pushes hard for federal dollars


Tech development group will incentivize private investors to attract SBA financing By CHUCK SODER


Students Jacob Sines (left) and Stephen Ball go over results from a test with Dr. Homero Castaneda-Lopez, an assistant professor of chemical and biomolecular engineering, at the University of Akron’s corrosion program lab.

RIDDING US OF RUST U. of Akron program targets billions lost to corrosion each year By TIMOTHY MAGAW


hough Northeast Ohio has tried to shake the stigma of its association with the Rust Belt, a growing cadre of researchers and undergraduates at the University of Akron gladly has taken on the role of what university president Luis Proenza has dubbed “rust busting.” The university isn’t training students how to touch up a bit of rust on a hub cap, but rather is working to create an army of professionals to tackle the estimated $400 billion in damage that corrosion causes each year in the United States. And with the looming retirement of experts in rust prevention, the university also is eyeing lucrative job opportunities for its graduates. The University of Akron launched its corrosion engineering initiative in 2006, but the centerpiece of the program — a first-in-thenation undergraduate degree in corrosion and reliability engineering — kicked off in fall 2010. The program modestly has grown to about 30 students without a big marketing push, but as the university and industry inject more resources into it, enrollment is expected to climb, said Sue Louscher, the school’s project director for the corrosion and reliability engineering program. See RUST Page 21

The state of Ohio wants to spur the creation of two $75 million investment funds with more than a little help from the federal government. The Ohio Third Frontier economic development program aims to make $5 million awards to two private investment funds as an incentive to get them each to raise at least $20 million from private investors and $50 million each in debt financing from the U.S. Small Business Administration. The end result would be two funds with a combined total of $150 million to invest in established small businesses.

The plan represents the first step in a broader Third Frontier effort to use its awards to attract additional money from the federal government, said Lisa Delp, entrepreneurial services and incubation program manager for the Ohio Department of Development. The Third Frontier program, which aims to create jobs by investing in high-tech projects and companies, also is looking to use some of its money for entrepreneurial services programs to attract matching dollars from a federal program designed to help small and midsize manufacturers innovate and grow. Ms. Delp said she expects there to be an opportunity to win federal money See FEDERAL Page 19

THE WEEK IN QUOTES “The credit metrics of your typical small business borrower are weaker today than they were four years ago. There’s just more borrowers right now that probably qualify less often for conventional financing.”

“Look, we know our customers. We know what makes them tick. We’re not just going to show a pretty picture of a truck driving down the road.” — Chris Mikolay, director of marketing, National Interstate Insurance Co. Page 5

— Craig Street, director of SBA lending, Huntington Bank. Page One

A corrosion experiment in UA’s corrosion and reliability engineering program

“If our partners aren’t worried about personal financial issues, it frees them up to focus on our clients’ issues that they’re paid to deal with.”

“It’s a much different business model (for accountants) to run and manage, providing all these different service offerings.”

— Joe Morford, managing partner, Tucker Ellis & West, Page 15

— Mark Goldfarb, managing director, SS&G. Page 16

Aircraft repair outfit outgrowing Hopkins space ‘MRO’ one of few qualified for difficult projects By DAN SHINGLER

Small planes can be big business at Cleveland Hopkins International Airport — just ask Steve Maiden. “We’ve had double-digit (percentage sales) growth, year over year, the past four years,” said Mr. Maiden, CEO of Constant Aviation Inc., which repairs and maintains

mostly small jets like those used by corporations and wealthy individuals. The privately held company does not disclose its revenues. Mr. Maiden said the only drawback to operating at Hopkins — as opposed to Burke Lakefront Airport or Cuyahoga County Airport, where many other aircraft-servicing companies operate — is that Hopkins doesn’t have more space to give his

company. “If I could add another 25,000square-foot facility here, I’d do it tomorrow,” he said. “But there is literally no space available.” That’s not just idle talk, as Constant Aviation already has expanded in and around Hopkins, twice, this year. In February, the company added a 15,000-square-foot building to inspect and repair composite panels and other aircraft parts made from hightech materials. Then, last month, it

expanded its main hangar by taking 25,000 square feet of adjacent space, bringing the total footprint for its Hopkins operations to about 100,000 square feet. The company also has been adding employees. It currently has 170 people, including about 35 added in the last 12 months. Mr. Maiden said he hopes to hire another 20 by spring.

From the nose to the tail The company, though its Air See REPAIR Page 19


An example of a gutted plane repaired by Constant Aviation Inc.




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NOVEMBER 7 - 13, 2011

Developers eyeing chic Beachwood hotel — if city agrees to rezoning Plan for Aloft brand on busy site under residents’ scrutiny By STAN BULLARD

Plans are afloat in Beachwood for a 135-room hotel that could carry the Aloft name — the chic hotel brand that will make its debut in Northeast Ohio as part of the Flats East Bank Neighborhood in downtown Cleveland. However, whether the $12 million project in the eastern suburb rises from the ground depends on whether Beachwood City Council approves a rezoning in the face of substantial and well-organized resident opposition. Eric Bell, senior vice president of Goldberg Cos., said if the hotel rezoning is not approved, he will go back to pitching a plan for an office building on the property, which Goldberg owns jointly with Forest City Enterprises Inc. of Cleveland. The site is at the northwest corner of Richmond Road and Chagrin Boulevard. Plans for an 80,000-square-foot office building at the site were approved by Beachwood in 1995, though no building has been constructed. Goldberg sees the property as able to accommodate more office buildings, which would expand upon its adjoining Signature Square I and II office buildings from the late 1980s. “We think that both uses would be

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very viable,” Mr. Bell said. But, he added, “Because of the immense amount of traffic that flows through the Richmond-Chagrin intersection, we don’t think more traffic (with an office building) would be better.” Mr. Bell said Goldberg is pursuing the hotel concept in a joint venture with Pepper Pike businessman Scott Berkowitz because it would allow the company to diversify into hotels from its core apartment business and its more than 500,000 square feet of office space in seven buildings on Chagrin. Standing in the way of the hotel is a citizens group, Beachwood Residents for Responsible Development, which boasts 70 members and operates a website at www.brrd Michael Silver, one of four BRDD co-chairs, said the group is concerned that the hotel is not the highest and best use for producing tax revenue for the city. Mr. Silver argues the developers should pursue build-to-suit office projects if they don’t want to create a multitenant building. Mr. Silver said members of BRDD also believe the planned hotel would be “too much building for the site” because the project would need a variance along with the rezoning. The site is six acres, while the size of the proposed hotel would require seven acres under city codes. Moreover, residents worry that the hotel might not wind up as an Aloft because the developers have not cemented a deal for the franchise yet. A new hotel brand is fertile ground for developers because operators often like to add multiple hotels to establish a brand in a market.

Council divided That’s where the parties stand after numerous negotiations between the developers and the residents organized by Beachwood City Councilman Mark Wachter. In that process, the city dropped a concept of loosening its business zoning along Chagrin to allow hotels in favor of rezoning the Goldberg-Forest City site alone and increasing the buffer between the proposed hotel and the neighborhood. The developer agreed to pay

for a 4-foot mound of earth and a 6-foot masonry wall atop it, compared with the 6-foot-tall, boardon-board fence the office building plan allowed. “In the end, the decision belongs to City Council,” Mr. Wachter said. He said he wants more information before making his own decision. One councilman has business contact with Goldberg and removed himself from deliberations on the matter, while two are against it and one is for it. That leaves two council people who may go either way, Mr. Wachter said. He declined to identify by name where individual council members stand. The matter is the subject of a public hearing at a Beachwood City Council meeting tonight, Nov. 7, Mr. Wachter said, and the rezoning measure may come before the council for final action or may be delayed for more study.

Prime opportunity Under the hotel plan, if the rezoning is approved, the partnership owning the land formed by Goldberg and Forest City would sell the site to a partnership formed by Goldberg and Mr. Berkowitz, who developed the idea of an Aloft Hotel in Beachwood and took it to Goldberg. Mr. Berkowitz said he decided a Aloft boutique hotel would work there because Beachwood primarily is a business-to-business hotel market and has expansion potential with the new Ahuja Medical Center and Eaton Corp.’s move from Cleveland to a new headquarters under construction in the suburb. “People are comparing the hotel to vacant land, while they should be comparing it to an office building,” Mr. Berkowitz said. Starwood Hotels & Resorts Worldwide Inc. is the creator and franchisor of the Aloft brand, which has 29 properties. The Flats project is scheduled to open in 2013. Messrs. Berkowitz and Bell said their hotel proposal has interest from the hotelier, but they do not have a final agreement with Starwood. Mr. Berkowitz said his mortgage broker, Brown Gibbons Lang of Cleveland, has letters of interest from three lenders he declined to identify. ■

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bined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373.

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Richfield insurer’s rebrand integrates human element National Interstate says marketing speaks to customer engagement By MICHELLE PARK

After significant growth in its business in recent years, one of Northeast Ohio’s publicly traded insurance companies has decided new branding is in order. Forget generic pictures of buses, trucks and the open road: National Interstate Insurance Co.’s new look pictures the clients the company typically serves, including fleet operators and RV owners. The company has a new tagline, too: “An insurance experience built around you.” The Richfield company unveiled the branding to its employees late last month and is spreading the word to agents and customers. The roll-out of the new brand identity on the company’s website, business cards and other materials will be done incrementally over the next year, said Terry Phillips, senior vice president. The new people portraits are formed not by lines, but by words. For example, the words “risk management” form a fleet operator’s eyebrow, and the words “needs bumper-to-awning coverage” are part of an RV owner’s hairline.

The company’s old marketing materials were pretty much what everybody else uses, said Chris Mikolay, director of marketing. He said the new people-centric brand is intended to reflect the way National Interstate partners with the parties it insures. “Look, we know our customers,” Mr. Mikolay said. “We know what makes them tick. We’re not just going to show a pretty picture of a truck driving down the road. “I want them to think, ‘Those are the people who create custom deals, that are about partnership,’” he said. The new branding effort is driven by National Interstate’s premium growth in recent years, Mr. Mikolay said — the result of steady growth and the company’s 2010 acquisition of Vanliner Insurance Co. For the nine months through Sept. 30, the company’s gross premiums written totaled $411.7 million. That partial-year figure is not far from the 2010 full-year total of $438.6 million, and eclipses by 19% the full-year total of $344.9 million in 2009. “We’ve grown, and we’re continuing to grow,” Mr. Mikolay said. “We need people to know what we stand

for beyond our four walls here.”

Focused approach National Interstate’s primary business is commercial transportation insurance. It insures truck fleets, school buses, charter buses, ambulances and more — “classes of business that other insurers get queasy about,” Mr. Mikolay said. The commercial business involves handling more claims and thus more communication, so the insurance buying experience is different for National Interstate’s clients than it is for a consumer, Mr. Mikolay said. The company’s word portraits are reflective of the things National

Interstate heard during four focus groups it hosted in January. It gathered during those sessions and other extensive interviews the input of clients, employees and people who sell the insurance it underwrites. “This is not what we decided we want to be,” Mr. Mikolay said of the word portraits. “This is what we are and have been” to various constituencies. National Interstate hasn’t spent more on marketing than it normally would in a given year, said Mr. Phillips, the senior vice president. And the company’s mode of marketing — going to trade shows, sending direct mailers — won’t change, Mr. Mikolay said. National

Interstate, he noted, “competes in a different world than the Progressives and Allstates of the world.” While it will be difficult to judge the branding initiative’s return in dollars, the company will track website hits over the next year and will try to solicit feedback in customer surveys, Mr. Mikolay said. The aim is to establish over time a brand for which people are willing to pay a premium, he said.

Putting on unique faces Branding has been a big trend in the insurance business over the last five to 10 years, said Brad Turner, plant manager for Communications Factory in Hiram, which assisted the

branding committee at National Interstate. He cited as examples Progressive’s spokeswoman, Flo, and Geico’s lizard. “There’s been a huge trend to set people apart in the marketplace,” he said, citing also the professor ads Farmers Insurance began playing in the last year. In general, with business as competitive as it is and with companies able to cut costs only so much, the desire to rebrand has grown, Mr. Turner said. Communications Factory posted probably 10% to 15% growth in year-to-date revenues in September over the same period a year ago because of an uptick in work on branding efforts, Mr. Turner estimated. “I think the economy is forcing companies to look at other ways to break off from the pack,” Mr. Turner said. ■

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WKNR gains ground in first full month with competitor

CRAIN’S CFO OF THE YEAR AWARDS Crain’s Cleveland Business on Oct. 25 held its fifth annual CFO of the Year awards reception in Westlake. More than 500 people attended the event, sponsored by Marsh, KPMG, KeyBank, Cox Business Class, Ulmer & Berne and eSearch. Bill Paul, the managing director of Marsh’s Cleveland office, told the audience in remarks before the winners were unveiled, “The CFO is a catalyst in instilling a mindset and desire for their organization.” Other speakers included KPMG’s John MacIntosh and Lisa Oliver from Key. This year’s winners include: ■ Bill Chorba, NineSigma Inc. ■ Mark Clark, First Energy Corp. ■ Mary Ann Freas, Southwest Community Health System ■ Richard “Duke” Jankura, JumpStart Inc. ■ Michael E. Mayher, Lakeland Community College ■ Vincent Petrella, Lincoln Electric Co. ■ Cameron C. Rubino, OrthoHelix Surgical Designs Inc. ■ Susan Suvak, Majestic Steel USA Inc. ■ Robert Trabucco, Sterling Jewelers Inc. For more CFO coverage — including past winners, a full list of 2011 finalists and nominees, video and photo slideshows, visit www.CrainsCleve

NOVEMBER 7 - 13, 2011



The winners gather on stage after the ceremony. From left: Michael Mayher from Lakeland Community College; Cameron Rubino of OrthoHelix Surgical Designs; Mary Ann Freas of Southwest Community Health System; Susan Suvak of Majestic Steel USA; Bill Chorba from NineSigma; Richard “Duke” Jankura from JumpStart Inc.; Simon Cashman, who accepted an award on behalf of Sterling Jewelers’ Robert Trabucco; and Vincent Petrella from Lincoln Electric Inc.

RIGHT: Garrett Hudson, Maria Castellano, Samantha Janosko and Shirley Cline from Ohio Technical College.

In the first full traceable month with its new competitor on air, ESPN Cleveland WKNR-AM 850 gained some ground. WKNR’s rating — logged by Baltimore-based Arbitron Inc. as the share of the listening audience tuned in to the station — jumped from 3.7 in September to 4.4 in October. Meanwhile, WKRK-FM, which goes by Sports Radio 92.3 The Fan and is owned by CBS Radio, saw its audience slip to 0.8 last month from 1.2 in September; the latter figure included two weeks of WKRK-FM’s old alternative rock format. Tom Herschel, CBS Radio’s senior vice president and market manager in Cleveland, said despite the apparent decline, the station is seeing daily and weekly increases in share, which also are tracked by Arbitron but unavailable to non-subscribers. Mr. Herschel would not be more specific. “This is the first full rating month we’ve had, and people still are discovering the station,” Mr. Herschel said. “The feedback we’re getting from listeners and advertisers is all positive.” Mr. Herschel went so far as to say that CBS Radio sees WKNR’s jump as good for everyone. “There’s a lot of activity in Cleveland sports, with the Browns and elsewhere,” Mr. Herschel said. “We

think we will benefit from that.” WKNR, owned by Good Karma Broadcasting, made significant lineup changes shortly after WKRK went live Aug. 29. Those changes included moving afternoon drive-time hosts Kenny Roda and former Cleveland Cavaliers TV play-by-play man Michael Reghi to an evening slot while hiring former Columbus Dispatch Ohio State beat writer Bruce Hooley for the afternoon drive spot and pairing him with longtime sports radio talker Greg Brinda and Chris Fedor. WKNR gained ground despite losing Westwood One’s NFL coverage to WKRK. WKNR replaced Westwood One with expanded Browns coverage, including five hours each of pre-game and post-game coverage. Craig Karmazin, president of Good Karma Broadcasting, acknowledged in an email that Arbitron is considered the industry standard in radio ratings, but he said his company does not use Arbitron’s ratings system as a scorecard for its performance. Rather, he said, Good Karma officials “are primarily focused on the return on investment our advertising partners receive from our marketing partnerships.” “We also have internal research that we conduct with Cleveland sports fans to make sure that our programming is meeting their needs,” Mr. Karmazin said. ■

Congratulations Mike Pressnell – 2011 CFO Finalist

From Your Friends at



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NOVEMBER 7 - 13, 2011




Cavs ex-execs form arm Outdoor hockey ticket could be tough get of Calif. marketing shop By JOEL HAMMOND


Three former marketing executives for the Cleveland Cavaliers have left the team to form a Cleveland office of San Francisco-based Phizzle. Jeff Lillibridge, Jeff Ryznar and Mike Maleski will form the Cleveland satellite office of Phizzle, which provides mobile marketing and advertising and specializes in audience relationship management. The Cavaliers, Lake Erie Monsters and Quicken Loans Arena have been a Phizzle client for three years, and Mr. Ryznar said they will remain a client. The trio worked with the Cavaliers before their departure to make sure their responsibilities were covered, Mr. Ryznar said, though the NBA lockout had slowed some of that activity. Mr. Ryznar said the work stoppage had nothing to do with the decision to leave. Cavs spokesman Tad Carper said the team planned to replace the three men in the future, though no timetable had been set. The three men, each of whom received a small ownership stake that Mr. Ryznar would not specify in the 5-year-old Phizzle, will head the company’s client services group and newly created digital marketing division in a space on Superior Viaduct overlooking Cleveland’s Flats. They specialize in mobile marketing — think text messages and content delivered on smart phones or tablet computers such as the iPad —

inside and outside of arenas. They’re also focused on monetizing and further activating their clients’ partnerships with corporate sponsors. That tack is in line with a growing trend, as seen in the Discount Drug Mart chain using its agreements with the Cavaliers, Browns, Indians, Monsters and Gladiators to drive foot traffic at the company’s stores. “No longer do teams just put up a sign and that’s it,” Mr. Ryznar said. Messrs. Lillibridge and Ryznar each spent seven years with the Cavaliers, the former as director of web services and the latter as director of strategic marketing. Mr. Lillibridge is Phizzle’s senior digital strategist, while Mr. Ryznar will carry a title of senior mobile and marketing consultant. Mr. Maleski, meanwhile, was director of new media sales for the Cavaliers since early 2008, and now is the senior director of new media sales at Phizzle. Mr. Ryznar said remaining in Cleveland was a major goal for him and his colleagues. “We believe in (Cavs owner) Dan Gilbert’s vision for Cleveland and what the city is going to be, and we wanted to be in downtown Cleveland,” he said. Mr. Ryznar said the trio plans to add staff in the 1,200-square-foot warehouse space just east of St. Malachi Church, and currently is in discussions with the company’s corporate office to determine exactly how many more employees that might entail. ■

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If you want to attend the first outdoor hockey game to be played in Cleveland, it appears you’ll need to work pretty hard to do it. The Cleveland Indians come Jan. 15 will play host to their first “Frozen Diamond Faceoff,” pitting the men’s hockey teams of Ohio State University and the University of Michigan against each other as part of the Indians’ second Snow Days attraction at Progressive Field. It won’t be an easy ticket to score. The Indians will begin public ticket sales next Monday, Nov. 14. But by then, the Indians already will have offered pre-sale tickets to a group of fans who registered for that opportunity, as well as to baseball season ticket holders and “other stakeholders,” Indians spokesman Curtis Danburg said. Mr. Danburg would not provide a breakdown of how many members of each of those groups have access to pre-sale tickets; there’s a six-ticket limit for members of those groups. Crain’s reported on Oct. 10 that about 5,000 people registered for the pre-sale opportunity; those who were not randomly selected to buy

pre-sale tickets were notified via email on Oct. 28. Besides those buying opportunities, the Indians today, Nov. 7, will offer a bundle option allowing fans to buy a hockey ticket with the purchase of a Snow Days combo ticket. The latter ticket provides access to unlimited snow tubing and ice skating for a price that ranges from $25 to $31. The Indians also allotted tickets to each school, though the ballclub would not reveal how many tickets each received. However, Ohio State athletics spokeswoman Leann Parker said the school initially received 10,000 tickets from the Indians, and then was allotted another 568 after the Indians determined that seats in the left-field bleachers would not be obstructed by the “Batterhorn,” a snow-tubing hill. Last year, that hill was constructed in the bleachers, but this year will start on the left-field home run porch to accommodate views of the full-size hockey rink. The rink — construction of which is under way and was pictured in a tweet last week by team president Mark Shapiro — will run from home plate down the first-base line. “We still need to figure out if any (seats) will be obstructed,” Mr.

Danburg said. Construction of the hill was just beginning late last week. Ms. Parker said Ohio States hopes to sell each ticket it received; it, too, has conducted pre-sales and will offer whatever is left to the public next Monday. Michigan spokesman Rob Tillotson confirmed UM also was allotted 10,000 tickets. Prices range from $10 (college students only) to $100 for all-you-caneat club seats. Seats in the lower bowl from third base to first base are priced at $45, while the first rows in the upper deck — the “view box” sections for Indians games — are $55. How the Indians, Ohio State — which will be the host school for the event — and Michigan will split the revenue remains to be seen, as the Indians and Ohio State do not have a completed contract for the event. Dan Wallenberg, Ohio State’s associate athletic director for communications, said in August when Crain’s made a public records request for the contract that it hadn’t been completed; Mr. Wallenberg reiterated last week that the sides still are finalizing terms. He said it wasn’t uncommon not to have a finalized contract three months prior to such an event. ■

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Gas: More manufacturing plants may be constructed continued from PAGE 1

many of the feedstocks for makers of plastics and specialty chemicals are derived from natural gas. And recent discoveries in eastern Ohio of huge deposits of “wet gas” — gas that has more of the liquids that are used to produce plastics and chemicals — are fueling the conversation further. They should be talking, says Rod MacDonald, managing director and specialty chemicals analyst for KeyBanc Capital Markets, because the benefits of shale gas liquids are going to be far reaching. “For example, when methane gas is cracked (processed), one of the byproducts it produces is ethylene, which is a major manufacturing feedstock,” Mr. MacDonald said. “When it’s made into polyethylene, it’s the most widely used plastic in the world.” Just about everything made from plastic — in addition to many adhesives, detergents, solvents and other manufacturing materials — is a byproduct of natural gas and its associated liquids, Mr. MacDonald said. The shale gas finds in and around Ohio are going to turn the specialty

chemicals industry on its head, the American Chemistry Council’s Mr. Dooley said. It will have particularly positive impacts for Ohio and its economy, which is dotted with plastics, chemical and rubber companies. All of them, Mr. Dooley said, will have access to cheaper feedstock from the gas fields, especially if those materials are processed in the region where the chemical and plastic companies have plants. “If we’re the bakers, natural gas is the flour,” sums up Mr. Dooley, in describing the importance of shale gas to his industry.

Getting the word out Mr. Dooley said the mere fact that he was traveling around Ohio pitching the media and lobbying government officials on the benefits of shale gas last month shows how important the matter is to the chemical industry. Other parties that stand to benefit from shale gas development are making similar pitches. For instance, when U.S. Rep. Bob Latta, R-Bowling Green, held a shale gas roundtable at Lakeland Community College in Kirtland last Tuesday, Nov. 1, among those who

“What this does is really change the dynamic of pricing as we know it.” – Rod MacDonald, managing director and specialty chemicals analyst, KeyBanc Capital Markets showed up to cheer on shale gas development was Dave Enzerra. He’s director of external affairs for Wickliffe-based specialty chemicals company Lubrizol Corp. and a former chairman of the Ohio Chemistry Technology Council. Mr. Enzerra said he spoke at the meeting for the same reason that Mr. Dooley is traveling the country: He wants people to know how important shale gas development is to the specialty chemicals industry. Just the way cheap labor attracted manufacturing to China, cheap energy and raw materials could mean more manufacturing in the United States, Mr. Enzerra said. “That’s why you find manufacturing facilities locating where they have cheaper access to energy and raw materials,” Mr. Enzerra said. Natural gas already costs twice as much in Europe as it does in the United States, and that’s giving U.S.

of LIM Bu sin 3 ITE es F D s I RE TIM nt E er M E O ne O t o NT FFE r P HS R: ho ne Se rv ice .

plastic and chemical companies a cost advantage, KeyBanc’s Mr. MacDonald said.

All it’s cracked up to be Adding to the excitement, especially for companies in Ohio, is talk that one or more “crackers” will be built. Crackers are large, multibilliondollar plants that take the liquids from natural gas production and separate them into the raw ingredients that eventually make plastics or other specialty chemicals. Shell Oil has said it plans to build such a plant in Ohio, western Pennsylvania or West Virginia, and there is hope that more than one could be built to better process what comes from wells in the region. “For the first time in decades, they’re talking about building a cracker in the U.S.,” Mr. Dooley said. “And it’s not in the traditional oil and gas territories along the Gulf. It’s right here.” It would mark a sharp reversal from just five or so years ago, when U.S. companies were shutting their domestic specialty chemical plants — including those that crack natural gas — in part because natural gas prices here were rising and manufacturing was growing faster in places such as China and Brazil. “What this does is really change the dynamic of the pricing as we know it now,” Mr. MacDonald said. Other processing plants might locate in Ohio or surrounding states too, as could more specialty chemical and plastics plants, he said. “I think each individual company will run a costing model to make that determination,” Mr. MacDonald said. Lower feedstock prices, lower delivery prices for those feedstocks

and proximity to their source all could play a part in their decisionmaking. In some parts of the United States, that’s already happening, and it’s because of shale gas, Mr. Dooley said. “Our companies are already making significant reinvestments,” he said, noting that Dow Chemical and others recently have reopened some of their shuttered U.S. plants. Those investments currently are happening in places where natural gas and specialty chemicals long have been produced, such as along the Gulf Coast, but they likely will spread, Mr. Dooley predicts.

Benefits spread The Ohio Chemistry Technology Council is banking on a 25% increase in the U.S. production of ethane, the chief component of natural gas from which other derivatives are made, Mr. Dooley said. He estimates an increase of that scale would result in $16 billion in new capital investments by the U.S. chemicals industry and would yield 400,000 more U.S. jobs. Ohio, and especially Northeast Ohio, would benefit from that growth more than most parts of the country, Mr. Dooley said, because the state is one of the top seven in the nation in terms of the size of its chemical industry. Lubrizol’s Mr. Enzerra, who is still active with the chemistry council, said Ohio’s specialty chemical companies employ 42,000 people across the state and bring in $28 billion in revenue each year. “Any benefit to the industry as a whole is going to have a very positive effect on Ohio,” Mr. Enzerra said. ■

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Lending: Loans appealing post-recession UH ahead of schedule FY ended Sept. 30















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January 2, 2011 December, 19 2011 —


Considering the recent pledge made by 13 banks in September, small business lending should continue to increase. The institutions committed to lending by the end of 2013 a collective $20 billion more nationwide than they lent in 2010 to small businesses. That figure is to include both conventional and SBA dollars. Michael Churney would have been one to roll his eyes at such an announcement not long ago. After hunting unsuccessfully for a loan for about a year, he wrote his congresswoman a few times about his inability to find money. Mr. Churney, president of Cleveland-based Churneys’ Truck Center, which sells, leases and repairs commercial trucks, said small business owners hear the same refrain from banks: “We’ve got all this money. All this money’s available. We want to make sure everybody stays in business.” But, Mr. Churney said, “Everybody I know (is asking), ‘Where’s this at?’” It’s a “rush to the finish line,” Mr. Churney said, to see who still exists by the time financing becomes more available. Eventually, however, with the help of Leader Capital Group LLC in Solon, Mr. Churney in July secured an SBA loan from a local community bank that enabled him to refinance debt and save his 28-year-old business roughly $4,000 a month. Mr. Churney said he had not realized that companies such as Leader Capital, which helps businesses find financing, existed. Now he considers Leader Capital his “extended CFOs.” Like many banks, Leader Capital has seen borrowers prove more creditworthy in 2011 because their cash flows and revenues have trended

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Taking the pledge

up, said Michael J. Gordon, the company’s president. “I think the banks are still requiring the same information that they used to, but are looking more deeply into things,” Mr. Gordon said, citing bank regulators as one reason why. “Clients in general are seeing more of a need to work with companies that do what we do.” From January to September, Leader Capital recorded a 104% increase in its number of clients over the year-ago period. “Small businesses are looking for the avenue to money,” said Marvin Margolin, a commercial mortgage consultant who on occasion refers work, including Mr. Churney’s financing need, to Leader Capital Group. “There’s more than one way to find a loan.” ■


any internal policies, but because companies now have a couple good quarters under their belts, said John E. Moshier, national SBA manager for the bank. The Cleveland-based bank issued $219 million in SBAguaranteed loans in the 12 months ended Sept. 30, nearly double the $114 million it lent in the year-earlier period. “More and more people have turned the corner and showed a profit for a quarter or two,” Mr. Moshier said. “That’s what we’re starting to see.” Andy Decker’s Bedford Heights company, Decker Forklifts Inc., received an SBA loan through KeyBank in March that has enabled the business to implement and grow a forklift rental program. “Business owners are more creditworthy because, having gone through the recession, we have retained cash and capital and drastically improved our balance sheets,” Mr. Decker said. “My fellow business owners in Northeast Ohio are very bullish and positive about their prospects in the near and long term.”

University Hospitals is in the final stretch of its $1 billion fundraising campaign it launched publicly last year, and so far has brought in about $803 million — an amount that puts the health system ahead of schedule in completing its largest fundraising effort ever. Tom Zenty, the system’s CEO, told Crain’s Cleveland Business last winter the plan was to complete over the next three years the fundraising campaign that quietly kicked off in 2004. However, Sherri Bishop, UH’s chief development officer, said last week that money is flowing into the system’s coffers at a faster pace than envisioned. “We don’t want to definitively say we’re going to finish this ahead of schedule because it’s still a tad too soon, but we’re definitely further along than we expected to be,” Ms. Bishop said. Ms. Bishop said donors have responded well to the health system’s $1.2 billion Vision 2010 capital and construction program that resulted

in the $298 million Ahuja Medical Center in Beachwood and $260 million Seidman Cancer Center on Euclid Avenue, among other projects. “With Vision 2010, UH said to all the stakeholders and the whole community that we would do something,” Ms. Bishop said. “We did it and delivered, on time and on budget.” About 53,000 donors have contributed to the $803 million raised. Of that total, 87 donors have given gifts of more than $1 million over the last seven years, Ms. Bishop noted. A $42 million gift from Jane and Lee Seidman — the largest in University Hospitals’ history — kicked off the public phase of the campaign last year. “The idea of a $1 billion campaign was unparalleled, and reaching this final stretch is an affirmation that we are on our way to a successful completion,” Ms. Bishop said. Ms. Bishop said she and the hospital’s leadership will continue to emphasize its new three-year strategic plan, which focuses on leveraging the health system’s new resources and capitalizing on its existing ones in order to make sure they work together seamlessly. ■





Dollar volume



More borrowers are proving creditworthy, particularly for SBA lending, said Craig Street, director of SBA lending for Huntington Bank. Its SBA-backed loans totaled $421.9 million in the 12 months ended Sept. 30, which was nearly double the $213.1 million in SBA-backed loans issued by Huntington the previous 12 months. SBA loans often are used when there’s a shortfall in collateral and when borrowers need longer repayment terms, which ease borrowers’ ability to gain access to credit — an important factor in the current postrecession environment. “The credit metrics of your typical small business borrower are weaker today than they were four years ago,” Mr. Street said. “There’s just more borrowers right now that probably qualify less often for conventional financing.” Other banks also are reporting that their SBA lending has increased dramatically year over year. At U.S. Bank, SBA-guaranteed loans through its 25-state footprint totaled $630 million in the 12 months ended Sept. 30, more than double the $283 million of such loans issued the previous 12 months, said Julie Huston, president of the bank’s SBA division. The volume of loans in the latest 12 months was a record, exceeding by 25% the previous high of $504 million in the 12 months that ended Sept. 30, 2008, a spokeswoman said. Though loan volume is up, bankers say their underwriting standards have remained consistent. Small business loan applications and approvals have risen at KeyBank not because the bank has changed

in $1B fundraising plan


Turning the corner



from 1,048 in fiscal 2010. That volume of lending looks more like the traditional levels seen prior to the Great Recession, said Gil Goldberg, director of the Cleveland district, which spans the 28 northern counties of Ohio from the Pennsylvania line to the Indiana line. And the percentage increase in the number of borrowers topped those recorded by all other districts in Ohio, Illinois, Indiana, Michigan, Minnesota and Wisconsin, according to Mr. Goldberg. Nationwide, the SBA helped 61,689 borrowers obtain loans totaling $30.5 billion in fiscal 2011 — the highest dollar volume in the agency’s 58-year history. SBA-backed lending was up 1.5% in terms of borrowers from 60,771 in fiscal 2010, and up 35% in terms of dollars from $22.6 billion in fiscal 2010. “I think companies have survived the depths of the recession and cash flow has improved, so banks are willing to look at them from a credit standpoint,” Mr. Goldberg said. “However, because of all the uncertainty out in the marketplace, banks are … still being cautious and using our guarantee program. “There’s something out there that’s telling the banks, ‘I can’t use a conventional loan, I need the comfort that the federal government guarantees give me,’” he added. “Two years ago, even with that comfort, they didn’t see borrowers that could qualify.” The Cleveland SBA district plans to release in mid-November a detailed analysis of the numbers, including a breakdown by industry, Mr. Goldberg said.


continued from PAGE 1

(2010 Erdos & Morgan subscriber study)

Chapter sections present

ed by:





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Brian D. Tucker ( EDITOR:


Scott Suttell (


Here we go


ortheast Ohio: Where are we, and where are we going? That was the title of a speech our editor recently gave to the Cleveland chapter of the Association of Government Accountants. Considering most of our readers weren’t among the small gathering of people who heard that talk, we figured we’d share some of its contents. In looking ahead, it often helps to look behind to see how far we’ve come. That’s especially true for longtime residents who may think it’s the same region as 20 years ago. It is not. We have managed to diversify our economic base — not in a big way, but enough to withstand the nasty bumps and bruises that came with the last recession, which was a doozy. Take a look at unemployment in the region. In September, the latest month for which these stats are available, the unemployment rate in the Cleveland-Elyria-Mentor metropolitan statistical area stood at 7.6%; in the Akron area, it was 8.1%. By contrast, the U.S. unemployment rate was 8.8%, with the jobless rates even higher in sunny places such as Savannah, Ga. (9.3%), San Jose, Calif. (9.6%) and Orlando, Fla. (10.2%) Since when has this region recovered better from a recession than the nation as a whole? Try never. One reason for this phenomenon is that manufacturing, which remains Northeast Ohio’s strong suit, has bounced back from the Great Recession faster than the real estate and finance sectors. But even within manufacturing, the mix of businesses isn’t what it once was here. Auto and steel plants no longer are dominant employers. Instead, the real action is in advanced manufacturing — high-tech stuff such as robotics, medical devices, aerospace parts, polymers and liquid crystals. Beyond manufacturing, the region has managed to stake claims in biomedicine and even software development. The proof of the strides that have been made in nurturing these business sectors is in the hundreds of millions of dollars in venture capital that have been drawn to Northeast Ohio for investment in emerging companies in these fields. Think about it: The words “venture capital” and “Northeast Ohio” didn’t appear in the same sentence 20 or even 10 years ago, unless it was to lament the region’s inability to attract those dollars. Times have changed. Just three weeks ago, the National Association of Seed and Venture Funds disclosed that its CEO, Jim Jaffe, is moving to Ohio to establish the group’s first physical headquarters, which will be located at Lorain County Community College’s Entrepreneurship and Innovation Center. The college and Ohio University will work with the association to develop workshops, webinars and, eventually, college courses designed to help people learn how to invest in startups. Northeast Ohio still has issues, the educational attainment of its residents being primary among them. But, on balance, we are encouraged by where we are headed in light of where we’ve been.


Attack on Obamacare can’t save SB 5


It was a brilliant, unnecessary political s we bear down on the end of tactic designed for just one purpose — this campaign season, is there luring the conservative voter that the anyone out there in Crain-land Rove team theorized would be most likely wishing for more? I mean, how to vote for President Bush rather than his many times can you hear or see the word Democrat challenger, Sen. John Kerry. “lie” in one week and not feel a little And they were right: It helped re-elect fatigued by it all? Mr. Bush to his second term. The two sides in the fight over Issue 3, Now along comes the 2011 election, the state ballot that tries to declare one in which a heated state isunconstitutional the Affordable sue regarding union rights for Care Act (derisively termed BRIAN public employees is taking the “Obamacare” by GOP office TUCKER Ohio spotlight, and — surprise! holders and strategists), recently — there’s another ballot issue, squared off in a debate at The this one challenging the federal City Club. It’s hard to imagine health care legislation passed that this issue wasn’t designed early in the Obama presidency. as a “me-too” version of the A state law or vote cannot famous Karl Rove strategy in trump federal law, so why are George W. Bush’s second presiwe voting, you might ask? Its dential campaign. supporters ramble about giving You may recall that the GOP the eventual debate in the Supreme managed to maneuver onto state ballots Court more ammo, or giving Ohioans that year votes on the topic of legal gay the right to fight this unfair law, or whatmarriage. Further, you might remember ever. But this really is simply nothing that in many of those same states, more than an attempt to get out those including Ohio, the vote was unnecessame conservative voters in hopes that sary because existing state law or constithey’ll help retain the provisions of tutional strictures already prohibited Senate Bill 5, the fate of which will be legal gay marriage.

decided on that very same Election Day. Those who hope to engineer a “yes” vote on Issue 2, which would make permanent those public union limitations imposed by SB 5, figure that a vote on Obamacare will bring out those conservatives most likely to retain public employee reforms. And they’re probably right. The only problem, as we pointed out last week in our front-page editorial, is that there is widespread dislike, even among some Ohio Republicans, of a few aspects of the sweeping reforms put in place by SB 5. You know, the same changes that helped bring together large crowds of sign-brandishing, chanting, pro-labor protesters who filled the Statehouse lawn and hallways last spring during the contentious debate and votes on Senate Bill 5. Ohio will be made stronger after this week’s elections, but my guess is that action will come in the form of targeted legislation that strategists know will be supported by a broad group of Ohioans. And isn’t that exactly the way the dominant GOP majority in Columbus should have done it all along? ■


Reader has issues with Issue 2 editorial ■ Well, you Crain’s editors did it again. You sit on your arses all day long and tell the rest of the world how they should live. Your writing on Issue 2 is so elegant and the prose is so well written. I suppose you learned how to write so well on your own, or was it all the teachers you had growing up from K-12 who taught you and helped you, and now you want them to live in the poor house? They knew when they went into this profession that they would not get rich, but to have a middle class income, and health benefits, and a retirement, which they pay into, is not too much to ask so they can buy a home, raise their children, pay for college, and enjoy the American Dream. If you all spent just one week of your

life in the classroom, which would include creating lesson plans and grading papers in the evenings, then managing and teaching the classroom all day, and going to school functions on your own time, you would not be taking this higherthan-thou attitude. You all are ungrateful, conceited aristocrats who don’t want those who helped you to do well, even though they were the people who wanted you to do well Marc A. Braun Beachwood

Find some middle ground ■ As a union Democrat, I was appalled at how Ohio Republicans passed Senate Bill 5 without regard to the average

Ohioan. Strangely, I do agree with some parts of it, and yes, that scares even me. Your Oct. 31, Page One editorial, “No matter SB 5’s fate, legislators must meet in the middle,” hit it right on the head — a plan that would have not been so starkly one-sided would have had a chance to be embraced by all, as everyone is looking for an answer to spiraling health care costs and pensions that cannot be funded any longer. Signatures gathered for repeal would not be necessary for a middle-of-theroad solution. Show some compassion for all involved here and we might have a chance at real reform. Your editorial was the first I’ve read to lay it out so simply. Thank you. This liberal has seen first-hand how health care and pensions are regarded as See LETTERS Page 11



2:45 PM

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NOVEMBER 7 - 13, 2011



THE BIG ISSUE The world’s population reached 1 billion people in 1800; now, a little more than 200 years later, the figure is 7 billion. Experts say the world’s population could reach 10 billion by 2050. Are you concerned about this rapid growth?


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What is interesting to me is that it’s urbanization (of the population). That could be good for Cleveland in a regional way.

It’s been a concern of mine since 1972. There’s too many people on the planet. We have to share precious resources and we don’t seem to know how to do that intelligently and it is increasing poverty.

There aren’t jobs enough for 7 billion people. What are we going to do when there’s 10 billion?

I’m really concerned about it. I’m a firm believer in negative population growth. ... We’re not really sustaining the people in the world. You hear about drought and people starving in Africa. We don’t have the resources as it is.

➤➤ Watch more people weigh in by visiting the Multimedia section at

AT&T plans to shutter downtown billing center By CHUCK SODER

as is the growing availability of online tools used to pay bills, said Seth Rosen, vice president for District 4 of the Communications Workers of America, which represents workers in Ohio, Illinois, Indiana, Michigan and Wisconsin. AT&T disclosed the closing in an Oct. 28 notice filed with the state of Ohio under the Worker Adjustment and Retraining Notification Act. Mr. Rosen said he is “cautiously optimistic� that the union will be able to find jobs for everyone who

AT&T plans to close a downtown Cleveland customer billing center that employs 61 people, but the union representing them expects to be able to find jobs within the company for many of those workers. The billing center, located at 45 Erieview Plaza, serves AT&T’s landline telephone users. The declining popularity of landlines was one reason AT&T is closing the center,

wants to continue working in AT&T’s landline business. He said he does not fault AT&T for planning to close the center, given the realities facing the landline telephone business. “We understand that the business is changing,� he said. The closing, which will take place toward the end of the year, will not affect other AT&T employees in the building, on the corner of East Ninth Street and Lakeside Avenue. The building houses one of the company’s administrative offices. ■

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LETTERS continued from PAGE 10

be hired because the controlled expense will be salaries, not out-ofcontrol benefits. Maybe signatures against a forced measure will not be collected because thought and compromise drafted a plan that could possibly work. Scary, did I say? Yes, the scary word above is “maybe.� But something does have to change, and there is no reason it can’t change for the betterment of our future. It will only work, as you pointed out, if the school bully has a change of heart and becomes one of the boys.

a “right� to a select few fortunate enough to be represented by a union or collective bargaining umbrella. But should it be a “right?� Those working just as hard on the other side of the fence are getting railroaded by skyrocketing health care costs and dwindling retirement savings. Maybe all workers alike will find affordable health care and establish sound retirement savings if the insurance companies and banks don’t have a blank check to gouge us at will. Maybe more teachers, firefighters and policemen will be hired if this burden is removed from employers. Maybe more people will

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Parker, Moss foundation fund CWRU oncology professorship By TIMOTHY MAGAW

Helen Moss, a slender, 75-yearold woman with boundless enthusiasm, has been dealing with cancer the last 11 years, though you wouldn’t know. Ms. Moss, a former vice president of Merrill Lynch, credits a combination of alternative medicine treatments, including herbal medicines, acupuncture and hydrotherapy, with extending her life and reducing her suffering from Moss the dreaded disease. To spread the word about and boost the research into such treatments, Ms. Moss and her Helen Moss Cancer Research Foundation have raised $1.5 million to fund a professorship at Case Western Reserve University’s School of Medicine in “integrative oncology.” The new program aims to blend mainstream cancer treatments with complementary therapies, with the goal of extending and enhancing the quality of life of people with cancer. “I wanted this to be at a medical school, not at a hospital because hospitals compete with one another,” Ms. Moss said. “A medical school is like an octopus — it has tentacles everywhere.” Half of the $1.5 million raised for the professorship comes from Parker

Hannifin Corp., a producer of motion and control technologies based in Mayfield Heights. It’s the first gift of its kind from Parker, but the company has a history of supporting alternative medical treatments — driven in part by the passion of its CEO, Don Washkewicz. Parker covers 80% of the cost of various alternative medicine treatments, such as on-site massage and acupuncture services, for its employees. The $750,000 gift in support of the professorship is an extension of that commitment, said Dan Serbin, the company’s vice president for human resources. “We’ve been trying to educate our work force on the benefits of alternative medicine,” Mr. Serbin said. “We’re not only trying to educate our employees but other employers as well. We like any opportunity we get to speak to other types of treatments out there.” Dr. Pamela Davis, dean of CWRU’s School of Medicine, said the new Parker Hannifin-Helen Moss Cancer Research Foundation Professorship in Integrative Oncology, shows the medical school’s commitment to exploring alternative methods for treating cancer. The medical school is sponsoring an international conference for the Society of Integrative Oncology; it takes place Nov. 10-12 in Cleveland. ■


NOVEMBER 7 - 13, 2011

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 Budget Lawn & Landscape 431 Norwich Drive, Broadview Heights ID: 34-1901752 Date filed: Oct. 20, 2011 Type: Employer’s withholding, unemployment, failure to file complete return, corporate income Amount: $512,305 Nevillewood Apartments LP 14600 Detroit Ave., Suite 1500, Lakewood ID: 34-1892037 Date filed: Oct. 7, 2011 Type: Annual return for partnership withholding tax Amount: $467,488 Cleveland Business Consultants LLC 526 Superior Ave., Suite 1111, Cleveland ID: 11-3678151 Date filed: Oct. 20, 2011 Type: Employer’s withholding Amount: $389,841

Ran-Dan Transport Inc. 2506 Grovewood Ave., Parma ID: 92-0184993 Date filed: Oct. 25, 2011 Type: Employer’s withholding Amount: $352,216 Choice Construction Co. 30675 Solon Road, Solon ID: 34-1551839 Date filed: Oct. 7, 2011 Type: Corporate income, failure to file complete return, annual return of withheld federal income tax Amount: $222,640 Tyler Disposal Inc. 4115 Charlton Road, Cleveland ID: 34-1887631 Date filed: Oct. 14, 2011 Type: Employer’s withholding, unemployment Amount: $216,887 Greater Achievement Community School 5455 N. Marginal Road, Cleveland ID: 34-1970968 Date filed: Oct. 12, 2011 Type: Employer’s withholding, unemployment Amount: $172,809 Studio Techne Inc. 12210 Euclid Ave., Cleveland ID: 34-1790162 Date filed: Oct. 12, 2011 Type: Employer’s withholding Amount: $147,911 Euclid Beach All Seasons Day Care Center Inc.

16910 Lake Shore Blvd., Cleveland ID: 34-1945429 Date filed: Oct. 12, 2011 Type: Employer’s withholding, unemployment Amount: $146,939 Corporate Installation Specialists LLC 18667 Sheldon Road, Middleburg Heights ID: 26-3821506 Date filed: Oct. 25, 2011 Type: Employer’s withholding Amount: $107,702 Christofour Inc. 20750 Sun Meadow Trail, Strongsville ID: 34-1071748 Date filed: Oct. 12, 2011 Type: Employer’s withholding, unemployment Amount: $85,822 LTC Clinical Resources Inc. 7172 Columbia Road, Olmsted Falls ID: 20-0550087 Date filed: Oct. 7, 2011 Type: Unemployment Amount: $83,248 Jatsek Construction Co. P.O. Box 441133, Brecksville ID: 34-1972639 Date filed: Oct. 25, 2011 Type: Employer’s withholding Amount: $45,507 Basic Contractors Inc. 2878 Wagar Road, Rocky River ID: 34-1577765 Date filed: Oct. 25, 2011 Type: CIVP Amount: $29,416

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THUNDER::TECH: Thea Letteri to account coordinator; Chris George to graphic designer.

PROJECT AND CONSTRUCTION SERVICES INC.: Jordan G. Westropp to vice president. RUHLIN CO.: Jason Rickey and Eric Gradert to project engineers; Matt English to project manager; Joe Sohutskay to estimator.




CBRE INC.: Mitch Baer to vice president; Steve Voinovich to senior associate.

JOHN CARROLL UNIVERSITY: John T. Day to provost and academic vice president.

TRANSACTION REALTY: Paul Drury to broker associate. English



BCG&CO.: Mike Sweeney to senior executive for business development and financial services.


FIRST FIDUCIARY INVESTMENT COUNSEL INC.: William S. Henry to shareholder. Ravakhah



LEGAL BROUSE MCDOWELL: Marc B. Merklin to managing partner. MAZANEC, RASKIN & RYDER LPA: Thomas F. Naughton and Robert F. Cathcart to partners. PATENT, COPYRIGHT & TRADEMARK LAW GROUP LLC: Nicholas Mihalic and Howard Wernow to associates. RENNILLO DEPOSITION & DISCOVERY: Barbara L. Redinger to marketing and communications

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ASSOCIATION FOR APPLIED SPORT PSYCHOLOGY: Jack J. Lesyk (Ohio Center for Sport Psychology) to president.


ST. VINCENT CHARITY MEDICAL CENTER: Dr. Keyvan Ravakhah to program director, internal medicine residency.

FIRSTENERGY CORP.: Dolores J. Lowery to vice president, corporate affairs and community involvement and president, FirstEnergy Foundation.


WELLS FARGO: Tom Harrington to vice president, senior relationship manager; Tawnya Bell to vice president, business development officer.

AKRON GENERAL PARTNERS PHYSICIAN GROUP: Dr. Ramon Kumar and Dr. Sergey Vitebskiy, Akron General Cardiology; Dr. William Lanzinger and Dr. Kevin Lowe, General Surgery; Dr. Sarel Vorster, Center for Neuro & Spine Inc.; Dr. Brad Everly, Green Primary Care; Dr. Laurie Matt, Internal Medicine Center.

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BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s, highlighting positive business news in Northeast Ohio. To submit information, please email Scott Suttell at ■ Vadxx Energy LLC of Cleveland has enlisted Rockwell Automation to help refine its proprietary process to manufacture synthetic crude oil and natural gas using petroleumbased raw material feedstock wastes at Vadxx’s demonstration plant in Akron. Under the agreement with Vadxx, Rockwell Automation will complete the front-end engineering and

design work necessary to commercialize Vadxx’s proprietary processes by the end of this year. Both companies then expect to enter into an engineering, procurement and construction contract that “enables Rockwell Automation to manufacture Vadxx’s commercial production units in modular fashion to accelerate Vadxx’s market implementation and refine the quality of Vadxx’s synthetic crude oil.” Terms of the agreement were not disclosed. Jim Garrett, CEO of Vadxx, said in a statement, “Vadxx’s objective is to implement over 100 commercial oil production units in the next five years. Partnering with such a credible company as Rockwell Automation is a significant step toward


meeting this goal.” Terry Gebert, vice president and general manager of Rockwell’s Global Solutions unit, said the company “will help Vadxx reduce risk while getting their waste-toenergy process to market sooner, and leverage our global operations as Vadxx expands its offerings to other regions of the world.” Vadxx has signed memorandums of understanding to form joint ventures with various feedstock providers for its first three commercial production units in Northeast Ohio. Vadxx expects the first commercial unit to begin producing crude oil in late 2012. ■ Blair Rubber Co. of Seville said it has launched a new international marketing initiative to increase its exports of rubber linings and belt splice materials worldwide.

NOVEMBER 7 - 13, 2011

The company makes and markets rubber linings under the Enduraflex, Plioweld, Crislip and Marflex brands. Its rubber linings are used in the interior of storage tanks, rail cars, food processing, wastewater and nuclear environments to protect metal and concrete from corrosion. Blair said it began exporting its rubber linings to China and Israel in 1990. While the export business has grown steadily, “international sales are a small percentage of Blair’s overall sales with a huge potential for growth,” the company said. In its pursuit of international growth, Blair said its new export strategy “includes building an infrastructure of local representation in each country.” Blair said it already has “successfully set up this infrastructure in Venezuela and now (is) modeling the program in other

target countries.” International marketing efforts through distributors, universities, the Internet, and export/import agencies and international delegations also are under way, Blair said. “Our products are needed worldwide,” said Dave Jentzsch, Blair’s general manager, in a statement. “Every country stores and transports harsh, hazardous chemicals and processes food and wastewater.” The international initiative is spearheaded by export marketing manager Nalex Cordova, who joined Blair in May. Mr. Cordova holds a master’s degree in international business management. In a 15-year career, he has conducted business in Spanish, Brazilian Portuguese and English in North American and Latin American countries, Blair said.

■ Westlake-based Nordson Corp., a maker of precision dispensing equipment, and the Nordson Corp. Foundation announced they contributed a combined $3.7 million to charity during the fiscal year ended Oct. 31. Nordson’s giving is focused on nonprofit organizations in U.S. communities where the company has major operations — Ohio, California, Georgia, New Jersey and Rhode Island. Grants from the foundation accounted for about $2.6 million of the total amount awarded and were distributed in the areas of arts and culture, civic affairs, education and human welfare. Education was the largest giving area, followed closely by human welfare, where the amount awarded increased in 2011 due to ongoing need. Nordson Corp. provided an additional $1.1 million in direct corporate support to various organizations through its Matching Gift program, United Way and other corporate donations. Nordson employees also donated thousands of hours of their time to charity during the year through the company’s Time ’n Talent volunteer program.

GET DAILY NEWS ALERTS FROM CRAIN’S ! Register for free e-mail alerts and receive: ■ The Morning Roundup: A collection of the day’s business news from Ohio’s daily papers ■ Breaking news alerts: When major news happens, you’ll know ■ Daily headlines: A collection of Crain’s-produced news and blog items from the day ■ Small Business Report: A weekly guide to small business news

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FINANCE Housing market propped by low rates Some see boom in refi demand tapering off By DAN SHINGLER


DOLLAR TALK MAKES SENSE Financial advising a bonus benefit, can help keep new leaders focused on work By MICHELLE PARK


ucker Ellis & West LLP wants its newest partners focused on its clients, not personal finance worries. So, the Cleveland law firm is paying to provide newly minted partners a full year of personalized financial planning through a Pepper Pike firm. It’s particularly challenging in these economic times for companies to give bonuses or increase salaries, so to offer a benefit, select companies are choosing to arrange for financial education — both general and personalized — for rising executives, according to Azim Nakhooda, managing principal/ CEO of Cedar Brook Financial Partners LLC, the firm Tucker Ellis & West has hired to guide its younger execs. “They are seeking ways to kind of show some love to the future leaders of the firms,” Mr. Nakhooda said of such companies. Through a program started two years ago, Cedar Brook meets with new partners and executives, who tend to be in their late 30s and early 40s, and assesses how they

can optimize and integrate the options available through their employers and elsewhere. The program today serves five organizational clients and 40 to 50 individual executives. Law firms, hospitals and other professional services firms have shown the most interest, Mr. Nakhooda said. It’s not required that Tucker Ellis & West partners accept the personalized financial planning, but all 15 who could do it have, said Joe Morford, managing partner. After a year, the onus is on the executive to continue accepting and paying for the advice. “If our partners aren’t worried about personal financial issues, it frees them up to focus on our clients’ issues that they’re paid to deal with,” Mr. Morford said. “We invest in people’s health and wellness — the physical side. Why wouldn’t we invest in their financial wellness as well?”

‘Left out in the wilderness’ Heather R. Ettinger not only has seen an increase in recent years in requests for her firm to work with younger executives, but also an increased interest among younger See WORRIES Page 18

INVESTING IN THE FUTURE Cedar Brook Financial Partners LLC is one of the financial services firms hired by area companies to help high-level employees, especially young ones, with their personal finances. Kristen Mayer — pictured above at the Cleveland office of her law firm, Tucker Ellis & West, where she became a partner in May — is one of those executives taking advantage. She said one surprise she found when meeting with Cedar Brook was that she is underinsured. “It’s a real eye-opener,” she said. “When someone hands you a gift like that, it’s almost like you can’t not do it. “To me, this service reflects a real commitment to investing in our futures. This type of benefit means to me: ‘We believe in you.’” — Michelle Park

ow interest rates — the lowest bankers, brokers and home buyers can remember — are helping buoy Northeast Ohio’s residential real estate market, but they aren’t providing the cure-all one might hope or expect. For borrowers with the best of circumstances and credit ratings, even 30-year fixed-rate mortgages could be attained in recent months at rates of 4% or even less. “People kept saying, ‘Rates can’t go any lower,’ and sure enough, they kept going lower,” said Darren Zeck, KeyBank Mortgage district sales manager in Cleveland. Mr. Zeck said August and September brought heavy early fall flurries in the form of applications for refinancings. Healthy mortgage companies, generally, say they’ve had a very busy and profitable year — even though the housing market as a whole has been stuck in the doldrums. But rates have since ticked upward, ever so slightly, say Mr. Zeck and others, and most who wanted to refinance and were in a position to do so have locked in rates about which their parents and grandparents only dreamed. Today’s rates seem like nothing when compared with 1981, for instance, when the average 30-year fixed-rate mortgage carried a rate of 15% or more. That’s meant things have slowed a bit in mortgage lending, and the mix of incoming mortgage applications has changed. For example, while about twothirds of KeyBank’s applications from in and around Cleveland in August and September were for refi loans, now they are running about even with mortgages for an initial home purchase, Mr. Zeck said. It helped, also, that purchases increased in September, when the number of sold listings climbed to 3,054, up more than 18% from September 2010, when only 2,583 sold, according to data from the Northern Ohio Regional Multiple Listing Service in Independence. No doubt, the low rates do help the housing market, say Mr. Zeck and others. They increase the purchasing power of buyers, helping to sustain home prices and may be enticing some new buyers into the See RATES Page 18



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Accountants’ roles expand beyond numbers

ON THE WEB Q&A: 401(k)s and disclosure rules It’s open enrollment season, so benefits are top of mind for many. New 401(k) fee disclosure regulations coming down the pike are going to change the way this particular benefit is viewed at firms across the country — with both employers and parSwallow ticipants likely to feel the effects. The new standards, which will be administered and monitored by the Employee Benefits Security Administration of the U.S. Department of Labor, in a nutshell will result in more transparency for plan sponsors and participants. Michael J. Swallow is senior vice president for CBiz Retirement Plan Services in Cleveland. He recently answered some questions about the new requirements and the effects they might have companies and plan participants in Northeast Ohio. To find out Mr. Swallow’s answers to some of the following questions, go to www.Crains ■ What will the new regulations mean for a company that offers 401(k) plans to its workers? ■ What will the new regulations mean for the average employee? ■ From your perspective, what are the pros and cons of the new disclosure regulations? — Amy Ann Stoessel

Firms offer bevy of advisory services in addition to tax, audit work By MICHELLE PARK


hen Britton-Gallagher & Associates Inc. needs accounting services, its people call the accoun-

tant. When the Solon insurance broker needs marketing help, it calls … the accountant. And for information technology guidance, it dials, yes, the accountant. Britton-Gallagher isn’t the only firm relying on its accountant for more than accounting: CPA firms increasingly are meeting client needs by providing advisory services, something that’s required a shift in their business model. In fact, it’s really become the norm for regional and national firms to offer a menu of advisory services on top of traditional tax and audit work, said Greg Skoda Sr., chairman of Skoda Minotti in Mayfield Village, which is BrittonGallagher’s go-to firm. “There are very few firms that would be a midsize firm or larger that would only be accounting and tax,” Mr. Skoda, whose 130-person firm was founded in 2001 and has added advisory offerings throughout the years, most recently a marketing group in 2009. Allan D. Koltin calls it an evolution. Firms and their clients are placing a greater value on the types of services the client needs and wants, versus the tax and audit services they simply need, said Mr.

Koltin, CEO of the Koltin Consulting Group, a Chicago firm that specializes in consulting for the accounting profession. Plus, profit margins for compliance and tax work are diminished, Mr. Koltin said, and technology is a factor, too. “What used to take hours takes minutes,” Mr. Koltin said. “Today’s world, you can push a button and it can make all the calculations in a millisecond.” So, he said, clients are demanding more.

Not just for CPAs anymore Offering advisory services has changed the DNA of firms. Since its evolution from a tax and accounting firm to one that also offers, among other things, health care and technology consulting, SS&G has become multiple companies, not one, said Mark Goldfarb, managing director of the Solon firm. “It’s a much different business model to run and manage, providing all these different service offerings,” Mr. Goldfarb said. “There’s a challenge to find all the professionals and consultants you need to hire to provide all these services.” Indeed, whereas many CPA firms historically hired the standard CPA, today they also are hiring people away from other professions. Twenty years ago, attorneys, certified fraud examiners and marketing professionals weren’t part of Skoda Minotti’s roster as

One firm. Many honors. Reminger’s practice groups garnered thirteen first-tier rankings by U.S. News & World Report and Best Lawyers® for 2011-2012, including nine for the Cleveland metropolitan area and one nationwide.

they are today, Mr. Skoda said. Likewise, at KPMG, recent hires include engineers and people who’ve worked for the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, said John MacIntosh, managing partner for KPMG, Northeast Ohio. Advisory work tends to be more profitable, accountants said. “It is a significant opportunity to separate the services that you offer from a commodity type service to a true value-add or niche-type service,” said Rick Fedorovich, managing partner of Bober, Markey, Fedorovich & Co. based in Akron. The lucrative nature of the consulting business is clear in recent revenue growth posted by KPMG: In the 12 months ended Sept. 30, 2011, the Cleveland region’s consulting revenues grew 157% over the 12 months ended Sept. 30, 2010, Mr. MacIntosh said. In the same period, tax revenues grew 62% and audit revenues, 7%. KPMG advises clients on risk, management, and transactions and restructuring.

Works in progress The industry’s biggest firms, recalls Mr. MacIntosh of KPMG, began building consulting capabilities decades ago. Then, in the late 1990s and early 2000s, most of the large firms sold off their consulting arms, he said. That happened, in part, because many firms had grown their consulting businesses significantly during the Y2K scare and saw opportunity to sell after such growth, he said. Additionally, regulatory change prohibited firms from doing both auditing and consulting for any given public company, Mr. Koltin said. Now that there’s a feeling the worst of the economic downturn is over and that companies will spend again for advisory services, many larger accountants have returned attention to beefing up advisory offerings, continuing to rebuild the consulting arms they once spun off.

“With the downturn in the economy, businesses are looking to firms like ours to provide advice or validate what they’re doing,” said Mr. Fedorovich, whose firm has offered many of its advisory services since its founding in 1959. “They’re looking for a second set of eyes to provide a sanity check on their thinking.” Moving forward, Mr. Fedorovich and others expect the metamorphosis of CPA firms to continue. “We have a mature marketplace here in our area, we have severe competition and we have little growth,” he said. “ If you keep doing things the same … my guess is you’re not going to be in business for long.”

One-stop shops Accounting executives say the change is positive for the profession and clients. Though it creates a more complex business model, offering advisory services carries intangible benefits, particularly the reward of doing work beyond “mundane tax and auditing services,” said David Gaino, chairman of Apple Growth Partners Inc. in Akron. The firm has layered on services over the decades, but shed some in recent years because the businesses proved to be unviable. Firms want to offer a laundry list of services because it makes clients more dependent on the firms, said Kathleen Seitz Watson, director of accounting, tax and advisory services for CBiz MHM LLC in Independence, which since its inception has offered accounting and advisory. On their end, clients seem to appreciate having the one-stop shop. Recall, for example, BrittonGallagher: Over the years, Skoda Minotti has helped the insurance broker draft a strategic marketing plan and develop the branding for a division Britton-Gallagher rolled out called NewScience Insurance. “Here’s where I see the value: These folks know us,” said Bruce H. Ball, chairman of Britton-Gallagher. “So when we sit down and start talking to the Skoda people, they’ve got a history with our company. They understand who we are, where we’ve been and where we want to go.” ■

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Application of Dodd-Frank takes shape


ogi Berraâ&#x20AC;&#x2122;s famous quote, â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s like dĂŠjĂ  vu all over again,â&#x20AC;? rings true to the current financial condition of the United States and global markets. Only a few years after the 2008 collapse of the financial markets, the United States and countries abroad are again experiencing financial troubles: the Greek debt crisis, questions about the European Union, general fear over the worldwide markets and talks of a doubledip recession in the United States. Many investors are left asking: What measures were taken after the 2008 financial crisis to protect investors and the financial markets in general? The answer: the DoddFrank Wall Street Reform and Consumer Protection Act. Passed on July 21, 2010, the Dodd-Frank Act was designed to regulate systemic risk in the financial industry, improve accountability and transparency in the financial system and protect investors from improprieties in the financial industry. The passing of the Dodd-Frank Act is seemingly old news; the application of the Dodd-Frank Act is not. The Dodd-Frank Act, in large part, delegated authority to various agencies to conduct studies and engage in formal rule making. This has led to the recent pronouncements involving the recommended uniform fiduciary standard of care for both broker-dealers and investment advisers, new rules governing whistleblower programs and increased regulation over investment professionals known as private fund advisers. â&#x2013;  Uniform fiduciary standard of care: One of the more significant accomplishments of the Dodd-Frank Act is the Securities and Exchange Commissionâ&#x20AC;&#x2122;s Jan. 22 recommendation for a uniform fiduciary standard of conduct for brokerdealers and investment advisers. Prior to the Dodd-Frank Act, broker-dealers and investment advisers were held to different standards of care. Investment advisers â&#x20AC;&#x201D; who are compensated on a fee-based model for investment advisory services, typically receiving a percentage of


ADVISERS assets under management â&#x20AC;&#x201D; owed clients a fiduciary duty of care, requiring them to act at all times in their clientâ&#x20AC;&#x2122;s â&#x20AC;&#x153;best interests.â&#x20AC;? On the other hand, registered representatives â&#x20AC;&#x201D; who receive compensation on a transactional basis through commissions or sales loads â&#x20AC;&#x201D; generally owed clients a more limited duty of care to ensure that any investment recommendation was â&#x20AC;&#x153;suitableâ&#x20AC;? (consistent with the clientâ&#x20AC;&#x2122;s stated investment objective, risk tolerance and general financial status, etc.). Pursuant to the Dodd-Frank Actâ&#x20AC;&#x2122;s instruction, the staff of the SEC studied these regulatory classifications and ultimately concluded that investors did not understand the distinctions; instead, investors expected investment professionals to act in their best interests at all times, regardless of what capacity in which the professional was acting. This finding prompted the staff of the SEC to issue a formal recommendation in January recommending that broker-dealers and investment advisers be held to the same uniform standard of care when providing retail customers with personalized investment advice. To date, this recommendation has not been adopted as law. â&#x2013;  Whistleblower programs: In addition to heightened standards of care for investment professionals, the Dodd-Frank Act also sought to protect investors and the financial markets by incentivizing internal reporting of misconduct through more enticing whistleblower programs. Prior to the Dodd-Frank Act, the SEC could provide whistleblowers with awards only in insider trading

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cases; and these awards were limited to 10% of the penalty collected in an enforcement action. As of May 25 the SEC now has the authority to award whistleblowers for providing â&#x20AC;&#x153;original informationâ&#x20AC;? about any violation of the federal securities laws (not just insider trading). The new rules remove the 10% cap and now permit an award up to 30% of the monetary amount recovered. â&#x2013;  Private fund advisers: In a similar vein, the SEC recently adopted new rules governing â&#x20AC;&#x153;private fund advisersâ&#x20AC;? â&#x20AC;&#x201D; that is, those advising hedge funds, private equity funds and the like. Prior to Dodd-Frank , these private fund advisers were virtually unregulated, which led many to point the finger at these private fund advisers and their unregulated activities (and risk taking) as a contributing factor to the â&#x20AC;&#x2122;08 financial crisis. To fix this regulatory gap, the SECâ&#x20AC;&#x2122;s new rules increase registration requirements and overall regulation of private fund advisers. These recent measures are just a few of the rules and recommendations adopted as a result of the passing of the Dodd-Frank Act. As the SEC rule making process continues, it is expected that new rules and laws will be issued to further protect investors and the stability of our financial markets. â&#x2013; 

IN BRIEF PBGC sues Bendix over pension debt The Pension Benefit Guaranty Corp. is suing Elyria-headquartered Bendix Commercial Vehicle Systems for $16.6 million over what the agency says is the firmâ&#x20AC;&#x2122;s unwillingness to cover pension debt from 63 displaced workers at its Frankfort, Ky., plant. Federal law requires companies to provide financial protection to employeesâ&#x20AC;&#x2122; pension plans when more than 20% of workers participating in a company plan lose their jobs in a shutdown, according to a PBGC

news release. â&#x20AC;&#x153;Bendix is fully committed to its current work force as well as its former employees and retirees,â&#x20AC;? said an e-mailed response from Barbara Gould, a Bendix spokeswoman. â&#x20AC;&#x153;We remain a strong, stable company with a consistent and clearly demonstrated commitment to our pension obligations.â&#x20AC;? The lawsuit was filed in U.S. District Court in Cleveland. â&#x20AC;&#x201D; Pensions and Investments

Mr. Dorman is a partner with Reminger Co. and chairman of the financial services professional liability practice group. Mr. Nally is an associate with Reminger Co.; he represents financial and corporate clients in all aspects of the legal system.



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professionals in receiving financial guidance. “Corporations know that it is much more cost effective to retain and grow a good employee and very costly to try to replace them,” said Ms. Ettinger, managing partner of Fairport Asset Management in Cleveland, which also receives requests to speak specifically with emerging female executives. The wealth management firm has a trademarked women’s education program, she noted. However, several other financial firms say they haven’t seen increased requests for them to advise younger executives, though they have received more requests to talk to employees in general. “When the markets tank, people tend to recognize the need for advice,” said Jeff Malbasa, chief operating officer of Spero-Smith Investment Advisers Inc. in Beachwood, which has delivered informational sessions for various companies, typically for free. According to a recent study by Aon Hewitt Corp., workers who receive some form of help with retirement planning experienced, on average, annual returns 3% better than those who handle their own retirement accounts. For those young execs who work with Cedar Brook, the aim is drawing up a strategy involving investment, risk management and estate, college and charitable planning, among other things, Mr.

Nakhooda said. More often than not, this is the first go-around for young executives, he said. Traditionally, Cedar Brook is not directly retained by younger executives, not so much because of price or access, but because young executives often work long hours and may have debt and young families, Mr. Nakhooda said. Actually, most firms tend to not want to commit a lot of time and resources to offering services to those who are not high-net-worth individuals, Mr. Malbasa said. “Younger folks, they’re really doing it on their own,” Mr. Malbasa said. “They’re kind of left out in the wilderness until they’re big enough.”

Benefits abound The recruitment of young executives, particularly in Cleveland’s legal community, has really ramped up, helping to motivate some of the requests Cedar Brook is receiving, Mr. Nakhooda said. Offering financial planning is one way to provide an attractive benefit toward retaining an organization’s people, he added. Kristen Mayer certainly appreciates it. In January, she became a partner at Tucker Ellis & West, and in May, she sat down for the first time with Cedar Brook. One shock, she said, was learning she was underinsured. “To me, this service reflects a real commitment to investing in our futures,” said Ms. Mayer, who doubts she would have scheduled

financial planning on her own. “This type of benefit means to me: ‘We believe in you.’ ” Exactly the point, Mr. Morford said. “It’s not cheap, but it’s not prohibitively expensive when you’re dealing with some of your most valuable assets as an institution,” he said. “I think it’s a real benefit to have your partners know that the firm genuinely cares about them as people.”

Growing a client base Financial planners stand to gain more than pay in working with younger executives, Mr. Nakhooda said. “Many of these people will become senior partners, senior doctors, so it’s a great benefit from our side,” he said. Mr. Nakhooda doubts Cedar Brook’s new partner advisory program will become a mainstream service because not every company has the desire to do it, or the funds. The clamoring for financial education, though, and the expanded offerings likely will continue, Mr. Malbasa said. One reason: There’s more fiduciary liability awareness and thus more pressure to provide education to employees. “Businesses ought to look at this more often,” Mr. Malbasa said. “They ought to be pressing firms like us, ‘Hey, would you guys be willing to come in and do a free informational session?’” ■

Rates: Mortgage industry compressed continued from PAGE 15

market, they say. But, while they are some help, they aren’t enough by themselves to completely heal a market as battered and pessimistic as this one. Even September’s improved sales figures are a far cry from the volumes the industry needs to see, say those in real estate. “We like low rates — all three of us, the Realtors, the banks and the buyers,” said Ed Dolinsky, president of Coldwell Banker Hunter Realty in Beachwood. “We would just appreciate it if there were more people taking advantage of the low rates.”

Mortgage market in motion That, in a nutshell, is the problem, Mr. Dolinsky said. Too many would-be buyers still are afraid of the market, lamenting the loss of government home-buying subsidies or fear they can’t get credit in today’s lending environment. Too many potential sellers are focused on what their home was worth at the top of the market or, in worse scenarios, frozen with fear and avoiding addressing what they will do about their underwater home. They should at least explore their options, especially in a market like Northeast Ohio where low home prices mean most homes qualify for federal lending programs, but he said too many people do nothing. “There’s inertia in the market,” Mr. Dolinsky said.

Mortgage companies are doing well though, or at least the ones still standing are, said Quicken Loans chief economist Bob Walters. He estimates there are far fewer than half the number of mortgage companies, including lenders and brokers, that there were before the financial crisis hit in 2008. That means the ones left are stronger, typically bigger and adept at implementing new underwriting standards and adhering to new guidelines for mortgage lending meant to avert another housing bubble. “In the last three years, our industry changed more than it did in the previous 50,” Mr. Walters said. That also means that companies like Quicken, as well as traditional banks, have fewer competitors in the mortgage arena. “It’s been a terrific year for us,” said Mr. Walters, who said Quicken has also been busy much of the year, mostly tending to helping existing homeowners refinance their mortgages to take advantage of lower rates. But less competition also means that lenders can pick and choose the loans they want to make. The lenders, like consumers, have been scared, and underwriting standards might have tightened too much in the industry generally, Mr. Walters said. That concerns him, because it’s another obstacle between the present reality and a healthy housing market.

First, lenders gave out too many loans to too many people, now they may be lending to too few, he said. “Just like with anything else, the pendulum always goes too far in either direction. You need to have really good credit now,” Mr. Walters said. “I worry sometimes that we have gone a little too far and that now only the ‘haves’ can get loans. I don’t want to see us go too far as an industry.” But lower interest rates or even lower underwriting standards are not likely to bring back the housing industry by themselves, say the experts. What it will also take, they say, is time — time for the industry to work through a still mountainous pile of unresolved foreclosures and time for the public to regain faith in the housing market.

A change in psyche That last condition might take the longest to fulfill. People like Messrs. Dolinsky and Walters say a whole generation has had its psyche twisted when it comes to thinking about a home purchase. While previous generations had tremendous faith that homes would hold their value or even provide a nice return on investment, today’s young people are more likely to look at home ownership as a risky proposition with few benefits. “I liken it to my grandmother’s experience,” Mr. Walters said. “She lived through the Depression and after that I could never convince her to put a penny into stocks.” ■



2:10 PM

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NOVEMBER 7 - 13, 2011




Repair: Airport aware of Federal: Backing helps money grow “(JumpStart) wanted to firm’s expansion needs pique interest (in the continued from PAGE 3

continued from PAGE 3

Services Division, also works on large, commercial airliners. But its main business has been working on smaller planes that are owned by corporations, individuals or small leasing companies and carriers. Those companies don’t want to own and operate their own repair and maintenance shops, but still want their planes kept in tip-top condition, Mr. Maiden said. The work can range from an oil change to a complete engine replacement or, in some cases, even gutting the interior of a plane to inspect, repair or replace each part so that it looks new. Known as an “MRO” in the industry, for maintenance, repair and overhaul, Constant Aviation has a Class IV rating from the FAA, meaning it can tackle the most complex and important repairs and overhauls. It’s one of only about 25 Class IV-rated MROs in the world, Mr. Maiden said. The company is best known for its expertise with jets made by the Brazilian aircraft company Embraer SA, and those planes account for about 60% of Constant Aviation’s total business, Mr. Maiden said. But it can and does work on other planes, and it hopes to build its reputation equally with other brands, he said. Constant Aviation does just fine in terms of serving owners of Beechcraft jets, too, said Corey Head, a pilot and director of operations for Sky Quest, a charter jet company that operates at Hopkins with four small jets. “We find them to be very knowledgeable with that aircraft,” Mr. Head said. “It’s mostly scheduled maintenance … but some of our scheduled maintenance is pretty involved and takes a couple weeks. They’ve taken engines out and put new ones in for us before and they were great.” Like Constant Aviation, Mr. Head said his company has been growing at Hopkins. And like Constant Aviation, Jet Quest is benefiting from the increased popularity of private jets for those who can afford to fly in them. Jet Quest’s clients, often Fortune 500 companies, call it and tell it where they want to take their passengers

and the company has a plane waiting for them at the airport. It charges by the hour and clients can book one hour, or 100; it makes no difference, Mr. Head said.

Crowded air space Ironically, some of the same conditions that restrain Constant Aviation’s ability to grow faster at Hopkins also make it a great airport for private jets, Mr. Head said. The airport is crowded with amenities and equipment, including all the heavy-duty gear needed to keep it running in even the foulest of weather. However, Hopkins isn’t nearly as crowded with commercial aircraft as the airports of other major cities, Mr. Head said. “The way the airlines have downsized has done nothing but help us,” he said. “We like to land and take off from the premier facility in the region, and that’s Hopkins.” As for Mr. Maiden, he said he isn’t concerned yet that Constant Aviation’s growth will be limited over the long run because of Hopkins’ lack of space. The airport and the city have been good about working hard to find the company more space over the years, he said, and he thinks they will continue to do so. They might want to get started now, though, as Mr. Maiden plans to grow quite a bit more. “I think we’re at where we need to be for the next 12 months,” he said. “But we’ll look to expand into paint services. … We kind of have an open, pending request — any and all available space, we’re interested. “I think our requirement over the next three to five years will be for 200,000 (total) square feet out there,” he said. The airport is well aware of the company’s need for more space and is trying hard to find it, said Hopkins spokeswoman Jacqueline Mayo. “We’re working with them. It’s a continuous effort,” Ms. Mayo said. The airport is not yet able to commit to when the company would get more space, or how much, Ms. Mayo said, but it wants to accommodate Constant Aviation. “We want them to grow,” Ms. Mayo said. ■

to help manufacturers in the Appalachian region of Ohio. “We’re really looking at pairing up programs we have with federal programs,” she said. The Third Frontier Commission in August voted to allot $10 million to a new program called the growth fund. The money from the start was designed to give private investment funds an incentive to raise more money that then could be invested in established businesses aiming to expand. Multiple fund managers that have experience investing money borrowed from the SBA have expressed interest in participating in the program, Ms. Delp said. “There is an appetite out there for this,” she said. The SBA requires funds to raise at least $25 million before applying for money from a new initiative within its Small Business Investment Co. (SBIC) program. The Impact Investment Initiative aims to finance fund managers that invest in economically distressed areas or focus on industries of national interest, which for now are limited to clean energy and education. The SBIC program aims to create another fund targeting

plan) because we think what the state is doing is really terrific.” – Cathy Belk, chief relationship officer, JumpStart early stage business in early 2012.

An example in Michigan The Impact Investment Initiative in July made its first investment, lending $80 million to the InvestMichigan! Mezzanine Fund. Since then, the Michigan-focused fund has invested in a document management and data services provider, a company that makes machined products for the automotive industry and a grocery distributor. The mezzanine fund — managed by Credit Suisse’s Customized Fund Investment Group and Beringea LLC of Farmington Hills, Mich. — invests in companies with annual sales exceeding $20 million. During a speech last month, Ray Leach, CEO of business development organization JumpStart Inc., lauded the Third Frontier program’s plan to attract federal money. Mr.

Leach described how fast a small pot of private money can grow when paired with state and federal dollars. JumpStart chief relationship officer Cathy Belk said the organization “wanted to pique interest (in the plan) because we think what the state is doing is really terrific.” Venture capital firm Early Stage Partners of Cleveland will consider applying for money from the SBIC’s early stage initiative once that program is finalized, said managing partner Jonathan Murray. Although he believes governments often make poor investment decisions, Mr. Murray said Third Frontier programs such as the growth fund work because they award money to professional money managers chosen with the help of private consultants. Mr. Murray, whose firm has received multiple Third Frontier grants over the years, said he supports the new SBA programs because there is a shortage of growth capital in Northeast Ohio and other areas of the country. Plus, institutional investors nationwide have been investing less in the asset class because of the recession, he said. “These kinds of programs are intended to fill the gap that’s developed,” he said. ■





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10:48 AM

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NOVEMBER 7 - 13, 2011



Company Address Rank Phone/Website

Net patient revenue ($ millions) 2010


% change

Staffed beds

FTE employees as of 6/30/2011

Year founded

Top executive Health care system Title


Cleveland Clinic(1) 9500 Euclid Ave., Cleveland 44195 (216) 444-2200/







Cleveland Clinic Health System

Delos M. "Toby" Cosgrove president, CEO


University Hospitals Case Medical Center and Subsidiaries 11100 Euclid Ave., Cleveland 44106 (216) 844-1000/







University Hospitals

Thomas F. Zenty III CEO


MetroHealth Medical Center 2500 MetroHealth Drive, Cleveland 44109 (216) 778-7800/







J. Moran MetroHealth System Mark president, CEO


Summa Akron City Hospital and Summa St. Thomas Hospital 525 E. Market St., Akron 44309 (330) 375-3000/







Summa Health System

Thomas J. Strauss president, CEO Summa Health System


Aultman Hospital(1) 2600 Sixth St. S.W, Canton 44710 (330) 452-9911/








Edward J. Roth III president, CEO


Akron General Medical Center 400 Wabash Ave., Akron 44307 (330) 344-6000/







Akron General Health System

Alan J. Papa president


Akron Children's Hospital(1) One Perkins Square, Akron 44308 (330) 543-1000/








William H. Considine president, CEO


Fairview Hospital(1) 18101 Lorain Ave., Cleveland 44111 (216) 476-7000/







Cleveland Clinic Health System

Janice Murphy president


Hillcrest Hospital(1) 6780 Mayfield Road, Mayfield Heights 44124 (440) 312-4500/







Cleveland Clinic Health System

Jeffrey A. Leimgruber president


Southwest General 18697 Bagley Road, Middleburg Heights 44130 (440) 816-8000/







partnering with University Hospitals

Thomas A. Selden president, CEO


St. Elizabeth Health Center(1) 1044 Belmont Ave., Youngstown 44501-1790 (330) 746-7211/







Humility of Mary Health Partners

Robert Shroder president, CEO


Mercy Medical Center(1) 1320 Mercy Drive N.W., Canton 44708 (330) 489-1000/







Sisters of Charity Health System

Thomas E. Cecconi president, CEO

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Mercy Regional Medical Center 3700 Kolbe Road, Lorain 44053 (440) 960-4000/







Catholic Health Partners

Edwin Oley president, CEO


Firelands Regional Medical Center(1) 1111 Hayes Ave., Sandusky 44870 (419) 557-7400/







Firelands Regional Health System

Charles A. Stark president, CEO


EMH Elyria Medical Center 630 E. River St., Elyria 44035 (440) 329-7500/







EMH Healthcare

Donald Sheldon, MD president, CEO


Parma Community General Hospital 7007 Powers Blvd., Parma 44129 (440) 743-3000/








Terrence G. Deis president, CEO


Trumbull Memorial Hospital(2) 1350 E. Market St., Warren 44482 (330) 841-9011/







ValleyCare Health System of Ohio

Robert Wolleben CEO


Marymount Hospital(1) 12300 McCracken Road, Garfield Heights 44125 (216) 581-0500/







Cleveland Clinic Health System

William Keckan interim president


West Medical Center(3) 36000 Euclid Ave., Willoughby 44094 (440) 953-9600/







Lake Health

Cynthia Moore-Hardy president, CEO


TriPoint Medical Center(4) 7590 Auburn Road, Concord Township 44077 (440) 375-8100/







Lake Health

Cynthia Moore-Hardy president, CEO


Summa Barberton Hospital 155 Fifth St. N.E., Barberton 44203 (330) 615-3000/







Summa Health System

Thomas A. DeBord president


Northside Medical Center(2) 500 Gypsy Lane, Youngstown 44501 (330) 884-1000/







ValleyCare Health System of Ohio

David J. Fikse CEO


St. John Medical Center 29000 Center Ridge Road, Westlake 44145 (440) 835-8000/







UHHS/CSAHS Cuyahoga, Inc.

Cliff J. Coker president


South Pointe Hospital(1) 20000 Harvard Road, Warrensville Heights 44122 (216) 491-6000/







Cleveland Clinic Health System

William Young interim president


Lakewood Hospital(1) 14519 Detroit Ave., Lakewood 44107 (216) 521-4200/







Cleveland Clinic Health System

Robert Weil, MD president


Saint Joseph Health Center(1) 667 Eastland Ave., Warren 44484 (330) 841-4000/







Humility of Mary Health Partners

John Finizio president

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. Individual lists and The Book of Lists are available to purchase at (1) Information is from the American Hospital Directory, Employee numbers represent total employees, not full-time equivalent employees. Staffed beds is the number of total complex beds. (2) Information is from the American Hospital Directory,, numbers as of Sept. 30, 2010 and Dec. 31, 2009. Employee numbers represent total employees, not full-time equivalent employees. Staffed beds is the number of total complex beds. (3) Numbers are estimates. (4) Numbers are estimates and include 13 off-site locations and Lake Health Physician Group practices.

RESEARCHED BY Deborah W. Hillyer



2:50 PM

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NOVEMBER 7 - 13, 2011




Rust: Industry sees new work force Grants: Funds aid costly redevelopment continued from PAGE 3

continued from PAGE 1

Dennis McAndrews, a principal with Silverlode Consulting Corp. in Cleveland, is among those who hope a path emerges quickly. He said business expansion projects heâ&#x20AC;&#x2122;s working on in Cuyahoga Heights and in Hannibal, in Monroe County, wonâ&#x20AC;&#x2122;t go forward if they canâ&#x20AC;&#x2122;t get state grants for brownfield cleanup assistance. â&#x20AC;&#x153;These are economic development projects that would never be realized without a grant,â&#x20AC;? Mr. McAndrews said. â&#x20AC;&#x153;In Cuyahoga Heights, it would not go forward with a loan (instead of a grant) because itâ&#x20AC;&#x2122;s a multimillion-dollar cleanup of a piece of property that, at the end of the day, its market value will only be $150,000, $200,000. â&#x20AC;&#x153;No company is going to invest millions of their own money to get a site that is only worth a fraction of that,â&#x20AC;? Mr. McAndrews said.

Stream runs dry The possible demise of the two funds is related to reorganization of the Department of Development and the creation of JobsOhio, a private, nonprofit body that will run many of the stateâ&#x20AC;&#x2122;s business attraction and retention programs. The programs have received their money from bonds issued against the profit stream from Ohioâ&#x20AC;&#x2122;s staterun liquor business. However, Gov. Kasich intends to sell the liquor revenue stream to fund JobsOhio, wiping out the programsâ&#x20AC;&#x2122; source of money. In addition, Mark Kvamme, chief investment officer of JobsOhio, is said to prefer loans over grants, according to a half-dozen economic development professionals who work with the stateâ&#x20AC;&#x2122;s programs. He was not available last week for comment. A similar change is under way at the Third Frontier Commission, which runs loan and grant programs for technology companies. Crainâ&#x20AC;&#x2122;s reported in June that Mr. Kvamme was behind recommendations the commission is adopting to move to loans from grants. Advocates of the change say loans not only stretch the reach of public funds, but also cause applicants to be more discerning about what they propose when theyâ&#x20AC;&#x2122;re on the hook to pay the money back. Grants, as opposed to loans, reduce the cost to property owners of redevelopment. They also help

cities compete against areas with environmentally cleaner properties or undeveloped land for companies looking for places for new factories or office space.

â&#x20AC;&#x2DC;Substantialâ&#x20AC;&#x2122; impact Clean Ohio was created through a bond issue in 2002, and voters in 2008 approved $400 million in continued support for it. The state during the administration of former Gov. Ted Strickland planned to continue to fund the program through 2014, but those plans are now up in the air. â&#x20AC;&#x153;It was supposed to end June 2014, but word out of Columbus is it will end sooner,â&#x20AC;? said one observer who asked not to be identified because heâ&#x20AC;&#x2122;s shepherding brownfield projects still under review. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m very concerned about them pulling the rug out from under us.â&#x20AC;? Two Clean Ohio programs work in tandem. The Revitalization Fund grants up to $3 million to redevelopment projects for the demolition of aging buildings and cleanup of the property. The Assistance Fund provides up to $750,000 to evaluate the environmental contamination of a site and for the cleanup of hazardous materials. Job Ready Sites, authorized by voters in 2005, was designed to build a portfolio of commercial and industrial properties that would be attractive to growing businesses because they were in near move-in condition. A Job Ready Sites grant might cover the cost of ridding a property of its asbestos contamination or of replacing old windows with new, energy-efficient ones. Jack Schron, a former chairman of the body that oversaw the Clean Ohio program and now is a member of the Cuyahoga County Council, said he believes the Clean Ohio grants should continue. â&#x20AC;&#x153;I think the Clean Ohio Fund has been a terrific vehicle for cleaning up sites,â&#x20AC;? said Mr. Schron, who is also president of Jergens Inc., a manufacturing company in Cleveland. â&#x20AC;&#x153;I think its impact has been substantial.â&#x20AC;? The program also is lauded for its impact on preserving farmland. â&#x20AC;&#x153;It makes sense to save (agricultural) land and redevelop alreadydesignated portions of urban areas,â&#x20AC;? said Joseph Reidy, a Columbus attorney who helps communities put together applications for the two programs. â&#x2013; 

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â&#x20AC;&#x153;The stars have been aligned at every point along the way,â&#x20AC;? Ms. Louscher said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve built a very strong program that has strong academic standing and industry applicability.â&#x20AC;? The University of Akron last spring broke ground on a 39,000-squarefoot, $14.8 million engineering research building on the west side of the universityâ&#x20AC;&#x2122;s campus. It is expected to open early next year and house the corrosion program. Dr. Proenza said the university has been able to capitalize on an industry need without injecting many of its own resources into the program. Both industry support and government money, particularly from the federal level, have propped up the fledgling program. â&#x20AC;&#x153;It was a program that absolutely came calling,â&#x20AC;? Dr. Proenza said.

Looking to fill holes Industry has taken an interest in the University of Akronâ&#x20AC;&#x2122;s work in corrosion and has contributed a significant amount of money to the startup of the program and for student scholarships, Ms. Louscher said. BP, The Carboline Co. of St. Louis â&#x20AC;&#x201D; which makes corrosion

resistant linings â&#x20AC;&#x201D; and The Mears Group of Rosebush, Mich., an international engineering and construction firm, all have supported the effort. University officials said one reason industry has backed the burgeoning program is because a significant portion of the work force trained in corrosion engineering is poised for retirement. Itâ&#x20AC;&#x2122;s estimated that over the next 15 to 20 years, 30% to 35% of the corrosion work force will retire, according to Stan Theobold, managing director of ASM International, a nonprofit involved in materials science located in Novelty, Ohio. For that reason, the universityâ&#x20AC;&#x2122;s corrosion program has piqued the interest of Wickliffe-based specialty chemical company Lubrizol Corp., which provides work opportunities for the programâ&#x20AC;&#x2122;s undergraduates, said Derek Phillips, the companyâ&#x20AC;&#x2122;s global commercial manager for its metal protection division. â&#x20AC;&#x153;From my experience and perspective, there arenâ&#x20AC;&#x2122;t a lot of people that come out of college that are attuned to (corrosion), and itâ&#x20AC;&#x2122;s definitely a need that cuts across all disciplines â&#x20AC;&#x201D; whether itâ&#x20AC;&#x2122;s from infrastructure, transportation or

everyday consumer goods,â&#x20AC;? Mr. Phillips said. Mr. Phillips noted that students traditionally havenâ&#x20AC;&#x2122;t graduated college with the knowledge of different coating and protective barriers placed on materials to prevent or reverse corrosion.

Federal dollars flow A key component of the University of Akronâ&#x20AC;&#x2122;s corrosion efforts has been the establishment of a national clearinghouse for corrosion-related information, known as the National Center for Education and Research on Corrosion and Materials Performance. The center is working to develop a series of web-based courses targeted for engineers at the U.S. Department of Defense and other professionals. The Defense Department thus far has injected millions of dollars into the corrosion center, including an $11 million investment earlier this year toward the new engineering building. â&#x20AC;&#x153;I think this program offers us an opportunity to have a national and an international presence,â&#x20AC;? Ms. Louscher said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re still on the road to that, but thatâ&#x20AC;&#x2122;s what this is going to offer.â&#x20AC;? â&#x2013; 

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Manager — Digital Strategy & Development —Crain’s Cleveland Business Crain’s Cleveland Business is the premier source of business news across Northeast Ohio, producing a weekly, four-color newspaper as well as a robust website and broad collection of targeted e-newsletters. This manager must be a team player and strategic thinker, as well as a hands-on developer and content producer who will lead in the creation and execution of a wide variety of web/digital products and projects. Reports to Crain’s publisher as a member of the management team. He or she must be able to: Provide oversight and strategic direction for: • Design review, branding (in conjunction with the marketing manager), monetization and development of Crain’s website and various digital products, with the aim of boosting traffic and viewer loyalty while helping to increase sales • Development of “must-view” pages and new features within the broad array of Crain’s digital products • Launch and manage webinars, webcasts, virtual trade shows, podcasts, slide shows, video products, etc. Collaborate with: • News editors and reporters in the creation of new web features and stories as well as creative, value-enhanced repurposing of newspaper content • The marketing department in developing and implementing social media tools and other brand-building strategies and processes • The audience development manager to address digital user and print subscriber needs as well as help grow our print and

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Apply online by visiting, and clicking on the “Careers” button. Crain Communications Inc is an Equal Opportunity Employer.



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NOVEMBER 7 - 13, 2011





THEWEEK OCTOBER 31 - NOVEMBER 6 The big story:

The MetroHealth System announced plans to lay off 104 employees and to eliminate an additional 151 vacant positions in order to stave off projected operating losses over the next two years. The county-subsidized health system also will eliminate another 83 jobs over the next six months through “attrition, efficiency improvements and consolidation of operations.” Besides these steps, it recently announced the closure of a long-term care facility, resulting in the loss of 91 jobs. MetroHealth currently has 6,360 employees.

First step: The Ohio College of Podiatric Medicine, a private medical school in Independence, could be on the way to becoming an arm of Kent State University, according to a joint statement issued by the two institutions. However, it may not be an exclusive arrangement. Dr. David Nicolanti, the podiatric college’s executive vice president, said Kent State is one of a number of universities involved in talks about a possible merger. He said he couldn’t disclose the identities of the others because of confidentiality agreements. Closer to the target: Cuyahoga County Executive Ed FitzGerald trimmed another 33 employees from the county payroll. The move is a key element of a cost savings the administration estimates at $1.7 million a year in payroll and benefits expenses. This latest round of cuts, all from the fiscal office, brings to 434 the number of positions FitzGerald eliminated since Jan. 1. The county now has slightly less than 4,800 employees. The budget sets a target of 4,694 county workers in 2012.

Can’t win ’em all: The city of Cleveland says a partnership controlled by the Ferchill Group is behind on nearly $5 million in loan payments and taxes to the city and Cuyahoga County on the University Club on Euclid Avenue. The city sent its loan to collection and intends to terminate a tax abatement agreement with the property’s developer. Economic development director Tracey Nichols said Stager-Beckwith Associates Ltd. — the partnership created to buy and redevelop the 1866 former mansion — hasn’t created any of the 100 jobs it pledged in 2004 to create when it accepted the loan and tax abatement and agreed to invest $10 million in a renovation. No more discounts: A stampede of bargain hunters may supplant the annual “Running of the Brides” event at the Warrensville Heights Filene’s Basement store at a date to be announced later. Filene’s owner Syms Corp. filed for bankruptcy liquidation in Delaware. Syms said the schedule for store closings is not yet set but will continue through January. The Warrensville Heights Filene’s store is the only outlet in Ohio for the retailer that traces its roots to the famous Boston department store.

This and that: Specialty chemicals maker Lubrizol Corp. of Wickliffe agreed to buy a Spanish producer of specialty thermoplastic polyurethanes for an undisclosed price. Lubrizol said the acquisition of Merquinsa, based in Barcelona, will expand its Engineered Polymers business. … GrafTech International Ltd. bought Fiber Materials Inc., a privately held manufacturer of advanced carbon composite materials, for $14 million cash. Maine-based Fiber Materials’ composites are used in the aerospace and defense industries and in high-temperature insulation. The acquired company employs 160 and will become part of GrafTech’s Engineered Solutions business segment.


A neat idea, but please hold the anchovies ■ They’re playing right into Mark Zuckerberg’s hands. Pretty soon, you might be able to order a medium pineapple and olive pizza — with a side of breadsticks — without diverting your attention from Facebook. Onosys, a Cleveland company that develops online ordering systems for restaurants, has developed an early version of a system that makes it possible to order food from a restaurant’s Facebook page. The company aims to complete the software in a few months, said Onosys partner Stan Garber, adding that it will be incorporated into the next version of the company’s online ordering system. A demo on Onosys’ Facebook page lets users search for fake restaurant locations, analyze a fake menu and place fake orders. The finished software will let Onosys clients customize how the system looks on their Facebook pages. Plus, the system allows people to send a message to their Facebook friends whenever they place orders, which could serve as a marketing tool for restaurants, Mr. Garber said. And, of course, Facebook would like this sort of thing, too. It’s one less reason to use Google. — Chuck Soder

A flash mob with a purpose

A new effort called Cash Mobs is rallying people to show up at a to-be-announced business, spend money and socialize. This way, shoppers can impact the local economy more than they would alone, said Andrew Samtoy, Cash Mobs organizer and an associate at Painesville law firm Dworken & Bernstein. “We want people to show up and have an adventure and do something they wouldn’t normally do — give in to that sense of exploration,” Mr. Samtoy said. The effort, which has a Twitter and Facebook presence and a blog, www.cashmobs.wordpress .com, will share the general location of its monthly “cash mobs” a week before they occur, and the exact location the day of, Mr. Samtoy said. The first business owner the group contacted was quick to respond. “You’re going to bring me business?” Mr. Samtoy said the man responded. “Why would I not want to do this?” If you’re champing at the bit to be mobbed yourself, there are parameters. Your business must be locally owned, have products for men and women and give back to the community in some way. Parking also must be available. — Michelle Park

Another refinancing option emerges

■ You’re invited to “mob” a local business on Nov. 16, but it’s a secret which one.

■ Dollar Bank is casting what some might call a buoy for underwater borrowers. The bank in recent weeks began offering and advertising the opportunity for home-


BEST OF THE BLOGS Excerpts from recent blog entries on

Data thieves take low road in attacking companies

COMPANY: Aetna Plastics Corp., Cleveland THE OCCASION: Its 65th anniversary The company was founded by Paul Davis in 1946 as a distributor of plastic materials. Aetna Plastics now includes process piping systems and industrial fabrication as key business segments. Aetna Plastics’ growth and business diversification has been overseen for the past 36 years by Gary Davis (pictured above), who became president in 1975 after his father’s death. The company in the past decade has acquired two Northeast Ohio fabrication companies — Vanguard Plastics in 2004 and ProFab Manufacturing in 2007. Company officials say Aetna Plastics is one of the nation’s oldest existing plastics distributors and fabricators. It serves a broad range of national and international customers. Aetna Plastics has 34 employees. Paul Davis left a legacy beyond Aetna Plastics. He organized companies in the industry into what is now known as the International Association of Plastics Distributors. Its annual award to a distinguished contributor to the plastics distribution industry is called “The Paul Davis Award of Merit.” For information about the company, visit

■ The head of security for ATM maker Diebold Inc. of Green was quoted in a Wall Street Journal story about the threat companies now face from low-tech data attacks. The story led with the story of a cybersecurity expert, Chris Patten, who, as a test, called a large investment management firm to report that he was going through a divorce and was worried that his wife had set up an account under a false name. “And with that story — entirely plausible but in this case a lie — a customer service representative turned over customer account numbers and other details with a readiness that makes banks and other companies cringe,” The Journal said. As banks and other large companies spend large amounts of money on building firewalls and using complex technology to fortify their systems, “it is often their own employees who are letting identity thieves in the door,” according to The Journal. The largest banks “are expected to spend tens of billions of dollars on cyber security this year, an increase of as much as 15% over 2010, as they rush to comply with new rules that require them to strengthen customer-authentication procedures and beef up other fraud detection measures,” the newspaper reported. David Kennedy, the head of security at Diebold, told The Journal, “It’s getting harder for hackers to penetrate firewalls and other technological barriers, so they are reverting to lower-tech methods of attack.” He said the type of attack Mr. Patten simulated, known in security circles as “pretexting,” is one of the biggest threats Diebold faces today.

owners to use their savings and investments — or those of family — as additional collateral for refinancing home loans. Those with good credit who have been shut out from refinancing because they owe more on a mortgage than their home’s appraisal may pledge a CD, passbook or other savings account to refinance, said Lawrence Slenczka, Dollar Bank vice president. Dollar Bank rolled out the product because it has seen an influx of refinancing requests from qualified, but underwater, borrowers, Mr. Slenczka said. He said he’s unaware of other banks offering such an option, and a number of banks confirmed that they do not. However, some bank executives, including Allen S. Lencioni Sr., president and CEO of Geauga Savings Bank, say the concept is not new. Geauga Savings would be willing to consider such a program for a borrower, Mr. Lencioni said, but rates and other terms would be impacted. Of course, the principal risk to borrowers is tying up their liquidity, Mr. Lencioni noted. Curious as to what rates might entice a person to put up their home and their savings to snag lower rates? Dollar Bank’s 10-year rate is 3.49%, and 15-year rate is 3.99%, Mr. Slenczka said. As for feedback thus far, Mr. Slenczka said, “It’s really too soon to measure success.” — Michelle Park

Forest City to help add to bustle of Atlanta ■ Forest City Enterprises Inc. of Cleveland is going to play a role in developing a major transit hub in downtown Atlanta. The Atlanta Journal-Constitution reported that the Georgia Department of Transportation signed a $12.2 million contract for a master plan with a team of contractors experienced in large-scale developments. It’s led by Atlanta-based Cousins Properties and The Integral Group, along with Forest City. The contract team’s job is to create a central hub linking the Metropolitan Atlanta Regional Transit Authority, intercity buses and rail; to help buy land for the project; to identify public and private sources of financing; and to surround the hub with commercial development.

Talk about taking one on the Chin ■ A Chicago Tribune story offered a real mobrelated throwback, with a Cleveland tie. The newspaper said “reputed Outfit lieutenant” Rudy Fratto recently pleaded guilty to a bid-rigging scheme involving forklift contracts for two trade expositions at McCormick Place. Fratto, who is nicknamed “the Chin,” admitted he and a co-defendant “used confidential pricing information about competitors’ bids to undercut the competition and come in with the low bid,” according to The Tribune. A consultant for a Las Vegas exposition firm who owed $350,000 to organized-crime figures in Cleveland “leaked the confidential information on competitors’ bidding in late 2005 after Fratto agreed to intervene with the Ohio mobsters, prosecutors said,” the newspaper reported.



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