$1.50/NOVEMBER 29 - DECEMBER 5, 2010
Vol. 31, No. 47
Cost, creative needs driving AG’s HQ search Officials with greeting card maker stress an environment conducive to hiring best By STAN BULLARD firstname.lastname@example.org
NEW GAME IN TOWN As UH’s Ahuja Medical Center readies itself to go live, expect intense rivalry with Clinic’s Hillcrest Hospital to follow By TIMOTHY MAGAW email@example.com
The leadership team at University Hospitals’ $298 million Ahuja Medical Center in Beachwood is in the midst of hiring hundreds of workers as the new hospital gears up for what’s likely to be a spirited competition for patients in Cleveland’s eastern suburbs. Jim Benedict, president of the new, 144-bed medical center, said Ahuja’s sprawling, 53-acre campus along Interstate 271 positions the University Hospitals system to gain access to an estimated 530,000 patients in the eastern suburbs, parts of Lake, Medina and Summit counties, and even into the western suburbs. So far, the health system has hired about 325 for the medical center, the bulk of whom are involved with clinical operations, and Mr. Benedict anticipates about 400 to be on staff by the time the See GAME Page 11
Talk about a creative business challenge, one that’s as much about corporate culture as corporate cost. That’s what the region faces as it strives to retain the headquarters of American Greetings Corp., which announced Nov. 19 that its search for prospective corporate homes includes two Chicago-area sites, four Northeast Ohio sites from Westlake to Beachwood and a major makeover keeping it in Brooklyn. Two American Greetings executives heavily involved in the site search emphasized the desire to establish a new headquarters that is amenable to creativity but is com-
An employment identity problem
TOP: PROVIDED/BOTTOM: MARC GOLUB
Ahuja Medical Center (top), University Hospitals’ new $298 million facility in Beachwood, likely will compete with Cleveland Clinic’s Hillcrest Hospital, which recently completed the Jane and Lee Seidman Tower (below).
Many NE Ohio companies see leveling off of recent positive results
After a year in which most saw their business improve, Northeast Ohio manufacturers disagree over whether the economy has reached the “new normal” they’ve been hearing and worrying about, or if
Walter & Haverfield attorney Mark Floyd (right) is one of many lawyers these days whose clients are dealing with investigations into the misclassification of employees. The government is trying to crack down on businesses that are misrepresenting their employees as independent contractors and reaping the financial benefits of doing so. Read Michelle Park’s story on Page 3.
it’s just in a slow section of the road back to recovery. “I’ve seen more of a slower recovery over the last six months, and I still have a difficult time forecasting the next six months due to fluctuating shipments or inconsistent shipments,” said Larry Fulton, owner of Cleveland-based Lefco Worthington,
which makes pallets and specialized shipping containers. Mr. Fulton has a good view of the local industrial landscape from his perch atop a company heavily involved in shipping, as his customers don’t sell much without Mr. Fulton being aware of it. He said his customers’ business has been erratic
recently, without the steady gains associated with a strong recovery. “Shipments of technical equipment, aerospace parts, defense parts — all are seemingly uncertain and continue to show no signs of true recovery,” Mr. Fulton said. “The new normal in business that everyone is talking about is real.” Similarly, Charlie Kerr, who owns Kerr Lakeside Inc., a company in See NORMAL Page 4
SPECIAL SECTION NEWSPAPER
71486 01032 0
See CREATIVE Page 12
Manufacturers wonder if ‘new normal’ is settling in By DAN SHINGLER firstname.lastname@example.org
petitive on a cost basis. The discussion came about because Brooklyn, the suburb that has been the greeting card maker’s home for the past 50 years, raised the city income tax to 2.5% from 2%. Catherine Kilbane, American Greetings general counsel, said the tax shift “started the conversation.” “It began a broader discussion about what the company will look like — and would like to look like — in the future,” Ms. Kilbane said. An important part of that discussion is how and where the company can attract creative personnel, from artists and writers to technical types. “We currently have one of the
HIGHER EDUCATION Northeast Ohio schools part of boom in recruiting international students ■ Page 13 PLUS: BULLYING REACTIONS ■ EARLY BIRDS ■ & MORE
BUSINESS CONDITIONS Is any of your plant work force now on short time or layoff?
SOURCE: PRECISION METALFORMING ASSOCIATION
CRAIN’S CLEVELAND BUSINESS
COMING NEXT WEEK
CORRECTIONS ■ The Great Lakes Wind Network is a part of WIRE-Net. An incorrect association appeared in the Nov. 15 Who’s Who: 150 Names to Know in Northeast Ohio section. ■ The Bedford and Brooklyn city schools saw voters pass by wide margins renewal levies that were on the Nov. 2 ballot. A Nov. 15 editorial cartoon in Crain’s incorrectly depicted that levies in both districts had failed.
REGULAR FEATURES Classified ....................18 Editorial ........................8 Letter............................8 Going Places .................9 List: Engineering firms ...17 Reporters’ Notebook....19
Legal issues and social media The National Labor Relations Board recently filed a complaint in favor of an employee who posted negative comments about an employer on a social networking site. The issue brings to light how and whether Northeast Ohio firms monitor what is being said about them in social media circles.
NOVEMBER 29-DECEMBER 5, 2010
MOST WONDERFUL TIME OF THE YEAR The holidays are the best time of the year … unless you’re trying to manage an office. That’s the message from a new survey by Accountemps, which conducted telephone interviews about holiday season productivity with more than 1,000 senior managers nationwide. Managers were asked, “In your opinion, are employees more or less productive the week before a major holiday?” Their responses:
Much more productive
Somewhat less productive
Much less productive
SOURCE: ACCOUNTEMPS; WWW.ACCOUNTEMPS.COM
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Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation
NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS
Survey: CIOs optimistic on 2011 budgets Equipment, staff the likely areas where firms ‘can’t save their way to prosperity’ By CHUCK SODER email@example.com
Tom Lucas could be speaking for information technology departments across Northeast Ohio when he says his budget at Sherwin-Williams Co. will be either “flat or up” in 2011. Roughly half of the 70 IT executives
THE WEEK IN QUOTES
who participated in a survey conducted at the Northeast Ohio Software Association’s annual CIO Symposium in mid-November say they expect their budgets to increase next year. Most of the rest expect budgets to remain flat. Mr. Lucas, chief information officer at Sherwin-Williams, said he’s not
yet sure whether he’ll see an increase in the paintmaker’s IT budget next year, given that home sales still are struggling. If the budget moves, though, it’s going up, he said. “I don’t think we will be down next year,” he said. Other CIOs spoke with more certainty, though they didn’t speak in unison: Fifty-five percent said they expect their IT budgets to increase in 2011, 33% expect no change and 12% anticipate a decrease. See SURVEY Page 6
GET CONNECTED NEOSA recently conducted an interactive survey to poll CIOs’ expectations for 2011. Overall, they seem to be optimistic about next year’s prospects: CIOs expectations for 2011 over 2010
Salaries and compensation
SOURCE: NEOSA BLOG — HTTP://TINYURL.COM/28RUFVC
Fred Baker dealerships on the block
“In the case of a company that is interested in moving to Chicago, it will be easier to attract creative talent there. The company will be able to plug into that dynamic and that (arts) infrastructure.”
Penske in line to take over top-end shops By DAN SHINGLER firstname.lastname@example.org
— Daniel Cuffaro, head of the Cleveland Institute of Art’s industrial design department. Page One
“Banks are willing to lend, but on what basis? ... Owners need to bring significant equity to the table. Money is available. Deals are being done. But we need more debt to do them.” — David Browning, managing director of the Cleveland office of CB Richard Ellis. Page 10
“In the future, competitors for jobs are not just going to be people who live in Portage County. They’re going to be people from around the world.” — Mary Anne Saunders, executive director of the Office of International Affairs at Kent State University. Page 13
“We can learn so much from tragedies. … It is a teachable and moveable experience in life we can’t escape sometimes.” — Jes Sellers, a psychologist and director of university counseling services at Case Western Reserve University. Page 13
Mark Floyd, partner and head of the employment litigation department of Walter & Haverfield LLP, said one of his clients is appealing a finding by the U.S. Department of Labor that it misclassified workers.
MISCLASSIFIED INFORMATION Government scrutinizing whether employees, contractors mislabeled By MICHELLE PARK email@example.com
government crackdown on employers that misrepresent employees as independent contractors is racking up substantial costs for some business owners and is prompting others to reassess the way they classify workers even before investigators come knocking.
INSIDE: The IRS categorizes ways it determines whether an individual is an employee or contractor. Page 7 Both federal and state bodies have ramped up efforts to identify employers who misrepresent workers and subsequently avoid paying into such funds as state unemployment and workers’ compensation. Though such misclassifications See EMPLOYEES Page 7
Now is a great time to buy a new car … dealership. And Fred Baker Porsche/Audi looks like it’s going to change hands soon. Mr. Baker, who has been selling Porsches and Audis around Cleveland since 1969, said he’s in negotiations to sell his two dealerships, which both operate out of a store on Rockside Road in Bedford Heights. While nothing has been finalized, he said he hopes to complete a sale by the end of the year to Penske Automotive Group, based in Bloomfield Hills, Mich. “There are offers on the table, and there’s work in progress, but it hasn’t happened yet,” Mr. Baker said. Penske senior vice president Tony Pordon confirmed that talks are under way but said a few things need to happen, even outside negotiations on price, for a transaction to take place. “Any acquisition we do is subject to a substantial amount of due diligence, including approval by the OEMs (original equipment manufacturers), and before that happens no acquisition can take place,” Mr. Pordon said. Mr. Baker said he moved to the Rockside Road site in 1993, largely at the automakers’ request, at a time when Porsche sales were down due to the economy and Audi was on the ropes from perceived quality problems. Both brands made a comeback in the following years, he said. “I was probably classified as an idiot, because Audi wasn’t doing very well and Porsche sales were down. But now that I’m selling, I’m a genius,” he quipped. At 68, Mr. Baker said it was time for him to choose between investing heavily into the business or selling it to someone who will. He estimates it would take $4 million in renovations to give his dealership the new look that Audi is asking for and realizes that would only be the first of other investments. “That’s just for Audi; how about Porsche?” he said. Penske likely has the resources necessary to make any investments demanded by the automakers. It operates 321 dealerships worldwide, See AUDI Page 9
CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
Normal: Staffing levels remain lean continued from PAGE 1
Cleveland that makes high-quality screws that are typically used in other manufacturers’ products, said conditions are settling in at a relatively low level of business activity. “I think we have reached a levelingoff point,” Mr. Kerr said. “I hope that’s not the case, but I’m not expecting the same growth in sales next year that we saw in the first six months of this year.” Mr. Kerr said he’s expecting 2011 to have about the same business conditions he’s seeing now — better than two years ago, but not what he’d call a full recovery.
Hitting pause Some people in manufacturing
say they are seeing their first downtime in a year or more after working hard to restock inventories or rework equipment for their customers. Keith Kokal, senior metrologist for Mentor-based Micro Laboratories, calibrates and sets up machinery at many area manufacturers. He said he’s getting his first breather in a while, even though he doesn’t want it. “All during the downturn we’ve been busy, but the last few months have seen business decline,” Mr. Kokal said. “Since we support many of the area manufacturers, I hope this is not representative of their business.” Others reported similar observations, and a recent national survey by the Independence-based Precision Metalforming Association
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confirms that they are not alone. In the group’s November survey of its members, only about 25% of respondents said they expected their business to pick up over the next three months — about the same as in September and October. Half said they expected no change, and a quarter expect another slowdown.
On the bright side But it’s not all downbeat, and some area manufacturers say they are continuing to see steady improvements. “Call me an optimist, but at Astro we have seen a very significant increase in activity as this year has progressed,” said Rich Peterson, vice president of Astro Manufacturing and Design, a large contract machine shop in Willoughby that makes parts for medical devices, military equipment and other industrial goods. Mr. Peterson thinks Astro is only going to get better: “I see no reason to think we have reached a plateau.” Some say if there’s a new normal, it’s for people who are standing still. “What you describe as the new norm is only for people that are not reinventing their companies,” said Chuck Gehrisch, president of Mentorbased Roll-Kraft, which makes metalforming equipment for other manufacturers. “If what you are selling people do not want, your price is not competitive or your product is obsolete, you have to … come up with a whole new strategy,” Mr. Gehrisch said.
Getting, and staying, lean One strategy many manufacturers have taken up, regardless of whether they are reinventing their businesses or just tweaking their efficiency, is to do more work with fewer people. That’s probably one reason only 15% of the respondents to the latest Precision Metalforming Association survey said they had staff on shorttime or layoff status, down from 85% of respondents in April 2009. Most of those manufacturers have called back workers, but not always the same number they let go initially. The reason many do not report they have staff on layoff now is that they probably don’t intend to call more workers back, said association president Bill Gaskin. “My guess is that maybe 20% of our members are back or very close to their pre-layoff head count,” Mr. Gaskin said. “Many others may be fairly close, within 5% or 10% of their former size. But fully half in my view do not ever expect to get back to their pre-recession headcount.” Not overstaffing is one of the lessons manufacturers learned the hard way during the recession. Jeff Walters, owner of Cleveland’s Master Products Co., a supplier of washers and stampings, put it this way: It’s like taking a hard fall on the ice — even if the footing looks good when you get up, you’re going to be pretty cautious with your steps until the pain of the fall fully subsides. ■
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CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
Survey: Use of consultants may wane, a positive indicator continued from PAGE 3
Likewise, 49% expect to hire more people next year, with 45% saying staff levels will remain the same; 53% said compensation will increase in 2011, while 44% said it won’t change. The rest of the respondents on both issues expected downturns in staffing and compen-
sation. The survey results are encouraging, but only to a degree, said Brad Nellis, president of NEOSA, who had symposium attendees plug answers into keypads as part of a presentation during lunch. After each question, the results were displayed on a screen.
Mr. Nellis said he thought more CIOs would say they expect their IT budgets to increase. So while companies might not be hoarding their money, they’re not overly confident, either. “I think things will be better next year, but I don’t think it’ll be a whole lot better,” Mr. Nellis said.
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Spending money Jim Sacher agrees that IT spending will rise. And he should know: The partner at business services firm Skoda Minotti not only oversees the Mayfield Village company’s IT consulting practice, but he also manages its internal IT team. Skoda Minotti plans to add a fifth person to that team by the end of this year, partly because the company plans to upgrade its hardware and software in 2011, Mr. Sacher said. “We might’ve done that a year ago, maybe a year and a half ago, and didn’t because of the uncertainty in the economy,” he said. He added that the IT consulting business has built up a “comforting pipeline” of work. “We’ve seen a real uptick in business in 2010, and I have every expectation that will continue into 2011,” Mr. Sacher said. DentalOne Partners also is among the local companies planning to increase its IT spending. The Mayfield Heights company, which provides services to dentists, plans to convert five consultants into full-time employees next year, boosting the firm’s IT staff by 30%, said Dave Drzewiecki, vice president and CIO. Mr. Drzewiecki attributed the move to DentalOne’s plans to make up to $1.5 million in IT upgrades next year, up from $500,000 this year. The company has had a “cashis-king attitude” since late 2008, but
now it is investing for growth, Mr. Drzewiecki said. “You can’t save your way to prosperity,” he said. Homeworks Inc., which does business as Arhaus Furniture, plans to increase IT spending 25% in 2011, said CIO Ron Kerensky. However, the company based in Walton Hills hired five IT employees this year, Mr. Kerensky noted, so the department’s staff likely won’t grow next year. Electronic Merchant Systems in Independence probably won’t expand its IT department, either, said CIO Leslie Pochaukas. The provider of electronic payment processing services hired its first new IT employee in three years back in June and likely won’t add another anytime soon. “We’re probably expecting to be about the same,” she said.
Sign of hope Despite the big chunk of companies that expressed caution in the survey, another statistic makes Mr. Nellis, president of NEOSA, think IT departments have more to look forward to next year. To his surprise, just 29% of respondents planned to use more outside consultants in 2011, while 16% plan to use fewer consultants, upon whom companies often rely during downturns because they can be shed easily. “Maybe that’s a sign that things are improving,” Mr. Nellis said. ■
NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS
Employees: Penalties can be ‘devastating’ to companies Check this continued from PAGE 3
have been a problem on “some radar screens over the years,” laws regarding the issue were “not seriously enforced,” said Ohio Attorney General Richard Cordray. Ever-tightening state budgets, however, have made it hard to stay passive about misclassification, which, according to a report by the Attorney General’s Office, costs the state an estimated $790 million a year in unpaid income tax revenue, workers’ compensation premiums and unemployment compensation. Over the past two years, the Wage and Hour Division of the U.S. Department of Labor has hired more than 350 investigators to uncover employment violations, including misclassification. President Obama has requested $25 million in the fiscal 2011 budget to target the issue further. And in 2009, the Ohio Department of Job and Family Services began conducting targeted audits — in addition to the random audits it historically has done — to find those employers who misclassify employees as independent contractors. In addition to the government crackdown, class action lawsuits brought against employers accused of misclassifying employees have increased, said John Cernelich, who co-chairs the labor and employment group at Calfee, Halter & Griswold. Also, U.S. Sen. Sherrod Brown (DOhio) in April introduced the Employee Misclassification Prevention Act, and it and a House version are pending in committee. All of this activity, local attorneys agree, underscores the importance of dotting the i’s and crossing the t’s of employee classification.
Prepare to be audited Some Northeast Ohio employers have been subject to state and federal employment audits, and even those that have not are asking legal counsel to review their classification of employees, local lawyers say. Mark Floyd, partner and head of the employment litigation department of Walter & Haverfield LLP, said one of his clients is appealing a finding by the U.S. Department of Labor that it misclassified workers. The projected back pay, penalties and interest owed by the business, which Mr. Floyd declined to identify,
total six figures, Mr. Floyd said. “It can be devastating to small employers,” he said. David Campbell, a partner with Vorys, Sater, Seymour and Pease LLP who concentrates on labor and employment, agreed. He’s had more than five clients investigated since 2009, including two that were found to have misclassified employees but were later vindicated. Mr. Campbell declined to identify them. The audit process — and appeals process, if pursued — are long and expensive, even if companies end up not owing back pay, penalties and interest, Mr. Campbell said. “I see all too often, companies that are doing it right … live for months thinking their company will be shut down,” he said. Business sectors commonly under the misclassification microscope include trucking, construction, manufacturing, information technology and home health care, according to lawyers and government officials.
State selects targets Federal and state agencies have varying reasons to investigate worker misclassification. Between Oct. 1, 2009, and Sept. 30, 2010, the federal Wage and Hour Division collected $2.2 million in back wages for 5,261 workers who were misclassified in some way. Of that amount, $256,730 was collected for 415 workers in the Midwest region, which includes Ohio and nine other states. After his election in 2008 to attorney general, Mr. Cordray convened a task force of state agencies to better tackle the problem. As a direct result, the Ohio Department of Job and Family Services began targeted audits in 2009. The department completed 88 targeted audits that year and found 80 employers that had misclassified 3,545 workers as independent contractors, spokesman Ben Johnson said. Through September of this year, the department has completed 64 audits and found 60 employers who’d misclassified 2,045 workers. Employers have a right to appeal. Nearly 40% of the misclassified workers were found in less than 2.5% of the audits, Mr. Johnson said. “That tells you that most of the people out there are doing the right thing,” he said. As a result of the misclassifica-
tions, the state has found it is owed back unemployment tax of more than $468,000 for 2009 and more than $195,000 for the current year, Mr. Johnson said.
Three degrees of cheating Misclassification of employees as independent contractors is about more than government pockets, though, Mr. Cordray said. “It’s doing three things,” he said. “It is cheating governments out of appropriate revenue. It is cheating law-abiding businesses (because) you are undercutting them by violating the law. The third aspect is cheating workers themselves.” Mr. Cordray said workers can suffer if they’re laid off or injured and discover only afterward that their employer hadn’t paid into unemployment or workers’ compensation on their behalf. Bill Hoag, president of A&H Trucking Co. in Cleveland, isn’t sorry the government is putting the hammer down. “They should crack down on it because it’s not right,” said Mr. Hoag, whose company has not been subject to an audit. He said the use of independent contractors “is real common in the trucking business, and yes, there are people that I
think they have employees, but they’re treating them as independent contractors.” “I have to compete with somebody that’s not following the rules,” Mr. Hoag said. “They’re not paying the payroll taxes, they’re not paying the workers’ comp, and the guy’s doing the same thing my guy’s doing.”
Not black and white The end of the year is commonly a time for contract renewals, and thus an appropriate time for employers to reassess employee classification if they haven’t done so already, said attorney Mr. Cernelich. Resources, such as the Internal Revenue Service’s three-category guide, can be helpful. Most with knowledge of the issue said an employer’s control over a worker is the dividing line. Local attorneys agreed, however, that the issue is not black and white, and Attorney General Cordray acknowledged the law has been “kind of confusing in this area.” “I think we try to be sensitive to whether it is unintentional or intentional,” he said. “But penalties are important. There are a lot of people we know who are deliberately violating the law. There have to be penalties.” ■
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list — twice The Internal Revenue Service has identified three categories of factors to be considered in deciding whether a worker is an employee or an independent contractor. They are: ■ Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? ■ Financial: Are the business aspects of the worker’s job controlled by the payer? These include how the worker is paid, whether expenses are reimbursed and who provides tools and supplies. ■ Type of relationship: Are there written contracts or employee-type benefits, such as pension plan, vacation pay and insurance? Will the relationship continue and is the work a key aspect of the business? The key, the agency says, is to consider the entire relationship and to document each of the factors used in making a determination. For information, go to http://tinyurl.com/5u0d.
CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
Brian D. Tucker (firstname.lastname@example.org) EDITOR:
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t’s still five weeks before he takes office, but it’s evident Ed FitzGerald has no intention of easing into the job of Cuyahoga County’s first county executive. And so far, we like what we see out of the man who will be king. For a guy who opposed the ballot issue that created the single executive post, Mr. FitzGerald has shown a zeal for the job that’s encouraging to those who hoped change in the county government’s structure would help end the culture of corruption and cronyism that has existed in Cuyahoga County. A week after winning election, Mr. FitzGerald hired retired FBI agent William Henterly — who a decade ago helped root out the Ponzi scheme stockbroker Frank Gruttadauria engineered to swindle rich Clevelanders — to conduct an “integrity audit” in the county auditor’s office, which had been run by the corrupt and disgraced Frank Russo. A week later, Mr. FitzGerald asked for the resignation of all members of the county’s boards of revision, which had come under fire after reports that the boards repeatedly violated county and state policies in their role of hearing taxpayer challenges to property valuations. He also endorsed the elimination of 20 jobs created by Mr. Russo, and indicated more firings were ahead. And just last week, Mr. FitzGerald said his administration would require an application for all potential nominees for county boards and commissions selected by the county executive. As he’d note, past practice involved varied methods of selecting appointees but no standardized application procedure. “This is another extremely important part of county government — appointing board members for everything from RTA to the Port of Cleveland to MetroHealth, and many, many more — and a fair application process is needed,” Mr. FitzGerald said in a statement. An application process doesn’t guarantee good choices for these powerful boards. However, by posting board openings on the county web site, it should improve the pool of candidates for those posts. It then will be up to the county executive and the 11-member county council to depoliticize the process by picking the best candidates from those pools. It will be interesting to see how the relationship evolves between Mr. FitzGerald and the county council. Right now, the executive-elect has been able to steamroll his way toward his new job; his path may not be so clear once all the players are in place come January. To this point, though, Mr. FitzGerald has been saying and doing the right things. That includes hosting an open forum last Monday with hundreds of county employees who fear the new broom will sweep them out of their jobs. Mr. FitzGerald indicated job cuts were inevitable amid tight finances. But he also promised employees would get a fair shake and their jobs wouldn’t depend on political connections. That’s a positive message for most county employees who are as much victims of public corruption as the taxpayers. We hope he’s true to his words.
FROM THE PUBLISHER
‘Thankful for’ list is long this holiday
sentence. Really, Frank? he Thanksgiving feast may be ■ The Cleveland Browns: No Browns over, with the stray pieces of fan saw this coming. Well, they might turkey leftovers and pumpkin have seen the numerical won-loss pie lingering to tempt us, but this record, but who could have expected the year, it seems there are just a few more wins against New Orleans and the Patriots things to be thankful for, in no certain and that overtime thriller against the order: Jets? This is a bona fide National Football ■ Ed FitzGerald: So far, the newly League team that’s giving its elected Cuyahoga County execfans a reason to anticipate utive seems to be making the BRIAN Sundays again. right moves, including last TUCKER ■ Governor-elect John week’s meeting with several Kasich: For his clearcut stance hundred county employees in a on the ill-conceived railroad packed Old Courthouse Building. project concocted with $400 The message was that changes million of your tax dollars for a had to be made, and that some line between Cleveland, Columof them just might not have jobs bus and Cincinnati. All that to when all the dust settles. It has create some construction jobs less to do with the lingering (indisputably) and develop a economic problems and more rail link that few people will use, and the because many county offices had been state will need to subsidize with more of chock full of people who got there your tax dollars. because of patronage. ■ The economy: Despite the continued ■ Frank Russo: The disgraced former challenges in Ireland and other Eurocounty auditor offered up some comic pean countries, the economy slowly is relief last week when he asked a federal recovering. Manufacturers are hiring judge to let him travel to Las Vegas for again, and our front-page story last week a wedding before he begins his prison
showed clearly that the combination of hard cuts in costs, better productivity and increased demand has Northeast Ohio companies sitting on a lot of cash, which only will make them stronger. Now, if the banks finally start to lend again, businesses can really spring back. ■ The RTA board: This group that oversees the Greater Cleveland Regional Transit Authority finally came to its senses and decided it is necessary to go after people who ride the buses or rapid trains but jump off without paying. ■ The election season’s end: This had to have been the high water mark for the television assault on our senses with negative campaign messages. Our society continues to find ways to make public service a career the best and brightest will never want to pursue. ■ My family: There’s no better way to spend a holiday evening than watching Christmas movies with my wife, Janet, and children, Graham, Meredith and Kelsey. Who cares if we know every scene and can recite the dialogue before Charlie Brown, Chevy Chase or Maureen O’Hara? Pass the cookies! ■
Teachers must learn a lesson on sacrifice ■ When I read Crain’s Nov. 15 editorial, “Get It?,” about the state teachers’ retirement fund and the teachers’ unions, I thought, “I couldn’t have said it better!” But last week, Thomas E. Harkness Jr. in his Letter to the Editor showed he doesn’t “get it.” Heaven forbid you criticize or question the teaching profession. Mr. Harkness claims that all schools should be palaces and teachers should be overpaid in a perfect world. After all, they have your children for nine months out of the year. Well, in a perfect world, caregivers, nurses and volunteers should be held on pedestals, too. Unfortunately, Mr. Harkness forgets that no matter how high the pedestal, it’s a job and a paycheck. Teaching jobs are no different than any other. A rough economy sometimes
means no raises for years. Be thankful anyone has pensions anymore. Yes, the job is demanding. Yes, there is overtime. It’s the same for everyone out there. When I see levies every two to three years asking for more money, I see what is first on the list: teachers’ raises. Yet, if the levy fails, you will never hear of teachers cutting pay to save the children’s programs. Even though we all agree on how valuable teachers are, it doesn’t change the fact that they are not exempt from the poor economy, which, in a nutshell, Mr. Harkness doesn’t get. Schools seek taxpayer money to fund their budgets, but the first thing on the agenda is satisfying the teachers’ unions with contract raises. There is not one profession out there that doesn’t feel they deserve a raise for the work they do.
Mr. Harkness would like to put teachers’ importance before other professions and reward them for choosing that career. In reality, we all live with few raises, no negotiated contracts and when we retire, we actually stay retired. We don’t come back and double dip. No matter how you look at it, teachers’ unions put teachers first. Not the children. Not the taxpayers. The behavior only confirms those facts. Which profession hits the picket line when contracts are not resolved to their liking? No sacrificing for the sake of the children there. Crain’s got it right. As taxpayers (and parents), we get it. Mr. Harkness still doesn’t get it and never will. Kelly Smargiassi Lyndhurst
NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS
THE BIG ISSUE Do companies like American Greetings owe loyalty to regions that have been their longtime homes, or do they simply need to do what’s best for the company and its shareholders?
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I think they owe an amount of loyalty to the people who nurtured them. They’ve had a successful business model here.
I really don’t know. That’s a tough call. … I know they’ve done a lot for the community, philanthropically. They’ve paid their dues.
I think they owe loyalty to the region for sure. They employ … the people in the community.
No (they shouldn’t just think about the company). Everybody relies on them.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
Audi: Sales provide automakers authority continued from PAGE 3
including five in Northeast Ohio, and routinely upgrades them, according to Mr. Pordon. “It’s sort of like when you or your wife goes shopping,” Mr. Pordon said. “People like to go to the luxury or upscale malls, they want the coffee, the nice music and the atmosphere. It’s similar with a car dealership.”
Opportunity knocks Another local dealer familiar with dealer-required investments said he isn’t surprised Audi is making demands, or that the demands are prompting a sale. That’s exactly what automakers often hope will happen, said Bernie Moreno, owner of the Collection Auto Group based in North Olmsted. “If you have a dealer who is not
AROUND THE AREA Cleveland-area Penske Automotive Dealerships: ■ Mercedes-Benz of Bedford ■ Toyota of Bedford ■ Infiniti of Bedford ■ Smart Center Bedford ■ Honda of Mentor willing to invest in the brand and they’ve sat in the same place for 10plus years, it (the automaker) is going to say, ‘You’re not committed.’ They look at the sale as an opportunity for them,” Mr. Moreno said. That’s because it’s only when a dealership changes hands that an automaker has any real authority over a dealership’s operations, Mr. Moreno said, noting that manufac-
turers must approve dealership sales. Mr. Moreno said he has spent millions upgrading each of his 10 dealerships, both to gain manufacturers’ approval of his purchases and to secure future business. Mr. Moreno said it’s a good time for those with the capital to buy. Auto sales still are down from their former levels, and it isn’t unusual for some longtime operators to get out at this cycle in the market. “We’re looking in the next 24 months to double the capacity we have right now, all through acquisitions,” Mr. Moreno said. As for Mr. Baker, he said he’ll miss the business if he sells. He’ll likely stay for two years as a consultant, he said, but after that he’ll retire fully and probably spend more time with his personal race cars. ■
BROKAW INC.: Katie Riley to digital media strategist; Jon Wiley to digital motion designer; Patricia DiFranco to copywriter; Sara Koch to interactive account executive; Wes Jones to senior digital art director; Laura Craig to business director.
FINANCE FIRST FEDERAL OF LAKEWOOD: Brian Winslow, Colleen Hebebrand, Amber Tanzillo and Gail Liggett to branch managers; Sharon Gerber to area sales manager; Dominic Lorenzo and Tom Frankito to mortgage loan specialists.
HUNTINGTON BANK: Brian Gallagher to senior vice president, Large Corporate Banking Group. OHIO COMMERCE BANK: Patricia Wade to vice president and commercial lender.
MERRILL LYNCH: Jon E. Lawrence to vice president, associate director.
BUCKINGHAM, DOOLITTLE & BURROUGHS LLP: Amanda T. Quan to associate.
CLEVELAND CLINIC: Dr. John Fung to chair, Digestive Disease Institute.
TAFT STETTINIUS & HOLLISTER LLP: Jeffrey T. Cicarella to associate.
HOSPITALITY THE RITZ-CARLTON, CLEVELAND: London Williams to business travel sales manager.
INSURANCE THE HOFFMAN GROUP: Yvonne Michalak to commercial lines technician.
MANUFACTURING DIEBOLD INC.: Natalie Gainer to vice president, global software and services development; Gregory S. Warder to vice president, commercial agreements; Steve Wolgamott to assistant treasurer. EATON CORP.: William E. Myers to vice president, technical accounting
BOARDS FEDERAL BAR ASSOCIATION, NORTHERN DISTRICT OF OHIO CHAPTER: Kip T. Bollin (Thompson Hine LLP) to president, Diana M. Thimming to president-elect; Virginia Davidson to vice president; Jason A. Hill to secretary; Dennis G. Terez to treasurer; Carter E. Strang to immediate past president and delegate to national council.
AWARDS CONSORTIUM FOR ENTREPRENEURSHIP EDUCATION: Greg Malkin (University School) received the 2010 Outstanding Entrepreneurship Educator Award. NORTHERN OHIO MINORITY SUPPLIER DEVELOPMENT COUNCIL: Tameka L. Taylor and Ruth Ramos (Compass Consulting Services LLC) received the 2010 President’s Award.
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CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
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Better but still problematic is the view from the borrower’s side when it comes to commercial real estate lending in Northeast Ohio. “I don’t call this lending,” said a local real estate investor who asked not to be identified because he doesn’t wish to irritate banks considering refinancing some of his officebuilding loans. This investor and others say lenders are willing to consider refinancing properties as existing loans mature if the properties are welloccupied and the borrower’s performance is spotless — something they were not willing to do last year. But terms are tough. “It’s still bad,” said Mark Munsell, who owns multiple office and retail properties with investors through Munsell Realty Advisors. “Everything is recourse” financing, which puts the borrower’s personal assets on the line for the loan, Mr. Munsell said. Landing funds for new development remains difficult in the suburbs, where the opportunities are slim to receive loans through the urban-oriented federal new markets tax credit program that is stoking projects in Cleveland. Consider the lengths to which Cumberland Development Group of Cleveland went to land more than $46 million
for a 130,000-square-foot office addition to and refinancing of its Independence Technology Center in Independence.
Poster child for tough times “Without the (Cleveland-Cuyahoga County Port Authority), we could not have gotten it going after two years of looking for financing,” said Dick Pace, Cumberland president. “None of the large banks we talked to were in the position to do that large a deal. It was too big for the smaller regional banks,” Mr. Pace said. “One large bank said it would do the deal if I deposited the same amount of money as I was borrowing with the bank. If I could do that, I wouldn’t be borrowing.” Only by issuing through the port authority taxable revenue bonds that were bought by TIAA-CREF, a giant financial services organization, was the project financed. “I am the poster child for how difficult it is to get development funded,” said Mr. Pace, whose building expansion will house administrative units of the Cleveland Clinic, a prized, creditworthy tenant. David Browning, managing director of the Cleveland office of the CB Richard Ellis real estate brokerage, said more money is available, but it is the assumptions about how properties will perform that muddy the picture. “There is healthy — or unhealthy
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Obrien & Nye Cartage Co. 29855 Solon Road, Solon ID: 34-0813042 Date filed: Oct. 5, 2010 Type: Employer’s withholding Amount: $766,546 Todd Industries Inc. 7300 Northfield Road, Walton Hills ID: 34-1098126 Date filed: Oct. 29, 2010 Type: Employer’s withholding, unemployment Amount: $469,178 Trusted Home Healthcare LLC 12808 Drexmore Road, Cleveland ID: 57-1186419 Date filed: Oct. 5, 2010 Type: Employer’s withholding Amount: $435,183 ECC Enterprises LLC 4500 Lee Road, Suite 205, Cleveland ID: 26-1662888 Date filed: Oct. 13, 2010 Type: Employer’s withholding, unemployment Amount: $362,504
Conservatism rules the day Steve Feldman, managing director of the Bellwether Real Estate Capital mortgage brokerage, said besides smaller banks, insurance companies are back in the market in a big way for projects valued at more than $5 million. The collateralized mortgagebacked financing market also is opening up, but lenders and investors only have an appetite for the bestlocated, best-leased properties — and only for deals in need of loans of more than $10 million. “You can’t have substantial vacancy,” Mr. Feldman said. “Those deals are hard to get done.” The only place that acquisition money is generally available is for apartments, thanks to government housing programs, he said. Bob Garber, a principal at the Cresco realty brokerage in Independence, said conservatism defines activity by any lender. “It still requires a healthy borrower financially to get the money, and it takes a bigger (equity) commitment,” he said. “I’m seeing more deals than last year, but it’s not substantial.” Mr. Munsell said he is more optimistic than last year and no longer puts obtaining financing at the top of his list of worries. Today’s top worry? “Anxiety about tenants,” Mr. Munsell said. “Some are still going out of business.” ■ Date released: Sept. 23, 2010 Type: Unemployment Amount: $8,619
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.
— skepticism about any underwriting, period. Banks are willing to lend, but on what basis?” Mr. Browning said. “Owners need to bring significant equity to the table. Money is available. Deals are being done. But we need more debt to do them.” Small and regional banks are providing most of the available real estate capital, although they typically have an appetite for loans under $5 million, which generally covers smaller commercial deals.
Obrien & Nye Cartage Co. 29855 Solon Road, Solon ID: 34-0813042 Date filed: Oct. 19, 2010 Type: Employer’s withholding Amount: $76,309 Power Alarm Inc. 25086 Lakeland Blvd., Euclid ID: 34-1344538 Date filed: Oct. 29, 2010 Type: Employer’s withholding Amount: $58,711 Abraxus Snow Removal Inc. P.O. Box 30550, Cleveland ID: 34-1669122 Date filed: Oct. 13, 2010 Type: Employer’s withholding, failure to file complete return Amount: $58,404 China Renaissance Corp. 24111 Lorain Road, North Olmsted ID: 34-1772152 Date filed: Sept. 28, 2010 Type: Employer’s withholding, unemployment Amount: $5,412 SQH Properties LLC 2945 E. 120th St., Cleveland ID: 56-2288387 Date filed: Sept. 8, 2010 Type: Employer’s withholding, unemployment Amount: $5,215
LIENS RELEASED Blaha Financial Services LLC 18500 Lake Road, Suite 220, Rocky River ID: 34-1896801 Date filed: Sept. 4, 2007
Crown Auto Body Inc. 3601 Carnegie Ave., Cleveland ID: 34-1810609 Date filed: Feb. 28, 2001 Date released: Sept. 23, 2010 Type: Employer’s withholding Amount: $8,296 K B Trading Inc. Berea Metals & Recycling 6511 Eastland Road, Brook Park ID: 34-1800470 Date filed: July 20, 2010 Date released: Sept. 8, 2010 Type: Employer’s withholding, corporate income Amount: $95,667 Montgomery Lynch & Associates Inc. 2940 Noble Road, Suite 101, Cleveland Heights ID: 34-1775337 Date filed: Nov. 1, 2005 Date released: Sept. 28, 2010 Type: Unemployment Amount: $6,839 Ohio Addressing Machine Co. 3040 Prospect Ave. Cleveland ID: 34-0890795 Date filed: July 27, 2010 Date released: Sept. 8, 2010 Type: Corporate income Amount: $161,385 Windsor Realty & Management Inc. 26100 Brush Ave., Cleveland ID: 34-1160126 Date filed: Feb. 1, 2008 Date released: Sept. 23, 2010 Type: Employer’s withholding Amount: $6,749
NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS
Game: UH says ‘new’ factor gives Ahuja campus advantages continued from PAGE 1
hospital opens in early 2011. In the next year or two, that number could grow to as many as 1,000 workers, which Mr. Benedict said would be part of a “phased, operational ramp-up consistent with the demand we receive from the community.” Despite other hospitals on the East Side, Mr. Benedict anticipates heavy demand for the medical center’s services, particularly because of its location near the highway. Offering patients more choice, he noted, is never a bad thing. “Competition is good in all industries,” Mr. Benedict said.
The competition Ahuja’s direct competitor likely will be the Cleveland Clinic’s Hillcrest Hospital in Mayfield Heights, according to Bill Ryan, president and CEO of the Center for Health Affairs, the trade association for area hospitals. Hillcrest — located about seven miles north along I-271 from Ahuja — recently completed work on a $163 million expansion and renovation that transformed the 42-year-old hospital and gave it a new look.
“We feel confident that we will continue to be the hospital of choice.” – Jeffrey Leimgruber, president, Hillcrest Hospital “Part of the approach in both the improvements at Hillcrest and Ahuja is to really start to tap into that middle market between the southern end of Cuyahoga County and northern end of Summit County,” Mr. Ryan said. He sees both Ahuja and Hillcrest serving as the magnet hospitals in that region. Though South Pointe — also a Cleveland Clinic hospital — is closer to Ahuja, Mr. Ryan noted that it’s a community-based hospital for the area around Warrensville Heights and won’t have the same drawing power as Hillcrest or Ahuja. Clinic spokeswoman Heather Phillips said South Pointe doesn’t plan to adjust its operations given Ahuja’s new presence. “For us, it’s business as usual at South Pointe,” Ms. Phillips said. “We’re going to continue what we do best and take care of patients.” Hillcrest president Jeffrey Leimgruber said he and his staff are “absolutely 100% focused on doing a great job here” rather than worry about a new hospital down the road, but he noted that he’s cognizant of the competition and comparisons that might arise. “We’re clearly aware that they’re here, and they weren’t here before,” Mr. Leimgruber said. “It’s not that I’m not concerned about (Ahuja), but I like to give people the example that when you run a race and keep looking over your shoulder, you can’t win races that way.”
with private rooms. In response to all the changes, Hillcrest has added about 75 jobs at the hospital, increasing its staff to 2,400. Mr. Leimgruber said the recent investments at Hillcrest were done to meet changing health care needs of the community as well as the growing populations east of the hospital in Lake and Geauga counties. He said the hospital had been at full capacity, and the addition will allow Hillcrest to use its space more efficiently. Mr. Leimgruber also noted the upgrades are part of an overall growth pattern within the Clinic system, which includes a planned family center in Twinsburg that will filter patients to Hillcrest — the
curved architecture to make it feel more like a five-star hotel rather than a hospital. For instance, the floors of the patient rooms, though made of a sound-absorbing vinyl material, are designed to look like wood flooring rather than the stoic white or gray typically associated with hospitals. Ahuja is one of the hallmarks of University Hospitals’ $1.2 billion Vision 2010 strategic plan, which includes a $260 million cancer hospital and $45 million center for emergency medicine, both scheduled to open at the system’s Case Medical Center at University Circle next spring. It also includes a $27 million neonatal intensive care unit that opened last year at UH
Clinic’s eastern hub. “We feel confident that we will continue to be the hospital of choice,” Mr. Leimgruber said.
Give us a try Mr. Benedict noted that Ahuja’s status as a new hospital comes with built-in advantages. He compared it to opening a restaurant that “everybody would try once, and if the quality’s not there, they’re not going to come back.” To ensure that quality, Dawn Gubanc-Anderson, the medical center’s chief nursing officer and director of clinical operations, said Ahuja not only is equipped with the latest technology, but also has been strewn with warm colors and
Rainbow Babies & Children’s Hospital. As part of the strategic billiondollar investment, University Hospitals pumped $100 million into installing electronic medical record infrastructure throughout the health care system. So far, six of the system’s medical centers have gone online; the latest is Richmond Medical Center in Richmond Heights. Ahuja is scheduled to go online in January. “This is probably the largest information technology application we’ve ever done in the history of the organization,” said Steve Standley, University Hospitals’ chief administrative officer in charge of Vision 2010. “It’s a massive project.” ■
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Hillcrest muscles up The renovations at Hillcrest include a new six-story tower that added 72 private rooms to the hospital, bringing its bed total to 496. Its neonatal intensive care unit also has been upgraded to a Level III and will serve babies born as early as 22 weeks — the only such unit in the eastern suburbs. In addition, the hospital’s emergency department has been expanded to 40,000 square feet from 10,000 square feet and has been redesigned
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CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
Creative: Chicago office space attractive continued from PAGE 1
largest creative studios in the country here,” said Brian McGrath, American Greetings senior vice president of human resources. “We need to have a facility that creates a creative environment for new and existing employees.” One concern voiced by Mr. McGrath is that “there are other locations around the country (where) it’s easier to hire the creative people we need.” “We’ve spent a lot of time understanding that,” he said.
Cultural relevance The concern Mr. McGrath cites is a familiar one to Daniel Cuffaro, who heads the Cleveland Institute of Art’s industrial design department and co-chairs efforts to develop a design district in downtown Cleveland. Mr. Cuffaro said many of his graduating students are eager to head from Cleveland to New York, Boston, Chicago and San Francisco. “In some cases, they take less money to go there because they are interested in being in a dynamic environment,” Mr. Cuffaro said. “In the case of a company that is interested in moving to Chicago, it will be easier to attract creative talent there. The company will be able to plug into that dynamic and that (arts) infrastructure.” At the same time, Mr. Cuffaro said Cleveland should not despair in pitting its arts community against Chicago’s because the Cleveland
Museum of Art, the Museum of Contemporary Art, other cultural institutions and oodles of galleries put Northeast Ohio in good stead. The other side of the equation is that attracting employees to Cleveland may be easier in terms of costs than Chicago, said George Hutchinson, CEO of Allegro Realty Consulting, a Cleveland-based corporate real estate consultant — and one not working with American Greetings. “From construction costs to rents to the cost of living, (Chicago) would probably be a more expensive option than Cleveland,” Mr. Hutchinson said. “But we also have to lower our costs to keep the premium significant to make Cleveland a win. I think we can compete.”
By the numbers Nonetheless, competing office properties in the Chicago market could present a challenge for the Northeast Ohio contenders. The financial consultant for American Greetings, Stephen Strnisha, director of finance services for Project Management Consultants Inc. in Cleveland, said the Chicago options are attractive because “there is a lot of high-class office space available that would meet American Greetings’ needs.” Although American Greetings said it has not yet determined its specific space requirement, the company wants to keep the 2,000employee staff of its Brooklyn headquarters in one location. The
Brooklyn headquarters has 1.2 million square feet of office space, but Mr. McGrath said the company has more space than it needs and leases some of it to outside tenants. One place it will not wind up is in a high-rise. “We don’t want a tower,” Ms. Kilbane said.
Environmental concerns The selection of Anderson Architects by American Greetings reflects how the desire to position the company for the future may come into play. Mr. McGrath said Ross Anderson, the namesake principal of the New York firm, has substantial experience creating work environments attractive to creative people. Mr. Anderson is well-known for designing the Abercrombie & Fitch corporate campus on 300 acres in New Albany, an area known for suburban office parks near Columbus. He’s also known for renovating the headquarters of Levi Strauss & Co. in San Francisco to create a contemporary, hip environment. In a phone interview, Mr. Anderson said he works closely with companies and their employees not only to figure out which business units need to be next to each other, but also to determine their brands and how they see themselves. “Abercrombie was very clear about the product and aspirational goals of the company,” Mr. Anderson said. “It allowed them to create the kind of place to import the talent they needed from both coasts.” ■
Correction from the National Committee for Quality Assurance Medical Mutual’s Commercial PPO Plan in Ohio holds “Excellent” Accreditation from the National Committee for Quality Assurance (NCQA). In fact, it was the first PPO organization in Ohio to achieve NCQA’s highest rating for providing quality healthcare to its members. NCQA is the gold standard for evaluating health plans for quality and consumer protections; both HMOs and PPOs obtain NCQA Accreditation to demonstrate their high value to purchasers and consumers.
An advertisement in Crain’s Cleveland Business ran October 19, 2010 stating that another PPO was the only plan to hold “Excellent” accreditation in Ohio. NCQA would like to note that, at the time it approved the advertisement, Medical Mutual’s PPO also had “Excellent” NCQA Accreditation.
CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
15 DETAILS ON EARLY-DECISION, EARLY-ACTION PROGRAMS.
WRITING THE BOOK ON GLOBAL RECRUITING Universities gain more diverse profile, greater profits as international student ranks rise By DAN SHINGLER email@example.com
he U.S. still leads the way when it comes to exporting one of the world’s most sought-after possessions — an education from an American university. And Northeast Ohio schools are working hard to reap the cultural, academic and financial benefits of their globally hot product. By working with INSIDE: China and India overseas recruiters, lead the list of top places of origin for international having offices in students at American far-off countries or colleges. Page 14 just by consistently sending home successful students with enviable tales of America, colleges around the area all are seeing their international enrollment jump and striving to keep it on the rise. Of all 50 states, Ohio ranks ninth in terms of the most international students, with 22,370 enrolled in the 2009-2010 school year, according to information released last month from the nonprofit Institute of International Education. International See BOOK Page 14
Schools aim for bullying awareness Broad codes of conduct apply to array of issues By TIMOTHY MAGAW firstname.lastname@example.org
oseph Bryan Ramón knows all about bullying on college campuses. He’s heard stories from classmates at John Carroll University who said they had been taunted for their sexual orientation, and he’s been criticized himself for holding hands with another man. At one point, the 20-year-old noted, another student walked up and told him, “This is not Puerto Rico. This is Cleveland, Ohio, and you can’t do that here.” Mr. Ramón shrugged it off, but it’s not always that easy for students who are criticized or harassed for any reason. The recent suicide of 18-year-old Rutgers student Tyler Clementi in New Jersey has ignited a nationwide dialogue about harassment and bullying on college campuses, including those in Northeast Ohio. Mr. Clementi committed suicide days after his roommate allegedly used a webcam to spy on him during an intimate encounter with a man, then posted about it on Twitter. On the heels of the incident, U.S. Sen. Frank Lautenberg and U.S. Rep. Rush Holt, both of New Jersey, introduced legislation Nov. 18 that would require colleges receiving federal student aid to have antiharassment policies and a mechanism to deal with complaints. It’s not a novel idea as most colleges have such policies. Regardless, observers note that bullying at the collegiate level often is an issue that simmers below the surface until an incident such as Mr. Clementi’s suicide. “We can learn so much from tragedies,” said Jes Sellers, a psychologist and director of university counseling services at Case Western Reserve University. “It’s not the way I think people should learn everything in life, of course, but it is a teachable and moveable experience in life we can’t escape sometimes.”
Preventing a tragedy Tragedies aren’t only teachable moments for students, but for universities and colleges as well. Most higher education institutions have student codes of conduct in place that forbid harassment and bullying. These could include harassment or taunting based on gender, age, sexual orientation, ethnicity or religion. The policies generally are written to include any situation that makes See BULLYING Page 16
14 CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
Book: International students fill demographic, discipline gaps continued from PAGE 13
enrollment increased 7.9% in the state from the previous year. It’s a trend not likely to end soon, said Mary Anne Saunders, executive director of the Office of International Affairs at Kent State University, where the number of foreign students has gone from 823 in 2008 to more than 1,400 today. “It’s probably one of the exports we are best at,” she said of the U.S. education system. Other schools, too, are seeing increases. “We’ve been on an upslope the last three falls. We had a dip the year before that, but it’s been climbing higher and higher since then,” said George Burke, director of the Center for International Services and Programs at Cleveland State University, where international enrollment has gone from 785 in 2008 to 924 in the current semester. At the University of Akron, the number of international students has gone from 1,072 to 1,250 over the same two years. “It’s absolutely by design,” Ms.
Saunders said of the increases, noting that bringing in more international students has been a major part of her marching orders since she took her post in September 2008.
A world view There are many reasons for schools to court students from abroad, and their profitability is certainly a driving factor. Foreign students who come to the United States often have wealthy families — and those who don’t often have extended families of five or six people, or entire states, working to pay for their educations. But almost without exception, they pay the full tuition that would be charged to any other out-of-state student — and a lot more than in-state students pay at state schools such as Kent, Cleveland State and others. “The taxpayers of Ohio can be assured that none of their tax dollars are going to provide lower tuition rates to out-of-the-country students,” Ms. Saunders said.
In fact, it’s the other way around. If anything, by paying out-of-state rates, international students help keep rates at state schools lower for Ohio students, say officials at area universities. They also help the schools bring in grant and research revenue. That’s because American students still lag behind some of their foreign counterparts in math and science — the disciplines required to secure most research funding. “They’re definitely a source of revenue,” said David Ayers, director of the Office of International Programs at the University of Akron. They’re also helping local schools make up for lost business from changing demographics. The U.S. simply does not have as many college-age students as it used to, especially states with declining populations like Ohio. Foreign students are helping to fill the empty seats. “It’s a new market for us. With the demographics, the number of graduating high school students is declining. When you have excess
GOING NATIONAL The top five countries below comprise 52% of all international students in the United States, according to findings from the Institute of International Education.
capacity, you try to put it to work,” Mr. Ayers said. But there’s another reason that the universities want international students, and it’s largely the same reason that those students come here to begin with — the schools want all of their students to have exposure to other cultures. Students need this international exposure if they are going to effectively compete in an increasingly international job market, the schools say. Kent State “president (Lester) Lefton is very committed to globalizing the experience our students have at Kent State,” Ms. Saunders said. “In the future, competitors for jobs are not just going to be people who live in Portage County. They’re going to be people from around the world.”
Inspiring minds, transforming lives, AND a great value sEmployers hire our students: Within 6 months of graduation, 97% of our students are either working full-time, in graduate school, or fulﬁlling a commitment to a year of service. sLeaders come from John Carroll: 500 Ohio companies are owned or operated by our alumni. sRecognized value: Student success and generous ﬁnancial aid earn JCU a top regional spot in the U.S. News and World Report “Best Colleges, Best Values” comparison. The John Carroll experience is more than the quickest path to a degree or getting that ﬁrst job. We inspire and prepare our students to engage the world as creative, innovative, and ethical leaders in the workplace and throughout their lives.
That’s probably why the same nations that are competing more — and trading more — with the U.S. economically also are the same countries providing students to local schools. China and India top the list of nations that send students here, followed by countries like Saudi Arabia, South Korea and other parts of Asia, depending on the school. Some of the countries move up and down the list depending on the policies of their government in paying for students to study abroad — but China and India are steady risers and providing more students to schools here generally every year. Those are the nations in which populations are becoming wealthier, more people are seeking degrees, where English is a preferred foreign language — and where there are not nearly enough universities to meet the demands of their populations. China is king, even when it comes to specialized areas of education, such as law. The Case Western Reserve University School
of Law has about 50 foreign students from 14 nations. “Out of the 50, I’d say close to half of them are from China,” said Jon Groetzinger, director of the school’s China Legal Program that was started in 2009 to help recruit Chinese students. That’s because China does not have enough law schools for its population — just like it does not have enough general universities. As the U.S. is finding itself with excess educational capacity, China is finding it does not have enough, education experts say. “They’ve not kept up with the number of college-age students in terms of building universities. The cost of doing that would bankrupt the country — so we provide a pretty valuable service for them in educating their students,” said Kent’s Ms. Saunders. And China is likely to keep them coming. Even Chinese families who aren’t wealthy often have the ability to send their child abroad to study, because of China’s onechild-per-family rule, Mr. Burke said. “That means one child has two sets of grandparents, so there are four people working; plus two parents working — so you have six people financing the education of one person,” Mr. Burke said.
Too much of a good thing? Some day, schools will probably even worry that they have too many Chinese students, Ms. Saunders predicts. “If we ever get up to 1,000 Chinese students, I think it will work against us,” she said. “Chinese parents don’t want their children going to a school that’s inundated with Chinese students … they want them to have an American experience.” But, for now, the schools aren’t at that point, she said, and they are still competing for as many foreign students, from China or anywhere else, as they can get. ■
NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS 15
Schools, students each benefit from early-admission process By CHUCK SODER email@example.com
growing number of high school students are applying to Northeast Ohio colleges earlier, and they are learning sooner whether they have been accepted. For their part, officials from colleges where there are earlyadmission programs say they’re all for more students acting early on their higher education plans. For one, colleges that get a significant number of students to take the next step and commit early get a glimpse of the incoming class, which helps them make sure the group includes sufficiently diverse backgrounds. Plus, it gives colleges a leg up in recruiting students. Those are two big reasons why the College of Wooster expanded its early-admission program last year. The school for years has offered what’s known as an “early-decision” program: Students apply by Nov. 15, and if they are accepted they must attend the College of Wooster, barring unforeseen circumstances. The benefit to students is that the college, like many schools, is more likely to accept a “borderline” student through the earlydecision process, said Catherine Finks, senior associate director of admissions at Wooster. Just last fall, however, the school also started what’s referred to as an “early-action” program, which speeds up the application and acceptance process but otherwise treats students like standard applicants who have until May to choose a school. Wooster started its early-action program partly because similar programs at other schools have been so popular, particularly among more selective East Coast colleges, Ms. Finks said. “Students are doing it at other schools; they’re going to want to do it at Wooster as well,” she said.
Ahead of the class Generally, it appears that students are taking an interest in earlyadmissions programs at Northeast Ohio schools. Wooster so far this year has received more applications for the programs than it had received at this point a year ago, she said. And they were plenty popular last year: Nearly 64% of Wooster’s freshmen this year applied through one of the two programs, she said. Applications for Oberlin College’s early-decision program are up, too, by about 15% so far this year, said Debra Chermonte, dean of admissions and financial aid at
Oberlin. About half of them will be accepted and enroll in Oberlin’s College of Arts and Sciences. They likely will make up about one-third of the student body, a figure that has increased from less than 20% in the mid-1990s, Ms. Chermonte said. Oberlin uses early decision for some of the same reasons Wooster does, but Ms. Chermonte added that the program also lets the college identify students who are truly committed to the school, one reason they are more likely to be accepted. “You’re looking at a student with a different kind of eye,” she said. She cautioned, though, that early-decision programs only are for students who “can’t imagine themselves any other place,” given that they are binding, she said. The early-action program at Case Western Reserve University has been “increasingly popular” as of late, said Rick Bischoff, vice president for enrollment management. Applications are up 60% this year, he said. Only part of that figure is due to an overall increase in applications to the university, he added. Students in general are getting used to the idea of applying to college early. “I’d be surprised if that trend did not continue,” Mr. Bischoff said.
particular, have been criticized for giving an advantage to wealthy students, who may not need to compare financial aid packages from different schools. That was one reason Harvard
University eliminated its program in 2007. Still, it’s easy to see why earlyadmission programs are popular among students: The report said 70% of students who apply
through early-decision programs are accepted, compared to 55% of standard applicants. Early-action applicants receive only a small boost, Mr. Hawkins said. ■
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Early birds While such programs are becoming more popular, they may not be growing as fast as they were a few years ago. Nearly half of all colleges with early-decision programs reported increases in applicants in 2008, down from 63% in 2006, according to the State of College Admission Report 2010. Likewise, 65% of colleges with early-action programs reported an increase in applicants in 2008, down from between 70% and 81% during the prior three years. A quarter of four-year colleges offer some sort of early-admission program, said David Hawkins, director of public policy and research at the National Association for College Admissions Counseling, which assembles the State of College Admission Report. They tend to be smaller, private schools, and they often are more selective. Some public schools do offer early-admission programs, and some schools offer programs for particular groups of students. For instance, high school students can apply early for acceptance into a program involving a few area universities that allows them to earn a bachelor’s and then attend medical school at the Northeastern Ohio Universities Colleges of Medicine and Pharmacy. Early-decision programs, in
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IN BRIEF Kent State prof receives translation grant Kelly Washbourne, associate professor of Spanish translation in the Department of Modern and Classical Languages at Kent State University, has received a $25,000 Translation Fellowship from the National Endowment for the Arts. Out of 102 applications from around the country, 20 grants were
funded, only four of which were awarded the highest level of support of $25,000 each. Dr. Washbourne’s grant is a critical translation, “Legends of Guatemala,” from the Spanish of Miguel Angel Asturias. The work will be published with the Latin American Literary Review/Press in 2011.
Open House November 29 - December 3
1.866.324.5917 http://business.strayeruniversity.edu Fairview Park Campus |
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16 CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
HIGHER EDUCATION ®
Tri-C Where futures begin
continued from PAGE 13
Since its inception in 1963, Cuyahoga Community College (Tri-C®) has helped hundreds of thousands of area residents build a future for themselves while also improving their quality of life. A proud, rich tradition has emerged that makes Cuyahoga Community College an educational institution Where futures begin for so many residents within Northeast Ohio.
Globally recognized Nationally ranked Locally vital Kent State University is the region’s leading public university • Ranked as one of the top 200 universities in the world, by Times Higher Education, London • Named to the top tier of the Best Colleges in the nation by U.S. News & World Report • Generated 1.96 billion in added income to the Northeast Ohio economy • Ohio’s second largest public university • Nearly 200,000 alumni worldwide • Celebrating more than 100 years of excellence in action
Kent State University, Kent State and KSU are registered trademarks and may not be used without permission. Kent State University, an equal opportunity, afﬁrmative action employer, is committed to attaining excellence through the recruitment and retention of a diverse workforce. 10-2633
Bullying: Web makes it easier a student feel uncomfortable. That could include anything from a verbal threat, an insulting text message or a hateful Facebook post. “Over the years, one of the things I’ve learned about policies is that we need to make them broad because I can’t think of all the things a student might do,” said Sherri Crahen, dean of students at John Carroll University. Getting the message out about the policies and that harassment won’t be tolerated is the challenge, according to university officials. Jim Drnek, dean of students at Cleveland State University, said the suicide at Rutgers was “really chilling for the community.” He reached out to the university’s lesbian, gay, bisexual and transgender advocacy group to make sure everyone felt comfortable on campus and that they were aware of policies in place. Dr. Drnek also took his message to the dorms and made sure the student supervisors were aware of the protocols in place for dealing with bullying and harassment. If the university is made aware of such occurrences, students have the option of filing formal charges. Possible sanctions could include suspension or even expulsion. “There is harassment on campus,” he said. “I wouldn’t say it’s prevalent, but it happens from time to time.” Getting students to report the harassment, however, can be an issue. “They’re in a real bind,” said Greg Jarvie, dean of students at Kent State University. “No young adult wants to publicly acknowledge in college they feel bullied. There’s this growing independence and assertiveness. That bullying term doesn’t really fit them.”
A web of insults Social media also has made it possible to harass or taunt someone with the click of a computer mouse. Web sites such as Twitter and Facebook have become the new bathroom wall to impulsively scrawl insults and hateful messages. “This is a time that we all have to step back from instant thoughts and reactions and really kind of develop a good, hearty sense of
judgment,” Dr. Sellers said. Policing those comments can be challenging for universities. For instance, balancing a person’s free speech with another’s right to feel comfortable in a university setting can be difficult, Mr. Jarvie said. However, punishing a student for harassment through social media channels doesn’t need its own separate policy because it folds into universities’ sprawling student codes of conduct. “Obviously, being a higher education institution we support the First Amendment rights, but we will also take action when we believe someone’s crossed that … First Amendment rights will have to take a backseat because we have to make sure someone’s not physically or emotionally hurt here,” Mr. Jarvie said.
Speaking out Mr. Ramón was one of the student leaders who pushed for sexual orientation to be included in the school’s anti-discrimination policies for faculty and employees. At one point, Mr. Ramón and a group of other students staged a sit-in at a John Carroll basketball game to make a point that sexual orientation should be added as a protected group under the college’s employment policy. Their efforts weren’t for naught. Sexual orientation was added to the school’s anti-discrimination policies. It was an uphill battle, Mr. Ramón said, that left him emotionally exhausted by the end of the school year. During the height of the tension on campus, Mr. Ramón said he was taunted and threatened. He since has taken a break from John Carroll and is taking classes back in Puerto Rico, but he sees himself possibly going back. Despite policies, bullying and harassment won’t go away overnight. Administrators say it takes constant communication with students and swift action when someone violates those policies to demonstrate that hateful speech won’t be tolerated. “We are an exclusive community about civility and learning,” Mr. Jarvie said. “Universities have to show by their actions that they will deal that.” ■
Congratulations g Middough
Excellence in Action www.kent.edu
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NOVEMBER 29-DECEMBER 5, 2010
CRAINâ€™S CLEVELAND BUSINESS
LARGEST ENGINEERING FIRMS
RANKED BY NUMBER OF LOCAL REGISTERED ENGINEERS(1)
Company Address Phone/Web site
Number of local Number of registered local engineers employees
URS Corp. 1375 Euclid Ave., Suite 600, Cleveland 44115 (216) 622-2400/www.urscorp.com
Middough Inc. 1901 E. 13th St., Cleveland 44114 (216) 367-6000/www.middough.com
Arcadis U.S. Inc. 1100 Superior Ave., Suite 1250, Cleveland 44114 (216) 781-6177/www.arcadis-us.com
GPD Group 520 S. Main St., Suite 2531, Akron 44311 (800) 955-4731/www.gpdgroup.com
2009 local engineering billings ($ Top local executive millions) Title
Cleveland Clinic, Global Cardiovascular Innovation Center; Hiram College, dining facility; Dow Corning, facility improvements
Gary R. Hribar, vp, URS division; William Colt, senior vice president
V & M Star, Youngstown; Brush Wellman, Elmore; BP, Oregon
Ronald R. Ledin president, CEO
Highlands Ranch, Colo.
Kirtland pump station and specialty maintenance building; Cuyahoga Valley Towpath and cable-stayed bridge
Jim Crandall vice president, Midwest region, operations manager
State Route 94, Wadsworth; Eaton Blvd., Beachwood; Standby Power Enhancement Study, NEORSD
Dave Granger president
CT Consultants Inc. 8150 Sterling Court, Mentor 44060 (440) 951-9000/www.ctconsultants.com
City of Barberton, wastewater treatment plant improvements; S.R. 82, construction administration; Cuyahoga Community College, Westshore Learning Ctr.
Dave Wiles president
Westlake Reed Leskosky 925 Euclid Ave., Suite 1900, Cleveland 44115 (216) 522-1350/www.wrldesign.com
General Services Administration; Cleveland Clinic, Twinsburg Family Health and Surgery Center; Museum of Contemporary Art, Cleveland
Paul E. Westlake Jr. managing principal
HWH Architects Engineers Planners Inc. 1300 E. Ninth St., Suite 900, Cleveland 44114 (216) 875-4000/www.hwhaep.com
GE Energy, turbine test facility, Greenville, S.C.; The Goodyear Tire & Rubber Co., HVA expansion, Santiago, Chile; CK Technology, production facility, Mt. Airy, N.C.
Peter P. Jancar chairman
Osborn Engineering 1300 E. Ninth St., Suite 1500, Cleveland 44114 (216) 861-2020/www.osborn-eng.com
Littoral Warfare Systems, Panama City, Fla.; CMHA headquarters; GCRTA, East Side Transit Center
Eugene P. Baxendale president
R. E. Warner & Associates Inc. 25777 Detroit Road, Suite 200, Westlake 44145 (440) 835-9400/www.rewarner.com
Construction staking at Cleveland Clinic Heart Center; Westgate Mall redesign; RTI International, titanium plating facility
David W. Sminchak chairman, president, CEO
Burgess & Niple 1300 E. Ninth St., Suite 612, Cleveland 44114 (216) 241- 9600/www.burgessniple.com
NEORSD, Cuyahoga Valley interceptor lift station; City of Akron, Martha Ave. roundabout; City of Akron, program management, CSO long-term control plan
Charles J. Zibbel director, Great Lakes region
Karpinski Engineering 3135 Euclid Ave., Cleveland 44115 (216) 391-3700/www.karpinskieng.com
Cleveland Museum of Art; Cleveland Clinic, E. 89th St. parking garage and service center; LHS, Tri-Point Medical Center
James T. Cicero president
ms consultants inc. 9217 Midwest Ave., Suite 100, Cleveland 44125 (216) 581-4035/www.msconsultants.com
Abbe Road widening, Lorain County; Canton Road, Summit County; Standardsburg Bridge, Huron County
Raymond J. Briya executive vice president, finance and administration
Thorson Baker & Assoc. Inc 3030 W. Streetsboro Road, Richfield 44286 (330) 659-6688/www.thorsonbaker.com
CSU, Student Center; CSU, Euclid Ave. student housing; Baldwin-Wallace College, Science & Innovation Center
Gordon R. Baker Michael G. Thorson principals
Michael Baker Jr. Inc. 1228 Euclid Ave., Suite 1050, Cleveland 44115 (216) 664-6493/www.mbakercorp.com
Moon Twp., Pa.
Fulton Road Bridge replacement
Stephen C. Collar Ohio manager
Richard L. Bowen + Associates Inc. 13000 Shaker Blvd., Cleveland 44120 (216) 491-9300/www.rlba.com
Cleveland to Aurora water line, phase 2; Cuyahoga Metropolitan Housing Authority, engineering services
Richard L. Bowen president
Scheeser Buckley Mayfield LLC 1540 Corporate Woods Parkway, Uniontown 44685 (330) 896-4664/www.sbmce.com
The Medical Center Co., chiller plant addition; Aultman Hospital, intensive care unit; Thomas Memorial Hospital, Clinical Pavilion
James E. Eckman president
HNTB Corp. 1100 Superior Ave., Suite 1330, Cleveland 44114 (216) 522-1140/www.hntb.com
Kansas City, Mo.
Opportunity Corridor Study; I-475 improvements; I-270 improvements
Michael C. Flynn office leader
The Austin Co. 6095 Parkland Blvd., Cleveland 44124 (440) 544-2600/www.theaustin.com
Hills Pet Nutrition; Always Bagels Bakery; Mitsubishi Power Systems, generator plant
Patrick B. Flanagan president
Euthenics Inc. 8235 Mohawk Drive, Cleveland 44136 (440) 260-1555/www.euthenics-inc.com
Pearl Road widening, Strongsville; Snow Road underpass, CSX Railroad, Brook Park; Smith-Hummel sanitary sewer, Brook Park
Ronald A. Bender president, CEO
KS Associates Inc. 260 Burns Road, Suite 100, Elyria 44035 (440) 365-4730/www.ksassociates.com
Cleveland Clinic, Marymount Hospital, Garfield Heights; Cleveland-Cuyahoga County Port Authority survey; Cuyahoga County, Juvenile Justice Center
Lynn S. Miggins president
Chagrin Valley Engineering Ltd. 22999 Forbes Road, Suite B, Cleveland 44146 (440) 439-1999/www.cvelimited.com
Engineering services and infrastructure and roadway projects for municipalities
Donald F. Sheehy president
Floyd Browne Group 450 Grant St., Akron 44311 (330) 375-1390/www.floydbrowne.com
Akron-Canton Airport, runway 5-23 extension; City of Green, municipal engineering services; Cleveland Metroparks, West Creek reservation
Dwayne Groll vice president, director, Northeast Ohio operations
Hatch Mott MacDonald LLC 18013 Cleveland Parkway Drive, Suite 200, Cleveland 44135 (216) 535-3640/www.hatchmott.com
NEORSD, Valley Belt Gravity Sewer
Michael G. Vitale vice president
Peters, Tschantz & Associates Inc. 275 Springside Drive, Suite 300, Akron 44333 (330) 666-3702/www.ptaengineering.com
Verizon Wireless, Hudson Data Center expansion; Allstate, San Antonio call-in center; Robinson Memorial Hospital, surgery addition and renovation
James E. Peters president
KCI Associates of Ohio P.A. 388 S. Main St., Suite 401, Akron 44311 (330) 564-9100/www.kci.com
High Bridge Glens Park; University of Akron, soccer stadium; South Main St., widening
Frank Bronzo practice leader
McHenry & Associates Inc. 25001 Emery Road, Suite 200, Warrensville Heights 44128 (216) 292-4696/www.mchenryassociates.com
Giant Eagle stores; CWRU air handling unit replacement
William Hulsey president
Wilbur Smith Associates 55 Public Square, Suite 600, Cleveland 44113 (216) 875-2000/www.wilbursmith.com
Euclid Corridor transportation project; Cleveland Clinic, site at E. 93rd St.; Salt Lake City Light Rail, bridge design
Robert Parker Ohio division manager
CDM 1100 Superior Ave., Suite 620, Cleveland 44114 (216) 579-0404/www.cdm.com
NEORSD Southerly WWTC renewable energy facility; NEORSD, asset management implementation; Erie Water Works, RSW WTP improvements
Edward J. St. John principal
Professional Service Industries Inc. 5555 Canal Road, Cleveland 44125 (216) 447-1335/www.psiusa.com
Oakbrook Terrace, Ill.
University Hospital Cancer Center; Cleveland Clinic, laboratory; Cleveland State University student center and housing
Vijay Khosla executive vice president
CH2M HILL 1100 Superior Ave. E., Suite 1420, Cleveland 44114 (216) 623-0326/www.ch2mhill.com
NEORSD, program management; Cleveland Water Department, meter automation and replacement program; Ridge Road reconstruction
Cindy Juliano transportation and planning manager
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 30, 2010.
RESEARCHED BY Deborah W. Hillyer
CRAIN’S CLEVELAND BUSINESS
NOVEMBER 29-DECEMBER 5, 2010
RECAPPING THE 2010 FORTY UNDER 40 AWARDS About 375 people attended the Nov. 22 ceremony, at Executive Caterers at Landerhaven. For more photos, visit CrainsCleveland.com.
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From left, Barbara Oney, Royden Watson and honoree Arlene Watson, all of Möbius Grey.
From left, honoree Leigh Hellner, Rick Rivitz, Dick Rosner and Susan McKean, of event sponsor Taft Stettinius & Hollister LLP.
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NOVEMBER 29-DECEMBER 5, 2010
CRAIN’S CLEVELAND BUSINESS
THEWEEK NOVEMBER 22 - 28 The big story: Invacare Corp. said its longtime CEO, A. Malachi Mixon III, who suffered a stroke last spring, will not be returning as chief executive. The maker of wheelchairs, portable oxygen units and other home medical equipment said Gerald B. Blouch will carry the title of president and CEO as of Jan. 1 after serving as interim chief executive since last April 30. Invacare said Mr. Mixon “will continue to be Mixon actively engaged with the company as chairman of the board, where he will focus on government relations, strategic issues and research and product innovation.” One of Mr. Blouch’s key initiatives as CEO will be the ongoing transformation of Invacare from regionally focused business units into what the company called “an agile global enterprise.”
Tough month: The Ohio Association of Realtors reported there were 7,041 home sales statewide in October, a decline of 31% from 10,142 sales in October 2009. The total dollar volume last month was $935 million, a 30% drop from $1.3 billion in the like month last year. Meanwhile, the average sales price stayed essentially flat, at $132,848 vs. $132,560 in October 2009. The numbers in Northeast Ohio were better, but not much. In the Northeast Ohio Real Estate Exchange, the number of units sold in October was 2,195, down 28.5% from 3,072 in October 2009. The average sales price, though, rose 6.5% to $134,157 from $126,025.
Closing the door: The Riverside Co. said it realized a return of $3.80 for every dollar invested in a Louisiana company that makes and distributes cabinet hardware, decorative trim and vanities. Riverside, a global private equity firm based in Cleveland and New York, completed the sale of Hardware Resources Inc. to St. Louis private equity firm Harbour Group. The price was not disclosed. Riverside bought Hardware Resources, based in Bossier City, La., in 2004.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Fewer banks, but at least more are in the black ■ The number of banks and bank employees has declined in Ohio and nationwide over the past year, according to data released last week by the Federal Deposit Insurance Corp. There were 240 banks in Ohio as of Sept. 30, down 3% from 248 on Sept, 30, 2009, the FDIC’s Quarterly Banking Profile revealed. Nationwide, the number of banks fell 4%, to 7,760 from 8,099 in September 2009. Bank employee numbers also declined: Ohio institutions reported 307,376 full-time equivalent workers, down 3% from 317,342 in September 2009. Nationwide, the number of employees slid 1.3%, to 2.04 million from 2.07 million. Happier news, though: More banks are in the black. In Ohio, the percentage of unprofitable banks slipped to 16.67% from 20.97% in September 2009 — the first time the percentage decreased since September 2005. Nationwide, the percentage fell to 20.44% from 28.74%. — Michelle Park
To their credit: Myers Industries Inc. closed on a new five-year, $180 million senior secured revolving credit facility with seven banks. The diversified manufacturing and distribution company said borrowings under the new credit facility will be used to pay off a portion of the company’s $100 million in senior unsecured notes, $65 million of which mature next month. The credit line also will be used for general corporate purposes and to fund investments in what Myers called “strategic growth initiatives.”
Follow the leader: Hyland Software Inc. for the first time was labeled a “leader” in its industry by business research firm Gartner Inc. Gartner placed the Westlake document management software firm alongside larger companies such as Microsoft, Oracle and IBM in its latest evaluation of companies in the Enterprise Content Management industry. Gartner’s 2010 “Magic Quadrant” report says Hyland Software has “strong management, a clear strategy, happy customers and a vertical-market focus.”
To keep up with local business news as it happens, visit www.CrainsCleveland.com.
Hot for a Harley? Check this out
■ University Hospitals is set to make what the health system is pegging as a “monumental announcement” at 7 p.m. tonight, but officials won’t budge on the details. The announcement is so big that UH officials are doing it at Severance Hall, and UH
■ We generally don’t follow pork bellies or Hog prices, but if you’re looking for a Harley-Davidson motorcycle, now might be the time. With the company’s core baby boomer audience aging and other owners struggling financially, more used Harleys than usual are on the market — and at cheaper prices than in years past. An informal survey of area bike dealers revealed many bikes that were fetching as much as $15,000 on the used market a few years ago now are selling for $10,000 or less. J and J Motors of Massillon recently had more than 50 used Harley-Davidsons on its
BEST OF THE BLOGS
Anticipation builds for UH announcement
Straight to the point: Private equity firm Blue Point Capital Partners of Cleveland said it invested $12 million in a Beijing company that serves the Chinese retail development needs of global brands such as Estée Lauder, Piaget and L’Oreal. The Chinese company — Haya Retail, a retail design and retail fixture manufacturing firm — provides services from concept design to fixture manufacturing and retail space construction. Blue Point’s investment made it a minority investor, said Blue Point partner Chip Chaikin.
spokeswoman Alicia Reale said 1,000 people are expected to attend. Ms. Reale wouldn’t offer particulars on the announcement other than to say it would be the “biggest announcement in our 144-year history.” The last time UH held an event this big was in December 2006, when Transtar Industries founder Monte Ahuja announced he had bestowed a $30 million gift for a planned hospital in Beachwood. At that time, it was the largest gift in the health system’s history. UH — the second-largest health system in the region — is in the midst of an ambitious, $1.2 billion capital program, which includes the new Beachwood hospital named for Mr. Ahuja, a new cancer hospital at its Case Medical Center and a neonatal intensive care unit at Rainbow Babies & Children’s Hospital. — Timothy Magaw
COMPANY: Automated Packaging Systems, Streetsboro PRODUCT: AirPouch FastWrap system Company officials recently traveled to Pack Expo in Chicago to introduce a benchtop system that produces cellular cushioning wrap on demand, minimizing the shipping and storage costs associated with large rolls of bubble wrap. Automated Packaging says its AirPouch FastWrap system uses high-yield boxes of flat, preformed bubble material. When inflated at the station, these compact boxes of material produce 1,385 linear feet of cellular cushioning wrap, roughly equivalent to 5½ rolls of bundled bubble product, the company says. A patent-pending honeycomb pattern allows air transfer between cells for maximum product protection, according to Automated Packaging. The FastWrap system also is capable of producing full-length tubes to accommodate a variety of protective packaging uses. The system produces its cellular cushioning wrap in 12-inch widths and a continuous length with perforations every 10 inches. For information, visit www.AirPouch.com. Send information to managing editor Scott Suttell at email@example.com.
showroom floor — and it’s not even a Harley dealer. On a recent warmer-than-usual Saturday in November, a lone salesman tried to juggle as many as four prospective buyers at a time while also working the phones to buy new bikes. He said the dealer has been buying the bikes — most of which were repossessed by finance companies for non-payment — in lots of as many as 30 at a time. — Dan Shingler
Former bank secretary reaches the mountain top ■ Beth E. Mooney, who will become CEO of KeyCorp next May when current boss Henry L. Meyer III retires, already knows how she’ll gauge success in her new role. “There’s one very clear report card: Are you creating value for your shareholders?” Ms. Mooney said in an interview. “I think that is always job one for any public company.” The way the bank drives new business, acquires clients and keeps employees happy are other factors Ms. Mooney said she’ll use to assess her performance. Asked if the CEO post is the ultimate role she envisioned for herself, Ms. Mooney replied that she isn’t sure anyone starts a job thinking that far down the line. She began her banking career of more than 30 years as a secretary; Mr. Meyer started as a teller. Asked if he’ll stay in the area in his retirement, Mr. Meyer said, “I’m a seventhgeneration Clevelander, and I’m not about to leave.” Mr. Meyer will stay in Hunting Valley, and “beginning with every day, I’m going to sleep a little later.” —Michelle Park
Excerpts from blog entries on CrainsCleveland.com.
Timken gets its bearings in massive Chinese market
To cut deficit, Eaton CFO suggests a bit of VAT
■ Timken Co. sees another growth opportunity in China. CEO James W. Griffith told The Wall Street Journal that Chinese wind turbines represent the biggest single growth market for the industrial bearings the company produces. Sales of its wind-turbine bearings in China, forecast to be around $50 million this year, “should roughly double next year and maintain a strong pace in the years beyond,” Mr. Griffith said. China sales overall make up the “lion’s share” of Timken’s Asia business, which accounts for up to 12% of the company’s global sales, forecast to hit roughly $4 billion this year, the newspaper reported. Mr. Griffith “acknowledged that by these standards $50 million doesn’t look like much — but he has confidence in the Chinese wind sector,” according to The Journal.
■ Eaton Corp. chief financial officer Richard Fearon has a recommendation for how the country should prevent its debt from reaching levels that roil foreign investors. “If you’re going to solve this budget problem, you are going to have to have a broad-based tax,” Mr. Fearon said in a recent interview with Bloomberg. “I personally think what we should do is go to what 30 of the 31 (Organisation for Economic Co-operation and Development) countries have, and that is a VAT or a national sales tax.” Introducing a tax on consumer goods similar to the valueadded tax, or VAT, found in the United Kingdom and Australia would raise revenue while easing debt and would compel consumers to save more, Mr. Fearon said during the interview in London, part of a tour of several European cities to visit investors. (The region’s shareholders own about 10% of Eaton stock, Bloomberg noted.) “The fundamental issue in the U.S. is that if we’re going to spend at the rate at which we are, we are going to need to collect more tax revenue,” Mr. Fearon told Bloomberg. The news service noted that Mr. Fearon during the interview cited a 2009 book, “This Time Is Different: Eight Centuries of Financial Folly,” warning that high debt can lead to default. “The conclusion (the authors) come to is that whenever your debt to GDP approaches 90%, your ability to extricate yourself from a default becomes really problematic,” he said. Bloomberg reported that federal debt held by the public will reach 62% of gross domestic product at the end of this year, up from 36% three years earlier.
Serves us right for taking their junky bait ■ We all know the Forbes.com lists are little more than web traffic bait based on dubious statistical analyses, but one of the web site’s new lists has a different problem. The site recently ran a list with a headline that read “America’s Worst Cities for Finding a Job,” accompanied by a picture of … downtown Cleveland. Sure, we all know things aren’t great here. Guess they had to use Cleveland’s picture to illustrate hard times. But when you click on the list of the 15 worst cities, you won’t find Cleveland. Why, you ask? Because Cleveland is No. 11 on the “America’s Best Cities for Finding a Job” list, a link also contained in the worst cities story.
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Published on Nov 24, 2010