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Hospitals fear effect of fall off fiscal cliff

BioMotiv aims to help drugs cross valley of death Startup plans to license compounds trapped in the lab, solve ‘major issue’ in mediciners

Reimbursements from Medicare would drop By TIMOTHY MAGAW tmagaw@crain.com

By CHUCK SODER csoder@crain.com

Should the United States fall off the so-called “fiscal cliff,” Northeast Ohio’s health care providers would stomach millions of dollars in revenue cuts their leaders say could gnaw away at their already-slim operating margins. The inability of Congress and the White House to hash out a deal to tackle the nation’s ballooning deficit would trigger billions of dollars in spending cuts and tax hikes through a process known as sequestration, which would include an estimated $10.7 billion in cuts to the Medicare program next year. Given Northeast Ohio’s aging population, many local hospitals rely heavily on Medicare dollars to subsidize their operations. For instance, 43% of the Cleveland Clinic’s patient volume stems from Medicare patients. Plunging off the fiscal cliff could cost the Clinic — an enterprise with annual operating revenue of about $6 billion — as much as $22 million in reimbursements. The impending Medicare cuts account for a mere 2% reduction in the federal program’s spending in 2013. But because Medicare reimbursements

B

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See HOSPITALS Page 33

aiju Shah and his colleagues at BioMotiv LLC are heading into the pharmaceutical industry’s valley of death to rescue some of the many drugs that lie at the

bottom. If they succeed, they’ll prove there is indeed a safe way to cross the chasm. And they’ll have created a cadre of young drug development companies in Northeast Ohio, which today has only a small presence in the pharmaceutical business. See BIOMOTIV Page 11

Union concerns eased, manufacturers again eye Ohio By JAY MILLER jmiller@crain.com

More manufacturers are returning Northeast Ohio to their list of candidates when they start shopping for a place to build a plant or expand existing operations, as concerns ease about the state’s history of unionized labor and the perceived challenges organized work

forces can present for management. “Our business attraction people said one of the trends they are recognizing is that the union question is not coming up as often,” said Tom Waltermire, president of Team NEO, the regional business attraction nonprofit. He said most of the companies his staff talks to about bringing operations to Northeast Ohio are manufacturers.

INSIDE: Team NEO’s quarterly report shows overall employment likely won’t return to peak levels until the end of the decade. PAGE 33 Ohio is landing on the lists of more site selectors, Mr. Waltermire said, as manufacturing rebounds and finding skilled or trainable workers has become harder in many parts of the country. As a result,

companies that have been wary of Ohio because of its union reputation are returning here and to other unionized states with pools of machinists, welders, electricians, plant maintenance workers and others with related work experience. “I think it’s not coincidental those two things (the return to Ohio and the shortage of skilled labor) sit See UNION Page 33

0

NEWSPAPER

74470 83781

7

INSIDE

Case Western Reserve University law school rapidly increasing number of study abroad affiliations ■ Page 3 PLUS: MANUFACTURERS TAKE GREATER INTEREST IN MAX HAYES PLAN ■ & MORE

Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 45


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COMING NEXT WEEK

NOVEMBER 19 - 25, 2012

RECOVERY TAKES ITS TIME Compensation costs for private industry workers rose 2% from September 2011 to September 2012, a sign of economic recovery that nonetheless was slightly weaker than the 2.1% increase in compensation costs from September 2010 to September 2011. Among industries, compensation cost increases for the 12-month period ended September 2012 ranged from a high of 3.7% in information fields to just 0.8% for leisure and hospitality. Here’s a breakdown of some of the data, from the U.S. Bureau of Labor Statistics:

Who to Watch: Law Crain’s year-long “Who to Watch” series, which thus far has identified up-and-comers in the technology, finance and health care industries, continues with our list of some of the brightest in the legal field.

% change in compensation for 12 months ended Occupation Sept. 2012 Sept. 2011 Information

REGULAR FEATURES Best of the Blogs ..........35 Big Issue ........................8 Classified .....................34 Editorial .........................8 From the Publisher .........8

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Going Places ................10 List: Largest savings institutions ................32 Reporters’ Notebook.....35 Tax Liens........................7

3.7%

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BUSINESS IS THE HEART OF THE COMMUNITY. WE’LL HELP KEEP IT HEALTHY.

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Park Place growth plan gets needed boost Private equity firm buys 85% stake; cash will help finance acquisitions By CHUCK SODER csoder@crain.com

The new owner of Park Place Technologies LLC plans to use its firepower to accelerate the company’s already-rapid growth. WestView Capital Partners of Boston has bought an 85% stake in the Chagrin Falls-based company, which helps other businesses maintain their computer servers and net-

working equipment. The purchase price was not disclosed, but the private equity firm opened a term loan and a revolving line of credit totaling $35 million to help finance the acquisition and to support Park Place’s growth. Prior to the deal, John Warcaba and Dan Grajzl, who founded Park Place in 1991, owned almost all the company’s shares, said Park Place CEO Ed Kenty, who owned a small

piece. WestView first bought all of Park Place’s shares, then the three men and several key employees bought back 15% of the company. The deal didn’t include Park Place International, a smaller information technology consulting firm that spun off from Park Place Technologies in 2010. The larger company was looking for a suitor: Its revenue has been growing by about 25% each year —

INSIGHT

sales are expected to hit $42 million this year, up from $33 million last year — but its ambitions are even bigger, Mr. Kenty said. The company wants to make acquisitions, sell more services west of the Mississippi River and add about 75 employees next year, including 40 to 45 in Ohio, he said. WestView will help the company finance that expansion, Mr. Kenty said. “It’s going to give us a lot of fuel for growth,” he said. The private equity firm is looking

to buy other companies that provide computer hardware maintenance and to add them to Park Place, which employs about 240, including more than 100 in Northeast Ohio, Mr. Kenty said. Park Place has created a list of acquisition candidates and is in the process of vetting them. Park Place aims to buy at least one company by the end of 2013, Mr. Kenty said. And there are plenty of targets out there. “It’s a pretty fragmented business,” he noted. See GROWTH Page 6

Sterling Jewelers goes to court over rival’s ‘most brilliant diamond’ claim Suit alleges Zale’s ads for Fire jewelry are false By MICHELLE PARK mpark@crain.com

FILE PHOTO/RUGGERO FATICA

Case Western Reserve University School of Law dean Lawrence E. Mitchell

CWRU FOLLOWS THE LAW — OVERSEAS Legal student exchange agreements reflect broader international focus By MICHELLE PARK mpark@crain.com

STUDENT EXCHANGE GEOGRAPHY

V

Case Western Reserve University School of Law dean Lawrence E. Mitchell said the school anticipates having 19 student exchange agreements in place by the end of the year. Those agreements will include 11 schools in Asia, seven in Europe and one in Canada. In the spring, meanwhile, Mr. Mitchell will travel to India, where the top five law schools have agreed to sign on, he said.

ery soon, Dean Lawrence E. Mitchell’s passport will be so full, it’ll need new pages, and the law school he leads has a rapidly growing study abroad program to show for it. By Jan. 1, the number of schools with which Case Western Reserve University School of Law will have student exchange agreements should total 19, Mr. Mitchell said, up from four when he became dean in June 2011. Mr. Mitchell expects the school’s partnerships to total at least 24 and likely 27 by the end of the academic

year — and he thinks the latter number would surpass that of any other law school in the country. The exchange agreements allow Case Western Reserve to send up to two law students a year, for a semester each, to the foreign schools See LAW Page 12

Not all that glitters should be sold, at least not using what a local jewelry giant claims is false and misleading advertising by a competitor. Akron-based Sterling Jewelers Inc., a retailer that operates more than 1,300 stores under several brands that include Kay Jewelers and J.B. Robinson Jewelers, has sued rival Zale Corp., which operates about 1,870 stores under the Zales brand and others. Sterling says Zale’s claim that its Celebration Fire diamond is “the most brilliant diamond in the world” is false and misleading. “Fire diamonds are not the most brilliant in the world, and the research claimed to prove that Fire diamonds are the most brilliant in the world does not and cannot so prove,” Sterling alleges in the law-

suit, which was filed last Tuesday, Nov. 13, in U.S. District Court in Cleveland. The timing of the lawsuit isn’t shocking, according to two local attorneys. “You’re coming into the holiday season. People are going to be buying jewelry, making decisions based on advertisements,” noted Richik Sarkar, a litigation partner at Ulmer & Berne LLP in Cleveland who is not involved in the case. Indeed, Sterling’s suit specifically cites claims by Irving, Texas-based Zale in its holiday catalog that only its Fire diamonds shine “with more brilliance than any other diamond in the world, based on independent laboratory testing.” A major flaw of Zale’s advertisements, Sterling claims, is that it says its diamonds are superior to all other See DIAMOND Page 32

THE WEEK IN QUOTES “You’re really not able today to find willing commercial partners that are interested in technologies at the earliest stages of development.” — Baiju Shah, CEO, BioMotiv. Page One

“There’s a family precedent. You have to go outside and bring experience. ... It’s not a free handout here.” — Matt Hlavin, president, Thogus Products Co. Page F-9

“There’s going to be a big turnover in the next 10 years or so of skilled people in the trades, and we’re certainly going to see a fairly large need for new people.” — Tom Schumann, general manager, E.C. Kitzel & Sons Inc., a Cleveland-based maker of cutting tools. Page 7

“I’ve been shoveling coal on the train engine. … The city is billowing smoke, and it’s ready to blow. I’m really glad to be a part of it.” — Rocco Whalen, chef, owner, Fahrenheit, Rosie & Rocco’s, Rocco’s at The Q. Page F-18


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UA expanding private-sector R&D Akron engineering school’s rapid growth draws outside interest By TIMOTHY MAGAW tmagaw@crain.com

The University of Akron is engineering something innovative within its walls, and it appears to be garnering interest in the business community. The university last year inked a deal valued at about $5 million with Timken Co. in Canton to collaborate on research and development efforts, and it appears similar arrangements with other companies are in the

September 2012

September 2012

works. As part of their deal, Timken and the university jointly operate a 6,000-square-foot lab in its engineering school’s new $14.8 million, 39,000-square-foot research building. “These negotiations continue,” said George Haritos, dean of the university’s College of Engineering. “At some point, we can announce collaborations with other companies to occupy space in our building.” Dr. Haritos wouldn’t identify the companies involved in the discussions, but said their interest was piqued thanks to the explosive growth of the College of Engineering and the types of graduates it produces. The growth rate of the college’s research enterprise already led the university to construct a 10,000-square-foot addi-

May 2012

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“The rate of our growth was totally unpredicted, but I was pleasantly surprised.” – George Haritos, dean, University of Akron College of Engineering tion to the new research building, which is slated for completion this month. While the University of Akron saw a 3.1% decline in its overall enrollment, its College of Engineering reported an 8.5% increase in the number of students flocking to its programs. The engineering college’s enrollment nearly has doubled since 2004, which makes it the fourthfastest growing engineering program in the nation, according to data from the American Society for Engineering Education. The growth, according to university officials, is due in large part to the college’s growing list of partnerships with and investments from industrial and government partners, as well as an influx of co-op programs with companies. The latter pave the way for post-graduate careers for students. “The rate of our growth was totally unpredicted, but I was pleasantly surprised,” Dr. Haritos said. “I am very happy that we have so many more students coming to the College of Engineering to be educated because I think we do a very good job.”

Filling an R&D need May 2012

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The idea behind multimilliondollar partnerships such as the one the university signed with Timken is to allow manufacturers to use the university’s resources for their own research and development efforts and, ultimately, to share in any revenue generated by the discoveries. “There are so many uncertainties in almost everything facing traditional companies, and how do you plan five years down the road?” said Gary Doll, who joined the university last year as a professor after serving since 2006 as Timken’s chief technologist of tribology and next-generation materials. “The thing is that there’s still a need to do (research and development), and what better place to do that than at a university?” Power generation equipment producer Babcock & Wilcox Co., which operates a research center in Barberton, is holding internal discussions about how it might be able to form a partnership with the university in the same vein as Timken, according to Jim Tanzosh, engineering manager at Babcock & Wilcox Power Generation Group. “Our research facility has limited resources to do frankly everything we want,” Mr. Tanzosh said. “It would be convenient if we could collaborate with the university on some research programs and contribute some lab equipment, making it easier for them to accommodate our needs.” ■

Volume 33, Number 45 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136


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Where’s the U.S. economy headed?

NOVEMBER 19 - 25, 2012

Solon manufacturer may take on former Dots site Retailer vacated property in move to Glenwillow

Come hear an expert opinion at the ... 39th Annual David A. Bowers Economic Forecast Luncheon

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By STAN BULLARD sbullard@crain.com

After three years in darkness, the lights soon may go on again at the Solon building that women’s clothing retailer Dots Inc. vacated after constructing a larger complex in Glenwillow. GLT Products, a Solon-based manufacturer and fabricator of specialty insulation materials, is taking steps to benefit from a potential purchase of the former Dots property at 30801 Carter St. The city of Solon has approved a job creation tax credit for GLT if it adds 20 jobs on Carter Street, according to Peggy Weil Dorfman, the city’s economic development coordinator. GLT currently is in a building at 6810 Cochran Road and plans to remain there, she said. The Solon income tax incentive would give GLT a check for 30% of the city income tax workers would pay, or about $53,000 annually, depending on how many jobs it locates at the property, she said. GLT

said it would use the added building for additional operations, but she does not have details on its plans. “We’re happy they want to grow in Solon and make use of an available building here,” Mrs. Dorfman said. Land records do not show the property has changed hands, as it is still held by Rag Associates, the same name as when Dots occupied the nearly 96,000-square-foot property. Terry Coyne, an executive managing director at Newmark Grubb Knight Frank brokerage, has the listing to sell the building, which has an asking price of $2.7 million. Mr. Coyne declined comment on the status of the property. An email to GLT and two calls each to Steven Wake, the company’s CEO, and Marinko Milos, its chief financial officer, were not returned by Crain’s deadline last week. GLT, previously known as Great Lakes Textiles, dates from 1956 and sells thermal, mechanical and acoustical insulation products to a variety of industries worldwide, according to the GLT website. ■

Growth: Buyer shows strong tech background continued from PAGE 3

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Park Place also plans to open a regional operations center in Denver to complement the centers it has in Boston and in Auburn Township, a few miles east of its headquarters. In addition, Park Place plans to start hiring more field sales representatives, which should help the company win more customers in the western half of the United States, Mr. Kenty said. “We want to hit the western region with brick and mortar,” he said. Park Place a few years ago started beefing up its sales team in the Chagrin Falls area — an investment in personnel that Mr. Kenty said is a major force behind the company’s recent growth. Plus, as Park Place grows, it is becoming better known in its field, which has helped it win even more business, he said. “We’re more established and better branded,” he said. WestView’s website says the private equity firm typically invests from $5 million to $30 million in companies that show consistent growth, have a “sustainable advantage” in their industry and earn between $3 million and $20 million before interest, taxes, depreciation and amortization. The website also said WestView plays no day-to-day role in running its portfolio companies. Mr. Kenty noted that WestView has no plans to replace any members of the Park Place management team, a notion backed up by a statement WestView managing partner Rick Williams made in a news release on the firm’s website announcing the deal. “The Park Place management team has achieved impressive results and they represent the type

of proven managers with whom WestView looks to partner,” Mr. Williams said. He did not respond to an email and a phone message left with an assistant.

The right chemistry WestView was one of about 15 private equity firms that bid on Park Place, Mr. Kenty said. Among the firms that made the final list of candidates, bid prices varied little, he said. WestView stood out because of its experience investing in technology companies, he said. Plus, its management team seemed to be on Park Place’s wavelength. “There was a significant amount of chemistry there,” Mr. Kenty said. The overall market for computer hardware maintenance services is flat, but independent companies are starting to win more business from original equipment manufacturers and the maintenance companies with which they work, said Christine Tenneson, a research director for information technology research firm Gartner Inc. of Stamford, Conn. “We are seeing customers of all sizes looking at having a thirdparty strategy,” said Ms. Tenneson, who focuses on the technology outsourcing and IT services sectors. A few other larger independent hardware maintenance companies have been acquired over the last few years, Ms. Tenneson said. And larger service providers are buying smaller competitors, which can help them add customers, serve new geographic areas and gain expertise needed to maintain different products. “There’s certainly some consolidation going on,” she said. ■


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Manufacturers widen role in Max Hayes plan Delay of new school allows representatives from trades taught there to get more involved By GINGER CHRIST gchrist@crain.com

In three years, the new Max Hayes High School will open its doors to 800 students if all goes as planned — though all hasn’t gone as planned in the past. The school, initially expected to open in 2013, already has been delayed two years because of necessary infrastructure changes at its new site on West 65th Street. The 165,000-square-foot building will be a showcase of what training for the manufacturing of today — highly technical manufacturing — should look like, according to its planners, which include members of the education and manufacturing communities. Manufacturing representatives first became involved with the project during the creation of the Take it to the Max strategic plan, which was devised in 2010 by consultants from San Diego-based Big Picture Learning and New Orleans-based Concordia. Part of the object back then was to determine the goals for the new school. Now, industry leaders are becoming even more active in the future of the new Max Hayes. Tom Schumann, general manager of E.C. Kitzel & Sons Inc., a Cleveland-based manufacturer of cutting tools, is chairman of an industryladen advisory board being formed to help steer the direction of the technical school. The board, known as the Friends of Max Hayes, will be comprised of representatives from each of the trades taught at Max Hayes who will help inform the Cleveland Metropolitan School District of the needs of industry in Northeast Ohio. The board won’t have any governing powers over the school, but instead will advise the district on curriculum matters. The creation of the Friends of Max Hayes will formalize a partnership between the school and industry that steadily has been strengthening, according to Mr. Schumann, who also is the former president of WIRENet, a Cleveland-based manufacturing advocacy group that supports Max Hayes. “I think if you talk to most manufacturers, you’re going to find a lot of them have very similar issues,” such as problems created by an aging work force and a negative perception about manufacturing, Mr. Schumann said. “There’s going to be a big turnover in the next 10 years or so of skilled people in the trades, and we’re certainly going to see a fairly large need for new people,” he said. Mr. Schumann said he hopes to help Max Hayes educate students to meet the needs of companies such as E.C. Kitzel, which deals with precision machining — work that involves mathematical and computer skills. “In my shop, we actually have more computers than we have people,” Mr. Schumann said.

Out with the old … The new Max Hayes, a $40 million

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school at 2211 W. 65th St., will allow for more technology-based learning, according to Phillip Schwenk, who is principal of the current Max Hayes High School at Detroit Avenue and West 46th Street. The existing school — built in the 1950s — can’t support widespread Wi-Fi and isn’t set up for newer technology, he said. But, even before the new school opens in 2015, Mr. Schwenk is working to change what he can at Max Hayes to better prepare students to meet the needs of area manufacturers. He’s encouraging teachers to use technology whenever they can; to that end, teachers this school year received laptops for the first time. Mr. Schwenk also is working to change the culture of learning. He’s promoting project-based learning, which involves students working collaboratively to solve real-world problems rather than learning from textbooks. And he’s encouraging more collaboration with the school’s more than 100 manufacturing partners, which include welding equipment producer Lincoln Electric, steelmaker ArcelorMittal and diversified manufacturer Eaton Corp., among others. Through these changes — and the allure of a new school — Mr. Schwenk plans to boost the enrollment at the new Max Hayes to its target 800 students — a 33% increase from its current 600-student body. The hardest part will be in changing the perception of manufacturing in the minds of students and parents in order to convince them there’s a future for students in highly technical manufacturing. “Manufacturing is not sexy,” said Mr. Schwenk, who took the helm of Max Hayes last year.

Cleaning up perceptions Many people still see Max Hayes as a trade school and not as a viable option for students looking to secure long-term careers, said Joe Archacki, president of Mainstreet Growth, an economic development and marketing organization in Avon Lake that is performing marketing services for Max Hayes. To combat that perception, Max Hayes plans to take parents on tours of manufacturing facilities to show them what the manufacturing of today looks like and how it differs from the shops of old, Mr. Schwenk said. Ashley Parker, media relations manager of the Association for Career and Technical Education, a national education association based in Baltimore, said many career tech schools are working with industry to encourage student interest in fields such as manufacturing and to change the dirty-factory mentality. “These models — which typically involve business and industry leaders in the schools as mentors or guest speakers, internship programs with area businesses, field trips to local business and industry sites to see the facilities and work being done, etc. — are a great way for students to see the real-life possibilities for careers,” Ms. Parker said. ■

Type: Employer’s withholding Amount: $9,832

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 James B. Solon, D.D.S. 4212 state Route 306, Willoughby ID: 34-1743463 Date filed: Sept. 11, 2012 Type: Employer’s withholding Amount: $16,767 Anthony Group Inc. Dapper Dans 10703 W. Pleasant Valley Road, Parma ID: 20-1291812 Date filed: Sept. 11, 2012 Type: Employer’s withholding, unemployment Amount: $16,489 Steel Shearing Inc. P.O. Box 44342, Cleveland ID: 34-1373143 Date filed: Sept. 7, 2012 Type: Employer’s withholding Amount: $16,251

7

C & S Door Inc. 5639 Porter Road, North Olmsted ID: 20-4000968 Date filed: Sept. 26, 2012 Type: Employer’s withholding, corporate income Amount: $16,121 Renaissance Center for Comprehensive and Cosmetic Dentistry 2211 Crocker Road, Suite 110, Westlake ID: 01-0688742 Date filed: Sept. 6, 2012 Type: Employer’s withholding, corporate income Amount: $16,015 Perfection Car Repair Inc. 2101 Saint Clair Ave. NE, Cleveland ID: 34-1326173 Date filed: Sept. 11, 2012 Type: Employer’s withholding, corp. income Amount: $13,353 GTC Auto Inc. Chernows Automotive Clinic 17050 Broadway Ave., Maple Heights ID: 20-0540934 Date filed: Sept. 7, 2012 Type: Employer’s withholding Amount: $11,505 Imperial Glass & Door Co. 6517 Bessemer Ave., Cleveland ID: 34-0858987 Date filed: Sept. 26, 2012

Doona Enterprises LLC Stone Mad 1306 W. 65th St., Cleveland ID: 32-0233883 Date filed: Sept. 20, 2012 Type: Employer’s withholding Amount: $9,050 Complete Home Health Services Inc. 25000 Euclid Ave., Suite 206, Euclid ID: 34-1965686 Date filed: Sept. 11, 2012 Type: Employer’s withholding, corporate income Amount: $8,617 C & S Door Inc. 5639 Porter Road, North Olmsted ID: 20-4000968 Date filed: Sept 27, 2012 Type: Employer’s withholding Amount: $8,010 Hal-Mark Associates Inc. ETs Travel 9697 Brookpark Road, Parma ID: 34-1770173 Date filed: Sept. 20, 2012 Type: Employer’s withholding, unemployment Amount: $7,810 Grumar Acquisition Co. McDonald Roofing Co. 1463 Warrensville Center Road, South Euclid ID: 34-1771404 Date filed: Sept. 26, 2012 Type: Employer’s withholding Amount: $7,119


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NOVEMBER 19 - 25, 2012

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Don’t blow it

O

hio voters were right to reject Issue 2, a flawed measure to change the redistricting process in Ohio. However, the 63%-37% vote shouldn’t be viewed as an endorsement of the status quo. Soon after the next session of the Legislature convenes, state lawmakers should change the method of drawing congressional and legislative districts so that the redistricting joke of 2010 isn’t repeated in 2020. The anger that brought Issue 2 before voters was justified. Republican control of key statewide offices and the Legislature produced redistricting maps in Ohio so skewed that the outcome of this month’s congressional and Ohio Senate races essentially was determined before a single vote was cast. The lopsided victories that occurred in nearly every one of Ohio’s 16 congressional contests should be an affront to anyone who ever uttered the phrase, “Every vote counts.” The fix was in as Republicans won 12 House seats and Democrats cruised to victory in the other four districts. The closest race was in the redrawn 16th Congressional District, where two current House members, Republican Jim Renacci and Democrat Betty Sutton, squared off. Mr. Renacci won by nearly five percentage points. In only one other district was the margin of victory less than 10 points. The margin exceeded 20 points in eight contested races. Democrat Marcia Fudge and Republican House Speaker John Boehner ran unopposed. The deck also was stacked in the voting for 18 expiring seats in the Ohio Senate. Republicans ran unopposed for five seats. They also won another 10 seats, with the margin of victory in nine of those elections exceeding 15 percentage points. Just three seats were won by Democrats. Hence the push for Issue 2, which would have taken the redistricting process out of the hands of various state officeholders and legislative leaders and given it to an appointed 12-member citizens committee. The concept sounds good. However, as the Ohio State Bar Association noted in opposing Issue 2, the committee selection process would have involved members of the judiciary. Consequently, it would have subjected judges — who are elected — to pressure from special interest groups that wanted to see their preferred nominees included on the citizens committee. With the defeat of Issue 2, legislators have been given yet another chance to bring greater fairness to the job of redrawing districts every 10 years. They shouldn’t blow this opportunity. We still favor a plan first proposed by Secretary of State Jon Husted when he was a senator. Under that plan, an Apportionment Board consisting of seven members (the governor, secretary of state, auditor, House speaker, Senate president and minority leaders in the House and Senate) would need a supermajority of five members to move a redistricting plan forward. And at least two of those “yes” votes would need to come from members of the minority party. Unless they want to risk losing control of the redistricting process entirely, legislators who dodged the Issue 2 bullet should act quickly to make it better.

FROM THE PUBLISHER

Set aside dogma to avoid fiscal cliff

I

really thought the election discusBut our elected representatives are sion would have died down by now, being held captive by ideology and but it appears — at least early on — extremism. The GOP, whose agenda has that the next term of Barack Obama’s been skewed by the radically conservapresidency could begin on the same tive Tea Party faction, fights every new rocky ground on which it teetered during source of revenue. The liberal wing of the the fall campaign. Democratic Party will fight ’til the end to And we should all hope and pray that avoid cutting entitlement programs. this partisan rancor dies down so that Nowhere in that discussion are the the two sides can get at the hard moderates from each party, the work of making our country more BRIAN people who thoughtfully confinancially stable. The markets TUCKER sider the issues and candidates want it; the majority of Ameriand cast their votes according cans want it. Now we must conto intellect rather than party vince the two parties in this dogma. You know, the people squabble that they want it, too. like Steve LaTourette and Most people seem to agree Olympia Snowe, who’ve quit that sequestration — the acrosstheir Washington lives because the-board budget cuts mandated they’re sick of the fighting. because the Republicans and ***** Democrats haven’t been able to comTHAT FRONT-PAGE HEADLINE in promise — is a bad idea. And it stands to last Tuesday’s Wall Street Journal was reason that a thoughtful approach to cut meaningful to thousands of Ohioans federal spending while also raising revtaking part in, or watching, the early enue is the best way to avoid sequestramega-investments in gas and oil explotion (forever to be known by historians ration along our state’s portion of the as “the fiscal cliff,’ as Fed chairman Ben Utica Shale. It read: “U.S. Redraws World Bernanke dubbed it). Oil Map.”

But it was the second, smaller headline that hit with greater force: “Shale Boom Puts America on Track to Surpass Saudi Arabia in Production by 2020.” Let that sink in for a moment. Many Americans can remember the gasoline rationing and other problems foisted on the industrial world by the Organization of Petroleum Exporting Countries, a price-fixing cartel that has managed the spigot on much of the world’s oil. Improving technology needed to free the massive deposits of shale gas and oil is changing everything, and Ohio is at the heart of it all. Which is precisely why you will receive — two weeks from now — our first magazine supplement dedicated to this booming industry. We plan four more in 2013. It will be distributed to more than 120,000 business readers: every subscriber of Crain’s Cleveland Business as well as to readers of three other Crain publications — Pensions & Investments, Plastics News and Investment News in eight states with major shale industries. This is a game-changer, folks, and we want to be telling you that story. ■

THE BIG ISSUE If you were trying to lure companies to relocate in downtown Cleveland, what amenity would you promote the most?

AINSLEE JOHNSON

AMY CLUM HOLBROOK

RICHARD MANDEL

GRANT RELIC

Cleveland

Cleveland Heights

Shaker Heights

Brunswick

That’s tough because downtown is so underutilized. If you can get a couple of companies here, more will follow because there’s nothing that’s really lacking.

The office space in the downtown area has actually gotten to be both better aesthetically and better by price.

Accessibility. We’re right near a nexus of the rail system, our bus lines run well … (and) there’s plenty of parking. Freeway lines merge here. It’s a good and functional downtown.

Affordable rent. Obviously, in these economic times, expenses are pretty important.

➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.


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Elyria financial services outfit eyeing Westlake to consolidate 375 employees Equity Trust, city haggle over tax incentives By STAN BULLARD sbullard@crain.com

Equity Trust Co., an Elyria-based custodian of self-directed retirement plans, is pursuing incentives to move 375 workers to a building in Westlake that investors headed by Richard Desich, Equity’s founder and chairman, recently acquired from the Cleveland Clinic. Westlake Mayor Dennis Clough confirmed his staff is negotiating an incentive package with Equity Trust. The incentives would include property tax abatement and an income tax measure that would allow Equity Trust to receive city funds for a percentage of income taxes paid by the employees the company moves to the building at 30033 Crocker Road. If the incentive package satisfies Equity Trust, it would move a $14 million payroll to the suburb by next fall. The company also plans to invest $11.3 million in improvements to the 30-year-old building, which the Clinic had operated as its Westlake Family Health Center. The city is preparing to submit a package to Equity Trust next week, Mayor Clough said. Dickering over terms of the package clearly is under way. In its application for incentives, Equity Trust asks for a 75% reduction in the site’s property taxes for 10 years. The city has proposed a 50% reduction of property taxes paid on improvements to the building for the same term. Westlake and Equity Trust officials have made the rounds at cities that would be losing jobs to Westlake in the move. Rebecca Corrigan, executive director of the Berea Community Development Corp., said she is working with Berea Mayor Cyril Kleem on a request for income tax-sharing with Westlake to soften the blow. To ready a request for Westlake, Ms. Corrigan said, Berea has obtained copies of Summit County’s taxsharing agreement for municipalities and another between Twinsburg and Solon it intends to use to craft its proposal. Mrs. Corrigan said Berea hoped to convince Equity Trust to build within its borders. However, the city

“It’s a prime spot for retail, so obviously there are a few opportunities.” – Jeff Desich, CEO, Equity Trust Co. found the company did not want to spend money for a new building and that its principal already had acquired the building in Westlake. “With about 100 employees here, Equity Trust is one of the top 10 income-tax payers in Berea,” Mrs. Corrigan said. “We’ll not only lose the jobs but be left with their building at Bagley Road and Baker Street, which will be 80% vacant after they leave.” Elyria Mayor Holly Brinda said she was “obviously disappointed” after hearing about Equity Trust’s plans to leave a 20,000-square-foot building in Elyria that Mr. Desich owns in Great Lakes Technology Park, which Lorain County Community College developed. The park was created as part of the college’s efforts to help growing companies and to diversify Elyria’s economy. “It is so important for our community to grow these opportunities outside manufacturing,” Mayor Brinda said. “We’re trying to grow new manufacturing firms but also financial services firms. Keeping a financial services organization is important to our current and future vitality.” Mayor Brinda said her last word to Equity Trust was that she hoped it would give Elyria a look when it needs space again. She said she does not have a head count for Equity Trust’s Elyria headquarters at 225 Burns Road.

Coy CEO Jeff Desich, Equity Trust’s CEO, said in a Nov. 9 interview that Equity Trust’s consolidation of operations in the Westlake building is one alternative the partnership owning the property might consider for the structure. “It’s a prime spot for retail, so obviously there are a few opportunities for that site,” said Mr. Desich, who is the son of founder Richard Desich. Equity Trust is pursuing a new location in order to consolidate its Ohio operations and to provide

room for growth. Its tax abatement application indicates some jobs, perhaps as many as 75, might move to Westlake from Waco, Texas, where Equity Trust recently acquired a similar company. “There is the possibility some jobs may be relocated from Texas, but our focus is on consolidating our Ohio operations and providing for organic growth,” Mr. Desich said. He also said it intends to maintain its Waco operations, where it employs about 120. Asked if Westlake’s offer of a 50% tax abatement on building improvements instead of 75% it sought for the whole property is acceptable, Mr. Desich said, “We don’t have a position on that right now.”

Poaching? No, mayor says Both Westlake and Berea have signed Cuyahoga County’s year-old business development and antipoaching agreement, which uses county economic development funds as a carrot to discourage communities getting into bidding wars for companies. Mayor Clough said Westlake did not poach the company; he said Equity Trust informed the city of its desire to consolidate in Westlake. He said he worries the company might yet consider relocating outside the region, perhaps to Texas, much less move to Westlake from Berea and Elyria. “There is no commitment for them to move here,” Mayor Clough said. He noted he would love to have the 71,000-square-foot building on Crocker Road occupied again. His city lost income tax revenues after Cleveland Clinic moved its family health center employees to a new building in Avon. The Clinic on Oct. 15 sold the building to 30033 Crocker LLC, a Florida corporation which has Richard Desich as its trustee, for $3.5 million, according to Cuyahoga County land records. Mrs. Corrigan said Westlake city officials have said the building still might be put to use as a multitenant building or could house another company, but she wonders, given the ownership, if that is really the case. Equity Trust is best known for providing investors assistance in handling self-directed IRAs, particularly if they involve real estate investments. Its website says it has more than 130,000 clients in 50 states. ■

Rance Crain newest member of ad HOF Rance Crain, Crain Communications Inc. president and editor-in-chief of Advertising Age, Crain’s Chicago Business, Crain’s New York Business and TelevisionWeek.com, is part of the American Advertising Federation’s 64th class to be Crain inducted into the Advertising Hall of Fame. Mr. Crain joins his father, G. D. Crain, mother, Gertrude Crain, and Sid Bernstein, the former editor, editorial director and publisher of Advertising Age, as hall of fame inductees. Mr. Crain’s career began as a reporter for Advertising Age’s Wash-

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ington bureau, and he later moved to the publication’s New York and Chicago offices. He was named senior editor of the ad industry’s leading publication in 1965 and later added titles of Crain editorial director in 1971 and company president in 1973. In his continued role as editor-inchief of Advertising Age, he writes a bi-weekly column. Mr. Crain founded four of the company’s influential titles — Pensions & Investments, Crain’s Chicago Business, Crain’s New York Business and Electronic Media, now published as tvweek.com. He is a

graduate of Northwestern University’s Medill School of Journalism and a charter member of Medill’s Hall of Achievement. “Being inducted into the Advertising Hall of Fame is a tremendously exclusive honor reserved for highly accomplished individuals who have had a profound impact on our industry and the world around them,” said Laurence Boschetto, chairman of the Advertising Hall of Fame. The official induction ceremonies and gala dinner will be held in late April in the grand ballroom of New York’s Waldorf Astoria hotel. Other inductees on that evening include Nike founder Phil Knight. ■

9

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11/16/2012

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NOVEMBER 19 - 25, 2012

GOING PLACES JOB CHANGES

Martin to partner; John P. Corrigan III to senior associate.

AUTOMOTIVE

WELLS FARGO ADVISORS: Susan E. Paolo to financial adviser.

MAYFIELD COLLISION CENTERS: Scott Kimmel to customer care manager, South Euclid.

FINANCE FEDERAL RESERVE BANK OF CLEVELAND: Jerrold Newlon to vice president, large banking organization supervision. LORAIN NATIONAL BANK: George Nassif to vice president, relationship manager, Commercial Banking Group; Jim McKee to mortgage loan officer.

FINANCIAL SERVICE

HEALTH CARE METROHEALTH: Robin Blass to executive director of development; Lynn Effron to senior development officer; Julie Jacono to director of development; Dr. Ronnie Fass to director of gastroenterology and hepatology and head, Esophageal and Swallowing Center; Dr. Jennifer Bailit to executive director, Women’s and Children’s Patient Care Unit.

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MANUFACTURING FAIRMOUNT MINERALS LTD.: Daniel G. Schmidt II to director, total rewards and risk. HYDROTEX: Jerry Duber to division partner, Northeast Ohio.

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CRAIN’S CLEVELAND BUSINESS

11

BioMotiv: Investors typically leery of taking on early stage drugs continued from PAGE 1

They’ve got a total of $21 million in their backpacks and hope to raise another $79 million for their endeavors. Their board members are their guides. Their business plan is the map that supposedly charts the path through the valley — a path that many other drug development companies have failed to find. BioMotiv aims to reduce the cost of drug development by licensing the rights to dozens of drugs developed by research institutions all over the world, then developing and testing the technology to the point where other investors are willing to buy the rights. If that formula works, it will help solve “a major issue in American medicine,” said Mr. Shah, who was president of BioEnterprise Corp., a nonprofit biomedical business accelerator in Cleveland, before becoming CEO of BioMotiv in September. Today, many new drugs are developed in laboratories run by universities, disease foundations and other research institutions. Sometimes those institutions will test the drugs in animals, but that’s typically as far as they’ll go. In the past, if a drug appeared promising, investors and pharmaceutical companies would pick up where the institutions left off: They’d finance human trials and push the drugs through the lengthy process of getting regulatory approval. However, over the last 10 years or so, investors and pharmaceutical companies have become more reluctant to fill that gap, Mr. Shah said. Instead, they’ve focused on putting existing drugs to new uses and investing in the few companies that can scrap together financing to move a drug through early human trials. “You’re really not able today to find willing commercial partners that are interested in technologies at the earliest stages of development,” Mr. Shah said.

Putting money to work BioMotiv aims to change that situation. Incorporated in September, the company in Shaker Heights serves as the for-profit arm of the Harrington Project for Discovery & Development, which looks to raise a total of $250 million that would be used to help researchers develop drugs and get them to the point where they can be handed off to investors. The initiative includes the nonprofit University Hospitals Harrington Discovery Institute, which plans to award grants to support the development of new drugs and to recruit physician-scientists to UH Case Medical Center. The nonprofit was seeded by a $50 million donation from the Harrington family, which formerly owned Edgepark Medical Supplies of Twinsburg. Likewise, BioMotiv raised its $21 million from UH and the Harrington family. BioMotiv is starting to put the money to work: The six-employee company has signed an exclusive option that gives it first rights to commercialize a cancer drug developed by an institution in New York state. BioMotiv also is negotiating to license the rights to another cancer drug from an institution in the western United States and an antiinflammatory technology created by an institution in the southern part of the country, Mr. Shah said,

declining to be more specific. BioMotiv’s plan is to take the drugs through Phase I clinical trials and possibly the first part of Phase II trials. The company’s goal is to generate enough data on the effectiveness of a drug to attract investors, who then would pay BioMotiv for the right to commercialize the therapies. Success is by no means guaranteed, as the valley of death is deep. But Mr. Shah says three factors will help BioMotiv make it to the other side: ■ Whereas startups often are created to commercialize just one drug, BioMotiv plans to license the rights to many drugs. That way, if one project is failing, the company can abandon it and focus its resources on another. Though BioMotiv will form subsidiaries for each of its drug candidates, those companies will employ only one or two people at first. BioMotiv will provide some management and back office functions, and early stage development and testing would be outsourced to the research institution or to contractors. “You don’t need full management teams around every product or project,” Mr. Shah said. ■ BioMotiv plans to get a lot more work out of the original team that invented the drug than a typical investor would, Mr. Shah said. The company will be able to do so because it plans to provide the research institution with better licensing terms than other investors would, he said. Plus, BioMotiv plans to make sure that its work complements the mission of the institution. ■ The company plans to sell the technologies earlier than a typical investor would. It wouldn’t need to finance expensive late-stage clinical trials or wait until a product hits the market to make money.

Taking their shots It sounds like a “reasonable” idea, according to Dr. Jon LeCroy, managing director and senior analyst at MKM Partners LLC of Stamford, Conn. Dr. LeCroy, who covers the pharmaceutical industry, noted that it’s often possible to get a drug into early clinical trials with a few million dollars, so the $21 million BioMotiv already has in hand could go a long way. Almost all drugs that make it into animal tests, which are called preclinical trials, still end up failing. Creating a company that licenses lots of them could be a good way to manage that risk, Dr. LeCroy said. “If every drug in preclinical (trials) has a 1% chance of success, it’s really shots on goal,” he said. Over the last few years there’s been an increase in the number of companies formed and projects created that aim to bridge the valley of death, said Melissa Stevens, deputy executive director of FasterCures, a Washington, D.C.-based nonprofit that works to improve medical research and speed the development of new therapies. The need for a solution is clear, Ms. Stevens said, noting that investors have been scared away from early stage drugs because it can cost more than $1 billion and take more than 15 years to bring a drug to market. Ms. Stevens said the BioMotiv model appears to be a capital-efficient, time-efficient way

FILE PHOTO/JANET CENTURY

BioMotiv CEO Baiju Shah to bridge the gap. “There’s probably not a silver bullet, but we have to do something,” she said.

Pieces of the pipeline BioMotiv plans to license the rights to about a dozen drugs per year, Mr. Shah said. The subsidiaries formed to take them into clinical trials all would be based in North-

east Ohio. Those that progress likely would grow to five or six employees before being bought out by investors or a pharmaceutical company. There’s no guarantee that the acquired subsidiary would stay in the region. Because they still would be small companies, it might not be hard for the new owners to move them to one of the major centers of

the U.S. pharmaceutical industry, which include New Jersey, Philadelphia, Boston and the San Francisco Bay area. Though there are relatively few people in Northeast Ohio with backgrounds in the pharmaceutical industry, the region has built a base of people who have experience launching other biomedical companies, which could help the region hold on to some of the new drug companies, Mr. Shah said. The region also has research capabilities related to drug development, he noted. Plus, local economic development groups and the state of Ohio could help convince the new owners to make the drugs in Ohio once they hit the market, perhaps with the help of incentives, he said. If the region can hold on to a few successful subsidiaries, it can start to build a base of entrepreneurs and managers with industry experience, Mr. Shah said. Then they could start more companies. And that’s how Northeast Ohio finally can start building a more substantial pharmaceutical industry, he said. “We haven’t been able to put the pieces together,” he said. “This hopefully gives us the opportunity to create that pipeline.” ■


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Law: Skeptics raise concerns over students’ costs, time away continued from PAGE 3

and to send faculty, too, as the opportunity arises. The foreign schools are welcome to do the same. Theoretically, if the exchange programs materialize and fill up, the school ought to be sending 50some students abroad per year, Mr. Mitchell said. In comparison, Case Western Reserve’s law school sent 11 students to five foreign law schools this year. “We’re globalizing this law school really fast, which is really good for Cleveland, too, I think,” Mr. Mitchell said. “It’s really good press for Cleveland abroad. “It would be very hard to be an effective lawyer in the 21st century in almost any practice of law without encountering some dimension of international practice, whether that is international law, or clients with an international problem, or having to deal with a foreign lawyer in some context,” Mr. Mitchell added. “If our students don’t have the exposure and cultural competence to work in this environment, they’re going to be behind.” The law school’s focus complements the university’s strategic plan to enhance its international character.

The near-term goal, Mr. Mitchell said, is to have enough partnerships so that any student who wants to can study aboard. The longer-term hope is to have enough agreements that Mr. Mitchell can ask the faculty to require a semester abroad of students, he said.

India on the map By the end of 2011, Case Western Reserve’s law school should have exchange agreements executed with 11 schools in Asia, seven in Europe and one in Canada. And, in the spring, Mr. Mitchell will travel to India, where the top five law schools have agreed to sign on, he said. Susan Prager, executive director and CEO of The Association of American Law Schools, said she’s heard anecdotally that a number of schools are expanding or initiating study abroad programs. The real question, though, according to an official with the American Bar Association, which accredits law schools, is how much actual exchange of students and faculty will occur. “It is a lot of formal agreements to sign, but what I don’t know is whether anybody is actually going,” Barry Currier, interim consultant

on legal education for the ABA, said of Case Western Reserve’s growing number of exchange agreements. Mr. Mitchell doesn’t anticipate full participation right away. But as those who participate share their experiences, the program will grow, he predicts. “This is a new program, and relatively unusual in legal education,” he said. “All new things take time to flower. “It is also my expectation that, as we already have, we will begin to attract more students who want to participate in this program, and I think that’s a very good thing for our law school,” Mr. Mitchell said.

Cost vs. benefit The ABA’s Mr. Currier agrees it’s helpful for aspiring lawyers to experience other cultures and legal systems, but said the benefits must be weighed against the added costs for students at a time “when legal education is not cheap most places.” Concerns about increasing students’ costs also were raised by officials with the University of Akron School of Law and Cleveland-Marshall College of Law. The University of Akron’s law school doesn’t have an active study abroad program at present, and Cleveland-Marshall

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Cleveland-Marshall College of Law dean Craig M. Boise suspended its study abroad in Russia last summer because student participation was lacking. “We’re operating in a period of contracted resources, so we have to be careful about the way that we’re using those resources,” said Craig M. Boise, dean of Cleveland-Marshall. And, he noted, almost every law school advertises and offers study abroad programs to other schools’ students — for a price. “There’s no shortage of opportunities for students to go abroad,” Mr. Boise said. “Our concern is how popular are study abroad programs going to be when legal educations are so expensive and there are fewer jobs available? I think you’re going to see a decline in demand for study abroad programs.” Case Western Reserve students aren’t required to add to their debt, though, Mr. Mitchell said. Participation is an option, not a requirement. “True, students have to buy a

plane ticket, and arrange room and board, but the latter typically are arranged with the help of administrators at our partner schools and can often be less expensive than in Cleveland,” he said. “So, there is no meaningful additional cost short term, and, we believe, a significant advantage over the longer term.” Already, he said, Case Western Reserve’s law school is seeing a return on its investment. It includes an increase in the quality of its foreign graduate students and more requests from students from other law schools to become visiting students at — and pay tuition to — Case Western Reserve to take advantage of the program. Also, “there’s reputational ROI,” Mr. Mitchell said. “We are a well-known quantity among the top schools in China. That means a lot,” he said. “That’s kind of spreading our name and our reputation around the world.” ■


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MARK ABOOD Senior vice president Chartwell Group ◆ 39

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ark Abood stores three massive floodlights in his Tower at Erieview office that he uses to show properties to prospective buyers. The lights — necessary because the properties’ electricity usually is turned off — are a hallmark of his niche in commercial real estate: serving as a court-appointed receiver for distressed buildings. Today that niche is paying off; Mr. Abood received the NAIOP Northern Ohio trade group’s award as investment broker of the year in 2011. However, that outcome was less certain in 2007, when Mr. Abood convinced Chartwell Group to bring him on board because he believed his background as a lawyer would

allow the firm to capitalize on a storm brewing in commercial real estate. That storm proved larger than anyone could have guessed following the financial collapse of 2008 and ensuing real estate downturn. “I was never as scared in my life as I was at the beginning at Chartwell,” he said. “It was not a good time to go into commercial real estate, for traditional property sales and leasing action were beginning to dry up.” Slowly, his efforts to meet lawyers and judges to win receiverships produced results. He became Chartwell’s top-producing agent for each of the last two years. David Wagner, a Chartwell principal, said Mr. Abood’s practice allowed him to use the brokerage’s assets to full effect, including its auction division. “He’s sold distressed office buildings, mobile home parks, yacht club resorts, golf courses and many one-of-a kind assets,” Mr. Wagner said.

There is a balancing act Mr. Abood must perform in serving as a receiver. “Your goal is to produce the best result for the property for the court,” he said. “I don’t judge people. I don’t think you are a bad person if you are a defaulted borrower. But I also have to show people they can’t take advantage of me.” Mr. Abood grew up in Cleveland Heights and attended Chanel High School, where his father was a long-serving faculty member and principal. He played football at Chanel and both football and baseball for two years at John Carroll University, until he dumped athletics to hike his grades and gain admission to Cleveland State University’s Cleveland-Marshall College of Law. He has been a solo practitioner and served as president of Solon-based Anripar Group, a commercial real estate developer. Today, he puts his athletic skill to work serving as a coach for his two

been realized through heightened engagement and outreach efforts. Ms. Bell is planning for another $100,000 budget increase in 2013.

“When I took over, we made some wonderful and drastic changes,” Ms. Bell said. “We are stepping up our game.” She played checkers with the board of directors, repositioning committee members and even bringing in new ones whose skills aligned with their posts. The nonprofit under Ms. Bell’s stewardship diversified its revenue streams beyond its steady supporters — the Cleveland and George Gund foundations — to other entities, such as the Abington Foundation, Council of Smaller Enterprises and JPMorgan Chase, as well as with new fundraising. “I’m excited, because we’re rolling out a comprehensive corporate sponsorship program,” which was scheduled to take effect in October, and it will support the nonprofit’s emerging entrepreneurs

NICOLE M. BELL Executive director The Presidents’ Council Foundation ◆ 30

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icole Bell quickly tuned into the growth potential of The Presidents’ Council Foundation when in 2008 she joined the organization as an executive assistant, a title that she says “meant you did everything.” The apprentice turned up the volume when in 2011 she became executive director of the nonprofit, which provides research and entrepreneurial education in Northeast Ohio’s African-American community. Her relatively short tenure so far has yielded an operating budget increase of 45%, to $304,000 this year from $210,000 in 2011, which has

NOVEMBER 19 - 25, 2012

STEPHANE BIBIAN Vice president of engineering and clinical research NeuroWave Systems Inc. ◆ 38

T sons’ baseball and football teams. He served a stint on Brunswick City Council and is active on the parish finance committee of St. Ambrose Church in Brunswick. He also has served as a bone marrow donor for a cancer patient. — Stan Bullard

and scholars programs, she said. Those programs also have received fine-tuning — when Ms. Bell joined the organization, the high school scholars initiative mentored 10th-graders for six months. Now, the area scholars are involved in a three-year program that continues through their senior year. “I was so close to their age when I joined the foundation, so I had more of a sense as to their goals and how to communicate with the students,” said Ms. Bell, who was 26 when she joined the organization. “The biggest and most important part of her contribution has been her energy and passion around the mission of the foundation,” said Brian Hall, board chairman and CEO of Cleveland-based Innogistics. Ms. Bell has a master’s in business administration from Cleveland State University and a bachelor’s degree in business from Baldwin Wallace University. She is active in several organizations, including Alpha Kappa Alpha Sorority, American Heart Association, Recovery Resources and Baldwin Wallace University’s Women’s Club. The North Olmsted resident dedicates her personal time to her soon-to-be stepson, Ken Jr.; planning a wedding with her fiancé, Ken; working out; reading; cooking; and frequenting Cleveland entertainment spots. — Kathy Ames Carr

he whole premise behind the technology pioneered by Stephane Bibian and his coworkers at NeuroWave Systems Inc. in Cleveland Heights is to ensure people are in a deep sleep during medical procedures. But when Dr. Bibian, a native of France, talks about the technology and the role Cleveland has played in its development, he’s anything but a snooze. “From a biotech perspective, we live and work in an environment that is extremely dynamic,” Dr. Bibian said. “If you’re in the field, this is the place to be.” Dr. Bibian and his wife, Tatjana Zikov, designed the algorithm that fuels NeuroWave’s technology during their graduate studies in Canada. The couple had been in search of an industrial partner to take their intellectual property and do something with it, which led Dr. Zikov to Cleveland Medical Devices in 2003, with Dr. Bibian following suit two years later. Dr. Bibian said they soon realized they couldn’t simply transplant their technology into an existing device and had to build a new machine from the ground up. In 2007, NeuroWave Systems spun off as its own company from CleveMed to do just that. “Stephane creates something out of nothing,” said CleveMed chairman See BIBIAN Page F-4

We congratulate

Dalithia Smith, Lincoln Electric’s Director of Recruiting and Training,

Congratulations to Colette Jones from Positively Cleveland! As a distinguished

on being selected a Crain’s 2012 Forty under 40 Honoree

member of Crain’s “Forty Under 40” Class of 2012, we proudly

Colette Jones Vice President of Marketing Positively Cleveland

celebrate her notable achievements as a leader in our organization and www.lincolnelectric.com

community.

334 Euclid Avenue Cleveland, OH 44114 216.875.6600 www.positivelycleveland.com


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DR. APARNA BOLE

continued from PAGE F-2

Sustainability manager and pediatrician

Bob Schmidt. “That’s what he does.” The company’s basic product — NeuroSense — is a monitor that measures and tracks brain functions for anesthetized patients. Dr. Bibian is credited with growing the company’s distribution network in Canada, France, Belgium, the Netherlands, Luxembourg and Germany. “He’s already a world-class guy,” Mr. Schmidt said. “When you go into operating rooms in Europe, they know who he is. When you go to an anesthesia conference, people know who he is.” Backed by money from a contract from the U.S. Army, Dr. Bibian also is steering the development of an “autopilot” system of sorts for anesthesiologists: The system automatically would adjust drug levels to maintain sedation, which would free medical professionals for other tasks. Asked about his interests beyond the workplace, Dr. Bibian chuckled. After all, he said, it’s difficult to separate work and personal lives when you’re married to the company’s president. But beyond work, he and his wife enjoy the city’s vibrant arts community, including the Cleveland Museum of Art and the Cleveland Orchestra. — Timothy Magaw

University Hospitals ◆ 33

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s someone raised in the environmentally friendly confines of Portland, Ore., the sustainability bug never really hit Dr. Aparna Bole — it had always been there. But as University Hospitals’ sustainability manager, Dr. Bole has made it her personal mission to ignite a similar passion in her coworkers and let them know that being stewards of the environment doesn’t only make good business sense, but is also a good way to improve public health. “I think sustainability and sustainable business practices are a really

NOVEMBER 19 - 25, 2012

important public health advocacy opportunity for my fellow clinicians and something I don’t feel is well enough recognized,” Dr. Bole said. Dr. Bole’s superiors credit her with the launch of the health system’s sustainability program in 2010. She had dabbled in some sustainability initiatives during her residency with University Hospitals, but had an idea about how to broaden those efforts. Part of what has made her a good fit for the role, she noted, is that she’s a clinician. “To be able to have somebody to translate between the clinical and administrative sides of the house has helped catalyze change,” Dr. Bole said. As part of her sustainability role, Dr. Bole leads systemwide efforts in the areas of waste reduction, energy management, sustainable procurement and green building. “She was energetic, smart and

CHRISTOPHER A. CHAPMAN Vice president of global finance Diebold Inc. ◆ 38

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s vice president of global finance at Diebold Inc., Christopher Chapman’s passport is filled with stamps. Yet, prior to joining

Diebold, he never had traveled beyond North America. His first trip abroad — a six-week stay in the United Kingdom in 2000 — was for work. However, Mr. Chapman’s passion

really had a passion for the sustainability space,” said Steven Standley, University Hospitals’ chief adminis-

trative officer. “She really helped ramp up that enterprise, and I was totally blown away.” Dr. Bole’s sustainability efforts go beyond her work at University Hospitals. For instance, she and her husband, Richard, share a car and regularly use public transit during their commutes from their apartment downtown. The couple also is building a home near Shaker Square that will be ultra-energy efficient and armed with solar power and other energy-saving capabilities. She’s even chided Mr. Standley for his occasional use of a plastic water bottle. “She lives it,” Mr. Standley said. “It’s not easy to change a big organization, and it takes a lot of effort. I think the fact that we’ve accomplished what we’ve accomplished is because of her and the way she’s done it.” — Timothy Magaw

for understanding other cultures started long before he crossed international borders. As one of seven children, early on he learned about differences among people. Paired with his love of history and numbers, international business seemed a natural fit for Mr. Chapman. Sixteen years ago, armed with a bachelor’s degree in finance and an MBA with a concentration in international business, both from the University of Akron, Mr. Chapman started at Diebold. Since then, he has moved through the ranks, taking on new roles and new responsibilities as opportunities arose. In his current job, Mr. Chapman has financial oversight of Diebold’s global operations, global supply chain and development and global financial planning and analysis. John Kristoff, chief communications officer at Diebold, said one of Mr. Chapman’s greatest skills is his knack for addressing the elephant in the room during discussions. “He says what everybody else is thinking but everybody else is afraid to say. He’s fearless from that perspective,” Mr. Kristoff said. “People know that when he says something it’s pretty accurate. He doesn’t dance around issues.” Mr. Chapman’s willingness to address issues head on engenders a level of trust among his colleagues, who also rely on him to provide an international perspective in the

board room. Mr. Chapman visits each of the company’s international sites at least once a year, which keeps him away from home for about a week every six weeks to two months. “You do not get to a role like this without having a very supportive family,” Mr. Chapman said. Outside of work, Mr. Chapman makes his family a priority. He serves as an assistant coach for his kids’ softball and baseball teams, despite his travel schedule keeping him from being able to take on head coaching roles. He and his wife, Jen Chapman, live in Sugarcreek with their four children — Allyson, Madison, Brendan and Grace. — Ginger Christ

CONGRATULATIONS TO

MARK S. ABOOD

40 under 40

CRAINS CLASS OF 2012

216.360.0009

|

www.ChartwellGroup.com


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MICHELLE COMERFORD

CHAD DAVIES

Managing director of Austin Consulting

Partner

The Austin Co. ◆ 33

T

Grant Thornton LLP ◆ 38

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t’s ironic that Michelle Comerford never really saw a clear career path for herself, but ended up in a field where she maps where others go. Ms. Comerford, 33, is managing director of Austin Consulting, the group within the Cleveland-based Austin Co. engineering and construction firm that advises companies on where to locate manufacturing plants. “I actually never knew that this type of job even existed,” Ms. Comerford said. After reconsidering on her very first day at John Carroll University her biology major, Ms. Comerford joined the business school and discovered the study of logistics. In 2001, she graduated with a double major in logistics and marketing. She took her first job in the male-dominated logistics field with a trucking company and, following that, joined a real estate company through which she had her first exposure to site selection consulting. A consultant with whom she was working referred her to Don Schjeldahl at Austin Co.; he ultimately became Ms. Comerford’s boss and mentor when she joined the company in 2004. Mr. Schjeldahl ended up recommending Ms. Comerford for the managing director position he vacated, which she assumed in 2009. Site selection work involves communicating with professionals, thinking on one’s feet, learning various industries and traveling all over, said Mr. Schjeldahl, who now is site coordinator for Sierra Nevada Brewing Co. “She did all those things well,” he said. “Most people will do two or three things well, or one thing well. Michelle did it from day one. It took her no time.” Today, Ms. Comerford oversees a depart-

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ment of seven and the projects they handle for clients ranging from growing family businesses to Fortune 500 companies. “I love that every project is different,” she said. “With each one, I’m learning something new, something interesting.” Ms. Comerford and her husband, Jim, live in Shaker Heights with their two sons, Jimmy, 3, and John, 1. Ms. Comerford calls her mother her greatest inspiration: Kim Marquette, who passed away in 2004, volunteered a lot despite battling a rare lung disease for 25 years. “I aspire to be as good of a mother, friend and worker as she was,” she said. Ms. Comerford recently was elected to the national Site Selectors Guild — becoming one of only three women elected to the young organization — and joined the board in October. A former collegiate volleyball player, Ms. Comerford also serves on the executive committee for the Blue Gold Club, which raises money for John Carroll University athletics. — Michelle Park

hose weekends that a young Chad Davies spent helping his grandfather cut the grass and pull weeds in his duties as the maintenance man for a bank were Mr. Davies’ first lesson in the importance of doing things right the first time. “The one thing I was always taught was you do things right or you do nothing at all,” Mr. Davies said. “It was more work for him if I didn’t do it right.” That doesn’t mean Mr. Davies rules with an iron fist at Grant Thornton LLP, the accounting firm for which he’s worked since 2002. Quite the contrary, it seems. “Chad likes to have a good time, and he likes to facilitate other people having a good time,” said Thomas P. Freeman, tax practice leader for Cleveland for Grant Thornton. “He’s always the life of the party … always sort of the first one to say, ‘Let’s go do a happy hour. You guys have been working hard.’ “Chad is a leader,” he said. “He has developed a state and local practice that I think is one of the best in the firm. He’s a great judge of talent, and he’s a great developer of people.” At age 38, Mr. Davies is a partner overseeing 10 people in the state and local tax service practice in this market for Grant Thornton, which has 56 offices in the United States. Mr. Davies and his practice help clients in a variety of industries navigate the complex tax world and tax controversies that are resulting from more state audits. The Strongsville native always found that math came easy, and in what he calls a natural progression, he studied accounting at what now is known as Baldwin Wallace University. Right out of the gate, he worked for Arthur Andersen LLP in 1996. While Mr. Davies is proud of making partner

at Grant Thornton last August, he talks more about helping the firm’s other people grow. “Our people are critical to the business,” he said. “You’ve got to understand they’re going to make mistakes, and you’ve got to learn that those are teachable moments.” Mr. Davies, it seems, is returning what was done for him when a tenured partner took Mr. Davies under his wing at Arthur Andersen. “This profession is more than about knowing the tax law, knowing the tax code,” Mr. Davies said the man told him. “It’s being genuine and taking an interest and getting to know (clients) on a personal level, not just a business level.” It’s clear Mr. Davies lives that lesson in the “very strong rapport” Mr. Freeman said he builds with clients. Mr. Davies lives in Medina with his wife, Jennifer, their 9-year-old son, Evan, and 5year-old daughter, Lauren. He is chairman of the board for Mental Health Services for Homeless Persons Inc. — Michelle Park

Invacare Co rp o r a t i o n would like to congratulate Gretchen L. Schuler on being selected as one of Crain’s Cleveland Business Forty Under 40.

©2012 Invacare Corporation. All rights reserved. Trademarks are identified by the symbols ™ , sm and ®. All trademarks are owned by or licensed to Invacare Corporation unless otherwise noted. Form no. 12-544

www.invacare.com (800) 333-6900


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STEPHANIE DORSEY Director of strategic initiatives Forest City Enterprises Inc. ◆ 32

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tephanie Dorsey became a residential real estate agent for Smythe, Cramer Co. — now Howard Hanna — because she loved real estate and the flexibility the job provided. However, she decided after being the Rocky River office’s “Rookie of the Year” in 2003 that she could do that job at any time in life and could use an MBA instead. A Case Western Reserve University professor suggested she interview at a company she knew little about — giant developer Forest City Enterprises Inc. One of her interviewers, and a later boss, was Emerick Corsi, Forest City president of real estate services. He said he was puzzled by her résumé, which showed her $2 million in gross

JAMES P. DOUGHERTY Partner Jones Day ◆ 38

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s soon as Lyle G. Ganske met James P. Dougherty, he knew he had to hire him. “He was extraordinary,” recalled Mr. Ganske, who today is managing partner of the Midwest region for Jones Day, which employs the largest number of attorneys in Northeast Ohio. “I cannot say enough good things about James. I call him ‘The Solution’ because if you have a problem, he is the solution. He’s been a complete superstar since the moment he showed up.” Mr. Dougherty, 38, advises public and private companies on mergers and acquisitions, corporate governance and takeovers. A practicing attorney for nearly 15 years, Mr. Dougherty regards last year as a

sales volume in her second year in brokerage was the same amount as her first year. Ms. Dorsey’s answer: The first year she worked full time, but the second year was part time, because she was in graduate school. “I thought, ‘Wow!’ She came in

“career year.” In 2011, he was the lead attorney for a number of multibillion-dollar, headline-making deals, including Cliffs Natural Resources’ $4.95 billion acquisition of Canada’s Consolidated Thompson Iron Mines Ltd.; Lubrizol Corp.’s sale to Berkshire Hathaway Inc. for nearly $10 billion; and Goodrich Corp.’s sale to United Technologies, valued at more than $18 billion. “There are very few people in the country who are fortunate enough to say, ‘Yeah, I’ve worked on an $18 billion deal; here’s how we handled it,’” he said. “Those are the kinds of deals that you want to do when you’re in this practice,” Mr. Dougherty said. “They’re that much more exciting. There’s a lot more at stake.” A Brooklyn, N.Y., native, Mr. Dougherty received his law degree from the University of California, Los Angeles, and worked for the prominent New York law firm Cravath, Swaine & Moore LLP,

MEGANN EBERHART Manager of government affairs Greater Akron Chamber ◆ 37

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hen Megann Eberhart made her first trip to Columbus, while working to get Bob Taft elected governor in 1998, she met Elizabeth Dole, a prominent Republican politician. Mrs. Dole, who was considering a run for the presidency (she later won a Senate seat from North Carolina in 2002), asked Ms. Eberhart if she would ever consider running for political office. “No, I just want to work behind the scenes and get other people elected,” Ms. Eberhart responded. That, apparently, wasn’t the answer Mrs. Dole was seeking. “‘What do you mean?’ Mrs. Dole said. ‘We need more women in politics,’” Ms. Eberhart recalled. Though she really didn’t see herself as a politician, Ms. Eberhart was a little shaken after her encounter with one of the most visible woman politicians in the country. “Why did I insert my foot in my mouth?” she asked herself. Last fall, Ms. Eberhart, who for

the last five years has been manager of government affairs at the Greater Akron Chamber, was elected to the Barberton school board. It’s a start. And it’s a long way from civil engineering. Ms. Eberhart, a Cleveland native, started college at the University of Akron as a civil engineering major. Then she took a required govern-


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and never looked back,� Mr. Corsi recalled. “She had a real thirst for knowledge. Sometimes I’d give her something to do that should take a week. She came back in two hours with it done.� Today, Ms. Dorsey serves as Forest City’s first director of strategic initiatives to carry out CEO David LaRue’s commitment to put the company’s 2012-15 strategic plan to work. “A big part of what I do is help in communications as departments put together their action plans under the strategic plan,� Ms. Dorsey said. “The role I really play is taking those big-picture ideas to the strategic and tactical level. What I love is that my days are so varied.� Ms. Dorsey moved into her current role from working as the contact person between the company’s internal strategic plan committee and its outside consultant. Before then, she was a development associate in Forest City’s commercial group. A key project

for her was working on Village of Gulfstream Park in Hillandale, Fla., as the 1 million-square-foot property with retail, office, residential and casino facets went from idea to operation. While such a task could be nebulous, Ms. Dorsey said her major in entrepreneurship at Miami University’s business school and master’s in organizational change management at CWRU gave her the tools to tackle it. “I’m a planner,� she said, noting that helps in her home life, as she is the mother of 2-year-old twins. Although Ms. Dorsey spent six years growing up in Chicago, she counts herself a Northeast Ohio native and graduated from Orange High School. She and her husband, Tim, live in Avon Lake, which stems from a choice to become a West Sider as she returned to Northeast Ohio to get a change from growing up in Moreland Hills. — Stan Bullard

before joining Jones Day in 2004. He made partner in 2008 and for three years also has been the hiring partner for the Cleveland office. Mr. Ganske says Mr. Dougherty has “extreme maturity for a lawyer of his vintage.�

“Typically, people ‌ don’t hit their stride until they are much more senior than James,â€? he said. “He hit his stride several years ago. It doesn’t hurt that he’s shockingly smart and has tremendous judgment.â€? Mr. Dougherty aspires to grow Jones Day’s presence in the Midwest and to mentor the firm’s younger associates as he’s been mentored. “My goal is to be able to leave this place ‌ 10 times stronger than it is today,â€? he said. Mr. Dougherty and his wife, Janelle, live in Shaker Heights with their three children, Connor, 6; Aidan, 5; and infant daughter, Blake. He spends a lot of his free time with his children, and also plays league or pickup hockey (he played in college) and golf. Mr. Dougherty also is a trustee for the Cleveland Leadership Center and volunteers for United Way of Greater Cleveland. — Michelle Park

ment course. And then another. Soon, she was a political science major with an emphasis on public policy and volunteering on the Taft campaign. After a stint in the Ohio Department of Development’s Cleveland regional office, she took a job with the Cleveland-based Fund for Our Economic Future, helping to solicit public opinion on regional issues for the fund’s Voices and Choices program. She joined the Akron chamber in 2007. In her job, she represents the business community on local, state and federal public policy issues that impact business. In particular, she has focused on talent development. “Megann goes above and beyond to ensure that the voice of business is heard and acted upon,� said Rebecca Guzy Woodford, the Akron Chamber’s senior vice president for communications. “And she has taken her passion for growing a competitive work force for business to a personal level.� Ms. Eberhart was the top votegetter in the race among four candidates for three Barberton school board seats. “I have all this knowledge during the day here at work and so, crazy me, I said, ‘There are openings on the (Barberton) school board, why not throw my hat into the ring,’� she said. — Jay Miller

MARSHALL EMERSON III Co-founder, CEO I Can Schools â—† 38

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erious learning was not on Marshall Emerson’s mind in high school. “If I couldn’t dunk it, I didn’t really care,� he says. That attitude has changed. After getting his degree at Xavier University in Cincinnati, the Detroit native figured he had two choices. Like his mother, he could go to work for one of the auto companies. Or he could follow in the footsteps of his father, who was an elementary and middle school teacher. He chose education and has been a leading figure in the charter school movement in Ohio for more than a decade. Through three charter school organizations — including his current venture, the I Can Schools — his schools’ students have scored highly on state achievement tests. He is co-founder and CEO of I Can, which now operates four schools in Cleveland. He started in a traditional school classroom, teaching fifth-graders for three years in Pontiac, Mich. Then, in 1999, came a call from

the right heart and the right intentions, but they have no idea what they are getting into.� But the DuBois Academy started to work. By the 2003-04 school year, its sixth-graders posted high scores on state proficiency tests. But after Mr. Emerson left, Mr. Willard was charged with and pleaded guilty to misappropriating funds, and student test scores later declined. “I’ve learned all the good and all the bad,� Mr. Emerson said ruefully. In 2005, Mr. Emerson was introduced to John Zitzner, a one-time Cleveland software entrepreneur who had started an after-school program for inner-city kids, E City. He was preparing to launch a charter school, E Prep, and he wanted Mr. Emerson to run it. “He has a total personal commitment to educate underserved kids,� said Mr. Zitzner, now president of The Friends of Breakthrough Schools. The school opened in the fall 2006 and produced dramatic results. Today, E Prep is a part of the Breakthrough Schools, a group of nine strong charter schools. But Mr. Emerson and a partner Jason Stragand, another E Prep alum and now I Can’s chief academic officer, were ready to go it on their own. Mr. Zitzner was supportive. “I told him, ‘Go for it,’� he said. — Jay Miller

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PAST FORTY UNDER 40 COVERAGE To read prior Forty Under 40 coverage from Crain’s, visit our Forty Under 40 home page at www.crains cleveland.com/section/40under40. There, you’ll find past editorial coverage, slideshows from previous events, videos of past honorees and more. That includes last year’s 20th anniversary coverage, in which we caught up with 60 of our past honorees. That group includes Fred Nance and Umberto Fedeli (pictured), now the Cleveland Browns’ general counsel and founder of the Fedeli Group, respectively. Check www.CrainsCleveland.com this week for coverage of this year’s awards reception, to be held tonight, Nov. 19.

Wilson Willard, a college friend who was opening a charter school in Cincinnati, the W.E.B. DuBois Academy. Mr. Emerson spent five years at W.E.B. DuBois, running operations and doing everything, including at times cleaning the school building at night. “It was a mess year one; we had no idea what we were doing,� he recalled. “I see a lot of people with

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Jon E. Lawrence &RPSOH['LUHFWRUq*UHDWHU&OHYHODQG   %UHFNVYLOOH&KDJULQ)DOOV&OHYHODQG 0HQWRU3HSSHU3LNH:HVWODNH

1.500%, 1.598% APR with a 1% origination fee. The initial annual percentage rate (APR) may vary. The interest rate adjusts monthly based on the one-month LIBOR as published in The Wall Street Journal, plus a margin of 1.25%, and may increase. Rate and margin are current as of 11/6/12. Rate and margin are subject to application of standard underwriting criteria and may change without notice. For a $600,000 purchase of a primary residence, with a 20% down payment and a $480,000 mortgage, 120 monthly interest-only payments of $600 are followed by 180 monthly amortizing payments of $2,980, assuming interest rate remains constant throughout the adjustable term of the loan. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater. When deciding whether an adjustable-rate mortgage is right for your situation, you should consider the potential risk of rising rates and payments and such factors as how long you plan to own your home. This is an interest-only mortgage that allows you to pay only the interest on the money you borrow for a certain number of years. If you pay only the amount of interest that’s due, once the interest-only period ends, you still will owe the original amount you borrowed, and your monthly payment will increase—even if interest rates stay the same—because you must pay back the principal as well as interest. You should ask what the payments on your loan will be after the end of the interest-only period. If you are considering an adjustable-rate mortgage, ask what your payments can be if interest rates increase. Visit our Web site at www.merrillhomeloans.com for more information about the risks of interest-only mortgages. Merrill Lynch Home Loans™ residential mortgage programs are offered and funded by Bank of America, N.A., 4804 Deer Lake Drive East, Jacksonville, FL 32246-6484; toll-free telephone: (800) 854-7154. Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, NY 10080, toll-free telephone: (800) 338-2814, Member, Securities Investor Protection Corporation (SIPC), does not make commitments for or fund loans. Residential mortgage programs, options and property types are not available in all states and jurisdictions and are subject to change without notice. Loans are offered on properties in all 50 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico. Additional terms, conditions, restrictions and costs may apply. Bank of America Corporation, its subsidiaries and their employees may receive compensation for its products and services. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and member SIPC, and other subsidiaries of Bank of America Corporation (“BACâ€?). Banking products are provided by Bank of America, N.A., and affiliated banks, members FDIC and wholly owned subsidiaries of BAC. Investment products:

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May Lose Value Code 439404PM-1112


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REGAN FITZPATRICK Co-founder Home Team Marketing ◆ 38

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egan Fitzpatrick gets a daily reminder of why the company he, two of his brothers and a friend founded in 2001 has been successful: His father, Tim, sits right outside his door in Home Team Marketing’s office in the Caxton Building in downtown Cleveland’s Gateway District. Tim Fitzpatrick, Regan said, taught his sons how to do things the right way, and Regan hopes it’s reflected in the way Home Team does business. The company assists high schools and high school associations nationwide with sponsorship and revenue opportunities, selling national and local companies on the benefits of advertising on the local level at high school sports events. “We knew the only way to work with them was that every program had to benefit the school,” Regan Fitzpatrick said. And business these days continues to grow. The company now employs 25 locally, and last year expanded its space in the Caxton Building to accommodate its continued growth. It now works with more than 6,000 high schools nationwide and has given $17 million to high schools. (A high

school receives half of every sponsorship deal Home Team sells.) Now, Mr. Fitzpatrick said, the company is in new business development mode, a luxury afforded by the growing client list and the subsequent roster growth. Instead of simply selling sponsorships and increasing revenues, the company is analyzing ways to employ its connections and brand recognition to save schools and school districts money on bulk equipment or supply purchases, for instance. “There’s still room for growth in the original model,” he said. “There are 18,000 schools out there, nearly

NOVEMBER 19 - 25, 2012

an endless inventory, and we’ve perfected the local approach to it.” That’s reflected in the company succeeding in a space in which not even media giant ESPN could. ESPN in June closed its high school unit, which it dubbed RISE. That included ESPNHS.com, and two print publications, the shuttering of which cost 75 people their jobs. Mr. Fitzpatrick said Home Team reached out to sponsors that had bought time with ESPN, and they still wanted to be prominent in the high school sphere. “It was just too local for (ESPN),” he said. Home Team’s new neighbor in the Caxton Building, Phizzle, partners with the company to handle mobile marketing features such as QR (quick response) codes at games that fans can scan with a smart phone for a sponsor coupon. Jeff Ryznar, vice president of marketing at Phizzle, said Mr. Fitzpatrick’s approach to business led the two firms to pair up. “He appreciates what you went through, the long hours, to get to where you are,” Mr. Ryznar said. “That makes you want to do business with him and it’s one of the reasons we’re happy to be partners with him.” The 38-year-old Mr. Fitzpatrick and his wife, Shane, have four children: Mairin, 7; Kelsey, 6; Regan, 2; and Bobby, 8 months. — Joel Hammond

Warmest congratulations to all the “Forty Under 40” rising stars, especially our alumni: Mark S. Abood ’95 Mary S. Marita ’95 Michelle Comerford ’01 As a Jesuit Catholic university, John Carroll inspires individuals to excel in learning. leadership, and service.

FRANK L. GALLUCCI III Managing partner Plevin & Gallucci Co. LPA ◆ 37

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ven F. Daniel Balmert, who has defended companies in lawsuits and claims brought by Frank L. Gallucci III, will tell you that Mr. Gallucci is fair, yet firm — “the consummate professional.” “Frank Gallucci is significantly more mature in his practice than his same-aged peers,” said Mr. Balmert, managing partner of the Akron office of the law firm Vorys, Sater, Seymour & Pease LLP. “Many lawyers function by rote, do things the same way time after time. Frank is high energy and is consistently thinking of ways to do things differently and better.” Mr. Gallucci, 37, entered the law firm business earlier than expected when his father, Frank Jr., passed away in 1996, leaving an uncertain future for his workers’ compensation law firm, then known as Frank L. Gallucci Jr. Co. LPA. Mr. Gallucci was 20 at the time.

injury and wrongful death firm typically represents people hurt at work, injured in some sort of accident or victims of medical malpractice. When matters go to trial, Mr. Gallucci wears the simple gold chain his father received from his own parents.

“Frank is high energy and is consistently thinking of ways to do things differently and better.” – F. Daniel Balmert, managing partner, Vorys, Sater, Seymour & Pease LLP’s Akron office “If I had to guess, I would say I would have become a lawyer” regardless of his father’s death, Mr. Gallucci said. “His passing solidified the thought in my mind. At his wake, 100 clients drove from all over the state to talk about what he had done for them. “It just weighed heavily on me that what you do in this capacity really does impact people in a way that they never forget,” he said. So, a trust structure was created to keep the firm running while Mr. Gallucci triple-majored at Boston College and worked toward his law degree, which he earned in 2000 from Cleveland-Marshall College of Law. While in law school, Mr. Gallucci ran the firm from a business standpoint. Mr. Gallucci, now managing partner, has been running the firm for 16 years and practicing law for 12. Following a partnership with Leon Plevin in 2005, the firm became Plevin & Gallucci Co. LPA. The Cleveland-based plaintiffs’

Mr. Balmert says Mr. Gallucci has “a network that is beyond description,” and that it’s hard to find someone Mr. Gallucci doesn’t know. He also says Mr. Gallucci possesses “the best sense of humor I’ve ever come across.” “He is a very generous person,” he added. “He became aware of my wife’s fascination with and love of the Cavaliers and one day, we found tickets to floor seats in the mailbox.” A resident of Cleveland’s Little Italy neighborhood, Mr. Gallucci loves food and cooking and enjoys shopping at the West Side Market and at his family’s Italian imports shop, Gallucci’s, in Cleveland. He also likes to travel. Mr. Gallucci is slated in 2015 to become president — the youngest ever — of the Ohio Association for Justice, an organization of claimant and plaintiff attorneys. He also serves on the board of the Cleveland-Marshall Law Alumni Association. — Michelle Park

Largest national staffing firm headquartered in North East Ohio Medical Billing Oil & Gas talent Engineering Accounting Finance www.nescoresource.com

Non-Clinical Light Industrial Clerical IT & Technical RPO/VMS/Onsite www.talentalley.com


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ALEX GERTSBURG Founder The Gertsburg Law Firm ◆ 37

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lex Gertsburg doesn’t practice criminal law. Or deal with divorce cases. So what does he focus on? Everything else. “Sometimes it’s easier to say what I don’t do,” he said with a laugh. Late last month Mr. Gertsburg left a position as in-house general counsel at digital phone service provider Broadvox to form The Gertsburg Law Firm, where he plans to provide similar services to various companies. Broadvox is his first client. Starting his own firm will allow him to apply the broad set of skills he picked up at Broadvox “to help companies across Cleveland and really beyond Cleveland,” he said. Mr. Gertsburg was the only attorney at Broadvox, which has about 80 employees in Cleveland, when he was hired in 2005. Until then he focused almost exclusively on litigation. At Broadvox, Mr. Gertsburg started practicing law related to contracts, employment, collections, regulations and whatever else came his way. Turns out, he liked the variety. Plus, joining Broadvox gave him the chance to create the company’s legal department, which now has

five employees. “I could build a department, and I could grow with this company,” he said. Mr. Gertsburg had wanted to be a lawyer ever since he watched Arnie Becker work a courtroom in TV’s “L.A. Law.” But after graduating from Brush High School, he enrolled in the U.S. Army Reserve and joined the Reserve Officers’ Training Corps. That helped him pay for college, but it also furthered his education in another way. In January 2003, he was called to serve in Iraq. Morale was high when the 160 soldiers in Akron’s 762nd

Transportation Company left for Fort Knox, but it degraded as they spent the next four months stuck in Kentucky, waiting to ship out. It was up to Mr. Gertsburg and three other officers to keep their spirits up, which meant getting to know individual troops, he said. “If you don’t recognize the human side of the people you’re in charge of, you’re not a good leader,” he said. Mr. Gertsburg is “a no-excuses businessman and a no-excuses lawyer” who knows how to analyze problems systematically, said Broadvox co-founder Eugene Blumin. “He’s taught us to be more patient, less impulsive, to analyze before jumping into deals,” Mr. Blumin said. But Mr. Gertsburg might have a few rule-breaker genes in his DNA: He’s writing a yet-to-be-titled book about how his grandfather escaped from the Soviet military in 1941 and fled to the United States — only to come back and help his family escape from Moldova, which was part of the Soviet Union. In addition to writing, Mr. Gertsburg likes running, hiking and biking. He lives in Chagrin Falls with his wife, Inna, and their sons, Ethan and Jake. They have a dog named Miles Davis and a cat named Dude. — Chuck Soder

MATT HLAVIN President Thogus Products Co. ◆ 37

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att Hlavin grew up in a family of entrepreneurs. The president of Thogus Products Co., an injection molder in Avon Lake, Mr. Hlavin was taught the entrepreneurial spirit early in life. By age 8, he was performing odd jobs for his neighbors — cutting grass, shoveling snow, delivering newspapers. He idolized his grandfather, Jack Thompson, a World War II veteran, who started the company after serving in the military because he didn’t want to work for someone else. “He was a great person willing to put it all on the line to create a great lifestyle,” Mr. Hlavin said. “When I was young, I wanted to work for my grandfather. I wanted to own and run Thogus one day.” But doing so wasn’t as easy as having the right genes. “There’s a family precedent. You have to go outside and bring experience,” Mr. Hlavin said. “It’s not a free handout here.” Thus, he started at Thogus in 1996 as a sales manager while still in college, majoring in communications and minoring in business and

English at Cleveland State University. From the bottom up, he learned the company before taking the reins. He now works at Thogus with his two younger sisters, one of whom works in operations and the other in human resources. “We believe that to truly be successful in growing a family business you have to set the tone,” Mr. Hlavin said. “This is not a third generation that’s here to live off the fruits.” Since becoming president in See HLAVIN Page F-10

GERALD HETRICK Chief operating officer

Congratulations

Vox Mobile ◆ 32

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laminated piece of paper changed the course of Gerald Hetrick’s life. And it wasn’t a diploma or a degree. During the summer of 1997, one of Mr. Hetrick’s colleagues at Dreher Business Products Corp. in Strongsville gave him an unofficial certificate designating him the “Part-Time Employee of the Month.” The recognition meant a lot to Mr. Hetrick, who had just graduated from Cleveland’s John Marshall High School. That’s when he started thinking that he might have a future at the company, which resold computer equipment to businesses and helped them install it. “I just decided, if given an opportunity, I’ll stay,” he said. And he did remain with the company, in a roundabout way: Mr. Hetrick in July was promoted to chief operating officer at Vox Mobile Inc., an Independence company that helps other businesses deploy and manage their smart phones and tablet computers. Vox Mobile is a spinoff of Clevelandbased MCPc, a technology reseller and systems integrator that itself was spun off from Miami Computer Supply Corp. of Dayton, which had bought Dreher in 1998. Mr. Hetrick has come a long way since his days moving boxes in and out of the lab where Dreher employees worked on computers. For instance, soon after joining Dreher full time — he dropped out of John Carroll University to take the position — he was tapped to open a new equipment configuration lab focused exclusively on one customer, FedEx. Later, at MCPc, he led the creation of a business unit focused on licensing out

to Stephanie Dorsey and the entire Forty Under 40 Class of 2012.

Microsoft products. When Vox Mobile was created in 2008, CEO Kris Snyder recruited Mr. Hetrick to become its chief technology officer. Since then, he has helped refine processes used in various Vox Mobile departments. Mr. Snyder described his colleague as a “constant learner” who “has natural instincts when it comes to leadership.” He’s also particularly good when things get a little hectic. “He almost expects the chaos,” Mr. Snyder said. Mr. Hetrick enjoys following Cleveland sports teams, tailgating, reading — he tears through one or two novels per week — and spending time with friends. Many of those friends work at Vox Mobile, the Hinckley resident said, noting that Mr. Snyder and a few other employees were in his wedding this past summer. His wife, Julie, works in the company’s accounting department. “I love working with people I like,” he said. — Chuck Soder

www.forestcity.net

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HLAVIN

TED HOFFMAN

continued from PAGE F-9

Vice president of facilities and support services, chief sustainability officer

2009, Mr. Hlavin has tripled the company’s business. He also has started two sister companies — Rapid Prototype and Manufacturing LLC, a product development company, and Jalex Medical, a biomedical consulting firm. Deb Mills-Scofield, owner of Oberlin consultancy practice MillsScofield LLC, of which Thogus is a client, said Mr. Hlavin has a foresight not many professionals possess, regardless of age. “Matt is a very innovative creative thinker. He doesn’t think based on what has happened. He thinks on what is possible more than what is probable,” said Ms. Mills-Scofield, who met Mr. Hlavin during a Lorain County Manufacturing Council meeting on innovation at which they both were speaking. “That’s not saying he’s unrealistic, just that he will look at all of the possibilities.” She characterized Mr. Hlavin as a passionate leader, one who maintains command while fostering a collaborative and innovative work environment. Mr. Hlavin lives in Westlake with his wife, Denise, 8-year-old daughter, Alexis, and 10-year-old son, Jack, whose baseball, basketball and football teams he coaches. — Ginger Christ

Lake Health ◆ 39

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ed Hoffman admits his career path wasn’t what he had in mind. After all, he wanted to be a helicopter pilot and never thought he’d wind up running hospitals. But over the last nine years, Mr. Hoffman has risen through the ranks at Lake Health — Lake County’s largest health care provider — from an intern to vice president of facilities and support services and chief sustainability officer. “I wish I could say it was by design, but I fell into it,” Mr. Hoff-

NOVEMBER 19 - 25, 2012

man said. “But it was the best thing that ever happened to me.” Mr. Hoffman’s foray in health care was a six-year stint as an engineer with the U.S. Army Medical Corps, where he focused on hospital facilities management. It wasn’t what he originally wanted to do in the military. But, Mr. Hoffman noted, “Each year that went by, I saw what a wonderful career I was in.” “We’re providing healing in times of need,” he said. “We’re not churning out widgets. We deal in the people business.” After his military duty ended, Mr. Hoffman landed at PricewaterhouseCoopers in Washington, D.C., as a health care consultant. He returned to his native Northeast Ohio two years later to earn his MBA from Case Western Reserve University. During his time at CWRU, Mr. Hoffman through a mutual friend met Lake Health president and CEO

JED HUNTER Area vice president, dealer principal Penske Automotive Group Cleveland ◆ 38

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ed Hunter is most definitely “Penske material.” Mr. Hunter is area vice president and dealer principal for Bloomfield Hills, Mich.-based

Penske Automotive Group, for which he oversees eight local car dealers selling vehicles ranging from Toyotas and Smart cars to Porsche and Mercedes Benz luxury rides. It’s a job

Cynthia Moore-Hardy, who immediately was struck by how “bright, energetic and resourceful he was” and hired him as an intern. “What really stands out is his focus and discipline,” Ms. Moore-

Hardy said. “He understands what needs to be accomplished and is able to do it. If he has to take a different route to achieve it, he’s able to do that.” As an intern, Mr. Hoffman was involved in the initial site selection process for Lake Health’s $155 million TriPoint Medical Center in Concord that ultimately opened in 2009, replacing Lake East Hospital in Painesville. As his role progressed, he took on greater responsibilities with the planning and construction of the new hospital. Lake Health has provided Mr. Hoffman with more than a career; it’s also where he met his wife, Laura, who worked in the health system’s marketing department until late last year, when she took a job with the Cleveland Clinic. The couple lives in Concord Township with their children, Teddy, 3, and Alexis, 1. — Timothy Magaw

he loves, but also one that fate seems to have directed him toward. In 1998, Mr. Hunter was set to take a job at General Motors, probably designing engines. He had a degree from Vanderbilt University in mechanical engineering, some work experience as a jet engine design engineer at Pratt & Whitney, and a wife preparing to enter business school in Michigan. Then GM workers went on strike, and the job evaporated. He went, instead, to work for Deloitte Consulting in Detroit, where he worked as a consultant and learned about business modeling, forecasting and capital structures. But when he and his wife moved to Chicago five years later, Mr. Hunter made a big career switch. Preparing to attend business school himself, instead of looking for another consulting job, he took a gig as a salesman for a Chicago BMW dealer. It was close to home and he was, after all, a longtime car buff. “I rode my bicycle to work and sold BMWs all day; it was a blast,” he recalls. “And I had the luxury of knowing I was going to business school.” He almost went back into financial consulting, and entered an intern program at Morgan Stanley briefly in 2002. But some contacts at Deloitte introduced him to executives at Penske, who hired him in 2003. He quickly began growing the dealerships he managed. In 2007, Penske tapped Mr. Hunter to take over its Northeast Ohio operations,

where he’s been buying, rebuilding and growing the company’s dealerships ever since. Since his arrival, Mr. Hunter has guided Penske through the acquisition of two Audi dealerships and three Porsche outlets. All of Penske’s local dealerships also are undergoing remodeling and updating under his leadership. Mr. Hunter’s rise in the car business is no surprise to those who know him — including Marty Mullen, general manager of Penske’s Honda dealership in Mentor. “A lot of times, the guys put into these positions have never done the jobs we do — they’ve never been a sales manager or worked in a store. Nothing could be further from the truth with Jed,” Mr. Mullen said. — Dan Shingler

CONGRATULATIONS!

Jason Radcliffe founder of 44 STEEL

and the rest of the honorees of the 2012 class of Forty under 40 Your friends and family at Berrington Pumps & Systems, Inc and Cleveland Pump and Supply, LLC

44STEEL.COM • 440.821.8495


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MICHAEL T. JEANS

COLETTE JONES

Director of business banking, regional market director

Vice president of marketing Positively Cleveland ◆ 38

Urban Partnership Bank ◆ 38

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nitially, banking was not on Michael T. Jeans’ radar. By the time he was a sophomore at Ashland University, Mr. Jeans was supervising seven Papa John’s stores as general manager and area supervisor. Then, upon earning his business administration degree, he worked for KPMG for three years before doing three years of investment work for Morgan Stanley. “It wasn’t until well after college that I realized the real impact of the banking system on the community, and I wanted to be a part of that,” he said. Mr. Jeans had seen firsthand how much Papa John’s relied on banks to open new branches and to manage cash flow, and later, witnessed the importance of banking on his clients’ wealth. So he joined KeyBank, where he became one of the top performers before leaving in April 2011 to lead all the banking activities in Cleveland and Detroit for Urban Partnership Bank, a community development financial institution focused on underserved urban areas. Mr. Jeans, 38, oversees nearly 20 people as director of business banking and regional market director. According to a bank spokesman, he is the youngest to lead geographic markets for the Chicago-based bank. “To be responsible for (the role the community bank has in a community) in two different markets, but in the market that raised me, if you will, it’s an honor, it’s a privilege and it’s a responsibility that makes getting up every day exciting,” Mr. Jeans said. Mr. Jeans grew up in Shaker Heights, the son of Yvonne Jeans, a single-mother chemist who

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he says led by example, taking him to her night classes as she worked to further herself. In the next few years, Mr. Jeans aims to lead Urban Partnership Bank not only to make an impact through accounts opened and loans made, but also by having its bankers become more active in schools and at charity events. Mr. Jeans’ own charitable work has not gone unnoticed. “I always admire people … like Mike: He has a healthy family, and yet he still donates his time and his money and his effort to people with disabilities,” said Gary Bauman, vice chairman for Our Lady of the Wayside, where Mr. Jeans previously served as a “very young” board president. “I always just marveled at how mature he was,” Mr. Bauman said. Mr. Jeans still is involved with Our Lady of the Wayside and also is on the board of the Cleveland Rape Crisis Center. He lives in Grafton Township with his wife, Areli, and their children, Nia, 10, and Isaiah, 7, and plays competitive volleyball and golf. — Michelle Park

olette Jones is a boomeranger — one of those people finding their way back to Northeast Ohio. Now, she can’t stop talking about the city’s virtues and attractions. Of course, if she did, she no longer would be the right person for her job as the head of marketing of Positively Cleveland, the nonprofit with the mission of extolling the community’s virtues and attractions. “We are getting good news about Cleveland in front of millions of readers nationally,” Ms. Jones said. She adds with pride that her seven-person department had counted 1,500 articles published around the country about Cleveland and its events and tourist opportunities this year by mid-September compared with 1,110 all last year. Born and schooled in Shaker Heights, Ms. Jones in 1993 began her odyssey at Miami University in Oxford, Ohio. She started a career in banking for KeyCorp in Cincinnati but soon discovered she preferred marketing. So, she went back to school at Ohio State. After earning her MBA, she worked as a product manager and then a brand and marketing manager in Chicago, first at ConAgra and then with chewing gum maker Wm. Wrigley Jr. Co. When she was downsized, her thoughts turned to consulting. At the same time, she came across an article talking up Cleveland as a place for entrepreneurs. “You know if I’m going to start a small business, it’s looks like Cleveland is the place to be,” she recalled thinking. “I ran the numbers and found that my savings could last a lot longer in Cleveland and there was more support for entrepreneurs.” So she moved her consultancy to Cleve-

land in 2009 and in 2011 joined the class of Cleveland Bridge Builders, the development organization for young leaders. There, she came to realize that what she really wanted to do was market Cleveland. Before too long, the marketing job opened up at Positively Cleveland. “I feel so passionate about Cleveland and my background is in brand management that after meeting (Positively Cleveland president) David (Gilbert), it was like the moon and stars truly aligned,” she said. Mr. Gilbert said Ms. Jones’ background in consumer products marketing “has been important in our strategy to view the community as a product for which we want consumers to sample and become repeat customers.” What would Ms. Jones like to be doing if she wasn’t promoting her hometown? “I’d really like to have my own business again and be teaching at the university level,” she said. “I’ve already done some work at John Carroll University, teaching consumer behavior.” — Jay Miller

In recognition of your

remarkable achievement. University Hospitals congratulates Aparna Bole, MD, as a 40 Under 40 honoree. Aparna Bole, MD Sustainability Manager University Hospitals Rainbow Babies & Children’s Hospital Assistant Professor Department of Pediatrics, Case Western Reserve University School of Medicine

© 2012 University Hospitals

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JEREL KLUE Principal, vice president Signet Enterprises ◆ 35

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hen Jerel Klue realizes he doesn’t know something, his first inkling is to delve into the subject and soak up as much information as he can. That’s what led the North Ridgeville native from a career in the private sector to one in the public sector, and then ultimately to Signet Enterprises, a prominent Akron-based real estate developer and private equity firm, where he can blend the skills he’s learned in both worlds. Despite a career first at the Cleveland office of Arthur Andersen LLP and then the finance department for The Limited — the Columbusbased parent company of Victoria’s Secret, Bath and Body Works and other retailers — Mr. Klue opted to move to New York City to earn his master’s degree in American politics from Columbia University. “I was really unhappy with the trajectory of my career, and I knew that I had to better understand how government and politics worked to be successful long term and have the career that I wanted,” he said. “I took a huge risk by moving to New

NOVEMBER 19 - 25, 2012

“If I could have 100 more of him, I’d love it. His star is still rising...”

ERIC AND HALLIE BRAM KOGELSCHATZ

– Anthony Manna, chairman and CEO, Signet Enterprises

Founders

York and throwing myself into the public sector. It could not have been more foreign.” Mr. Klue’s first incursion into the political realm was as an unpaid intern with Democratic New York City councilman Eric Gioia. He swiftly rose through the councilman’s organization, eventually serving as chief of staff and one of his top aides. But upon learning that Cleveland had been named one of the nation’s poorest metropolitan areas, the allure of the Big Apple started to wear thin. “The truth is that I felt something when I saw that,” he said. “I loved New York and loved being there, but I felt like I could do something great at home.” Riding off the success of the Democrats in the 2006 congressional election, Mr. Klue landed a gig organizing U.S. Rep. Betty Sutton’s district office. Shortly thereafter, however, he met Anthony Manna, Signet’s chairman and CEO, through a mutual acquaintance. Mr. Manna had been looking for a project manager to join the Signet

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team, and Mr. Klue had all the qualities even the most experienced headhunter couldn’t find in a job applicant — persistence, tremendous communication skills and a hard-charging persona. Mr. Klue took the job, rose through the ranks and now serves as one of the principals and vice president of the Signet operation. “If I could have 100 more of him, I’d love it,” Mr. Manna said. “His star is still rising, and he’s one of these guys in Northeast Ohio you’re going to be reading about for many years to come.” — Timothy Magaw

orking late on Friday nights at a marketing firm in Boston, Eric and Hallie Bram Kogelschatz used to talk about how they missed the Midwest — and wanted to help rebuild it. Or perhaps rebrand it. So the husband-and-wife duo moved back in 2009. But before they even packed their bags, they started thinking about how they could help the region create a new identity. The result is TEDxCLE. During the annual event — a local version of the popular TED (which stands for Technology, Entertainment and Design) conferences — people give presentations describing what they’re doing to change the world. The event has sold out three years in a row. Mr. Kogelschatz said starting a TED event in Cleveland seemed like the best possible thing they could do to improve Northeast Ohio’s image. “Our audience was the world. Our product was Cleveland,” he said. The Shaker Heights couple met in Boston, working for a marketing firm called Modernista! They both were doing well professionally, managing marketing campaigns for Cadillac, the NFL and Napster, but something was missing. When Ms. Kogelschatz left Orange Village to attend Emerson College in Boston, she thought she’d never move back to Northeast Ohio. But like her husband, who had grown up in Detroit, she wanted to help the region turn itself around. She also realized it wasn’t as bad as she thought. “Cleveland has all of the things that I love about big city living at a fraction of the cost,” she said. Mr. Kogelschatz is director of strategy and insights at marketing

firm Arras Keathley of Cleveland. He specializes in digital marketing and analytics. He also plays drums, saxophone and clarinet. Until recently he worked for The Adcom Group in Cleveland, as did Ms. Kogelschatz, who now is marketing director for Saks Fifth Avenue’s Beachwood store. In addition to fashion — “Clevelanders get a bad rap for not knowing how to dress,” she says — she enjoys music, theater and cooking. Her husband refers to her as “the organic MacGyver.” They’re cooking up other civic projects, too. For instance, they’ve helped the Kent State University Urban Design Collaborative with strategic planning and other initiatives. They’re also conducting surveys of Northeast Ohioans to generate data that could be used to promote the region. — Chuck Soder

DAVE LAZOR President, majority owner Lazorpoint ◆ 39

D In addition to Ursuline’s evening and executive MBA, the College proudly announces the launch of a new online MBA. For more information call 440 646 8119 or visit us online. ursuline.edu 440 646 8119

ave Lazor started writing software at age 8. He applied to join the U.S. Naval Academy and thought about becoming a Navy SEAL. He started an information technology consulting company. And he loves helping other entrepreneurs. A common thread runs through many of the things Mr. Lazor does. “They’re all in that ideal of trying to do something great,” he said. Mr. Lazor is president and majority owner of Lazorpoint, an IT consulting firm he started 15 years ago. Today the Cleveland company — which helps its clients create IT strategies and manage their computer systems — has more than 20 employees, and its sales exceeded $3 million in 2011. If Mr. Lazor decided to stop there, he’d be betraying his personality. He’s all about achieving his full potential and helping others do the same, be they employees, clients or other entrepreneurs. One of the first big events that put him on the path to self-actualization happened when he was 8:

His dad, who was in the IT systems management field, bought an IBM personal computer. Young David taught himself how to program, wrote a piece of educational software and thought about selling it. From there, it was clear what he wanted to do for a living. He learned a few more lessons as an undersized left guard on the Lakewood High School football team. That team was the first in school history to go to the playoffs, See LAZOR Page F-17


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NOVEMBER 19 - 25, 2012

MAJEED G. MAKHLOUF

MAURA DAVID MARESH

Director of law Cuyahoga County ◆ 35

Development director, associate counsel

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s the first Cuyahoga County law director hired by the first county executive, Majeed Makhlouf is very cognizant that whatever he does, and the way he conducts himself, will set a pattern for law directors who follow him. “I hope that the culture I create remains,” he said. “I hope what we are building here doesn’t get lost after I leave.” The new county government, with a single elected county executive, replaced an elected county commission and a handful of other elected officials in January 2011. County Executive Ed FitzGerald named Mr. Makhlouf his chief legal counsel in March 2011. But first, the Bay Village resident had to wait for a ruling on what his duties would be. The new county charter eliminated nine elected offices and replaced them with the single county executive. But it also retained the elected county prosecutor, dividing responsibility for the county’s legal affairs. Ohio Attorney General Mike DeWine resolved the situation in favor of county prosecutor Bill Mason, ruling that only the prosecutor — not the new law director — can represent the county in both criminal and civil litigation. Muddled government situations are nothing new for Mr. Makhlouf. He grew up in Ramallah, a Palestinian town near Jerusalem that was under Israeli administrative authority. The son of the Greek Orthodox priest of Ramallah grew up thinking he would follow his father’s experience and further his education in France. But an offer of a scholarship

Hemingway Development ◆ 29

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for international students to Hiram College brought him to Northeast Ohio. His family soon would move to the United States, and Mr. Makhlouf went on to law school at Ohio State University. He never thought he would practice law, but then he got an internship with the Roetzel & Andress law firm in Akron. He found himself writing briefs and liking it. He joined the firm after law school. A few years later, he moved to the Cleveland office of Taft Stettinius & Hollister LLP and began advising local communities on zoning and other matters and handling business litigation. Then came the offer from Mr. FitzGerald. “He was somebody who was known in legal circles as a lawyer’s lawyer,” Mr. FitzGerald said. “He’s the perfect embodiment of what we want in county government.” Mr. FitzGerald said Mr. Makhlouf has played a key role in building the county’s ethics policy, in establishing a new system of handling contracting and in collective bargaining talks. Mr. Makhlouf expects to return to private practice. “I look at myself as a transitional person, to build the law department and then pass the torch to someone else,” he said. — Jay Miller

t the end of the first week in 2010 that Maura David Maresh spent on the job at Hemingway Development, a property development unit of Geis Cos., her boss, Fred Geis, got her into the seat of an excavator. Ms. Maresh extracted the first bucket of dirt at the site of what became the MidTown Technology Park, a much-ballyhooed office complex in MidTown Cleveland. She was sold after that. “I knew that every day would be different,” she said. “And terrific.” She works on duties from planning to meeting potential tenants for Hemingway projects, primarily from a third-floor suite in the Offices at the Agora, the famed Cleveland concert hall that Hemingway is redoing for offices and entertainment uses. She also works at the Streetsboro offices of Hemingway and Geis and assists the company’s counsel with legal work. Ms. Maresh’s job brings her into contact with Hemingway’s other principals and staff as well as city of

Cleveland offices, from economic development to planning commission. “She was uniquely qualified to join us,” Fred Geis said of Ms. Maresh. That’s because she has a law degree from Cleveland-Marshall College of Law and a master’s in urban planning from Cleveland State University with a certificate in real estate finance. “I love working with young people because they want to try new things,” he said, and because they undertake work more experienced real estate pros might consider too difficult.

Ms. Maresh landed at Geis through simple channels. Her cousin, Christina Martini, an interior designer at Geis, suggested she talk to Fred Geis about an opportunity. It turned out Mr. Geis’ expanding urban ventures called for more help. “(Fred Geis) always points out that the company had been in development since 1967. It’s only the last few years it had in-house counsel, and now it has two,” Mr. Maresh said. The Pickerington, Ohio, native majored as an undergrad in criminal studies at Bowling Green State University because she wanted to do criminal defense work. An internship with a Washington, D.C., criminal defense firm changed her mind. “Everyone was divorced or drank,” she said. Her course was set when she found she enjoyed law school classes in the vagaries of real estate law, which led to the dual major. Ms. Maresh and her husband, Chris, were recently married at St. Stanislaus Church in Slavic Village. They are decorating their first home in Strongsville and just got a puppy. The couple enjoys the city’s night life as well as biking on the Ohio Canal Corridor’s towpath. “I used to think of moving back to Columbus,” Ms. Maresh said. “Not anymore. Cleveland’s home.” — Stan Bullard

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MARY S. MARITA Vice president of campus development Benjamin Rose Institute on Aging ◆ 39

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here’s never a dull moment in Mary Marita’s work at the Benjamin Rose Institute on Aging in Cleveland, and that’s why she’s chosen to, as she characterized it, “embrace the chaos.” In her work, she’s constantly balancing the needs of her staff, the organization’s budget and, most importantly, the seniors the agency serves — the people who she said make her job so rewarding. Ms. Marita last spring put the finishing touches on a 36-apartment addition to Margaret Wagner House, the agency’s assisted-living complex in Cleveland Heights. The residents’ appreciation for her and her staff’s hard work made the grueling task of renovating a 50year-old building worthwhile. “The people I love to interact with the most are our residents, our tenants,” said Ms. Marita, the organization’s vice president of campus development and chief operating officer for its property LLC. “To see the appreciation for the home that

we have there for them and the smiles on their face lets you know you’ve done something good.” Ms. Marita signed on with Benjamin Rose in 1999 as the assistant administrator of Kethley House, the organization’s 184-bed nursing facility. She was promoted to the executive administrator post in 2001 and ran the nursing home until the organization’s board opted to shutter the facility in 2006 and

NOVEMBER 19 - 25, 2012

lease much of the space to Kindred Healthcare of Louisville, Ky. Last spring, Ms. Marita was instrumental in negotiating the sale of the 144,000-square-foot Kethley House to Kindred for $17.4 million. At the same time, she led the development of Benjamin Rose’s new 31,000-square-foot, $7.5 million headquarters off Fairhill Road in Cleveland, which should be completed by early next year. Part of what has made Ms. Marita such an asset to Benjamin Rose is her ability to learn new skills on the fly, according to Richard Browdie, the organization’s CEO. For one, she went from managing the daily operations of a nursing home to managing multimillion-dollar construction projects. “She’s not a high drama kind of person,” Mr. Browdie said. “She’s quiet until there’s something she needs to say. Mary speaks forcefully but selectively, so you really need to pay attention when she says something.” Ms. Marita and her husband, Brian, live with their 7-year-old daughter in Westlake. They enjoy taking their daughter to Cleveland Indians games, orchestra concerts and to the West Side Market. “It’s fun to watch all the things our city has to offer through a child’s eyes,” Ms. Marita said. — Timothy Magaw

BILL MATHEWS Chief technical officer and co-founder Hurricane Labs LLC ◆ 39

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n Dec. 19, 2003, Bill Mathews quit his job as an information technology consultant at a local company. That afternoon, he started working for himself. “I was unemployed through lunch,” he said. A few weeks later, Mr. Mathews and longtime colleague Glen Brzuziewski incorporated Hurricane Labs LLC, an IT security services firm in Independence. Both men previously had worked for two now-defunct IT services companies — they jokingly refer to the firms as “they who shall not be named” No. 1 and No. 2 — run by people who were untrustworthy and treated customers poorly, Mr. Mathews said. Those early experiences helped shape Hurricane Labs’ unofficial philosophy: “Don’t be a jerk.” “We basically wanted to build a company that had nothing to do with the way they did business,” Mr. Mathews said. It has worked pretty well so far. Hurricane Labs today employs 30 people. Its sales have grown by 60% to 70% annually since the company started, Mr. Mathews said, though he would not give dollar figures. Mr. Mathews serves as Hurricane Labs’ chief technical officer. The role lets him focus on what he enjoys: writing the code behind the company’s security software tools. He helps manage the company and its employees, but he admits that he’s never been big on telling other people what to do. Even so, people like to work for him, said Mr. Brzuziewski, managing partner at Hurricane Labs.

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“On the engineering side, he’s challenging people. He’s into it,” Mr. Brzuziewski said. Mr. Mathews’ affinity for building things started taking hold when he was 7. With the help of the manual that came with his family’s new Commodore VIC-20, he learned to program the computer to run calculations and create games. After earning his diploma in 1991 from the Cleveland School of Science, Mr. Mathews spent two years as a political science major at Cleveland State University, thinking he might become a lawyer. He says he left out of boredom, but by then he’d started helping companies manage their computer networks. He does help out current college students, though: Hurricane Labs last year hosted a “Hackademic Challenge,” where it asked area college students to hunt for “flags” in a computer network. The company has hosted other similar events, including one that raised money for the Cleveland Foodbank. Mr. Mathews enjoys comic books, video games and spending time with his wife, Courtney, and their dogs, Darby, Pistol and Armstrong. — Chuck Soder

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NOVEMBER 19 - 25, 2012

VLADIMIR NOVAKOVIC

JASON RADCLIFFE

Project director

Owner, founder

Perspectus Architecture ◆ 39

Forty Four Steel ◆ 36

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uch of the work Vladimir Novakovic has done with the Cleveland Clinic — which now numbers 45 projects — has been behind the scenes. It’s involved incredibly detailed, intensive projects such as installing magnetic resonance imaging and computed topography (CT) machines in various areas within the Clinic. His efforts include developing the master plan for the hospital’s electrophysiology department in the Clinic’s Cardiovascular Institute. His latest project, as Perspectus’ project director and lead architect of the Clinic’s $75 million, 135,000square-foot Pathology and Laboratory Medicine Institute at East 105th Street and Carnegie Avenue, has placed a more visible face on the work for which Mr. Novakovic has become known. “I have always loved the idea of creating places where people are, places they experience,” he said. Born and raised in Cleveland after his parents emigrated from Serbia, Mr. Novakovic has been with Perspectus since 2004. He earned his bachelor’s and master’s degrees from Kent State University’s highly regarded School of Environmental Design, where he also served as an adjunct professor for 10 years after earning his master’s degree. As both an undergrad and graduate student, Mr. Novakovic studied

abroad in Florence, Italy, a region famed for its architecture. He said he looks most fondly on the times after his studying ended when he and friends backpacked across Italy and other parts of Europe. Back home, he’s been most involved with the Clinic. However, he also has worked closely with Quality Electrodynamics, a growing Mayfield Village company that makes coils that go into MRI machines, on its new ultra-high-tech facility. Hiroyuki Fujita, Quality Electrodynamics’ CEO, said Mr. Novakovic “was very dedicated and is a very reliable individual with a positive attitude.” Mr. Novakovic remains active in what he calls a “very strong” Serbian community, including as vice president of the Serbian Sports Club Karadjordje, a youth soccer club in Broadview Heights. He remains active in his church, St. Sava, and coaches his son, Mihailo, in soccer. He and his wife, Danica, also have a 2½-year-old daughter, Teodora. — Joel Hammond

AMY PAUSCHE Executive director The Leukemia & Lymphoma Society ◆ 32

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my Pausche runs her nonprofit like a business, but the numbers on which she is focusing aren’t merely losses and gains. The numbers represent people. The executive director of the Leukemia & Lymphoma Society’s Northern Ohio chapter views the nonprofit’s 33% organizational budget growth over the last two years as a victory for individuals and families affected by cancer. Despite a challenging fundraising environment, Ms. Pausche has overseen an increase in the nonprofit’s budget from $1.73 million to $2.3 million, which funds research that is accelerating the development of new therapies and treatments for blood cancer patients. She is forecasting a 2013 budget of $2.5 million. “Behind every number is a person,” she said. “Our critical research is changing lives around the world. You see the blessings through the diagnosis.” Ms. Pausche has been affiliated with the nonprofit for about six years, first as a coordinator from 2003 to 2006 and again as executive director since 2009. She oversees 800 volunteers, and about 32 staff and board members. Her application of business principles and strategic thinking has enabled the chapter to raise awareness about the organization’s mission, capture additional funds and restructure its board of directors. “You don’t want to put the catcher in the outfield, and the pitcher on first base,” Ms. Pausche said. “You

put the pitcher on the pitcher’s mound,” and appropriate the other players accordingly. The nonprofit under Ms. Pausche’s leadership has hit the majority of its three-year strategic plan goals within two years, she said. Board member Kevin Goodman said in his nomination that he has observed Ms. Pausche over the last three years effect meaningful change, from both a personal and professional standpoint. “She speaks with Fortune 100 CEOs and the cancer patients and their families, and consoles the grieving as well,” he said. “Amy’s professionalism and drive brings additional credibility to the mission. … She is a uniquely empowered individual.” Ms. Pausche also is a member of the Union Club’s Cleveland Business Leaders Committee, and is a board member of the restaurant advocacy group Cleveland Independents. She also has been a 16-year marketing and event coordinator for the Chagrin Valley Hunter Jumper Classic. The Brecksville resident devotes her personal time to her husband, Brad, and their three children, as well as cooking, wine tasting and running. — Kathy Ames Carr

ason Radcliffe had been tooling around with industrial furnituremaking when a friend who owned a furniture shop volunteered Mr. Radcliffe to design a stainless steel glass-top table for an interior design client. The customer loved his product, but it would be four more years before Mr. Radcliffe’s designs received the type of reception that convinced him that he could make a living off his work. His minimalistic stainless-steel table and other items generated about a dozen orders at the 2009 International Contemporary Furniture Fair in New York City, at which he was the only Cleveland participant. “Now I have a nice base of architects and designers who are clients” based in New York, along with pieces displayed at two Manhattan stores, said Mr. Radcliffe, owner of Forty Four Steel. His momentum continued that year when he co-founded the f*sho, a contemporary furniture show that each year showcases Cleveland’s designers and makers. “(The business) has just kept going from there,” he said.

His year-over-year sales have doubled since then; in 2009, he brought in about $22,000. This year, Mr. Radcliffe is on pace to cross the six-figure mark and is planning to transition the business from his Rocky River home into a new space. Closer to home, Mr. Radcliffe’s work can be found primarily at topnotch restaurants, with La Strada’s reclaimed wood railing and Lola’s stools and bathroom markers among the customized creations. Mr. Radcliffe now journeys to New York’s annual furniture fair with a couple other local fabricators, whose displays are branded with a Cleveland logo designed to emphasize the city’s place in the larger

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design community. “Jason really has his finger on the pulse of the bigger picture,” said Freddy Hill, owner of Clevelandbased Bomb Factory Furniture. “He’s not so much concerned about how much we make on a certain piece, but how we can collaborate and build up the Cleveland design community.” Messrs. Hill and Radcliffe frequently collaborate on projects such as wood tables and cabinets, accented with steel shelves or bases. “I think we’ve designed everything but beds,” Mr. Hill said. “He’s my amigo.” Mr. Radcliffe describes his work as clean and simple, with the materials sourced from local steel suppliers and the reclaimed wood from partners such as A Piece of Cleveland. The inspiration for his personal business venture stems from his family’s Avon-based Berrington Pumps & Systems Inc., a pump distributor that he still manages. When he isn’t there or hammering out sleek furniture pieces from scrap, he’s bound to be mountain biking, fishing, skiing, paddleboarding or engaging in any other outdoor activity. “You name it,” Mr. Radcliffe said. “I’ve been traveling to Hawaii and Costa Rica the last couple of years to surf.” — Kathy Ames Carr


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ILYA ROMANOV President American Heelers Inc. ◆ 29

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eed a lift? Ilya Romanov can give you one — and no, he isn’t a cab driver. Mr. Romanov is the son of a cobbler who moved here from Russia with his family in 1989, when he was 6 years old. After earning a business degree from Ohio State University in 2005, he spent a brief period working as a financial analyst. Then, to his father’s surprise — and, at the time, chagrin — Mr. Romanov quit. “One day, he said, ‘Dad, I can’t sit in a cubicle,’” his father, Alexander, recalls. So the younger Mr. Romanov began focusing his efforts on the shoe-repair business and started a company called American Heelers, in Beachwood. With the number of cobblers in the United States dropping from 70,000

GRETCHEN L. SCHULER Vice president of insurance risk management and technical documentation Invacare Corp. ◆ 38

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retchen Schuler may not be a house cat trainer — her childhood dream — but she is good at her job. And, as a bonus, she owns a cat named Poppins. Ms. Schuler, vice president of insurance risk management and technical documentation for Invacare Corp., is “the kind of person who’s such a valuable individual

NOVEMBER 19 - 25, 2012

to less than 5,000 over the last 75 years or so, he figured he could leverage the power of the Internet to connect customers with his father and others in the shoe repair business. It worked, he said, but along the way he also found something else that worked even better. In addition to requests for shoe repairs, Mr. Romanov was getting requests for lifts to be built into shoes. The customers weren’t usually folks trying to add an inch or two to their height, but people who had one leg shorter than the other, often older folks who had had hip surgery. It was a better business, he figured, because as people lived longer, the market was growing, and lifts brought in $80 to $100 per shoe, while new heels and soles might bring in $40 to $50 per pair. And shops that could make lifts were even harder to find than cobblers. By 2010, American Heelers was doing only lifts. Today, it employs six people who build about 150 shoes a week. The business is growing,

and Mr. Romanov said he aims to increase sales by about 50% next year, as he did this year. He hopes to get his volume up to more than 1,000 shoes a week, and revenues up to about $500,000 a month. “I don’t see why we can’t do 1,000 a week,” he says. “I think I’ve only

performer, she becomes indispensible,” said her boss, Gerry Blouch, president and CEO of Invacare. Over Ms. Schuler’s 14 years at Invacare, Mr. Blouch progressively has given her more responsibilities and made the job more of a challenge. She now manages Invacare’s global insurance, technical writing, product liability litigation and risk management services. “It’s never boring because what I do does have some variety to it,” Ms. Schuler said. Despite her added duties, Ms. Schuler maintains the same poise she exuded on her first day on the job, Mr. Blouch said. “She gets involved in a lot of things that have a certain amount of stress associated with them,” he

said. “She’s never flustered. Where she calls upon that energy, I’m not sure. That’s what sets her apart.” Ms. Schuler now has 15 people reporting to her, including internationally based employees of the producer of wheelchairs and home health care equipment. “This is the first year I’ve had people outside North America, so that’s been a challenge, a good one,” Ms. Schuler said. Ms. Schuler graduated in 1996 from what was then Mount Union College with a major in history and a dual minor in political science and German. She completed graduate school at Cleveland State University in 1998 with a degree in history. She said she has appreciated her company’s willingness to give her

Congratulations Michael T. Jeans and to all the “40 Under 40” honorees

seen the tip of the iceberg so far.” Mr. Romanov markets the business online and through doctors whose patients are likely to need lifts. Most of his business is from the United States, but he also has had orders from 15 other countries. Most of his customers come back for more. He pauses during a conversation to talk to a woman from Baton Rouge, La., who needs one shoe made an inch thicker. After discussing her needs for a few minutes, he gives her instructions on how to print a mailing label. “I get about five to 10 calls like that a day,” he said. “If she does send me a shoe, she’ll probably become a three-time-a-year customer.” He might have even convinced his father that he made the right move. “I didn’t want him to go into this business — it’s a hard business,” Alexander Romanov said. “But I’m so proud of my son. … I wanted him to get a law degree here and then get a Russian law degree. Instead, he said, ‘Dad, the lawyers are going to work for me.’” — Dan Shingler

new opportunities and responsibilities and to show confidence in her abilities, especially because she doesn’t have a legal background. “I’m lucky I’m allowed to grow into the opportunity,” she said. In addition to her work responsibilities, Ms. Schuler is active in her community. She is a member of the Kiwanis Club of North Olmsted and helps with its Scholarship Foundation and is a trustee of the North Olmsted City Schools’ Education Foundation. — Ginger Christ

DALITHIA C. SMITH Director of recruiting and training Lincoln Electric Co. ◆ 37

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alithia Smith attended college intending to become an engineer. The problem was that dealing with numbers wasn’t the right fit for the Cleveland native. By her sophomore year at Ohio University, Ms. Smith had swapped her engineering major for one in marketing, a decision that ultimately would lead her to welding equipment maker Lincoln Electric Co. Ms. Smith now is the director of recruiting and training for Lincoln Electric, where she has worked for the last five years. “I love sales,” Ms. Smith said. “When you’re recruiting, you’re essentially selling the company to the candidate.” After receiving her MBA from Cleveland State University, Ms. Smith worked in sales at banks and pharmaceutical and accounting companies before moving to Lincoln Electric, where she feels she has found a good fit. An essential part of her job is interaction with others, and she gets a sense of reward for doing her work. “I love the feeling of giving that person the job offer,” Ms. Smith said. “It makes me feel like I’m helping someone start the next chapter.” It is because of that concern for others that Ms. Smith often serves as a mentor to young professionals within the organization. While the relationship is informal, many naturally turn to her because of her welcoming demeanor and willingness to share lessons she has learned from her own mistakes. But what makes her stand out in the company is her willingness to take on new responsibility and her ability to master those new challenges, said Gretchen Farrell, senior vice president of human resources and compliance at Lincoln Electric. “She has some of the broadest shoulders that you can imagine,” said Ms. Farrell, who is Ms. Smith’s supervisor. “I’m amazed every time we heap more stuff on her to do. She takes it and exceeds expectations.” During her time at Lincoln Electric, Ms. Smith has expanded her position from one of recruiting to

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Congratulations to Ted Hoffman and all the 40 Under Forty honorees.


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THOMAS P. STRAIN JR. Manager of applications OEConnection ◆ 35

T one involving training and development. Now, she is responsible for global oversight of both those areas. “My mantra is, always strive to do better than you did yesterday,” Ms. Smith said. Ms. Smith has revamped Lincoln Electric’s college recruitment efforts. Rather than trying to have a presence at 50 schools, as in the past, she now has developed relationships with 23 targeted schools. Lincoln Electric now is at those schools year-round, and employees from various parts of the company are involved in the recruitment process. Yet, despite her success at work, Ms. Smith’s “pure life and joy” is her 10-year-old daughter, Jordyn. “She just makes you have fun,” Ms. Smith said. She said she always strives to set the same good example as her mother, who also is a single mom. — Ginger Christ

ech guru Thomas P. Strain Jr. was climbing the corporate ladder until late September, when he jumped off — which is good news not only for his family, but probably for his new employer as well. Mr. Strain had been a technology leader at PerkinElmer in Akron, where he was director of health informatics and technical support for the company, which among other things makes health care diagnostics equipment. “He did great. We loved his project management experience and his attention to detail,” said Darren Hudach, Mr. Strain’s boss at PerkinElmer and the man who hired him. Mr. Hudach says Mr. Strain left in September on amicable terms and still has friends at his old company. “We’re friends as well,” Mr. Hudach added, “I had lunch with him yesterday.” But Mr. Strain, married since 2005 and with a 6-year-old daughter and 3-year-old son at home, was growing tired of spending nearly half his life on the road and away from his family. So when an opportunity came up to become manager of applications at Richfield-based OEConnection, Mr. Strain took it. The job not only afforded him the opportunity to be home more, but it also would use some of the skills Mr. Strain learned while

DANNY SPITZ CEO EverStaff International ◆ 37

D

anny Spitz was working for the world’s largest staffing firm, Robert Half International, when he developed his own global point of view on meaningfully connecting with industry clients. At age 26, he addressed that vision by forming in 2001 EverStaff, a firm that aims to provide more specialized services to clients by acting as a staffing provider and consultant. “We aren’t just a vendor of staffing services but a partner to our clients,” Mr. Spitz said. “We want to know their business inside out, and we work closely with management teams to create customized solutions that exceed their goals.” The Independence-based staffing outfit 11 years later has grown from one location to 13 branch offices, serving about 500 active clients in 24 states and Canada. EverStaff internally employs 45, although the number of individuals on its payroll exceeds 1,000. “We’re looking at becoming a leader nationally,” Mr. Spitz said. “We’re planning to add locations and expand our presence on the West Coast and South.” The staffing firm for three consecutive years has been recognized on the Inc. 5000 list as one of the fastest-growing private companies in the U.S. Its 2012 ranking lists the operation’s three-year revenue growth as 419%, from about $3.5 million in 2008 to about $18.4 million in 2011. The firm is on track to generate about $25 million this year. EverStaff also has been a three-

time recipient of the Weatherhead 100 award, which honors Northeast Ohio’s fastest-growing companies. “In my three years of working with him, I’ve never experienced a more driven, hard-working individual than Danny,” said Ray Johnson, a controller at EverStaff. “Our success rate is unbelievable.” Among other contributions, Mr. Spitz helps mobilize students to battle childhood obesity through the American Heart Association’s “healthy heart” program. Each year, the group partners with a professional sports team — including in 2011 the Cleveland Browns and this year the Lake Erie Monsters — to organize an event that teaches students the benefits of eating healthy. EverStaff participates in the Susan G. Komen Race for the Cure, and Mr. Spitz’s company and his family each year sponsor underprivileged individuals as a way of giving back and helping the community. The Orange Village resident’s hobbies include sports and spending time with his family: his wife, Wendy; and his children, Tyler, 9; and Haley, 7. — Kathy Ames Carr

“(My father) always told me ... ‘Work with your mind, not your hands.’” – Thomas P. Strain Jr. working at one of his first professional jobs, in information technology and manufacturing systems for General Motors. OEConnection provides specialized software that automakers and suppliers use to manage their parts inventories and supply chains. Being with his family is what drove Mr. Strain to even entertain a job jump.

“To be honest, that was a big reason for the career move,” Mr. Strain said, “I wanted to be home more.” Mr. Strain will be managing customized software used by Ford and General Motors — the biggest clients in the automotive world — as well as software used by dealers, repair shops and other original equipment maker customers. It will be a big switch from health care information technology, but Mr. Strain seems apt to handle it. “He’ll work his way up to speed at OEConnection, I’m sure,” Mr. Hudach said. Away from work, Mr. Strain plans to use his additional time at home to be with his family, improve his technical skills and probably engage in a little e-commerce or website design. “The work-life balance is important to me,” he said. Family has always been important to him, said the former baseball and football team captain from Girard, who grew up in a house with four siblings. Mr. Strain’s father, a mechanic, gave him the advice he needed to find his present career. “He always told me, ‘You want to work where you don’t get your hands dirty — work with your mind, not your hands,’” Mr. Strain recalls. — Dan Shingler

F-17

LAZOR continued from PAGE F-12

an achievement he attributes to great coaching. He didn’t get into the U.S. Naval Academy, so instead he studied electrical engineering at the University of Michigan. He spent two years in Warren, Ohio, working for Electronic Data Systems, which then was part of General Motors, and another year at Intel in Portland, Ore., before he decided to move back to Northeast Ohio to start a family with his now-wife, Mary. They have four kids: Julianne, 12; Allison, 11; David, 8 and Andrew, 4. Mr. Lazor enjoys reading and helping other business owners via the Cleveland chapter of the Entrepreneurs Organization and the John Carroll University Entrepreneurs Association. Mr. Lazor is an honest, levelheaded businessman and a great student, according to family friend and mentor Dave McKee, who founded and sold interior landscaping firm Interior Plant Specialists of Cleveland. The two men have been regularly meeting for coffee to discuss business ideas since the late 1990s. “When he focuses on what he wants to do or needs to do, he really follows through with it,” Mr. McKee said. — Chuck Soder


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11/14/2012

3:15 PM

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CRAIN’S CLEVELAND BUSINESS

JENNIFER STULL Vice president, director of business development and administration Osborn Engineering ◆ 37

J

ennifer Stull thrives in a domain where she still can claim firsts for a woman — and someone who is not an engineer. She is a member of the board of directors of Osborn Engineering and both the first woman and first person without an engineering degree to serve in such a capacity at the high-profile, 120-year-old Cleveland engineering and architecture firm. The international business major and one-time cell phone salesperson is responsible for sales, marketing and administration at the firm. “Since joining the firm in 1999, (Ms. Stull) has been on the fast

KEN SURATT Chief financial officer Breakthrough Schools ◆ 39

O

ne of Ken Suratt’s dream jobs is to run a barber shop. In the meantime, Mr. Suratt, who has an MBA from Duke University, is working as chief financial officer of the Breakthrough charter schools. “For black men, the barber shop was kind of where they grew up and learned about manhood, especially if, like me, they grow up in a house with all women,” he said. “Why can’t a barber shop be formalized as a place for mentoring? It could have computers for kids whose parents work late.”

track for success,” Osborn CEO Lee Hooper said. “Her fresh ideas and diverse background have brought marketing and business relationships to the forefront. She is also the youngest member of the board.” Ms. Stull credits leaders at Osborn with her success because they were willing to hire someone who was not an engineer. She manages a marketing coordinator and oversees the firm’s website, works on its pitches and engineered the firm’s rebranding, which in part involved dropping the word “architects” from its name while adopting the OSports name for its stadium and recreation work. The presence of “architects” in the name had cost Osborn business from architects who could have used its engineering services, Ms. Stull said matter-of-factly. “When I was coming up at Osborn, they were looking for a fresh approach. They were very open to trying new things,” she said. A poster-size photograph of the

Mr. Suratt returned to Cleveland to help fulfill another dream — playing a role in rebuilding his hometown, as well as the Glenville neighborhood where he grew up. For him, working for a nonprofit that manages charter schools is a way to repay a debt to his parents and an aunt. (Charter schools are privately run but get some public financing.) Education always was of the utmost importance to the Suratt family. Despite losing their parents at an early age, an aunt who raised them made sure Mr. Suratt and his three siblings got good educations. Mr. Suratt entered the business world first at Arthur Andersen LLP and then at IBM Global Services, after earning his MBA in 2001

NOVEMBER 19 - 25, 2012

Osborn board, including her, is pasted on the ceiling above her desk at the Penton Media Building. A fellow board member put it there as a joke to let her know they are

following his graduation from University School and the University of Virginia. Mr. Suratt changed careers in 2006, taking a job with the KIPP Foundation, a San Francisco nonprofit that operates charter schools as well as a program to train charter school leaders. From there, he moved to Stanford University, where he was assistant director of the Center for Research on Education Outcomes, or CREDO, which produced a study in 2009 that offered ways to measure the effectiveness of charter schools. He left CREDO in 2011, returning home to Cleveland, to be chief financial officer of the Breakthrough Schools, a group of nine charter schools, including E Prep and the Intergenerational School.

Congratulating our friends and colleagues on their continuing achievements: Frank L. Gallucci, III Jed Hunter Gretchen L. Schuler

watching her, she said. However, when Ms. Stull discusses her goals at Osborn she puts her future plans simply: “My goal is to make my principals successful,” she said of the firm’s ownership, adding, “I never imagined being at a professional services firm. I love working here.” A competitor and colleague, Brett Neff, who also does business development at R.E. Warner & Associates of Westlake, said Ms. Stull “has a bubbly personality and is one of the most outgoing people in our business.” “She certainly understands our industry,” Mr. Neff said. A single mother with two daughters, 4, and 7, Ms. Stull said, “I work hard for my children.” She said Osborn has assisted her as a parent by being flexible, particularly as she is active with multiple trade groups. Her big outlet is running on a treadmill in the morning before her girls get up, and she loves vacationing in Hawaii. — Stan Bullard

ROCCO WHALEN Chef, owner Fahrenheit; Rosie & Rocco’s; Rocco’s at The Q ◆ 35

C

leveland is defined by the people who’ve built this city. They are the laborers, the artisans, entrepreneurs and innovators. Rocco Whalen is all of the above — a representation of the hard-working, unstoppable and creative force that drives the city’s ethos. “I bleed orange, brown and red,” said Mr. Whalen, referring to his passion for the Browns and his hometown Mentor Fighting Cardinals. The chef of Fahrenheit has been steaming ahead, with the introduction this year of Rocco’s Nachos & Tacos at Quicken Loans Arena and Rosie & Rocco’s at the Horseshoe Casino Cleveland and Cleveland Browns Stadium. Mr. Whalen is predicting his 60-employee operation this year will more than double last year’s sales, to $5 million from $2 million. “I’ve been shoveling coal on the train engine,” he said. “The city is billowing smoke, and it’s ready to blow. I’m really glad to be a part of it.” Mr. Whalen has been cooking since he graduated at age 19 from the Pennsylvania Culinary Institute.

BRAD WIANDT President Madison Electric Products Inc. ◆ 38

“Two, 2½ years ago, I decided I wanted to get back to Cleveland,” he recalled. “My aunt was getting older, (and) my oldest niece went to college. Where did the years go? I’d been in California for seven years; I wanted to get closer to home.” By that time he had met Perry White, founder of Citizens Academy, another Cleveland charter school, and heard about a job opening at Breakthrough and about its efforts to build a group of strong charter schools. “A kid from Cleveland who wanted to come back — a brain gain,” said John Zitzner, president of The Friends of Breakthrough Schools, and a founder of E-Prep, now one of the Breakthrough schools. “He’s been a great help; he brings a real knowledge of the business side.” — Jay Miller

T

he son of a first-generation American, Brad Wiandt always has been taught to think big. His father moved to the United States from Hungary as a child, yet managed to learn the native tongue and eventually land a job as associate controller at the University of Akron. “It was instilled in me that you could do big things,” Mr. Wiandt said. At age 38, Mr. Wiandt already is president of Madison Electric Products, a 40-person electrical products manufacturer in Bedford Heights. Since assuming the top job less than four years ago, he has transformed Madison Electric from a commodity-driven business to a forward-thinking manufacturer, according to Rob Fisher, its vice president of marketing. After graduating in 1996 from the University of Akron with a

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20121119-NEWS--31-NAT-CCI-CL_--

11/15/2012

3:06 PM

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CRAIN’S CLEVELAND BUSINESS

NOVEMBER 19 - 25, 2012

BRYAN P. ZABELL

“I’ve forgotten everything about Pittsburgh except the techniques I’ve learned,” the chef joked. He then hit the fast-forward button on honing his culinary skills by toiling about 19 hours a day for five years at Wolfgang Puck restaurants out west. Mr. Whalen returned to Cleveland in 2001, where he worked at Blue Point Grille before unveiling Fahrenheit in 2002. He also paved the way for the city’s food truck business when he rolled out in 2007 his ShortRib1 mobile bistro. His efforts have earned him a James Beard Rising Star nomination, and he has been recognized locally and nationally for his cuisines. About 20 charity events also are on Mr. Whalen’s books each year, including those that benefit Autism Speaks and the Cleveland Foodbank. Meanwhile, the chef has tackled a recent lifestyle 180-degree turn with a will of iron. He competed on the Food Network’s “Fat Chef” series that aired this year; when filming began, he tipped the scale at 343 pounds. A rigorous workout and strict meal plans prompted about a week of vomiting several times a day before his body adjusted. Mr. Whalen dropped 85 pounds in 16 weeks. “I crush green, leafy vegetables,” Mr. Whalen said. “I kill kale.” Dan Bednar, co-owner of Fitness Revolution and Mr. Whalen’s

personal trainer, said he believes the chef has transformed his lifestyle for good. “He was so gung-ho about making his weight goals. He’d run through a brick wall if he had to,” Mr. Bednar said. “He’s one of my most talented boot-campers.” Indeed, the chef has a renewed sense of purpose, though he’s pausing for a bit before embarking on any new ventures. “I promised my wife I wouldn’t do anything until the end of calendar year 2012,” he said. “Jan. 3, 2013, it’s on.” — Kathy Ames Carr

degree in marketing management, Mr. Wiandt held a number of marketing roles before being identified in 2008 by a headhunter as a good fit for Madison Electric. Mr. Wiandt is considered young among his peers, many of whom are in their 50s and 60s, Mr. Fisher said. Because of his age, Mr. Wiandt is able to understand the needs of millennials, yet he still respects the tradition of the older generation, he said. “A lot of people in the electrical industry know him from when he used to be a rep,” Mr. Fisher said. “They’re always impressed but they’re never surprised.” Mr. Wiandt in 2009 launched the

Sparks Innovation Center, an Internet-based product development program through which the company partners with electricians and contractors to develop their product ideas. Through Sparks, Madison Electric already has brought six new products to market. “He definitely empowers individuals. He encourages them to take risks, which I think is very important when you’re trying to grow a business,” Mr. Fisher said. It was the sense of empowerment Mr. Wiandt bestows upon his employees that made the decision to work at Madison Electric an easy one for Mr. Fisher, who has worked with Mr. Wiandt for eight years — at two different companies. “In any given room, I’m probably not the smartest person in the room and that’s OK,” Mr. Wiandt said. “I’m not a manager or a president who has to have all of the ideas. I realize in many cases I don’t. I have ideas come from the bottom up.” Mr. Wiandt lives in Concord with his wife, Gina, and their two children: Bradley, 7, and Annamarie, 5. He volunteers as an assistant den leader for his son’s Cub Scout troop and is an avid golfer. Professionally, he serves on the board of the National Electric Manufacturers Representatives Association and is involved in various industry associations. — Ginger Christ

Senior vice president of anchor store leasing DDR Corp. ◆ 35

B

COMING UP

ryan Zabell tracks 30 retailers with Google alerts on his iPhone but waits until after his two young children are in bed to plow through the dozen retail and shopping center trade magazines he follows. There is no time for the trade pubs during the day. Both cell phone practices reflect life for the head of a seven-person unit that oversees anchor-store leasing at shopping center giant DDR Corp. The job includes working with tenants of more than 20,000 square feet that account for 80% of the square footage in the real estate investment trust’s portfolio. During a fast rise at the company — the Ohio State University business grad was part of its first recent college graduate training class in 2001 — Mr. Zabell has worked in the last few years to find tenants to fill large vacancies created by retail bankruptcies and shutdowns since the 2008 financial collapse. He also has served with corporate counsel on creditor committees for some of the major bankruptcies of the past few years. “It was unfortunate to lose so

many companies,” Mr. Zabell said. “It was not just losing retailers but doing so as the debt markets were closed. It was a very interesting process.” His team filled vacancies created by the disappearance of retailers such as Borders, Steve & Barry’s, Circuit City and Linens ‘n Things. “His performance as a group leader and a deal maker are a significant part of our success and our resurgence,” said Dan Hurwitz, DDR president and CEO, in an interview about Mr. Zabell, who considers him a mentor. “We lost numerous locations and they are all

F-19

about 98% leased.” Mr. Hurwitz interviewed Mr. Zabell for entry to the then-nascent internal DDR training program in 2001. “He is highly intellectual. He has a charismatic personality. That is a strong combination. I know what it takes to be successful and he had that,” Mr. Hurwitz said. Moreover, Mr. Hurwitz said Mr. Zabell excelled because, no matter what the topic, “You never need to teach or tell (Mr. Zabell) anything twice.” In the training program, new hires do stints in various jobs to find their niche. Mr. Zabell found his in leasing. “I enjoy the negotiating,” Mr. Zabell said. “I like the personal aspects of it. There is a certain excitement to it because we are closing deals fast.” Mr. Zabell also lives the dream for many area college grads. The Cleveland Heights native wanted to pursue his career in Cleveland to be near his family. He also wanted to get his feet wet in business rather than pursue law like many members of his family. Today, he lives in Beachwood, a couple minutes from DDR’s headquarters. Despite a demanding travel schedule, he is a coach for his daughter’s soccer team and a member of Beachwood’s planning and zoning commission. — Stan Bullard

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20121119-NEWS--32-NAT-CCI-CL_--

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11/16/2012

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

NOVEMBER 19 - 25, 2012

LARGEST SAVINGS INSTITUTIONS RANKED BY NORTHEAST OHIO DEPOSITS(1) Deposits Company name Headquarters address Rank Phone/website

Non-performing loans

6-30-2012

6-30-2011

% change

2012 entire market share %(2)

Total assets ($millions)

$ millions 6-30-2012

% of gross loans 6-30-2012

Net income Top local executive ($millions) Title

1

Third Federal Savings & Loan 7007 Broadway Ave., Cleveland 44105 (216) 441-6000/www.thirdfederal.com

$6,162.5

$6,156.4

0.1%

7.2

$11,451.8

$157.2

1.5%

$2.4

Marc A. Stefanski chairman, president, CEO

2

Ohio Savings Bank, A Division of New York Community Bank 1801 E. Ninth St., Cleveland 44114 (216) 588-4100/www.amtrust.com

$1,997.1

$1,947.0

2.6%

2.3

$40,811.6

$570.4

1.9%

$248.7

Jon Baymiller president, CEO, NYCB Mortgage Co. LLC

3

Dollar Bank FSB 1301 E. Ninth St., Cleveland 44114 (216) 736-8900/www.dollarbank.com

$1,718.8

$1,654.1

3.9%

2.0

$6,556.9

$41.7

0.8%

$19.8

Andrew D. Devonshire president, Ohio banking region

4

First Place Bank P.O. Box 551, Warren 44482 (330) 373-1221/www.firstplace.net

$1,522.1

$1,575.7

-3.4%

1.8

$2,639.0

$135.7

6.8%

$17.7

Albert P. Blank president, COO

5

Home Savings & Loan Co. 275 Federal Plaza W., Youngstown 44503 (330) 742-0500/www.homesavings.com

$1,196.6

$1,236.9

-3.3%

1.4

$1,909.9

$114.5

8.9%

$4.1

Patrick W. Bevack president, CEO

6

First Federal Savings & Loan Assoc. 14806 Detroit Ave., Lakewood 44107 (216) 221-7300/www.ffl.net

$1,154.2

$1,154.9

-0.1%

1.3

$1,349.4

$20.5

2.0%

$3.9

Gary R. Fix president, CEO, managing officer

7

Park View Federal Savings Bank 30000 Aurora Road, Solon 44139 (440) 914-3900/www.parkviewfederal.com

$697.4

$688.5

1.3%

0.8

$805.5

$24.8

4.3%

$1.0

Robert J. King Jr. president, CEO

8

Westfield Bank FSB Two Park Circle, Westfield Center 44251 (800) 368-8930/www.westfield-bank.com

$479.4

$436.4

9.8%

0.6

$591.5

$8.5

2.1%

$2.1

Timothy E. Phillips president

9

First Federal S&L Assn. of Lorain 3721 Oberlin Ave., Lorain 44053 (440) 282-6188/www.firstfedlorain.com

$359.0

$356.1

0.8%

0.4

$487.3

$10.7

3.2%

($0.1)

John R. Malanowski president, COO

10

Wayne Savings Community Bank 151 N. Market St., Wooster 44691 (330) 264-5767/www.waynesavings.com

$310.7

$305.4

1.7%

0.5

$409.1

$5.4

2.2%

$0.8

Rodney C. Steiger president, CEO

11

Geauga Savings Bank 10800 Kinsman Road, Newbury 44065 (440) 564-9441/www.geaugasavings.com

$240.4

$261.0

-7.9%

0.3

$402.5

$18.5

9.0%

$1.1

Allen S. Lencioni Sr. president, CEO

12

Hometown Bank(3) 142 N. Water St., Kent 44240 (330) 673-9827/www.homesavingsbnk.com

$129.2

$124.5

3.7%

0.2

$155.9

$1.8

1.4%

$0.5

Howard T. Boyle II president, CEO

13

North Akron Savings Bank 158 E. Cuyahoga Falls Ave., Akron 44310 (330) 434-9137/www.northakronsavingsbank.com

$114.7

$106.4

7.8%

0.1

$158.2

$1.3

1.1%

$0.2

Stephen D. Hailer president, CEO

14

CFBank 2723 Smith Road, Fairlawn 44333 (330) 666-7979/www.cfbankonline.com

$113.4

$149.0

-23.9%

0.1

$224.0

$6.4

4.6%

($1.2)

Timothy T. O'Dell, CEO Thad R. Perry president

15

Valley Savings Bank 140 Portage Trail, Cuyahoga Falls 44222 (330) 923-0454/www.valleysavingsbank.com

$93.6

$90.6

3.3%

0.1

$112.3

$0.6

0.6%

$0.4

Ann H. Durr president, COO

16

Conneaut Savings Bank 305 Main St., Conneaut 44030 (440) 599-8121 /www.conneautsavings.com

$70.0

$70.3

-0.4%

0.1

$84.0

$0.4

0.6%

$0.1

Philip Heffelfinger president, CEO

17

Home Federal Savings & Loan Association of Niles 55 N. Main St., Niles 44446 (330) 652-2539/www.homefedniles.com

$62.2

$61.5

1.2%

0.1

$105.8

$1.7

6.7%

$0.2

Lawrence Safarek president

18

Northwest Savings Bank 2 Liberty St., Warren, Pa. 16365 (814) 723-9696/www.northwestsavingsbank.com

$59.4

$59.8

-0.7%

0.1

$8,054.1

$117.3

2.1%

$33.1

Thomas Stanton vice president, Crawford, Lawrence, Mercer and Ohio district manager

19

Pioneer Savings Bank 6701 Detroit Ave., Cleveland 44102 (216) 961-0422

$14.2

$14.0

1.4%

0.0

$30.9

$0.5

3.4%

$0.1

Virginia C. Barsan president, CEO

20

First Federal Bank of Ohio 140 N. Columbus St., Galion 44833 (419) 468-1518/www.firstfederalbankofohio.com

$4.3

$4.2

1.3%

0.0

$252.5

$3.7

3.3%

$0.0

Thomas L. Moore president, CEO

Source for financial data: Thomson Reuters Bank Insight. NA=Not available. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Deposit information includes branches located in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties, as of June 30, 2012, and June 30, 2011. All other numerical data is institution-wide as of June 30, 2012. (2) Includes all financial institutions in the 15-county coverage area. (3) Previously Home Savings Bank.

Diamond: Brilliance a measurable quality continued from PAGE 3

diamonds in the world when it limited its lab study to diamonds from select national jewelry store chains. “Zale’s claim that it has proven its Fire diamonds to be more brilliant than any other cut of diamond in the world can be true only if its Fire diamonds have been tested against every other cut of diamond in the world,” the lawsuit alleges. “Zale’s admission that it has tested only a ‘select’ subset of round-cut diamonds renders this claim false.” Sterling is seeking an injunction restraining Zale and its people from engaging in future acts of false advertising and ordering removal of

all of Zale’s false ads. Sterling also claims it is entitled to recover from Zale damages sustained by Sterling as a result of the false claims, though it said it “is at present unable to ascertain the full extent of the monetary damages.” Zale Corp. spokeswoman Roxane Barry said Zale officials believe the lawsuit is without merit and “an attempt by a competitor to distract consumers from our terrific products.” “Our advertising was based on testing by an independent laboratory, and our ads make that fact clear,” Ms. Barry said. She declined to identify the lab.

Puffed up claims? Though he noted it’s his company’s policy not to comment on legal matters, David A. Bouffard, vice president of corporate affairs for Signet Jewelers Ltd., the parent company of Sterling Jewelers, wrote in an email: “It’s important to note that the brilliance of a diamond is a recognized property within the global jewelry industry and among jewelry consumers. It is not a statement of subjective opinion but is capable of being systematically, reliably and scientifically measured.” The likely reason for the company’s delineation is that the law recog-

nizes that some advertising claims are “puffery,” or subjective hyperbole, and others are so-called establishment claims said to be factual. David Cupar, who co-chairs the intellectual property practice group at McDonald Hopkins LLC in Cleveland, says it’s pretty clear that Zale’s claims are not puffery claims. “They’re coming out to say, ‘We really are the most brilliant diamond,’” said Mr. Cupar, who is not involved in the case. “They really go out of their way in a small paragraph (at the bottom of their ad materials) to identify that they’ve performed independent lab testing and that that independent lab testing finds (theirs to be) the most brilliant.” Conversely, an example of a puffery claim would be a sandwich shop saying it has the best-tasting

RESEARCHED BY Deborah W. Hillyer

sandwiches in the world and leaving it at that, Mr. Cupar said. Both Mr. Cupar and Ulmer & Berne’s Mr. Sarkar agreed: The crucial answer the judge in the case must unearth is whether the lab tests that were conducted were enough for Zale to make its claims. “Does it, in fact, support Zale’s claim, or are there significant holes that could really undercut its advertising there?” Mr. Cupar said. That said, Zale need not test its diamonds’ brilliance against that of every diamond in the world to make the claim, Mr. Cupar noted. “Just because you’re considered the fastest person in the world doesn’t mean you have to race everybody in the world,” he said. “But you want to race the world-class runners, so to speak.” ■


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CWRU med school effort gets $10M more Hospitals: Providers University now halfway to goal of $50 million bear brunt of deep cuts By TIMOTHY MAGAW tmagaw@crain.com

Case Western Reserve University has landed what it characterized as another “significant” gift to support the construction of a 160,000-squarefoot, $50 million building for its medical school on the site of the now-defunct Mt. Sinai Medical Center on East 105th Street in Cleveland. Per the donors’ wishes, university officials did not disclose the size of the gift from longtime health care philanthropists Constance and James Brown, but noted it brings the university halfway toward its $50 million fundraising goal for the new

building. Mr. Brown is chairman of Tailwind Technologies — the holding company of Hartzell Propeller in Piqua, Ohio. The Browns, of Chagrin Falls, made the donation in honor of the medical school’s dean, Dr. Pamela Davis, who has treated their granddaughter, KC Bryan White, for cystic fibrosis for decades. “Dean Davis has been her principal caregiver for 30 years — through childhood, adolescence, marriage and motherhood. So we know the dean well,” Mr. Brown said in a news release. “We have learned to admire her without reservation. And above all, we have learned that

she has a heart as big as all outdoors.” Per the Browns’ wishes, the administrative suite in the new facility will be named in honor of Dr. Davis. “I am overwhelmed, both by Jim and Connie’s personal tribute, and the level of support they have shown for this important capital project,” Dr. Davis said in the release. “With their gift, the School of Medicine will soon enter a new era of technologyenhanced medical education.” The Browns’ gift follows a historymaking donation announced in September by the Cleveland Foundation and Mr. Sinai Health Care Foundation, which each pledged $10 million. This fall, CWRU alumnus Dr. Michael D. Eppig and his wife, Ruth, committed $1.5 million to the project. ■

Union: Skill sets take more importance continued from PAGE 1

side by side,” Mr. Waltermire said when he met last week with a group of Crain’s reporters and editors to discuss his group’s third-quarter economic report. A key forecast in data supplied by Moody’s Economy.com, a leading economic forecasting firm, is optimistic about the growth of manufacturing in Northeast Ohio between now and 2020. From 2012 to 2020, Economy.com is projecting a 23% increase in gross regional product within the manufacturing sector. GRP is a widely accepted measure of the value of goods and services produced in a regional economy. Underlying that forecast, Mr. Waltermire said, is a recognition that even unionized companies in the region, notably steelmaker ArcelorMittal and the automobile companies, are able to operate their plants here profitably and at high levels of efficiency. The prospects for manufacturing in the state also reflect a kind of survival of the fittest. “The base we have now is healthier,” Mr. Waltermire said. “The weaker operations have faded away and even some of the traditional things are back at a (higher) productivity level.” That improvement gets back to the union issue — unionized plants are showing high levels of productivity. As a result, Mr. Waltermire said, “it’s hard to find a productivity penalty in the unionized areas; if (productivity issues) were there, they generally have died.”

Hiring won’t match output While the Team NEO report forecasts growth in manufacturing GRP, it isn’t forecasting matching growth in manufacturing employment. Rather, it expects manufacturing employment to remain flat — a strong indication that most of the gains in manufacturing will come from efficient and productive manufacturers that invest in automation. While Team NEO’s experience with site selectors may be encouraging to those who are rooting for a manufacturing renaissance in the region, other observers say the attitude toward the state only may be changing in certain manufacturing sectors that are accustomed to a unionized labor force and among companies that need workers with hard-to-find

Employment back to peak by 2020 Team NEO’s quarterly economic report makes the case for steady progress toward recovery, though overall employment in the 18 counties that comprise Team NEO’s service area won’t return to peak employment levels of the early-1990s until the end of the decade. The data, supplied to Team NEO by Moody’s Economy.com, a leading economic forecasting firm, project that the number of people employed in the region by 2020 will rise by 169,000 jobs, or 8.7%. “That would put the region back to the 1990 level,” said Jacob Duritsky, director of business attraction at Team NEO. Employment began declining steadily in the 1990s and then took a deep dive at the end of 2008. The growth is forecast to come in health care (40,000 jobs), construcskills. Many companies still focus their site selection on so-called “rightto-work” states that have laws that hamper the ability of unions to operate. State right-to-work laws generally allow employees to opt out of union dues while they maintain the pay and other advantages that come with union organizing. Supporters say right-to-work laws create a business-friendly environment, which brings jobs. Union leaders believe the legislation is designed to weaken labor unions. “There are people for whom the right-to-work dimension is very attractive,” said Richard Vedder, an economics professor at Ohio University.

Haul out the data Dr. Vetter said he recently was in Indiana and heard from government leaders there who say manufacturing is booming as a result of its new right-to-work law. Gov. Mitch Daniels signed the state’s right-to-work law earlier this year, making Indiana the 23rd state — and the only one in the Midwest — to pass such a law. Dr. Vedder was an advocate for Indiana to become a right-to-work state. But he also acknowledges that the right-to-work advantage may be narrowing.

tion (12,000 jobs), professional and technical services (12,000 jobs), and finance (8,000 jobs). The report estimates the number of people currently employed at 1.95 million, compared with 1.96 million in 1990. That total is forecast to grow to 2.1 million in 2020. In the short term, Team NEO reports that the manufacturing sector has been the fastest-growing sector over the last year, adding 7,000 jobs, a 3.1% increase from the end of the third quarter of 2011. That was offset, however, by a decline in government employment of 8,000 jobs over the same time period. Also, regional unemployment at the end of third quarter of 2012 was 7.0%, similar to the statewide unemployment figure of 6.9% in October but lower than the U.S. unemployment of 7.9% last month. — Jay Miller “The evidence you’re picking up has some validity to it,” Dr. Vedder said of Mr. Waltermire’s belief that the avoidance of Ohio is diminishing. “I can understand the nature of the labor force does make a difference and you could have labor force needs that are of a certain nature where having the skill set is more important than worrying about whether workers are unionized. “As the percentage of the work force in unions has declined, the issue is less on the radar screens than it was a decade or two ago,” he said. Michelle Comerford, managing director of Austin Consulting, said she believes communities must be able to show data to companies and their site selectors that backs up claims of available skilled labor and high labor productivity to sell the region. Austin Consulting is a unit of the Cleveland-based Austin Co. that is a site selection consultant to businesses. “We usually advise communities and regions to combat (concerns about the union labor environment) with data — how many places are unionized, the history of strikes — along with productivity data,” she said. That kind of information can back up an argument that a region will be a comfortable place for a nonunion company, Ms. Comerford said. ■

continued from PAGE 1

already fall short of covering the cost of providing care, hospital officials say any cuts to the program — no matter how small — provoke furrowed brows. “I don’t think it matters how you measure, $22 million is a lot of money,” said Clinic CFO Steve Glass. Northeast Ohio health care leaders have built the potential Medicare cuts into their budgeting models for next year. Individually, none would say the cuts would lead to layoffs or massive cutbacks in services, and instead suggested they’d trim costs elsewhere. For instance, Mr. Glass said the Clinic would continue the “process improvement” initiatives it has employed in recent years, including the consolidation of certain services at one location rather than spreading them out through the system. In a more dramatic assessment of the situation, the Ohio Hospital Association, a statewide lobbying group, said the Medicare cuts could lead to a loss of 31,163 jobs in the state. “In this environment, everyone is throwing up their hands,” said Matthew Albers, an attorney in the health care group at Vorys, Sater, Seymour and Pease LLP in Cleveland. “It’s the Wild West right now. We don’t know what’s going to happen.”

Cut with care During the contentious president election, both President Barack Obama and his Republican challenger, Mitt Romney, agreed on the need to reform Medicare so the popular health care program could remain solvent for generations to come. Health care providers are concerned, however, that lawmakers will continue to punt major reforms down the road and instead continue to siphon the amount of money the providers are paid for services. “Arbitrary, across-the-board cuts undermine our ability to care for our patients,” said Heidi Gartland, vice president of government relations at University Hospitals. “We recognize the country faces a looming deficit, and we all know we have to partner to come up with the right solutions. But we’re looking for solutions that make sense for the country’s finances (and) for providing health care to its citizenry.” Marty Hauser, chief government relations officer for Summa Health System in Akron, likened what’s occurring in health care to the old adage “death by a thousand cuts.” He cited Medicare reimbursement reductions rolled into President Obama’s health care overhaul, as well as continued financial pressures facing the Medicaid program — a health care program for lowincome people — caused by Ohio’s own budget woes. Summa officials pledged last year to cut nearly $1 billion out of its system over the next decade by consolidating services, negotiating better contracts and using a limited number of layoffs to prepare for what they expect will be steep reimbursement cuts for years to come. If the automatic Medicare spending reductions take effect at the start of the year, Summa is slated to lose between $3.5 million and $4.5 million annually over the next nine years or as long as sequestration is in play. In Mr. Hauser’s view, deficit

“There are other people operating much closer to the break-even line than us. If they don’t figure out how to budget wisely, who knows what could happen?” – Thomas Selden, CEO, Southwest General Health System reduction “can’t just be born on the backs of the providers.” “There has to be a rational and reasonable approach to moving forward with transforming health care,” said Mr. Hauser, who also serves as CEO of SummaCare, the health system’s insurance arm.

Close to the line While all expressed severe unease about the potential Medicare reductions, Northeast Ohio’s largest health care systems, such as the Cleveland Clinic, Summa or University Hospitals expect to absorb the blow without much, if any, bloodshed. For one, their revenue streams are more diversified than those of their smaller counterparts such as Parma Community General Hospital — an organization that boasts a modest annual budget of about $183 million compared with the Clinic’s staggering $6 billion. “In most cases, spending cuts always impact smaller, independent providers more immediately and more directly than a large system,” Vorys’ Mr. Albers said. “Their payer mix is skewed more heavily toward government payers.” About 60% of Parma Community’s volume is comprised of Medicare patients, according to hospital spokesman Mark White. If they’re triggered and as long as they’re in place, the sequestration cuts are expected to cost the hospital roughly $2 million each year. “Parma Hospital has prepared in the sense that we have calculated the potential impact, and if the cuts were to stay in place for a material length of time it could be significant for us,” Mr. White said in an email. He added, however, there wasn’t a specific “action plan” that will go into effect if the cuts occur at the start of the year. Similarly, Southwest General Health System in Middleburg Heights — a roughly $300 million operation loosely affiliated with University Hospitals — boasts a Medicare payer mix that hovers around 55%. The sequestration cuts would cost the system about $2.5 million a year, according Southwest General CEO Thomas Selden. However, Southwest General’s finances have fared well in recent years and the system in the midst of an ambitious $128 million expansion project. Mr. Selden expects Southwest to finish the year with more than a 6% operating margin. Expecting lawmakers “won’t get their act together” to stave off the Medicare cuts, Mr. Selden said Southwest is aiming for a 4% operating margin next year. “There are other people operating much closer to the break-even line than us,” Mr. Selden said. “If they don’t figure out how to budget wisely, who knows what could happen?” ■


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THEINSIDER

THEWEEK NOVEMBER 12 – 18 The big story: After a nearly year-long search, the MetroHealth System’s board of trustees named Dr. John Brennan, chief executive at Newark Beth Israel Medical Center in New Jersey, as its next president and CEO. Dr. Brennan, an expert in emergency medicine, will replace Mark Moran, who joined the system in 2008 and last winter announced plans to step down. Dr. Brennan will begin his new role Jan. 1. He will earn an Brennan annual salary of $685,000 — $135,000 more than his predecessor. The value of Dr. Brennan’s total compensation package will hover between $750,000 and $1.1 million.

Covering more of the earth: SherwinWilliams Co. is expanding its North American operations by agreeing to acquire Consorcio Comex of Mexico City for $2.34 billion. Comex, founded in 1952, is privately held and has operations in Latin America, the United States and Canada. It had sales last year of $1.4 billion. Christopher M. Connor, CEO of Sherwin-Williams, said the deal “will significantly increase our presence in markets where our store count is low.”

Change at the top: James Kirsch, chairman, president and CEO of Ferro Corp., resigned Nov. 13, less than three weeks after the specialty chemicals maker posted a third-quarter loss of $316 million as it absorbed charges related in part to its beleaguered solar pastes business. Mr. Kirsch had been with Ferro since 2004 and held the company’s top positions since 2005. Peter Thomas, Ferro’s operating vice president of polymer and ceramic engineered materials, will serve as interim president and CEO. Board member William Lawrence will be acting chairman.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Job cuts cut in half as aid comes to Legal Aid ■ The Legal Aid Society of Cleveland laid off eight staff members on Nov. 9, reducing its staff by 10% to 70, but eight positions were spared, thanks to the generosity of others. The cuts weren’t as significant as officials earlier this year expected they might be, given the budget challenges Legal Aid faces as revenue derived from interest on lawyers’ trust accounts has plummeted. In a letter dated Nov. 16 and posted on the organization’s website, Colleen M. Cotter, executive director, said Legal Aid officials thought they’d need to lay off up to 16 people, or 20% of the staff. In the end, increased grants and philanthropy enabled Legal Aid to limit the cuts, Ms. Cotter wrote. Individual giving and giving via United Way were up 35% over last year as of midNovember, reaching $412,000 compared with the year-ago number of $304,000. Plus, foundation giving increased 13% — $500,000 compared to $439,000 this time last year. The cuts that Legal Aid did make will mean fewer people are served by the nonprofit moving forward, Ms. Cotter noted. — Michelle Park

Going with the flow: Parker Hannifin Corp. bought Houston-based PGI International, a maker of high-pressure flow control components and systems for use in the oil and gas, agriculture, and petrochemical markets. Parker did not say what it paid for PGI, which has annual sales of $100 million and 550 employees.

In control: Johnson Controls Inc., a maker of environmental and operating controls for buildings, will be a tenant in the new medical mart. The Milwaukee-based company will take a large space on the third floor of the four-story building under construction on Cleveland’s Mall. MMPI Inc., the Chicago company that is developing and will manage the $465 million convention center complex that includes the medical mart, has designated the third floor for “clinical spaces.” Shape up: Welding equipment maker Lincoln Electric Holdings Inc. acquired the Kaliburn, Burny and Cleveland Motion Control businesses from ITT Corp. Kaliburn makes shape-cutting products, Burny produces shape-cutting control systems and Cleveland Motion Control makes web tension transducers and engineered machine systems. All three businesses are in Ladson, S.C. Their combined sales in 2011 were $35 million.

Give them credit for protecting this credit

■ There’s a new landmark coming to downtown Cleveland — a “smart” trash can from a Massachusetts company called BigBelly Solar. The city of Cleveland is bringing a modular pair of high-tech green trash containers to

■ More than 30 real estate developers, lawyers, architects and consultants tied to redevelopment deals associated with the Federal Historic Tax Credit met last Thursday night, Nov. 15, for cocktails and appetizers at Terminal Tower’s famed Greenbrier Suite. The reason: Two executives from the National Trust for Historic Preservation made a pitch for lobbying dollars to keep the 20% credit on qualifying redevelopment expenses

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Another change at the top: Ramon Lugo III will be leaving his post as director of NASA Glenn Research Center at the end of the year. The federal space agency has announced that he will be replaced by the deputy director of NASA Glenn, James Free. NASA headquarters described his departure as “retirement,” but NASAWatch.com in August reported that the agency planned to replace Mr. Lugo and two other NASA center directors. In the news release announcing Mr. Lugo’s departure, NASA also said one of the other two directors would be replaced. Mr. Lugo has worked at NASA for 37 years. He became director of NASA Glenn in March 2010.

the corner of West Third Street and Superior Avenue for a trial run. Not only does the container separate recyclables from other trash, it compacts the waste and wirelessly signals the city’s department of public works when it needs to be emptied. BigBelly Solar is donating the equipment for the trial run. The city’s commissioner of waste collection, Ron Owens, said the demonstration will allow the city to see if it makes sense to buy the units, which cost about $9,000 each. Mr. Owens said the city has a full-time crew cruising the streets and emptying trash cans daily. He hopes this new kind of container can cut the cost and environmental impact sufficiently to justify the expense. “We’re running this test to see how it affects our bottom line — saving dollars in labor, fuel consumption and emissions,” he said. — Jay Miller

After auction, Cleveland’s art museum is in the Monet

THE COMPANY: Osborn, Cleveland THE OCCASION: Its 125th anniversary The supplier of surface treatment products and high-quality finishing tools got its start in 1887 when John J. Osborn launched a business that made horse and butcher block brushes as well as street cleaning brooms. Today, Osborn has more than 10,000 standard finishing products and more than 100,000 customized products for customers in about 120 countries. Osborn’s product lines include metal finishing products, maintenance tools and Load Runners rollers. The company serves customers in markets including metals processing, manufacturing, pipeline and energy, welding, construction and maintenance. Throughout its history, Osborn has maintained headquarters in Cleveland while adding locations in 15 countries to better serve its global customers. In celebration of its 125th anniversary, Osborn has published the company’s history in a coffee table book. The book “captures a valuable piece of brush making history and takes the reader from the company’s beginning to present day,” Osborn says. For information, visit www.Osborn.com. Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.

■ In an otherwise lackluster recent sale of Impressionist and modern art at Sotheby’s, a Monet sold by the Cleveland Museum of Art emerged as a standout. Reuters reported the sale of Impressionist and modern art totaled $163 million, below its pre-sale estimate of $170 million. However, a Bloomberg story characterized the Cleveland museum’s sale of an 1881 Monet landscape, “Champ de ble,” as one of the evening’s big successes. “Estimated between $5 million and $7 million, it went for $12.1 million after prolonged bidding,” Bloomberg reported. The sale will raise funds for future acquisitions at the Cleveland museum.

It took some persistence to get ‘Somm’ uncorked ■ The New York Times profiled a Cleveland filmmaker, Jason Wise, whose new movie “Somm” had its premiere Nov. 7, at the Napa Valley Film Festival in Napa, Calif. The film “follows four promising young sommeliers as they mount an all-out effort to attain the highest distinction in their field: the title of master sommelier,” the newspaper reported. “Standing

in place as Congress and President Barack Obama turn their attention to the fiscal cliff. Within the dark wood paneled walls of the downtown apartment, David Brown, the trust’s chief preservation officer, said it is raising money for a three-year-drive to maintain the credit in the face of calls to eliminate or halve it. Long term, the trust wants lawmakers to broaden it. Thomas Cassidy, the trust’s vice president for government relations, said in current budget-cutting discussions, the credit is “at great risk.” The trust wants to emphasize to federal legislators the role the credit plays not only nationally but in their districts and regions. To do so, the trust is creating reports at the congressional district level as well as local government level about projects to show legislators. In Cleveland’s case, the trust said the credit has helped fund 86 projects from 2001 through 2011 that represent a $923 million investment in the city. Moreover, in Cleveland the credit created 6,450 construction jobs and 8,690 permanent jobs, the trust said. Ronald Ratner, a Forest City Enterprises Inc. board member and CEO of the company’s residential group, told the assembly that it has pledged “a small amount” to the campaign. He noted that rehabilitating historic buildings is essential in creating exciting places to attract people to urban areas. “We could find a lot of real estate to do without the credit,” Mr. Ratner said, “but it makes it a lot more interesting and exciting.” — Stan Bullard

between these men and that goal is a test so difficult that fewer than 5 percent of all candidates who have ever taken it have passed. It takes applicants an average of four attempts to pass.” Mr. Wise told The Times that when he first approached the Court of Master Sommeliers, the chief examining body for wine service professionals, headquartered in London, they were a little apprehensive. “Imagine you are this prestigious organization that gets a lot of respect around the world, and are worried about your image,” he says. “And this first-time filmmaker from Cleveland, Ohio, comes up to you and says, ‘I’m not a sommelier. In fact, I’m not in the wine industry at all, but I’d like to make my first movie about you guys and what you do.’”

These numbers are a home run (if they’re true) ■ Home prices nationwide are up 7.6% from a year ago, according to a report from the National Association of Realtors. The Wall Street Journal said third-quarter prices rose in 120 out of 140 metro areas from the like quarter a year ago. The national median price of an existing single-family home was $186,000 in the third quarter, up 7.6% from $173,000 in the third quarter of 2011. That’s the strongest year-over-year price increase since the first quarter of 2006, the newspaper reported. Akron posted a whopping — and, truth be told, a little hard to believe — 26.9% gain, to a median price of $118,800 from $93,600 a year ago. The Cleveland market gained 5.5%, to $119,800.


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