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Vol. 31, No. 49

Hyland to take on debt to pay shareholders Planned $131M dividend distribution signals investor confidence in Westlake software firm By CHUCK SODER csoder@crain.com

Hyland Software Inc. plans to take on $225 million in debt that it would use to fund a $131 million dividend payment to shareholders and to refinance existing loans. The Westlake-based document management software company plans to secure a $205 million senior secured term loan that would be due in 2016 as well as a $20 million secured revolving credit facility due in 2015, according to

credit rating reports issued by Moody’s Investors Services and Standard & Poor’s Ratings Services. Transactions in which a company takes on debt to pay shareholders were rare during the worst of the economic downturn but have grown in popularity over the past few months, particularly among companies owned by private equity firms. Thoma Bravo, a private equity firm with offices in Chicago and San Francisco, bought a majority stake in Hyland Software in mid-2007. See HYLAND Page 22

INSIDE 12 Days of a Cleveland Christmas

GETTING LOADED Port officials take a shot at diverting some imported liquor shipments from East Coast to Cleveland By JAY MILLER jmiller@crain.com

P 49

rohibition-era bootleggers used to “import” Canadian whiskey from across Lake Erie under cover of darkness to speakeasies. Now, the Cleveland-Cuyahoga County Port Authority and International Longshoremen’s Association want to bring imported liquor from overseas into the Port of Cleveland in broad daylight.

A spokeswoman for the Ohio Division of Liquor Control said her agency convened a meeting in Columbus on Oct. 20 to open the discussion with spirits importers about the feasibility of rerouting shipments of scotch, vodka and other liquors. The shipments, now received at East Coast ports, could be sent up the St. Lawrence Seaway to the docks of the Port of Cleveland. See LIQUOR Page 9

You need some serious cash to afford all the gifts of the 12 Days of Christmas, Cleveland-style. Following in the spirit of the annual PNC Christmas Price Index, we determine how much various Cleveland-centric gifts would cost you, from Browns tickets to rock stars and beer. Check out the localized lyrics and our gift list on Page 3.

Nonprofits keep fingers crossed through holidays Organizations close in on fundraising goals By TIMOTHY MAGAW tmagaw@crain.com

The holiday months are a key fundraising period for many of Northeast Ohio’s nonprofits and charities, and so far this year, many — but not all — say they’re on track to meet or exceed their targeted goals. Giving hasn’t rebounded to prerecession levels, but many nonprofits are counting on the fundraising vise that hampered their efforts over the

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last few years to continue to loosen over the holiday season. Many raise a large chunk of their revenue — some as much as 50% — during the months around the holidays, and they’re ramping up their marketing efforts. “This is a very crucial time, and nonprofits are realizing they can’t just sit and wait for checks to come in the mail in December,” said Kathy Bergh, program director for the certificate of nonprofit and See GIVING Page 8


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CORRECTION A Dec. 6, Page 7 story misstated the percentage that independent physicians must pay of their annual cash collections to join the Sisters of Charity Health System’s physician alignment subsidiary, Independent Physician Solutions. Physician practices earning $600,000 or less must pay 7.75%, while those earning more than that must pay 6.75%.

REGULAR FEATURES Classified ................21-22 Editorial .......................10 Going Places ................12 Letters .........................11 List: Banks, savings institutions............18, 20

WWW.CRAINSCLEVELAND.COM

COMING UP This year’s Book of Lists, which publishes Dec. 20, features 44 lists, including our Health Care Directory, and thousands of contacts with area organizations. And on Jan. 3, Crain’s will publish our 2011 Economic Outlook section that looks at emerging sectors and issues in Northeast Ohio.

DECEMBER 13 - 19, 2010

HOW WE SPEND IT Households in the Cleveland-Akron area spent an average of $45,844 on living expenses in 2009, a figure that’s 8% lower than the national average of $49,778. The biggest area of expenditure was housing (including utilities), where the average Northeast Ohio household spent $15,483, accounting for 33.8% of total household spending. Northeast Ohioans allocate their dollars in eight major categories — representing 93% of household spending — in similar fashion to their counterparts nationwide, though more is spent here on health care and insurance:

Category

Share of household expenditures in U.S.

Share of household expenditures in NEO

Housing

34.2%

33.8%

Transportation

16.3

15.3

Food

12.9

12.5

Insurance and pensions

11.1

12.2

Health care

6.1

7.1

Entertainment

5.6

5.3

SOURCE: U.S. BUREAU OF LABOR STATISTICS

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We’re committed to Ohio. That’s why we’re helping companies here navigate changing market cycles and create new opportunities for success. Our client managers are trusted partners who work with you to understand your business and seamlessly deliver customized solutions based on your unique needs. From term loans through revolving credit lines, let us help increase your financial flexibility and drive operational efficiencies. Joseph DiRocco 1.216.925.5396

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

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CRAIN’S CLEVELAND BUSINESS

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Contractors’ big worry still lack of work Pending projects offer glimmer of hope for long-term construction By STAN BULLARD sbullard@crain.com

Concerns over rising health care expenses, taxes and other costs are less a worry for Northeast Ohio construction contractors than other business owners because their pri-

mary woe is more fundamental. It’s a lack of work, and it trumps all other anxieties — though some big projects in the pipeline, such as the planned Cleveland casino and the proposed medical mart/convention center, are bolstering contractors’ long-term outlook.

That’s the verdict of the latest annual survey of Northeast Ohio’s construction and real estate industries by the Skoda Minotti accounting, business and financial advisory firm. It found 69% of the contractors who responded see a shortage of work as the biggest threat to their

INSIDE: Results of accounting firm Skoda Minotti’s annual survey of the local construction industry. Page 19 business over the next year, far outpacing tightened credit, which 16% cited as their chief woe. “The only thing that people are bidding on in Northeast Ohio is in the health care industry and some

12DAYSOFCLEVELANDCHRISTMAS Good lords-a-leaping: To buy your true love all the gifts in the “The Twelve Days of Christmas” — beginning with the partridge in a pear tree and ending with 12 drummers drumming — you’d need $23,439, or 9.2% more than last year, according to the 2010 PNC Christmas Price Index. The bank has priced the classic list for 27 years; this year, Crain’s Cleveland Business priced its own. As it turns out, the list we penned costs much, much more, but anything for your true love — and to stimulate the economy — right? Feel free to sing along! — Michelle Park

Walleye wiggling

Ore boats sailing

COST: $274 That’s 12 three-pounders from the lake at $7.60 a pound.

COST: $300 million, to buy them new Operating the river-size boats, which can carry 21,000 tons of cargo, costs $1,000 to $3,000 an hour.

Eleven pierogies frying COST: $8 Most popular pierogi picks at one local vendor, Pierogi Palace at the West Side Market: potato and cheese, loaded baked potato and chicken paprikash.

Rock stars rocking COST: $5 million if you book 10 Springsteens The Boss runs $500,000 per, while John Mayer costs less at $300,000 an appearance, and Billy Joel runs roughly $1 million.

Slyman’s slicing COST: $81 Open wide: Each $9 corned beef sandwich packs 14 ounces on rye.

Slabs of steel COST: $2,500 Assuming each slab weighs a ton.

Browns tickets COST: $218 Average ticket price is $54.51; being tackled by an inebriated tailgater will cost you at least $5 more.

Malley’s sundaes COST: $12 After all six scoops of gourmet vanilla and all 7.5 ounces of hot fudge, redeem thyself with an adult membership to the The YMCA of Greater Cleveland for $660 a year.

Ales a-brewing

Stadium Mustards

COST: $20; cab ride home: $2.75 loading fee, plus $2.24 per mile thereafter That’s if you pay for the individually sold Great Lakes bottles; buying two 6-packs would cost less per ale. Either way, you’re further warranting the 21% yearover-year increase in Christmas Ale production.

COST: $6 Rather have two cases? If that amount of mustard wets your whistle, $64 buys you 24 bottles and shipping.

Strudels baking COST: $84 Each $12 strip at Lydia’s Hungarian Strudel Shop in Parma Heights is 18 inches filled with your choice of apple or cherry.

ALL THIS CAN BE YOURS IF THE PRICE — $305,003,205 — IS RIGHT

... and a pigeon on Public Square COST: $2, according to a pigeon dealer ... or priceless or worthless, depending on your point of view. Domestic homing pigeons, unlike the feral ones we typically see, can sell for $10 to $8,000 a bird. (Not a misprint. Racing the birds is apparently quite lucrative.)

SOURCES: CLASSIC SEAFOOD MARKET AND PIEROGI PALACE, WEST SIDE MARKET; CLEVELAND STATE UNIVERSITY WOLSTEIN CENTER; GREAT LAKES BREWING CO.; ACE TAXI SERVICE, CLEVELAND; LYDIA’S HUNGARIAN STRUDEL SHOP, PARMA HEIGHTS; LAKE CARRIERS’ ASSOCIATION, ROCKY RIVER; AMERICAN METAL MARKET; TEAM MARKETING REPORT; YMCA OF GREATER CLEVELAND; GIANT EAGLE; KC KENNELS AND LOFTS, DAYTON.

school work,” said Roger Gingerich, partner-in-charge of Skoda Minotti’s real estate and construction group. “You’re starting to see (tax-strapped) municipalities cut back on capital expenses,” he said. “In some cases, there is so much competition that everyone is cutting everyone’s throat. It’s hard to make any money.” See CONTRACTORS Page 19

Marathons’ economic impacts rise with entries By JOEL HAMMOND jmhammond@crain.com

The Cleveland and Akron marathons are keeping stride with the nationwide growth in running, and the region as a whole is benefiting. Rite Aid Cleveland Marathon officials last month said registrations for its 2011 event — which includes a marathon, half marathon, 10K and kids race — were up 76% over the same point last year. That’s a significant increase because overall participation in 2010 rose 26% from 2009. Race officials on a preliminarily basis estimate 19,000 participants will be involved in next May’s festivities, which would be a 21% increase from the 15,631 runners who raced in 2010. “The numbers are increasing across the board,” said race director Ralph Staph. That jump includes a corresponding rise in out-of-staters and people residing outside Northeast Ohio, though race officials only could estimate those figures. Non-Ohioans — including international runners — totaled See MARATHONS Page 11

WEEK IN QUOTES “We seem to be able to hit the mark (each month), so I think we’re coming out of it. Our donors are starting to increase giving or come back from a break they’ve taken.” — Natalie Leek-Nelson, president and CEO of Providence House. Page One

“I’m willing to help you grow … as long as you’re willing to help someone along the way.” — Deb Mills-Scofield of MillsScofield LLC of Oberlin. Page 13


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Tech firm’s Wi-Fi antennas catch on quickly By CHUCK SODER csoder@crain.com

Wayne Gartin believes in MP Antenna’s products. Not only is the chief operating officer of Novarum Inc. working to install the North Ridgeville company’s antennas in the city of Cleveland and other large metropolitan areas, but he uses an MP Antenna product to boost his Wi-Fi reception at home, too. It’s easy to see why: MP Antenna’s products provided a 20% larger coverage area in tests Novarum ran to determine what technology to use for one of its municipal Wi-Fi projects, said Mr. Gartin, whose company helps cities, companies and other groups design and install

wireless networks. Hence, Novarum, which has offices in Akron and California, is using MP Antenna’s patented technology as it builds out a Wi-Fi network in Cleveland’s Ward 13, which includes much of the Old Brooklyn neighborhood. The project will provide free Wi-Fi to residents and businesses and is expected to go live early next year. “We think that these guys are going to give us measurably better performance,” Mr. Gartin said. The improvement is the result of “multi-polarization” technology created by co-founder Jack Nilsson. The three-dimensional shape of the antennas allows them to pick up or transmit signals even if they

encounter obstructions that alter their polarizations. The shape of the antennas also lets them pick up signals in different places, said CEO Joe Bliss. Projects such as the one in Cleveland represent just one area of opportunity for MP Antenna, Mr. Bliss said. The company, founded in 2008, already sells several antennas, including the Trident, which consumers can plug into a router to improve Wi-Fi access in their homes. MP Antenna also aims to win business from government agencies that help emergency responders communicate. For instance, the state of Ohio is running tests on the company’s antennas in an effort to improve its Multi-Agency Radio Communications System (MARCS), used by emergency responders from different agencies. Though still running tests, MARCS director Darryl Anderson said it appears the antenna will help the state eliminate gaps in its radio communications coverage. Mr. Anderson said he would recommend MP Antenna products to other agencies if all goes well. “It seems like they have devised a better mousetrap,” he said. MP Antenna employs eight, though a manufacturing company Mr. Bliss owns, JBS Technologies Inc., provides MP Antenna with back-office services as well as space. Though only two years old, the company got a head start by acquiring Manatee Wireless, a descendant of a company Dr. Nilsson formed in 2003 to commercialize ham radio antennas. The company also got a boost in November 2009, when it reached a settlement with WiFi Plus Inc. of Brunswick, which Dr. Nilsson helped start, and a group of other companies and individuals that sell products based on some of MP Antenna’s intellectual property. The settlement allows the group to continue selling only the multi-polarized antennas already in their product lineup. Still, challenges remain. For instance, the group in June filed an appeal with the Medina County Court of Common Pleas, arguing over a contract that dictates how the license agreement is to be implemented. Plus, many people still see antennas as commodities, Mr. Bliss said. “Everybody thinks antennas are all the same,” he said. ■

IN BRIEF PRSA honors Crain’s custom publishing Fahlgren Mortine Public Relations won a silver award for its ACG Cleveland Advertorial, produced by Crain’s Cleveland Business Custom Publishing. The award was presented to the public relations firm on Friday, Dec. 3, at the eighth annual PRSA Cleveland Rocks Awards Luncheon at Windows on the River. The section appeared in Crain’s Jan. 18 edition.

Volume 31, Number 49 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136


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DECEMBER 13 - 19, 2010

As parent splits, little change at Moen Informal ban on earmarks By DAN SHINGLER dshingler@crain.com

When Fortune Brands Inc. splits up sometime in the second half of 2011, faucet maker Moen will be the single biggest brand in a newly independent public company that will be formed from what is now the conglomerate’s Home and Security division. But there’s no chance Moen’s headquarters in North Olmsted will become the new corporate headquarters of that company, nor will much change for the folks at Moen, a Fortune Brands spokesman said. “The business will remain headquartered here in Deerfield, Ill.,” said Clarkson Hine, Fortune Brands’ vice president of corporate communication. Fortune Brands announced last Wednesday, Dec. 8, that it plans to split itself up. Instead of one company selling $6.7 billion of faucets, padlocks, cabinets, booze and golf balls each year, it will become three separate companies. Fortune Brands will remain as a liquor company, its Home and Security division that includes Moen will be spun off into a separate public company, and Titleist golf ball maker Acushnet either will

go public or will be sold outright. Moen will make up about $850 million of the Home and Security company’s annual sales of about $3 billion, effectively contributing nearly 30% of the business to an operation with 15 brands. But there was little to no consideration given to Moen serving as the headquarters of the new company when it’s spun off, Mr. Hine said. That’s because the Home and Security unit’s management and headquarters structure already are up and running in Deerfield. “It’s really business as usual,” Mr. Hine said. There was seemingly no time for local economic development officials to lobby the company to consider a Cleveland-area headquarters — nor was there much need, said Tom Waltermire, CEO of Team NEO, which markets the region to site selectors and corporations considering a move or expansion. In the case of Moen, which once was led by Fortune Brands CEO Bruce Carbonari, there’s no need to familiarize its parent with Northeast Ohio or its business community. “They don’t really need our help — it’s not like we have to tell them what it’s like here,” Mr. Waltermire said.

Not that the move by Fortune Brands to break up its business will be a negative for the region. When the dust settles, Moen still will be headquartered in North Olmsted and will be a big fish in a smaller corporate pond as part of a newly independent company. But the presence of another public company actually headquartered here would have been a better thing, said economist Ned Hill, dean of Cleveland State University’s Maxine Goodman Levin College of Urban Affairs. “I’d rather have the headquarters of a company here than a division or branch, because the decisionmaking is here,” Dr. Hill said in an e-mail on the subject. As it is, Moen supports the local economy, including through the use of local contractors. Those companies, too, are counting on their relationship with Moen not changing — and they’re glad for that. “We have had an outstanding relationship with Moen for 20 years. This change in the corporate structure will not have any impact on our relationship, and we will operate as business as usual,” said Rob Falls, CEO of Falls Communications in Cleveland, which handles Moen’s public relations work. ■

could hurt college budgets By TIMOTHY MAGAW tmagaw@crain.com

The state’s budget woes are a constant source of concern for colleges and universities in Northeast Ohio, but a potential congressional ban on earmarks — colloquially known as “pork” — could cause a snag for some of the schools’ burgeoning programs. The lawmaker-directed spending items known as earmarks don’t account for a huge chunk of college budgets, but a million dollars here or a few hundred thousand dollars there can go a long way in starting a program, school officials say. A formal ban on earmarks failed recently in the Senate. However, it’s still uncertain whether any legislation containing earmarks can make it through Congress, given that Republicans in the House agreed to a moratorium on them and Republicans in the Senate could filibuster any legislation containing the spending items that some suggest have become a symbol of waste in government. U.S. Rep. Tim Ryan, D-Niles, who has slated earmarks for several universities and colleges in his district, recently told Crain’s that “for all intents and purposes, earmarks are a thing of the past, at least for the next year or two.” Without this money, higher education institutions will need to look elsewhere — competitive grants or private partnerships — for the cash.

The benefactors The University of Akron received about $4 million in earmarks over the last fiscal year, according to John LaGuardia, the university’s vice president for public affairs and development. Mr. LaGuardia said the university is awaiting word on several appropriations, but he noted what will happen when the next Congress is seated in January is anybody’s guess. The university recently received a $1.6 million earmark, placed by U.S. Sen. Sherrod Brown, to help launch the school’s corrosion engineering program. It also received earmark money for its polymer innovation

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center, high-technology forensics lab and resource center and the research and development of clean vehicle technology. “Every one of those projects encouraged young people (involved with them) to consider staying (in Ohio),” Mr. LaGuardia said. “We want to keep them afterwards. The success we have also hopefully generates business in the community.” Over the last 10 years, Kent State University has received about $12 million in congressional earmarks, according to Constance Hawke, its associate counsel and associate vice president for federal relations. That’s compared with about $20 million to $25 million the university receives each year in federally awarded competitive grants. Ms. Hawke said the earmarks generally went toward new initiatives lacking certain types of equipment and where there was no grant money available. Some of the projects financed by earmarks include the university’s bio-safety training laboratory and 3D classroom, which allows researchers to study at the cellular level in three dimensions. “We’ve never looked to earmarks as our sole-source funding for any project,” Dr. Hawke said.

Looking elsewhere Rep. Ryan said budgets for the National Science Foundation and the National Institutes of Health have grown over the last few years, and universities have competed for a larger chunk of that money. He anticipates their budgets will shrink over the next couple years, though, as Congress looks to reduce spending. And with fewer, if any, earmarks, the scarcity of federal dollars could hinder future research projects that otherwise could create jobs. The University of Akron’s Mr. LaGuardia said aside from federal grant money, universities may need to look for more private investments from companies to help fund research projects. Regardless, Mr. LaGuardia noted that Northeast Ohio’s higher education institutions are using the earmarked funds for “exceptional tasks that are relevant to today’s society.” ■


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DECEMBER 13 - 19, 2010

Giving: Nonprofits say fundraising efforts paying off continued from PAGE 1

human services management at Kent State University. Those year-end donations — often a way for donors to shore up their last-minute income tax deductions — are expected to be on the upswing for about 32% of the state’s nonprofit organizations, according to a recent survey by the Ohio Association of Nonprofit Organizations. About 47% of the respondents anticipate holiday giving to remain steady, while 21% expect giving to decrease.

Emerging from a rut Nationwide, giving has started to rebound, albeit slowly.

According to a national survey by the Nonprofit Research Collaborative, 36% of charities responding reported an increase in donations in the first nine months of 2010 from the like period in 2009, an improvement from the 23% that saw donations rise in the first nine months of 2008. Also, the number of charities reporting a decline in giving during that period this year fell to 37%, a decline from 2009’s 51%. “For the first time in a couple of years, there’s some cautious optimism about the nonprofit sector,” Ms. Bergh said. Natalie Leek-Nelson, president and CEO of Providence House, said the Cleveland crisis nursery’s

fundraising efforts for its fiscal year started strong in July, and she expects that trend to continue through the holidays. The organization, she said, has engaged prospective and existing donors with new e-mailed newsletters and a stronger presence on the Web and social media sites such as Twitter and Facebook. Ms. Leek-Nelson said she hopes to raise 27% of Providence House’s revenue in December, and so far the group is on track to meet its goal. Also, 90% of the donated goods it uses throughout the year are donated between Thanksgiving and Christmas. “We seem to be able to hit the mark (each month), so I think we’re coming out of it,” she said. “Our

donors are starting to increase giving or come back from a break.” Still, Ms. Leek-Nelson said Providence House has operated at a 28% reduced budget for the last two years, and has made only 16 of its 26 beds available for at-risk babies. The revenue still isn’t there to restore what had been cut.

Scaling back the mission Likewise, The City Mission restructured its organization about a year and a half ago and cut its budget by 10% in anticipation of economic pressures that would confront nonprofits, according to the group’s CEO, the Rev. Rich Trickel. Since then, he said, the or-

“We seem to be able to hit the mark (each month), so I think we’re coming out of it.” – Natalie Leek-Nelson, president and CEO, Providence House ganization’s budget has become “viable and sustainable.” The cuts mostly were done internally by eliminating some full-time and part-time positions so as not to impact the City Mission’s outreach efforts. Still, the group cut back on its neighborhood ministry program, where anyone could ask the mission for assistance. “I don’t think it’s ever minor when you can’t serve a group of people you used to serve, so we’re very sensitive to those things,” said Mark Charvat, the City Mission’s chief financial officer. About 45% to 48% of The City Mission’s annual budget stems from donations during October, November and December, Rev. Trickel said. So far this year, he noted, the organization is “slightly ahead” of last year in terms of income. “We’re satisfied in how things are going so far,” he said. Not everyone can say the same.

Demand outpaces supply

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The Salvation Army of Northeast Ohio has seen a 15% decline in fundraising for this time of year compared with the like period in 2009, according to Stella Dilik, the organization’s divisional development director. November donations had dipped slightly, which she attributed to the election season, but they started to rebound in December. It’s challenging, Ms. Dilik noted, because while donations have declined, the need for the Salvation Army’s services is increasing. “It comes down to the wire,” she said. “A lot of people will come out of the woodwork but need prompting right now. I feel confident that if we get the word out we’ll be able to meet the need of those coming to us.” In order to spur giving, Ms. Dilik said The Salvation Army has increased its direct-mail campaign. It’s also boosting its online presence and offering a service that allows people to donate through text messages. The Cleveland Foodbank nets about 50% of its yearly fundraising goal in December alone, according to Karen Pozna, the organization’s communication manager. The group hopes to raise $2.2 million this month and is on track to do so. Ms. Pozna noted that overall giving has increased by about 40% over the last two years, but the demand for the food bank’s services has risen by 50%. “It’s a kind of a double-edged sword because the need is continuing to increase. So, we’re doing our best to keep up with that need,” Ms. Pozna said. “I think the food bank has been doing very well and has been successful at fundraising, but we still need to do more because the need has been increasing so much.” Though charitable giving slowly is starting to grow, nonprofit professionals say it will take several years to recover in full from the recession. Regardless, Rev. Trickel of The City Mission is optimistic about giving this holiday season. “Cleveland is an incredibly generous town. Even for all of its difficulties and financial stresses it’s under, the people of Cleveland are very, very generous,” Rev. Trickel said. ■


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After ’09 dip, East Side IT outfit ramps up By CHUCK SODER csoder@crain.com

Liquor: Port Authority aims to boost capability continued from PAGE 1

“It was a good exchange,” said Port Authority president William Friedman. “There seemed to be some interest in the concept.” To make the idea work, European exporters need to be convinced that shipping to Cleveland is no more costly or time-consuming than shipping through a port such as Baltimore or Norfolk, Va., and that a shipper likely would be available to carry the cargo to an East Coast port in the winter months, when the seaway is closed. The longshoremen’s union for many years has been pressing the Port Authority to expand its maritime operations to make more work for local stevedores. Now, with a new maritime leader recently hired, the Port Authority is focusing on expanding business along the Cleveland waterfront. John Baker, president of the Cleveland-based Great Lakes District Council of the International Longshoremen’s Association, said he was optimistic the Port Authority under Mr. Friedman — who has been on the job less than a year — will work to rebuild the flow of cargo through the Port of Cleveland. He said bringing in the liquor trade is a good place to start. Recounting part of the discussion at the Columbus meeting, Mr. Baker said, “Some of the local (importers) said, ‘Where have you been all our lives?’” Mr. Baker said he even envisions Cleveland as the dropoff point for liquor shipments to many Midwest states around the Great Lakes.

Right time, right place Direct shipping to Cleveland makes sense now because of efforts by a Burlington, Ontario, shipping company to operate regular cargo service between Cleveland and Montreal. The company, Great Lakes Feeder Lines, announced in October that it would make Cleveland the U.S. base for its ship, the Dutch Runner, and the company is preparing to begin operations next spring. Meanwhile, Mr. Friedman is paying more attention to rebuilding dock traffic. For many years, the Port Authority, because of its ability to issue taxexempt bonds, viewed itself as a sort of public investment firm. With the hiring of a new maritime director,

the pendulum is swinging back. David Gutheil, the Port Authority’s new vice president for maritime and logistics, said the agency is looking for niche markets to grow the Port of Cleveland. Sea lanes from Asia to either U.S. coast carry the heaviest traffic, and keeping the cargo on a boat to Cleveland would be slower than trucking Asian cargo to Cleveland from an East Coast port. But, Mr. Gutheil said, it’s actually faster to move cargo from European and even Mediterranean ports down the St. Lawrence than to drop it in New York and haul it west by truck or rail. That’s why targeting European liquor imports makes sense. Mr. Gutheil said importers now bring their U.S. cargoes to a single location on the East Coast in trailer-size containers. The cargo is moved to a warehouse and broken down into truckloads for shipping across the country.

Spirit-ed discussion To ship directly, European distillers instead would move their Ohio-bound containers on ships destined for Montreal. Because the large container vessels are too big to move through the seaway locks, containers destined for Cleveland would be put on the Dutch Runner at Montreal and shipped up the seaway. Mr. Baker said a ship such as the Dutch Runner can carry about 700 containers, and his research suggests Ohio imports the equivalent of 2,200 containers of liquor a year. Robinson Cooper, vice president and general manager of Clevelandbased Southern Wine & Spirits of Ohio, said several of his executives attended the meeting in Columbus. While he isn’t ready to embrace the idea, Mr. Cooper said he’s willing to listen further. “It’s very interesting,” he said. “We’re waiting for more information from them (about costs).” Mr. Gutheil said he is working up cost and transit time comparisons to present to the liquor companies, but he believes shipping through the Port of Cleveland can be competitive. Mr. Baker said a second meeting is scheduled for mid-January, though the change of administrations in Columbus has him a little unsure about the meeting’s likelihood. ■

A harrowing 2009 helped Paragon Consulting Inc. laid the groundwork for what could be its best year ever. The custom software development firm plans to double the size of its staff during the first three months of 2011, said CEO Mark Atwood. The company, which employs 18 today, also is looking for an East Side office that would be twice as big as its 3,500-square-foot headquarters in Mayfield Heights. The pipeline of work at Paragon Consulting is “as full as it’s ever been,” Mr. Atwood said. The company sought new customers when times got tough, and now old customers are spending again. “Suddenly, we have both,” he said. Paragon Consulting needs 20 more people just to handle the projects it has on hand, Mr. Atwood said, adding that he expects sales to double in 2011. He declined to disclose specific revenue figures. The growth marks a major reversal from 2009, when sales fell 40%. The company responded by seeking more customers outside of Northeast Ohio, developing partnerships

with companies that make tools for building web sites and promoting its ability to develop software for both smart phones and other handheld devices. It also won more business from health care providers, Mr. Atwood said. Because of those efforts, Paragon Consulting this year expects to recover almost all the sales it lost in 2009. And not only are old customers spending again, but some are spending more than they normally would because they delayed many projects, Mr. Atwood said. “For us it’s going to come back larger than it was,” he said. Paragon Consulting already had the ability to develop mobile software, but it started promoting it in 2009 as a way to rise “above the noise of all the IT consulting companies out there doing custom applications,” Mr. Atwood said. Paragon Consulting also took a step toward broadening its customer base when it formed a partnership with Sitecore, a company that makes software that developers use to build web sites for businesses. Sitecore, with its U.S. headquarters in the San Francisco area, eventually started referring clients to Paragon Consulting.

That partnership helped Paragon Consulting establish itself as a “preeminent player” when it comes to creating complex, interactive web sites, Mr. Atwood said. The company also is in a partnership with another web content management software maker, Bridgeline Software Inc., and it has built web sites using Microsoft SharePoint and other tools. Sitecore also helped Paragon Consulting find clients outside Northeast Ohio. It recommended the Mayfield Heights firm to an Atlanta-based startup developing a web site to help businesses prepare for and respond to crises. That job gave Paragon Consulting the confidence to do more work remotely, Mr. Atwood said. Paragon Consulting did more than build a web site for Preparis Inc. — it helped the startup figure out how to build it right, said Dan Kehoe, chief technical officer for the Atlanta company. Paragon Consulting’s willingness to learn about the business and build a web site to match its needs was a big reason the company impressed Preparis during the interview process, Mr. Kehoe said. “The way Paragon approached it was, ‘Let’s understand before we start talking about ourselves,’” he said. ■


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PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Caucus? No

W

e respect Stuart Garson, chairman of the Cuyahoga County Democratic Party and a skillful attorney. However, we object to Mr. Garson equating a private meeting of select members of the new county council to a party caucus. The comparison insults citizens who voted last year for reform of county government because they were fed up with all its behind-the-scenes wheeling and dealing. Our friend Bill Wills, morning drive-time host at WTAM-AM 1100, last Wednesday conducted a revealing interview with C. Ellen Connally — the woman whom attendees of the Dec. 3 private meeting settled upon as their choice for council president — that exposed the gathering in the home of fellow council member-elect Julian Rogers for what it was, and what it was not. It wasn’t an exercise in good government. It was an exercise in politics and power. If you haven’t heard the interview, we highly recommend visiting the WTAM web site and clicking on the “Wills & Snyder In The Morning” page under “Shows.” You’ll find it there. In the interview, Ms. Connally is evasive and stumbles over her own words multiple times as Mr. Wills poses simple, straightforward questions about how and why the meeting took place. Here is a sample of their exchange: Early in the interview, Ms. Connally draws an analogy between the Dec. 3 meeting and the Republican Party caucus in Washington in which John Boehner was chosen as the next speaker of the House. “So you would call it a caucus?,” Mr. Wills asks. “Yes,” Ms. Connally replies. “Why weren’t … were all Democrats invited?” Mr. Wills asks. At which point, Ms. Connally begins to hem and haw, aware that Chuck Germana — a Democratic contender for the council president’s post who enjoys Republican support — wasn’t invited to the meeting. “Well, it was — it wasn’t — originally supposed … the people who showed up. I didn’t call this meeting. I really didn’t even know who was going to show up,” Ms. Connally says. “OK, let’s start this way,” Mr. Wills says. “Who called the meeting?” “You know, I don’t, I don’t really remember,” Ms. Connally says. “I got a call and I decided to go over to Julian’s house.” These guarded responses pop up throughout the interview. So do comments by Ms. Connally that express frustration with the public and media response to the meeting. “Everybody is so hung up about this,” she states at one point. And later: “I think that this thing has been blown all out of proportion.” No, it hasn’t — not in a county still embroiled in an extensive corruption investigation that has shaken people’s faith in the motives of elected officials. Even against this backdrop, some of the county’s new leaders, blinded by their own ambitions, can’t see that voters want a new day in government. They need to remove the scales from their eyes, and quickly.

FROM THE PUBLISHER

Winter wonderland creates wonder

S

building and the old post office. I tandard journalism advice handed watched a uniformed police officer, bundled to young reporters by seasoned in winter clothes, safety vest and goggles, editors over the years always has stand outside for several minutes watching included a warning against using the cars and their #$*% drivers block the a direct quote for your first paragraph. Huron Road intersection ahead of me, in But, man, sometimes they’re so darned both directions. good, it’s very tempting. At the stroke of 5 p.m., that officer I suppose this belongs in that walked into the intersection and began “stranger than fiction” category, but to help clear things. Now, I here’s an entertaining little don’t care if he was on the city’s tidbit, courtesy of The Plain BRIAN clock or working for Forest City, Dealer’s post-blizzard story last TUCKER the owner and redeveloper of Thursday: the post office. The fact was “Sgt. Sammy Morris, spokeshe watched this maddening man for the Cleveland Police turmoil unfold and did nothing Department, said that there until what I can only presume were no reports of any major was his official shift starting accidents and that 22 traffic time. controllers were on city streets Now, if I’m wrong, I’ll apolodirecting drivers.” gize in this space, and I’ll do it That is just plain hilarious. without the same non-apology apology Here were my two experiences with offered by the young man who mouthed “traffic controllers” as I made my oneoff to a patrolman at bar closing time in hour, six-block drive from our Warethe Warehouse District, but that’s a house District offices to the Inner Belt whole ’nother story. Freeway. Now, back to my sojourn Wednesday First, after about a half-hour drive the night as I tried to make a 6 p.m. volunfirst three blocks, I sat in my car on that teer board meeting (ha!), and my next short block between the state office

and only glimpse of a police officer. As I finally made it to the corner of Carnegie and Ontario, I saw a cruiser, lights flashing, blocking the on ramp. The officer simply was sitting in the car, offering no advice to motorists trying to get on the Inner Belt, our multi-highway bypass/bridge. The only way I got any advice was by rolling down my window and asking. The officer cracked her window and gave me some directions, and I was on my way. But do you think she could have been doing that outside and actually trying to help some very stressed-out downtown workers? All day long on Wednesday, downtown looked like the middle of a Christmas snowglobe. It was beautiful, and I assume the folks just a few short blocks away at City Hall were seeing the same weather conditions. Why on earth did they not have “traffic controllers” at all the key downtown intersections? What would happen if we had to do an emergency evacuation? Hope, I guess. But as the old cliché proves again and again, hope is not the best strategy. ■

THE BIG ISSUE Do you ever make comments on Facebook or in another social media outlet about your company, boss or co-workers?

SUSANN GEITHNER

ERICA HOLMAN

DAVID KOVATCH

STEVE AUSTIN

Lakewood

Lyndhurst

Westlake

Medina

No. I just don’t think it’s appropriate. I tend to keep my social life and my business life separate, and I think a lot of people should rather do that.

Yes, absolutely: inside jokes and just commiserating with each other.

No. You never know who’s watching it, never know who’s reading it.

I am on the Twitters, and we do occasionally say things. We make comments about decisions the company makes, but it’s all obfuscated. Names of the innocent are changed.

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


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LETTERS

U.S. must preserve more than security ■ I am writing in response to the last three paragraphs in Brian Tucker’s Nov. 22 commentary regarding his thoughts on airport full-body scanners. It is a slippery slope we are treading by allowing the invasive full body scans and pat downs. Has modesty and respect for basic human dignity completely gone out the window? Aside from modesty, of which this world is sorely lacking, these “security” procedures are quickly turning this nation into a totalitarian state. Has no one learned anything from history? The old saw that those who fail to learn from history are doomed to repeat it bears remembering. It was not that long ago that Hitler’s Germany and Stalin’s Russia (and the forced starvation of Ukraine) reduced their citizens to pawns by stripping away their basic rights. If one knows even the basics of what happened to the Jews, as well as those caught helping to save Jews, they know that all those sent to the gas chambers were stripped, literally, of their dignity. Why, then, are we not demanding that those in charge of intelligence do their job? In other words, do your job and target those who are truly attempting to do wrong. Profile! And I do not mean racial or ethnic profiling. I am referring to

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

what true investigators do — establish a criminal profile based on the evidence and intelligence they obtain. Why does every man, woman and child (of every age and physical ability) have to go through a demeaning body scan or pat down? As you have surely already read or heard, TSA officials have admitted these “safety” procedures cannot possibly catch every possible hidden weapon. And to where does that next lead us? This is not about safety. It is about control and trying to cover up the ineptitude of those who should have the intelligence, yet fail to act on it. Just as punishing the entire class for the disruptive behavior of one student does not truly deter the errant child, punishing an entire nation does not do anything to stop a terrorist. As one local newspaper columnist noted, we are turning into a nation of sheep. And we, like sheep, are quickly going astray. Kathleen Egan Cuyahoga Falls

Transparency is key ■ Have we learned nothing from over two years of corruption proceedings in Cuyahoga County government? A private meeting to select the new president of county council was

outrageously ill-conceived. Our new county council members must shed their old partisan ways. They are not working for their districts. They are not working for themselves and their political futures. They are working for us, the citizens of Cuyahoga County. They should ask themselves: Is each decision in the best interests of the county as a whole? We want a less costly and more efficient government for the entire county. Hiring practices in particular should be oriented toward getting the best talent at the right price. Open postings and a professional human resources department are essential. Efficiencies from technology are sadly lacking in the auditor’s office and probably other areas as well. Real improvements can be made that will reduce the cost of government and ultimately provide better service to the citizens. We expect and demand a more thoughtful and open process in every area. Frankly, selflessness is what we seek, and it’s a commodity that is very hard to find. Our only chance is in front of us. Please, council members, give us new and better government, not the same old stuff.

11

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Marathons: Participation up nationally continued from PAGE 3

2,800 this year and typically make up 18% to 24% of registrants. In-state runners from outside Northeast Ohio totaled around 3,000 in 2010 and usually account for about 20% of registrants. These out-of-towners are valued because they’re most likely to stay in a hotel, buy dinner at a Cleveland restaurant or take in a post-race show at PlayhouseSquare. The Cleveland event’s economic impact has risen accordingly, said Highland PR vice president Leigh Greenfelder, whose firm works with the Cleveland marathon. Ms. Greenfelder said Forward Analytics, a Pittsburgh-based market research outfit, in 2007 estimated the event’s impact at $11.8 million, when 9,000 runners participated. In 2004, with about 6,000 runners, the impact was estimated at $6.8 million. Cleveland race officials figure the 2010 event’s impact at $15 million, though that may be conservative, Ms. Greenfelder said. From 2004 to 2007, participation jumped 50% and impact 74%; from 2007 to 2010, participation jumped 72%, but the impact growth estimate only registers a 27% increase. “We didn’t want to overstate without a full study,” Ms. Greenfelder said. And while convention and visitors bureau Positively Cleveland hasn’t researched the marathon’s effect downtown, vice president of marketing Tamera Brown said hotels and other businesses benefit greatly. “Even locals opt to stay downtown for an earlier start and patronize local businesses,” she said.

Good vibrations The Road Runner Akron Mara-

CreatingValue.

PHOTO COURTESY OF THE RITE AID CLEVELAND MARATHON

Runners line up at the start of May’s Rite Aid Cleveland Marathon. thon, too, has seen a rise in participation; an economic impact study conducted by University of Akron economics professor Shawn Rohlin and a group of five students and obtained by Crain’s shows 11,051 runners took part in the September event. That was up 4.6% from 10,566 last year and up 21% from 9,100 in 2008. (Race officials, in declining to release the report, cautioned the data still were preliminary.) Of those 11,051, 5,085 were non-local — outside Portage and Summit counties — and that group contributed $1.99 million in total spending impact. The event as a whole had an impact of $4 million. “It lifts the community, not only economically but also its spirit,” said Gregg Mervis, vice president of the Akron/Summit County Convention and Visitors Bureau and an Akron marathon finisher. It gives us an overall good feeling, and impacts our residents’ health.” The local jump in running participation mirrors a nationwide trend, perhaps attributable to a growing focus on healthy lifestyles and wellness. According to an analysis conducted by Race Results Weekly,

a distance running wire service, participation in 200 established road races in 2009 rose a collective 11% over 2008, with 168 of those races reporting increases. The Rock ‘n’ Roll Las Vegas Half Marathon recorded the biggest jump in the group studied, at 132%, or 10,199 runners, while participation in the Los Angeles Marathon dropped by 18%, or 3,119 runners. In many places, including Cleveland, the rise in participation has led to the placement of caps on the number of participants in individual races in order to give runners room to maneuver. At the 2010 Rite Aid race, the half-marathon and 10K races were capped at 6,000 and the marathon at 3,000; officials are pondering how to cap the races with the previously mentioned higher registration estimate. Much will depend on final course approval; there currently are two proposals. “It’s hard to fit 9,000 people in Tremont all at the same time at the beginning of the race, due to road size and parked cars,” Ms. Greenfelder cited as an example. ■

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

LIENS FILED Double Moose Management Co., Moosehead Hook & Ladder No. 3 7989 Columbia Road, Olmsted Falls ID: 26-2147968 Date filed: Oct. 19, 2010 Type: Employer’s withholding Amount: $41,865 First Choice Homecare Inc. 601 Towpath Trail, Suite C, Broadview Heights ID: 34-1876809 Date filed: Oct. 19, 2010 Type: Employer’s withholding Amount: $31,586 Watsons Funeral Home Inc. 10913 Superior Ave., Cleveland ID: 34-0755005 Date filed: Oct. 15, 2010 Type: Employer’s withholding Amount: $29,837 Johnny & Co. Bar and Grille LLC 18029 Euclid Ave., Cleveland ID: 20-4383154

Date filed: Oct. 29, 2010 Type: Employer’s withholding Amount: $29,810 Beta Strategy Group Ltd. 33 River St., Chagrin Falls ID: 20-4359850 Date filed: Oct. 29, 2010 Type: Employer’s withholding Amount: $26,855 Ran-Dan Transport Inc. 2506 Grovewood Ave., Parma ID: 92-0184993 Date filed: Oct. 29, 2010 Type: Employer’s withholding Amount: $23,116 Charles P. Braman & Co. 23300 Chagrin Blvd., Suite 102, Beachwood ID: 34-0877051 Date filed: Oct. 19, 2010 Type: Employer’s withholding, corporate income Amount: $22,083 Diamond Billiards & Spas Inc. 8003 Brookpark Road, Parma ID: 38-3661275 Date filed: Oct. 13, 2010 Type: Employer’s withholding Amount: $21,653 CSF Enterprises 29 S. Main St., Chagrin Falls ID: 59-3824639 Date filed: Oct. 7, 2010

Andrew Hopper Joins First Place Bank Commercial Banking Team Andrew Hopper has joined First Place Bank as Vice President and Commercial Relationship Manager, Commercial Banking.

Andrew Hopper

DECEMBER 13 - 19, 2010

Type: Employer’s withholding Amount: $21,604

GOING PLACES

Power Alarm Inc. 25086 Lakeland Blvd., Euclid ID: 34-1344538 Date filed: Oct. 13, 2010 Type: Employer’s withholding Amount: $21,223

JOB CHANGES

Mutt Hutt Ltd. 2603 Scranton Road, Cleveland ID: 71-0983025 Date filed: Oct. 19, 2010 Type: Employer’s withholding, employer’s annual federal tax return Amount: $19,725 Stec Construction LLC 6507 Luelda Ave., Parma ID: 57-1175189 Date filed: Oct. 19, 2010 Type: Employer’s withholding, unemployment, civil penalty assessment Amount: $19,303 Arco Comfort Air LLC 22053 Aurora Road, Bedford Heights ID: 14-1867200 Date filed: Oct. 19, 2010 Type: Employer’s withholding, unemployment Amount: $17,211 Ohio Sauce Corp., Hot Sauce Williams 12310 Superior Ave., Cleveland ID: 34-1286996 Date filed: Oct. 5, 2010 Type: Employer’s withholding Amount: $16,786 Kid Nation Inc. 1413-1419 Hayden Ave., East Cleveland ID: 74-3237201 Date filed: Oct. 29, 2010 Type: Employer’s withholding, unemployment Amount: $16,590

EDUCATION URSULINE COLLEGE: Matthew McCaffrey to director of undergraduate admission; Melissa Waclawik to director of graduate admission.

FINANCE CFBANK: Kemper C. Allison to vice president, commerical banking; Keith D. Anderson to credit officer. FIRSTMERIT CORP.: Julie Clemo Tutkovics to senior vice president, chief marketing officer; Jason Gendics to director of retail banking, Ohio. HUNTINGTON BANK: Diane M. Downing to senior vice president, regional manager of corporate affairs. OHIO COMMERCIAL BANK: Gregg Paliokas to senior credit analyst.

FINANCIAL SERVICE LINSALATA CAPITAL PARTNERS: James V. Guddy to vice president. PRICEWATERHOUSECOOPERS: Erik Rosenfeld to partner. SKODA MINOTTI: Ted R. Ginsburg to principal, compensation and benefits advisory services group. SS&G: Kelly Pulling to associate. SS&G HEALTHCARE SERVICES LLC: Jonathan Steiner to financial analyst.

www.firstplacebank.com

Dr. Elia Pestana Knight to Division of Pediatric Epilepsy.

INSURANCE BRITTON-GALLAGHER: Tim Krenn to employee benefits producer.

LEGAL GALLAGHER SHARP: Shane A. Lawson to associate. REMINGER CO. LPA: Bethanie E. Ricketts, Rafael P. McLaughlin and Nick R. Catanzarite to partners; Anthony M. Catanzarite to co-chair, Construction Design and Liability Practice Group.

MANUFACTURING SWAGELOK CO.: Edward Bayer to director, sustainability.

NONPROFIT CLEVELAND INSTITUTE OF MUSIC: Lorraine Schuchart to director of marketing and communications.

HEALTH DESIGN PLUS: Kathleen Daberko to account manager.

SERVICE

UNIVERSITY HOSPITALS RAINBOW BABIES & CHILDREN’S HOSPITAL:

CASNET: Terry Fischer to president, chief operating officer.

Mission Outstanding!

CLEVELAND METROPARKS ZOO: Dr. Mike Selig to veterinarian, The Sarah Allison Steffee Center for Zoological Medicine.

BOARDS KENT STATE UNIVERSITY FOUNDATION: Linda Neiheiser to secretary. MAYFIELD AREA CHAMBER OF COMMERCE: John D. Swartz to president; Donna Leseman to vice president; Bruce Bechhold to treasurer; Mary Jo Vleck to secretary.

AWARDS THE AMERICAN ACADEMY OF NURSING: Carol Sedlak (Kent State University) was named an academy fellow.

Would you describe your law firm as outstanding? It could happen. The attorneys at McDonald Hopkins are on a mission to provide outstanding legal services to every client.

OHIO STATE BAR FOUNDATION: David C. Weiner (Squire, Sanders & Dempsey LLP) received the 2010 Honorary Life Fellowship Award.

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

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Hopper is a graduate of The Ohio State University and is a member of Rotary International. He can be reached at 216-288-1174.

Rosenfeld

TEAM NORTHEAST OHIO: Christine Nelson to vice president, business attraction; Jacob Duritsky to director, business attraction.

Hopper has 13 years of experience in providing business banking services to his clients, having held managerial positions at other Northeast Ohio financial institutions.

“Andy is a great addition to our commercial banking team,” said Kenton Thompson, North Coast Regional President. “With his strong commitment to his clients, well-rounded financial services expertise, and involved experience with the Cleveland area business community, he’s a perfect fit with our brand of business community banking.”

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INSIDE

17 TAX TIPS: NOW MAY BE THE TIME TO LOOK AT S CORP STATUS.

13

SMALL BUSINESS GIVING BACK NOW PART OF THE PLAN Entrepreneurs make philanthropy a focus, find donations make companies more successful long-term By AMY ANN STOESSEL astoessel@crain.com

D

JANET CENTURY

Bedford Heights-based Beecology, run by Amy and Dave Rzepka, has committed to donate 10% of its net profits. Its charity web site allows customers to direct donations to certain organizations.

ave Rzepka not only feels strongly about giving back to the community, he wants people to have a choice when it comes to where their money is donated. That’s why when he started Beecology about two years ago to sell handcrafted natural skin care and hair products, he and his wife, Amy, not only committed to donate 10% of their net profits to charity, they created a charity web site, www.sweetyear.org. Each of the products sold by the Bedford Heights company online and at boutiques and farmers’ markets carries a unique code on its packaging, which then can be input by a customer at the Sweet Year web site. Customers can choose from a list of organizations online — which includes such groups as the American Diabetes Association, Autism Speaks and Susan G. Komen for the Cure — to help determine where donations from See GIVING Page 16

Number of raises grows, but still below pre-recession Those lacking resources to increase salaries look for other ways to reward employee performance By TIMOTHY MAGAW tmagaw@crain.com

I

f an employee of Chuck Glover’s performs well and exceeds expectations, that person will get a raise. It’s that simple. Last year, a select number were lucky enough to get a pay bump, but this year most — if not all — of his about 20 employees will get a 3% to 5% pay hike.

“If they do the work that is above expectation, they get a raise,” said Mr. Glover, the president of LMI Family Group, a Mentor-based management and construction company. “They know that because they do what they’re supposed to do. That’s how it’s always been.” The number of small businesses in the region giving their employees raises appears to be on the rise, though it’s still far below what it

was before the recession. For instance, of area businesses with fewer than 50 employees, about 73% plan to give raises this year, according to a recent survey by the Employers Resource Council, a nonprofit human resources organization based in Mayfield Village. That’s up from 53% of small businesses that planned to give raises last year, but still far below pre-recession levels in 2007 when

about 93% planned to give pay increases. The raises, of course, won’t be anything Google-like in nature — the search engine giant recently gave each of its 20,000 employees a $1,000 holiday bonus and a whopping 10% raise. Pay hikes at small businesses in Northeast Ohio are expected to be around 2.8%, about on par with the national average. See RAISES Page 15

2011 WAGE PLANS Northeast Ohio companies responding to a survey by Employers Resource Council are projecting an average salary increase of 2.8% for 2011. How that compares to previous years:

Year

Wage adjustment

2010

2.7%

2009

3.1

2008

3.4

2007

3.5

2006

3.4

2005

3.4

2004

3.6


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14 CRAIN’S CLEVELAND BUSINESS

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SMALL BUSINESS

Demand for retro hand carving set in stone Area fabricators continue to serve specialized market

GRAND OPENINGS

By KATHY AMES CARR kcarr@crain.com

C

hris Pascoe watched a Harry Potter movie recently and was transfixed by something other than the

action. As he watched Harry and his friends running atop cloisters at the Gloucester Cathedral in England, he muttered to himself, “Man, that looks familiar.” The jolt of realization hit. Mr. Pascoe worked on restoring that 900-year-old cathedral early in his stone-carving career, when he was 15 and didn’t know what he was going to do with his life. “But when I picked up a mallet and chisel, I had one of those moments. I knew I was going to make a career out of this,” he said. And 30 some years later, Mr. Pascoe — along with a few other Northeast Ohio artists — still are practicing the old-world craft of carving natural stone by hand, eschewing big machines for sweat and chisel to produce customized work. “The key is for the structure to look like it has been there for 100

Chris Pascoe, the owner of Tri-R-Stone in Garfield Heights, in early December shipped this 35-foot-by-22foot stone front for an out-ofstate residential client. JASON MILLER

years, rather than created last month,” said the formally trained Mr. Pascoe.

Stepping stones Years of education and manpower preceded the opening about a year and a half ago of Mr. Pascoe’s business, Garfield Heights-based Tri-R-Stone. Mr. Pascoe went to Bath Technical College in England and earned through the City & Guilds of London Institute a five-year apprenticeship

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in stone carving, which is the equivalent of a journeyman’s certificate. “We learned the whole aspect of the construction industry, from stone carving to construction to architecture and civil engineering,” he said. “A lot of fabricators and masons here are self-taught because the skills have been lost. It’s sad.” Fellow stone carver Nick Fairplay in 1991 lured Mr. Pascoe to the United States, where they worked on a five-year restoration of the Cathedral of St. John the Divine in New York with a team of 21 stone carvers and cutters from throughout the world. Family ties and access to natural stone brought him in 1996 to Northeast Ohio, and since then he has developed the stone-carving divisions for various businesses such as Vermilion-based Cleveland Quarries. He went out on his own, with the help of two private investors, to set up in April 2009 his own shop while working on a 35-foot-by-22foot stone front for an out-of-state residential client, a project that took him nine months to complete. The project required 900 cubic feet of cut stone and costs were in the six-figure range, though Mr. Pascoe declined to elaborate since his client prefers to remain private about his expenditures. In fact, clients such as Mr. Pascoe’s tend to be discriminating about structural and landscape work, opting for the unique skills that stone carvers bring to the table. Doug Brown, co-owner and design salesman for Chagrin Fallsbased Naturescape Inc., said his business is predicated on perfection because the landscape and design firm’s clients prefer high-end, unusual landscape products. “Chris does a lot of blue stone outdoor kitchens for me,” he said. “If I need a unique piece, Chris will do it.” Mr. Brown said masons like Mr. Pascoe are valuable because stone can’t be completely carved with machines; only the hand and chisel can precisely carve out grooves and designs, if done the proper way.

Carving out a niche Norbert Koehn of South Euclidbased Koehn Sculptors also is a

stone carving master, and he said the construction market about 20 years ago shifted from using wood to more granite, quarry and other types of natural stone. “We get about 50% of our commissions from stone,” he said. Mr. Koehn, for example, is working on carving by hand special script, one-foot stone lettering for the University Hospitals Case Medical Center’s cancer center at University Circle. Bob O’Brien, of Warrensville Heights-based O’Brien Cut Stone, said his fourth-generation family business does minimal stone carving jobs — mostly finishing work by hand — because there’s not a large demand for “true stone carving work.” “It can be cost prohibitive,” he said. Meanwhile, Mr. Pascoe worked this past summer with BaldwinWallace College to renovate the front of Strosacker Hall, the college’s union, with sandstone. He also is teaming up with Mr. Fairplay, who now is an architectural sculptor at Oberlin-based Fairplay Stonecarvers LLC, to produce a line of hand-carved stone fireplaces that meld modern American design with traditional architectural detailing. The cost of a project like this varies greatly, according to materials involved and client preferences, but Mr. Pascoe said a hand-carved natural stone fireplace can cost anywhere $2,000 to $40,000. Typically, a slab costs $36 per cubic foot to $50 per cubic foot. Mr. Pascoe in March collaborated with the Ohio Landscape Association to teach about 40 area landscape artists and other contractors the proper techniques in stone carving during two sold-out clinics. “Chris is excited about sharing his old-world craft,” said Sandy Munley, executive director of the Ohio Landscape Association. “He’s brilliant in what he’s doing and wants to be sure the craft doesn’t die. And he wants people to learn how to do it the right way.” Mr. Pascoe is planning to continue conducting the seminars this spring; ultimately, he hopes to formally parlay those skills to would-be apprentices. “My hope is to teach young lads here one day,” Mr. Pascoe said. ■

JUST DOGS! GOURMET 30323 Detroit Road Crocker Park Promenade Westlake 44145 www.justdogsgourmet.com Just Dogs! Gourmet, a nationally franchised company, is a bakery for canines that offers an assortment of fresh-baked, hand-cut, all-natural dog snacks. Locally owned by Lori Aldrich, Just Dogs! Gourmet makes its snacks fresh daily, and they are available in a variety of shapes, sizes and flavors. In addition to edibles, Just Dogs! Gourmet offers an array of accessories, such as supplements and shampoos. 440-808-9663

CLOSED LOOP LLC 16201 Parkland Drive Cleveland 44120 www.closedloop-cle.com Closed Loop LLC is a five-person team of professionals from varying backgrounds that work with companies to identify and implement sustainable business strategies. The group’s aim is to take the concept of sustainability and make it part of the business or organization. 440-821-5022 info@closedloop-cle.com

BLACKROCK PARTNERS 635 W. Lakeside Ave. No. 202 Cleveland 44113 www.blackrocklp.com A boutique real estate firm, BlackRock Partners specializes in the brokerage, marketing and development of downtown residential and commercial real estate. Co-founders Jon Mavrakis and Nick Petrakis are joined by partner Nicholas A. Zarnas, former chairman of Grubb and Ellis Co. Investment Services Group, who has focused the last decade on the reuse of existing downtown Cleveland buildings to create high-end, customized, multi-story residential properties. Messrs. Mavrakis and Petrakis also have been integrally involved in highprofile downtown Cleveland residential real estate projects. They helped facilitate marketing, sales, construction and financing for the 14-story Pinnacle Project. They also helped lead the conversion of the work-live building known as the Cloak Factory into 26 condominiums and offices. Phone 216-245-3343 Fax 216-861-2969 To submit a new business, send the following information by e-mail to Amy Ann Stoessel at astoessel@ crain.com: business name; address; city and ZIP; web site; brief description of business; business phone number; business fax number; business e-mail address; and date that business opened. Call 216-771-5155 with questions.


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SMALL BUSINESS

Raises: Morale can suffer in long slump continued from PAGE 13

Mr. Glover said the pay increases are about making sure he can provide his employees the resources to live comfortably. In his estimation, the cost of living is increasing, contrary to what some analysts might suggest. “You don’t see that going to the grocery store,” Mr. Glover said. “You don’t see that going to meat store or local places you’re buying things. The costs are still going up. Employees still have to pay more to live.” Paul Roetzer, president of PR 20/20, said he expects that the nine employees in his Cleveland-based public relations and marketing agency will receive somewhere between a 5% and 10% pay increase. Because PR 20/20 has experienced significant growth over the last five years, Mr. Roetzer said the firm has been able to continue giving raises. “Our largest investment is in our talent, so our base compensation packages are designed to be at or above average in our industry,” Mr. Roetzer said. Meanwhile, Lori Long, associate professor of human resources at Baldwin-Wallace College, noted that if employers are looking to give pay increases based on performance, they need to ensure there is a significant enough pay bump between the highest and lowest performers.

“How a company treats its employees during tough times has a lasting impact.” – Lori Long associate professor of human resources, Baldwin-Wallace College For instance, if high performers earned a 3% pay increase while low performers earned a 2% bump, there isn’t much of an incentive to perform well, she noted. Dr. Long said that small businesses tend not to have the resources to create a strong performance management system, but she said it is important to have a point person — whether that’s a human resources professional or perhaps a lead office manager — to oversee pay increases and performance reviews. “Smaller businesses need to be more cautious and have a central person responsible for that process,” she said.

If the cash isn’t there Susan Chermonte, a human resources specialist at the Employers Resource Council, said she’s fielded calls from area businesses that don’t have the resources to offer pay boosts but are looking for ways to reward their employees. She said a lot of employees don’t feel appreciated, so even sending them a handwritten note thanking them for their hard work and apologizing for not being able to offer a pay increase or bonus could pay off. Other suggestions, Ms. Chermonte noted, include offering more vacation time, celebrating anniversaries and birthdays or providing some sort of treat such as bagels or

ice cream every Friday. “People want to know their work and their time is appreciated,” Ms. Chermonte said. Still, Dr. Long said many businesses are still choosing to forego pay increases simply because the job market is so tight. It’s a shortsighted view, Dr. Long said, but employees disheartened by a lack

of a pay bump aren’t likely to leave the company because the economy is still recovering. “How a company treats its employees during tough times has a lasting impact,” Dr. Long said. “Employees know if a company is doing well. ... If they don’t give raises, it could have a detrimental effect on employee morale.” ■

WAGE ADJUSTMENT BY SECTOR How Employers Resource Council survey respondents said they’d adjust employee salaries, broken down by industry:

Sector

2011 adjustment

Non-union production, service

2010 adjustment

2.7%

2.6%

Union production, service

2.7

2.7

Clerical/technical

2.8

2.6

Supervisory/professional

2.8

2.7

Executives

2.9

3.0


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SMALL BUSINESS

Giving: Partnerships help spread word about nonprofits’ causes continued from PAGE 13

Beecology should be made. Mr. Rzepka is far from alone in his philanthropic efforts among the small business community. According to a study released last month by Ernst & Young and the Fidelity Charitable Gift Fund, 89% of entrepreneurs donate money, both personally and through their companies. In fact, 62% feel that giving back makes their companies more successful in the long run, and 26% even incorporate philanthropy into their companies’ business plans.

One such entrepreneur is Deb Mills-Scofield, who has made philanthropy a central part of the way she conducts business. So much so, it’s the policy of her Oberlin-based consulting practice, Mills-Scofield LLC, that any client of the firm must match and donate 10% of Ms. Mills-Scofield’s consultancy fee. Clients can give to the cause of their choice, and some donate more than is asked. Mills-Scofield client giving this year has amounted to $12,000, plus in-kind donations. Over the past nine years, cash and in-kind donations have totaled $250,000.

“I’m willing to help you grow … as long as you’re willing to help someone along the way,” said Ms. Mills-Scofield, who also donates 10% of her personal income to charity.

A win-win Beth Darmstadter, director of development for The Gathering Place, a cancer wellness and support center with locations in Westlake and Beachwood, said there are many benefits derived from partnerships between small businesses and nonprofits. “People want to give back to companies that are not just

making money off them,” she said. “It’s really a win-win model.” During The Gathering Place’s last fiscal year, which ended June 30, 6.7% of the organization’s donated revenue came from external fundraisers, which include small businesses. That number was more than double what had been anticipated, and the hope is that it will exceed those levels during the current fiscal year. Of course, the benefits are not just monetary. “The more we have relationships with community businesses, the more they help spread the word”

A SECOND OPINION SAVED US *

about The Gathering Place, said Ms. Darmstadter. One of the small businesses lending support to The Gathering Place is VanityLab Salon Spa Shop in Westlake, which recently added an onsite local artisan jewelry collection under the name Sparkle Jewelry. Sparkle features the work of more than 50 local artists, and a portion of the proceeds, along with a match from Sparkle, support an area nonprofit. Contributions currently are benefiting The Gathering Place. VanityLab owner Angie Hofelich said sometimes it can be a challenge to juggle the many requests for donations. “They all think you just have extra money to give,” she said. While she might respond to such requests with in-kind donations such as makeover passes, Ms. Hofelich tends to focus her efforts on specific local organizations like The Gathering Place or the Northeast Ohio Society for the Prevention of Cruelty to Animals, to which VanityLab already has donated $5,000 to $6,000. “Find something that you believe in and have an organized approach,” she said. “Give what you can give.”

Every little bit counts

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* Results may vary depending on your business situation.

For entrepreneurs like Valerie Mayen — best known by some for her appearance on Season 8 of “Project Runway” — it’s no doubt a challenge to nurture a young business while staying committed to philanthropy. But “doing well by doing good” is a mantra that Ms. Mayen takes to heart. The designer — who currently lives and works in a 2,000-squarefoot loft space in Cleveland — has made the commitment to donate 5% of the profits from Yellowcake, her fashion line. She likes to base her donations on need, going to causes such as the City Mission and those that fight hunger and homelessness. “The need is now … the growth of my business isn’t as pressing,” she said. “I’m still able to pay my bills; I’m still able to eat; I’m still able to enjoy my life.” Ms. Mayen gives anywhere from $120 to $300 a month when sales are consistent. Certainly, she said she would like to eventually be able give more as her business grows. Gina and Ed Trebets of Chesterland — who recently launched their own wine label, Muddy Paw — also included a plan to give back when developing the concept for their product, inspired by their 8-year-old rescue dog and 1-year-old yellow Lab. A portion of the wines’ proceeds — currently at least $1 from each bottle — benefit the Geauga County Humane Society Rescue Village, an organization that Ms. Trebets said does not euthanize and that accepts all types of animals. There’s a business benefit, too, the Trebets admit. People who love animals are drawn to the label and the cause. “It’s rewarding to be able to see your profits and hard work go to good,” Ms. Trebets said. Ms. Darmstadter of The Gathering Place couldn’t agree more on the positive effect that small businesses can have. “No matter how small you are, it all comes together to do big things,” she said. ■


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CRAIN’S CLEVELAND BUSINESS 17

SMALL BUSINESS

If dividends are on tap, consider switch to S corp Distribution taxes higher in other structure

W

ith the beginning of a new year around the corner, business owners who operate their businesses as C corporations will begin thinking about whether 2011 is the year to make an election to have the business taxed as an S corporation. This decision has special importance for 2011, with the specter of corporate dividends being taxed at almost 40% for higher income taxpayers. S corporation distributions generally are not taxed — a significant tax savings for businesses that make cash distributions. C corporations can be tax efficient in years that dividends are not paid. In fact, tax rates for C corporations may be less than the rates for S corporations because S corporation income is taxed to the individual shareholders, and individual tax rates are more likely to rise next year. This possible efficiency is lost if

distributions are made from the C corporation since distributions will generate a second level of tax to be paid by the shareholders. This is bad enough under current law that sets dividend rates at 15%, but the scheduled tax increases would make dividends taxable at ordinary income rates — scheduled to increase to a maximum 39.6% rate. Regardless of whether these worst-case scenario tax rates become reality, businesses that distribute cash to their shareholders should seriously consider the alternatives to being structured as C corporations. This is especially true in the case of a corporation in the year it sells all of its assets. Business owners often are reluctant to make an S election if a sale of the business is possible in the near future because it is “too late” to avoid the built-in gains (“BIG”) tax. S corporations pay a corporate level of tax if assets are sold during

CARLGRASSI

TAX TIPS a period of time, generally 10 years, following the S election if such assets (including goodwill) were appreciated at the time of the S election. The amount of gain subject to the BIG tax is limited to the gain built into the assets at the time of the S election. For example, assume that in 2004 a C corporation purchased property for $1 million that appreciated to a value of $3 million in 2005. An S election is made in 2005, and over the next five years, the property appreciates to $10 million. When the property is sold in 2010, the BIG tax only is applicable to the $2 million in appreciation from 2004 to 2005. The balance of

the appreciation, $7 million, is taxed only once, even if the proceeds from the sale are distributed to the shareholders. Most taxpayers and advisers assume that a significant period of time must pass between the S election and a subsequent sale to have appreciation taxed only once as in the above example. A recent tax court case held that a significant amount of appreciation can occur after an S election is made, even if the election is made in the same year as the sale. In this case, the corporation’s accountant appraised the value of the corporation at $2.6 million at about the same time an S election was made on Jan. 1, 2000. In November of that same year, the company sold for $5.2 million. The taxpayer asserted that the value of the company at the time of the S election (and therefore the amount of built-in gain) was $2.6 million. The IRS challenged this valuation, asserting that the value at the time of the S election was $5.2 million, which was the recent purchase price.

Many observers might assume that the IRS challenge might be successful. After all, the best valuation of any business is the amount a third party would pay. The tax court found that while the sale price in November was probative of the value, it did not automatically set the value as of Jan. 1, and determined that the correct value was $3.7 million. The company therefore saved taxes on $1.5 million of gain even though the S election was made in the year of the sale. One lesson of this case is to document value at the time of the S election with a reliable independent appraisal. Of course, there are very specific requirements that must be satisfied for a business to qualify to make an S election, but many closely held businesses will satisfy these requirements. This is a good time to review those requirements and consider or reconsider the S election. ■ Mr. Grassi is a member and president of McDonald Hopkins LLC.

S H O R T TA K E S ■ KIDS STUFF: Hazel Tree Interiors in Akron, owned by Karen Starr and her husband Jon Haidet, has added a new line, called Hazel Tree Kids, which will feature children’s furniture and toys made or redesigned by local artisans. Several of the artists already seen in Hazel Tree now have put their spin on pieces for use in children’s rooms, such as nightstands, rocking chairs and bookshelves. ■ A GEM: Howard’s Jewelry Center last month opened its fourth location in the Great Lakes Mall in Mentor. In business for almost three decades, Howard’s, founded by Howard Hurwitz, also has locations in Maple Heights, Mayfield Heights and Parma Heights. In addition to offering new jewelry and like-new jewelry for sale, Howard’s also accepts jewelry for trade-in or as collateral. ■ NEW LOCATION: Season’s Practice, a health and wellness practice for women, has opened a second location at 30638 Center Ridge Road in Westlake. At the new Westlake location, Season’s Practice will offer cosmetic services including Botox nonsurgical treatment; dermal fillers; permanent makeup; laser skin rejuvenation; and other services. Season’s Practice’s other location is in Middleburg Heights, where it offers psychological/emotional services. ■ DO YOU COPY?: A new Canon Business Solutions office has opened in Independence. The Cleveland-area office, which will serve as a sales and service hub, is part of Canon Business Solutions’ larger growth strategy; it is one of 15 offices that opened in metropolitan areas this past year. Canon Business Solutions currently serves nine counties with plans to expand in 2011 throughout Ohio and surrounding areas. The new office will employ 11 with plans to double that figure in 2011. ■ WORKING OUT: Brothers-in-law Brad Newcomb, Jonathan Slain and Michael Hall opened their fifth Fitness

Together franchise last month in Gates Mills at 1540 Chagrin River Road. Fitness Together is a fitness studio dedicated to one-on-one personal training. The group previously opened Fitness Together franchises in Chagrin Falls, Solon, Hudson and Rocky River. ■ ADDING TO THEIR RANKS: RediGo Food Marts in Lake County has added a ninth store to its brand. The new store was formerly Poppa C Sunoco, and it is owned by Andrew and Carolyn Cianfaglione. The RediGo brand was formed in 2007 so its store owners could share an advertising program and leverage other benefits from working as a group. ■ SET IN STONE: S.B. Stone and Co., a consulting firm that is more than 30 years old, has changed its name to Stone Crossing Solutions and has moved offices within Independence to accommodate staff growth. The company has 40 employees and works with 45 independent contractors. President John Vojtush said the company will be adding 25 more employees in the next three to six months and more independent contractors. The company is a strategic business solutions provider focusing on the areas of custom application development; agile and lean software development; staff augmentation; network infrastructure; hardware/software installation and implementation; and business strategy consulting. ■ IDEA EXCHANGE: The Entrepreneur’s Idea Exchange is still going strong since its founding in March, according to organizer Corrine Beller. The program is for any person with a business idea, at any level of development. A featured speaker has been added to the format, which also includes informal discussions facilitated by seasoned entrepreneurs and professionals in a small-group setting. Meetings, which are the third Thursday of odd-numbered months, are held at the University of Akron’s College of Business Administration.

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.

www.jcu.edu/success


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BANKS IN NORTHEAST OHIO RANKED BY DEPOSITS(1)

Name Address Rank Phone/Web site

Northeast Ohio deposits (millions) 6-30-2010

6-30-2009

% change

Offices

Employees (companywide) 6-30-2010

Holding company

Top local executive

1

KeyBank NA 127 Public Square, Cleveland 44114 (216) 689-3000/www.keybank.com

$13,395.3

$14,896.6

-10.1%

120

15,517

KeyCorp Cleveland

Henry L. Meyer III chairman, CEO KeyCorp

2

PNC Bank 1900 E. Ninth St., Cleveland 44114 (216) 222-2000/www.pnc.com

$8,767.3

$23,798.4

-63.2%

159

48,939

PNC Financial Services Group Inc. Pittsburgh

Paul Clark regional president

3

Huntington National Bank 917 Euclid Ave., Cleveland 44115 (800) 480-2265/www.huntington.com

$8,171.1

$7,675.1

6.5%

136

10,045

Huntington Bancshares Inc. Columbus

4

FirstMerit Bank NA 106 S. Main St., Akron 44308 (888) 384-6388/www.firstmerit.com

$7,136.0

$6,757.2

5.6%

125

3,095

FirstMerit Corp. Akron

5

Charter One 1215 Superior Ave., Cleveland 44114 (216) 566-5300/www.charteronebank.com

$6,941.5

$6,561.1

5.8%

111

16,352

6

JPMorgan Chase & Co. 1300 E. Ninth St., Cleveland 44114 (877) 226-5663/www.chase.com

$4,791.4

$4,653.5

3.0%

97

173,596

JPMorgan Chase & Co. New York

7

Fifth Third Bank 600 Superior Ave. E, Cleveland 44114 (216) 274-5300/www.53.com

$4,402.7

$4,360.4

1.0%

86

20,479

Fifth Third Bancorp Cincinnati

8

U.S. Bank NA 1350 Euclid Ave., Cleveland 44115 (216) 623-9300/www.usbank.com

$2,057.0

$1,970.9

4.4%

111

57,128

U.S. Bancorp Minneapolis

9

Lorain National Bank 457 Broadway Ave., Lorain 44052 (440) 244-6000/www.4lnb.com

$975.4

$1,040.8

-6.3%

20

273

LNB Bancorp Inc. Lorain

Daniel E. Klimas president, CEO

10

The Farmers National Bank of Canfield 20 S. Broad St., Canfield 44406 (330) 533-3341/www.fnbcanfield.com

$635.8

$593.1

7.2%

13

265

Farmers National Banc Corp. Canfield

John S. Gulas president, CEO

11

Citizens Banking Co. 100 E. Water St., Sandusky 44870 (419) 625-4121/www.citizensbankco.com

$529.7

$508.9

4.1%

12

287

First Citizens Banc Corp. Sandusky

James O. Miller president, CEO

12

Middlefield Banking Co. 15985 E. High St., Middlefield 44062 (440) 632-1666/www.middlefieldbank.com

$475.8

$361.0

31.8%

8

91

Middlefield Banc Corp. Middlefield

13

Citizens Bank One Citizens Banking Center, Flint, Mich. 48502 (800) 676-6276/www.citizensbanking.com

$375.7

$371.9

1.0%

14

1,985

Citizens Republic Bancorp Inc. Flint, Mich.

14

Cortland Savings and Banking Co. 194 W. Main St., Cortland 44410 (330) 637-8040/www.cortland-banks.com

$371.2

$387.1

-4.1%

14

146

Cortland Bancorp Cortland

James M. Gasior president, CEO

15

First National Bank 112 W. Market St., Orrville 44667 (330) 682-1010/www.fnborrville.com

$311.7

$283.6

9.9%

14

104

National Bancshares Corp. Orrville

David C. Vernon president, CEO

16

First National Bank of Pennsylvania 166 Main St., Greenville 16125 (800) 494-2265/www.fnb-online.com

$283.5

$259.5

9.2%

11

2,125

F.N.B. Corp. Hermitage, Pa.

17

Andover Bank 19 Public Square, Andover 44003 (440) 293-7605/www.andoverbankohio.com

$253.9

$232.5

9.2%

8

91

Andover Bancorp Inc. Andover

18

Liberty Bank NA 2351 Edison Blvd., Twinsburg 44087 (330) 425-3033/www.libertybankna.com

$223.0

$142.8

56.1%

3

47

NA

19

Portage Community Bank 1311 E. Main St., Ravenna 44266 (330) 296-8090/www.pcbbank.com

$194.8

$182.4

6.8%

2

48

Portage Bancshares Inc. Ravenna

Richard J. Coe CEO

20

Farmers Savings Bank 111 W. Main St., Spencer 44275 (330) 648-2441/www.fsb-spencer.com

$186.6

$169.0

10.4%

2

29

NA

Thomas W. Lee president, CEO

21

Western Reserve Bank 4015 Medina Road, Medina 44258 (330) 764-3131/www.westernreservebank.com

$185.7

$173.3

7.2%

3

35

Western Reserve Bancorp Inc. Medina

Edward J. McKeon president, CEO

22

Independence Bank 4401 Rockside Road, Independence 44131 (216) 447-1444

$144.8

$134.2

7.9%

1

23

Independence Banccorp Independence

Christopher Mack president

23

Premier Bank and Trust(2) 6141 Whipple Ave. NW, North Canton 44720 (330) 478-1000/www.mypremierbankandtrust.com

$139.2

$157.4

-11.6%

4

57

Ohio Legacy Corp. North Canton

24

Buckeye Community Bank 105 Sheffield Center, Lorain 44055 (440) 233-8800/www.buckeyebank.com

$133.6

$128.9

3.7%

1

26

Buckeye Bancshares Inc. Lorain

Bruce E. Stevens president, CEO

25

Consumers National Bank 614 E. Lincoln Way, Minerva 44657 (330) 868-7701/www.consumersbank.com

$116.6

$113.3

2.8%

5

103

Consumers Bancorp Inc. Minerva

Ralph J. Lober II president, CEO

26

Sutton Bank 3 S. Main St., Attica 44807 (419) 426-3641/www.suttonbank.com

$112.6

$105.4

6.8%

6

98

Sutton Bancshares Inc. Attica, Ohio

Eric A. Gillett vice chairman, CEO

27

Croghan Colonial Bank 323 Croghan St., Fremont 43420 (419) 332-7301/www.croghan.com

$83.0

$78.3

6.0%

3

149

Croghan Bancshares Inc. Fremont, Ohio

Rick M. Robertson president, CEO

28

Lake National Bank 7402 Center St., Mentor 44060 (440) 205-8100/www.lakenationalbank.com

$82.4

$81.2

1.6%

1

18

NA

29

Apple Creek Banking Co. 21 E. Main St., Apple Creek 44606 (330) 698-5003/www.applecreekbank.com

$75.4

$73.9

2.0%

6

40

Apple Creek Banc Corp. Apple Creek

30

The First National Bank of Bellevue 120 North St., Bellevue 44811 (419) 483-7340/www.fnblifetime.com

$71.7

$69.3

3.5%

2

41

First Bancshares Inc. Bellevue

Dean J. Miller president, CEO

31

The Park National Bank 50 N. Third St., Newark 43058 (740) 349-8451/www.parknationalbank.com

$68.0

$66.5

2.3%

3

1,774

Park National Corp. Newark, Ohio

Dan DeLawder chairman, CEO

Daniel P. Walsh Jr. president Greater Cleveland region Paul G. Greig chairman, CEO

E. Marblestone Royal Bank of Scotland Group PLC Kenneth president Edinburgh, Scotland Ohio region James M. Malz president Northeast Ohio market Todd F. Clossin, regional president and CEO, Fifth Third Bank, Northeastern Ohio Kurt C. Treu president U.S. Bank, Cleveland

Thomas G. Caldwell president, CEO Jamie Lynch Ohio district president

Stephen J. Gurgovits president, CEO Martin R. Cole president, CEO William A. Valerian chairman, president, CEO

Rick L. Hull president, CEO

Richard T. Flenner Jr. president, CEO Kurt Kline CEO

See LIST Page 20


20101213-NEWS--19-NAT-CCI-CL_--

12/10/2010

2:13 PM

Page 1

DECEMBER 13 - 19, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Contractors: Builders cite financing difficulties continued from PAGE 3

require more financial information than before. Financing also is a big issue for commercial property owners and developers. Asked in the survey to list the sources they use for new development and acquisitions, 50% of the respondents cite private equity, 40% say seller financing and 38% say regional banks. The most significant obstacle to getting a deal done is credit, according to 42% of the respondents. However, 60% say they the credit market will loosen up in the coming year.

Mr. Gingerich said there is more optimism afoot because financing woes have eased a little and megaprojects are on the horizon. But making it to tomorrow is the more immediate concern. To cope, contractors are seeking more work outside the area and are pursuing smaller projects. Hamilton Biggar, vice president of Cleveland-based Drake Construction Co., said the downturn has changed the general contractor’s willingness to take on out-of-town work. “It used to be we worked out of town within an hour-and-a-half drive. Now we’re in the car seven hours, often going to places without air service,” Mr. Biggar said. Half of Drake’s work now is outside Northeast Ohio, mostly involving retail properties and federally financed renovations of affordable and low-income housing complexes dating from the 1970s. “Much of the traditional work has dried up,” Mr. Biggar said. For instance, outfitting offices for tenants moving into new space was a steady source of business at one time. “Now they’re going with a little paint and new carpet,” Mr. Biggar said. Building contractors and subcontractors also are coping by going after smaller jobs than in the past. Skoda Minotti reports 54% of contractors are bidding on smaller jobs than a year ago, while 26% are staying in the same project range and 20% are seeking larger jobs.

Money matters matter Builders are hurting because they’ve been hit by a financing double whammy: Tight real estate lending standards not only have shrunk their pool of available business as developers scrounge for money, but contractors also face more trouble financing their companies’ operations. Two years after a financial crisis rocked the country, 40% say their ability to obtain financing was down slightly this year, and 25% said it decreased significantly. One thing that’s up, though, is that 72% of the contractors report lenders

AN UPHILL CLIMB Skoda Minotti’s annual survey of construction contractors and the real estate industry shows continued challenges. Have you had more or fewer opportunities this year?

2010

2009

2008

More opportunities

32%

27%

39%

Fewer opportunities

43

49

36

Over the last year, has your ability to obtain financing ...

What is the biggest threat to your business over next 12 months?

responses

responses

Big projects to the rescue?

Decreased slightly

Relief for construction contractors, if not developers, may loom on the horizon in downtown Cleveland when construction begins on the medical mart and convention center, the casino and the Flats East Bank Neighborhood and its Ernst & Young Tower office building. Mr. Biggar said those big-ticket jobs will occupy large contractors and free up opportunities for smaller contractors for projects in the range of $20 million and below. Dominic Ozanne, CEO of Ozanne Construction Co., said he’s confident the megaprojects will stabilize much of the construction market. “Cleveland does not follow anyone else’s script,” Mr. Ozanne said. “In terms of downtown, I’m very optimistic about what I see the next few years. The convention center and casino will get the motor running for other projects.” In Ozanne’s case, a variety of public works projects such as a jail in New Orleans and corporate assignments such as the new Nordson Corp. headquarters in Westlake contributed to a good year in 2010. “We look forward to seeing these projects moved ahead and to stay in the game a few more years” despite the current challenges, Mr. Ozanne said. Overall, Skoda Minotti’s Mr. Gingerich said, the tenor of this year’s outlook is more positive than last year’s. “We believe we are reaching the bottom,” Mr. Gingerich said, though he added, “Reaching some form of normalcy will be a long, winding road.” ■

Decreased significantly

25

Tightening credit

16

Increased

9

Material costs

3

Stayed the same

26

Other

12

Business Lending Made Easy! 9œÕʅ>ÛiÊ>ÊvÀˆi˜`ʈ˜Ê̅iÊL>˜Žˆ˜}ÊLÕȘiÃðÊ7i½Àiʏi˜`ˆ˜}ÊvœÀÊV>«ˆÌ>Ê ˆ“«ÀœÛi“i˜Ì]ʈ˜Ûi˜ÌœÀÞ]ÊÀi>ÊiÃÌ>Ìi]Ê}ÀœÜ̅°Ê œ˜Ì>VÌʜ˜iʜvʜÕÀÊ œ““iÀVˆ>Ê i˜`ˆ˜}Ê/i>“Ê>˜`ÊÃiiÊ܅ÞÊÜi½ÀiÊ̅iÊ

°

WELCOME TO

The Middlefield Banking Company 888-801-1666 www.middlefieldbank.com

…>À`œ˜ÊÊ{{ä‡Ónȇ£ÓÓÓÊUÊ iÜLÕÀÞÊÊ{{ä‡xÈ{‡ÇäääÊUÊ>ˆ˜Ê"vwViÊÊnnn‡n䣇£ÈÈÈÊUÊ7iÃÌÊÊ{{ä‡ÈÎӇ£ÈÈÈ "ÀÜiÊÊ{{ä‡{ÎLJÇÓääÊUÊ>˜ÌÕ>ÊÊÎÎä‡ÓÇ{‡änn£ÊUÊ>ÀÀiÌÌÃۈiÊÊÎÎä‡xÓLJӣӣÊUÊ œÀ̏>˜`ÊÎÎä‡ÈÎLJÎÓän

40%

Real estate owners/developers: How do you plan to manage increased vacancies if they occur?

Lack of work

Real estate owners/developers: Are you seeing decreasing rents in the market?

responses

responses Lower rents

68%

69%

Significant decrease

37%

Increase marketing

47

Slight decrease

46

Other cash sources

39

No decrease

17

ON THE WEB

Story from www.CrainsCleveland.com.

Former VP at Akron General back as boss Akron General Health System announced the return of Alan Papa, who will take over as president of its 511-bed medical center in downtown Akron. Mr. Papa, who will begin his new role Jan. 31, comes from Mt. Carmel-West, a Trinity Health hospital in the Columbus area, where he served as president and chief operating officer since 2007. He will replace Dr. Jack Mitstifer, who has served in an interim role as Akron General’s president of inpatient services since March 2009. Prior to his work at Mt. Carmel-West, Mr. Papa served for more than eight years as Akron General Health System’s senior vice president for network services and operations. Mr. Papa holds degrees from Youngstown and Cleveland state universities. — Timothy Magaw

19


20101213-NEWS--20-NAT-CCI-CL_--

20

12/9/2010

8:57 AM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

DECEMBER 13 - 19, 2010

BANKS IN NORTHEAST OHIO RANKED BY DEPOSITS(1)

Name Address Rank Phone/Web site

Northeast Ohio deposits (millions) 6-30-2010

6-30-2009

% change

Offices

Employees (companywide) 6-30-2010

Holding company

Top local executive

32

Ohio Commerce Bank 24400 Chagrin Blvd., Beachwood 44122 (216) 910-0550/www.ohiocommercebank.com

$63.5

$49.2

29.0%

1

17

NA

33

Farmers State Bank 11 S. Main St., West Salem 44287 (419) 853-4631/https://farmersstate-oh.com

$61.8

$56.3

9.9%

5

36

Community Independent Bancorp Inc. West Salem

34

The Bank of Magnolia Co. 122 N. Main St., Magnolia 44643 (330) 866-9392/www.bankofmagnolia.com

$59.1

$59.7

-1.0%

3

23

Magnolia Bancorp Inc. Magnolia

35

Commercial & Savings Bank 91 N. Clay St., Millersburg 44654 (330) 674-9015/www.csb1.com

$34.9

$27.3

27.6%

4

143

CSB Bancorp Inc. Millersburg

Rick L. Ginther president, CEO

36

National Bank and Trust Co.(3) 5603 Ridge Road, Parma 44129 (440) 884-1112/www.nbtdirect.com

$17.9

NA

NA

1

231

NB&T Financial Group Inc. Employee Stock Ownership Plan Wilmington

John J. Limbert president, CEO

37

Woodforest National Bank 13301 E. Freeway Drive, Houston 77015 (877) 968-7962/www.woodforest.com

$13.8

$10.5

31.8%

17

3,765

Woodforest Financial Group Inc. Houston, Texas

Robert E. Marling Jr. CEO

Dell R. Duncan president, CEO

Source: Federal Deposit Insurance Corp., www.fdic.gov, Summary of Deposits reports. 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) Banks with deposits in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties are included in this list. Only deposits from those counties are used for the NE Ohio deposit numbers. (2) Formerly Ohio Legacy Bank NA. (3) Formerly American National Bank.

Marlene Barkheimer president, CEO Kevin Greer president

RESEARCHED BY Deborah W. Hillyer

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

Non-performing loans 2010 entire market share %(2)

Total assets ($millions)

$ millions 6-30-2010

% of gross loans 6-30-2010

Net income Top local executive ($millions) Title

6-30-2010

6-30-2009

% change

1

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

$6,281.2

$6,191.4

1.5%

7.5

$10,894.3

$227.1

2.5%

$12.9

Marc A. Stefanski chairman, president, CEO

2

Ohio Savings Bank, A Division of New York Community Bank(3) 1801 E. Ninth St., Cleveland 44114 (216) 588-4100/www.amtrust.com

$2,438.7

$3,502.2

-30.4%

2.9

$39,788.7

$851.8

3.1%

$266.3

Robert J. Tolomer executive vice president, officer-incharge

3

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

$1,838.6

$1,764.1

4.2%

2.2

$3,152.6

$91.5

3.6%

($25.5)

Steven R. Lewis CEO

4

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

$1,595.8

$1,460.7

9.3%

1.9

$5,746.1

$47.5

1.1%

$22.4

Andrew D. Devonshire president, Ohio banking region

5

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

$1,243.9

$1,335.1

-6.8%

1.5

$2,314.9

$155.1

8.5%

($9.5)

Douglas M. McKay chairman, president, CEO

6

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

$1,001.1

$952.5

5.1%

1.2

$1,237.6

$17.0

1.8%

$0.4

Gary R. Fix president, CEO, managing officer

7

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

$695.7

$764.5

-9.0%

0.8

$867.5

$69.1

11.3%

($7.4)

Robert J. King Jr. president, CEO

8

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

$351.8

$296.3

18.7%

0.4

$500.5

$4.5

1.3%

$1.2

Jon W. Park president

9

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

$349.7

$321.6

8.7%

0.4

$450.4

$13.2

3.4%

$0.5

John R. Malanowski president, COO

10

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

$291.7

$284.4

2.6%

0.4

$407.5

$3.9

1.6%

$1.1

Phillip E. Becker president, CEO

11

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

$253.8

$261.8

-3.1%

0.3

$432.8

$26.5

9.4%

$0.1

Allen Lencioni Sr. president, CEO

12

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

$131.6

$122.0

7.8%

0.2

$273.3

$7.7

3.4%

($5.3)

Eloise Mackus Therese A. Liutkus interim CEO president, CFO

13

Century Bank(4) 1640 Snow Road, Parma 44134 (216) 351-7000/www.centurybankoh.com

$122.6

$124.9

-1.8%

0.2

$129.5

$2.9

3.3%

($1.0)

Jeffrey J. Calabrese president, CEO

14

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

$113.8

$103.5

9.9%

0.1

$138.1

$2.0

1.9%

$0.3

Howard T. Boyle II president, CEO

15

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

$111.6

$108.1

3.2%

0.1

$159.2

$2.5

2.2%

$0.2

Stephen D. Hailer president, CEO

16

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

$75.3

$64.6

16.5%

0.1

$88.5

$0.8

1.5%

$0.1

Philip Heffelfinger president, CEO

17

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

$71.4

$67.8

5.3%

0.1

$107.5

$0.1

0.1%

$0.5

Ann Durr president, COO

Source: Highline Financial LLC. NA=Not available. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Deposit information includes branches located in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties, as of June 30, 2010, and June 30, 2009. All other numerical data is institution-wide as of June 30, 2010. (2) Includes all financial institutions in the 15 county coverage area. (3) Formerly AmTrust Bank, purchased by New York Community Bank, Dec. 4, 2009. (4) First Federal of Lakewood has signed an agreement to acquire Century Bank. The deal is expected to close in December.

RESEARCHED BY Deborah W. Hillyer


20101213-NEWS--21-NAT-CCI-CL_--

12/9/2010

4:21 PM

DECEMBER 13 - 19, 2010

Contact: Phone: Fax: E-mail:

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

REAL ESTATE

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

21

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

LEGAL NOTICES NOTICE TO VENDORS

NOTICE TO BIDDERS

Notice is hereby given that sealed proposals will be received in the Board of County Commissioners Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113 until 11:00 A.M. local time on January 14, 2011 for lease of office space for a Public Safety Service Center (PSSC) for the period June 01, 2011 to May 31, 2016.

Notice is hereby given that sealed proposals will be received in the Board of County Commissioners Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113 until 11:00 A.M., (Local Time) on:

Required geographic locations: The space must be in an area bounded approximately by: The PSSC must be constructed within Cuyahoga County, in a location that will minimize the effects of any local hazards (hazmat routes, rail lines, airports, high band snow areas, areas of flooding, high voltage power lines), cannot be in a 100-year flood plain nor will it change or alter listed or nationally designated historic sites or structures. Ease-ofaccess for public officials is essential. Close proximity to government offices and non-hazmat route highways for easy access by agency representatives and elected officials should be demonstrated in responses. A set back from public rights-of-way shall be a minimum of 200 yards. The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity. (SAME ADDRESS) Late proposals will be returned unopened. There will be a Pre-proposal Conference on December 29, 2010 at 10:00 A.M. local time at The Department of Central Services, 2nd floor conference room, 1642 Lakeside Avenue, Cleveland, OH 44114. IT IS STRONGLY RECOMMENDED THAT INTERESTED VENDORS ATTEND. Specifications and proposal blanks may be obtained at the Board of County Commissioners Office of Procurement & Diversity. (SAME ADDRESS) Questions may be addressed to Mr. John Myers, Real Estate Manager at 216.698.2517. Payment will only be made upon approval of the Board of County Commissioners and payments will be warrants issued by the County Auditor upon notification from the Commissioners. The Board of County Commissioners reserves the right to accept or reject any proposals or any part or all parts of any proposal submitted, and waive all technicalities. Each proposal must state in full the name and address of each person, firm or corporation interested in the proposal submitted. By order of the Board of County Commissioners of Cuyahoga County. Jimmy Dimora Timothy F. Hagan Peter Lawson Jones

LEGAL NOTICE OHIO TURNPIKE COMMISSION 682 Prospect Street Berea, Ohio 44017 (440) 234-2081

January 25, 2011 for: The sale of County-owned property no longer needed for public use: Permanent Parcel Nos. 110-04-005 to 007, 60 to 63, 80 to 82 and 117 to 124 located at 12212 St. Clair Avenue, Cleveland, Ohio, as per County Requisition No. CT-10-18993. Any questions concerning the property may be directed to the Real Estate Division, at (216) 698-2517.

REQUEST FOR PROPOSALS CONSULTING SERVICES RELATED TO THE OHIO TURNPIKE COMMISSION’S PROPERTY AND CASUALTY INSURANCE PROGRAM

The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113. Late bids will be returned unopened.

The Ohio Turnpike Commission (“Commission”) has issued a Request for Proposals (“RFP”) for Consulting Services Related to the Ohio Turnpike Commission’s Property and Casualty Insurance Program, with services to commence in late January 2011 as described in the RFP Specifications.

Specification and proposal blanks may be obtained at the Office of Procurement & Diversity (Same Address). Interested bidders may visit the site (12212 St. Clair Avenue, Cleveland, Ohio) for a walk-thru on Tuesday, January 11, 2011 at 11:00 AM.

One (1) original and three (3) copies of sealed proposals will be received at the Commission’s offices, 682 Prospect Street, Berea, OH 44017, c/o the Purchasing Department, until 2:00 P.M. (E.S.T.), January 6, 2011.

Each purchase offer bid must be accompanied by a “Certified Check”, “Cashier’s Check” or “Money order” drawn on a solvent bank or Savings and Loan Association, payable to the Treasurer of Cuyahoga County, Ohio, in a sum equal to 5% of the amount bid, conditioned that if such bid is accepted, the bidder shall proceed with the purchase. The balance of the amount bid is due from the successful bidder within sixty (60) days after award by the Board of County Commissioners.

THE FIRM SELECTED AS THE CONSULTANT UNDER THIS RFP WILL BE PRECLUDED FROM BIDDING ON THE COMMISSION’S PROPERTY AND CASUALTY INSURANCE PROGRAM. CONSULTANTS, WITH THEIR RESPONSES TO THIS RFP, MUST ALSO DISCLOSE TO THE COMMISSION ANY POTENTIAL CONFLICTS OF INTEREST OR BUSINESS AFFILIATIONS WITH OTHER INSURANCE BROKERS AND/OR CARRIERS.

The above described parcel and interest to the conveyed will be by Quit-Claim Deed. The Board of County Commissioners reserves the right to accept or reject any or all bids. By order of the Board of County Commissioners of Cuyahoga County. Jimmy Dimora Timothy F. Hagan Peter Lawson Jones Lenora Lockett, Director, Office of Procurement & Diversity

The RFP is on file and available from the Purchasing Department at (440) 234-2081. This document will be forwarded upon request and without charge to any interested, prospective Responding Insurance Consultants. All inquiries concerning this RFP must be submitted in writing to Kevin Golick, Purchasing Manager, via email to kevin.golick@ohioturnpike.org, or facsimile [fax number (440) 234-0232], with the Inquiry Period ending at the close of business 5:00 P.M. (E.S.T.) on December 28, 2010.

Publish in Crain’s Cleveland Business December 13, 2010 and December 20, 2010

The Commission reserves the right to require Responding Insurance Consultants to submit additional written or oral clarifications to their Proposals.

This notice may also be viewed at the following Cuyahoga County Internet Web Site: www.opd.cuyahogacounty.us by clicking on the show events tab and the bid due date month. A list of open bids will appear on the next screen.

The Commission further reserves the right to reject any and all Proposals and to waive irregularities and defects. The Commission will notify the Successful Insurance Consultant as soon as practicable after the receipt and review of Proposals.

Lenora Lockett, Director, Office of Procurement & Diversity

OHIO TURNPIKE COMMISSION

Advertise in Crain’s Cleveland Business on December 13, 2010 and December 20, 2010

ATTENTION REALTORS:

NOTICE TO BIDDERS

Now is a great time to promote your Luxury Properties to high-end prospects AND receive reduced rates on your advertising.

Notice is hereby given that sealed proposals will be received in the Board of County Commissioners Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113 until 11:00 A.M., (Local Time) on: January 25, 2011 for: The lease of County-owned property no longer needed for public use: Permanent Parcel Nos. 101-09-027 located at 1264 & 1276 W. Third Street, Cleveland, Ohio, as per County Requisition No. CT-10-18978. Any questions concerning the property may be directed to the Real Estate Division, at (216) 698-2517. The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113. Late bids will be returned unopened.

Call Genny Donley at (216) 771-5172 or e-mail GDonley@Crain.com for more details.

Crain’s Cleveland Business Online Property Search

Published in Crain’s Cleveland Business December 13, 2010

NOTICE TO VENDORS Notice is hereby given that sealed proposals will be received in the Board of County Commissioners Office of Procurement & Diversity, Room 110, County Administration Building, 1219 Ontario Street, Cleveland, Ohio 44113 until 11:00 A.M. local time on February 28, 2011 for lease of office space for Departments of Senior & Adult Services, Child Support Enforcement Agency & Department of Development for the period October1, 2011 thru September 30, 2016. Required geographic locations: The space must be in an area bounded by: North: Lake Erie South: Carnegie Ave

East: E. 55th St West: W. 65th St

The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity. (SAME ADDRESS) Late proposals will be returned unopened.

Specification and proposal blanks may be obtained at the Office of Procurement & Diversity (Same Address). Interested bidders may visit the site (1264 & 1276 W. Third Street, Cleveland, Ohio) for a walk-thru on Tuesday, January 11, 2011 at 2:00 PM.

Powered by LoopNet, No. 1 in Commercial Real Estate online

There will be a Pre-proposal Conference on January 11, 2011 at 10:00 AM at 1701 E. 12th St., Senior & Adult Offices – Lower Level Conference Room. IT IS STRONGLY RECOMMENDED THAT INTERESTED VENDORS ATTEND.

The Board of County Commissioners reserves the right to accept or reject any or all bids.

Looking for property? Search thousands of local listings

Specifications and proposal blanks may be obtained at the Board of County Commissioners Office of Procurement & Diversity. (SAME ADDRESS)

By order of the Board of County Commissioners of Cuyahoga County. Jimmy Dimora Timothy F. Hagan Peter Lawson Jones Lenora Lockett, Director, Office of Procurement & Diversity

Selling or leasing a property? Get your property featured through Crain’s www.CrainsCleveland.com/LoopNet

Publish in Crain’s Cleveland Business December 6, 2010 and December 13, 2010 This notice may also be viewed at the following Cuyahoga County Internet Web Site: www.opd.cuyahogacounty.us by clicking on the show events tab and the bid due date month. A list of open bids will appear on the next screen. Prepared By: Wanda Graves, Real Estate Division (DS)

For advertising opportunities contact Genny Donley gdonley@crain.com 216-771-5172

Payment will only be made upon approval of the Board of County Commissioners and payments will be warrants issued by the County Auditor upon notification from the Commissioners. The Board of County Commissioners reserves the right to accept or reject any proposals or any part or all parts of any proposal submitted, and waive all technicalities. Each proposal must state in full the name and address of each person, firm or corporation interested in the proposal submitted. By order of the Board of County Commissioners of Cuyahoga County. Jimmy Dimora Timothy F. Hagan Peter Lawson Jones Lenora Lockett, Director, Office of Procurement & Diversity Advertise in Crain’s Cleveland Business on December 13, 2010 and December 20, 2010

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IN BRIEF Corporate retirement plans on the upswing Third-quarter asset levels rise from previous quarter U.S. corporate retirement plans had combined assets of $5.661 trillion as of Sept. 30, up 6.5% from three months earlier, according to the Federal Reserve’s Flow of Funds report issued last week. The third-quarter increase reversed a decline of 6.8% in the previous quarter. Corporate defined benefit plan assets totaled $2.154 trillion as of Sept. 30, up 5% from the previous quarter. Total assets in corporate defined contribution plans were $3.507 trillion, up 7.5%. The value of equities in corporate defined benefit plans was $750 billion, up 6.8%, while the value of bonds was $364 billion, up 2.8%. In corporate defined contribution plans, the value of equities was $1.082 trillion, up 11%, while the value of bonds was $105 billion, down 2.8%. Corporate defined benefit plans saw outflows of $21.5 billion for the quarter, while corporate defined contribution plans had inflows of $52.5 billion. Total assets in state and local government retirement funds as of Sept. 30 were $2.729 trillion, up 6.9%, while the federal government’s retirement fund assets totaled $1.336 trillion, up 1.9%. “The overall growth of pension assets was due to the positive returns in equity markets during the third quarter,” Craig Copeland, senior research associate for the Employee Benefit Research Institute, said in an interview. Mr. Copeland said defined contribution plans “had positive net contributions for the quarter, while (defined benefit) plans had negative net contributions because (defined benefit) plans have a declining number of active

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participants while the number of participants in (defined contribution) plans continues to go up.” — Doug Halonen, Pensions & Investments ■ KEEP ON ROLLING: Robert J. Keegan, former chairman, president and CEO of Goodyear Tire & Rubber Co., has been elected to Xerox Corp.’s board of directors. “Bob brings to the Xerox board a proven track record of business success,” said Keegan Xerox chairman and CEO Ursula Burns. “His leadership experience, respected financial and business acumen and global expertise will serve Xerox and our shareholders well, and will complement the strong talent of our board of directors.” Mr. Keegan, 63, served as Akronbased Goodyear’s president and CEO from January 2003 to April of this year and as chairman from July 2003 to October of this year. Prior to joining Goodyear in 2000 as chief operating officer, he was president of the consumer imaging business at Eastman Kodak Co. Mr. Keegan received a bachelor of science degree in mathematics from LeMoyne College in Syracuse, N.Y., and an MBA in finance from the University of Rochester, where he currently is on the board of trustees. Mr. Keegan also is a board member of the Autism Family Foundation of Northeast Ohio. — Tire Business ■ HEALTHY CASH AMOUNTS: Hospitals and health systems surveyed by Moody’s Investors Service could convert nearly all their investments into cash within one month, according to a newly released report. The ratings agency analyzed investment and short-term debt portfolios for more than 300 nonprofit hospitals and health systems. Their median percentage of unrestricted cash and investments — or cash not tied up by donor restric-

tions — that could be liquidated within one month was 99.6%, Moody’s said. Including restricted cash, the median slipped to 90%. Of those surveyed, slightly less than half, 46%, had alternative investments such as hedge funds or private equity, Moody’s said. Hedge funds and private equity can lock up cash by limiting how quickly investors may pull out. Such investments add stress to balance sheets for borrowers with debt sold to short-term investors that abruptly may demand repayment. — Melanie Evans, Modern Healthcare ■ TRASH TALK: About 31% of bottled water and water cooler bottles were recycled in 2009, according to the National Association for PET Container Resources and the International Bottled Water Association. Although recycling rates have doubled since 2005, the rate is only a slight increase from 2008, when 30.9% of the containers were recycled, the organizations said in their reports, “2009 Post Consumer PET Bottle Bale Composition Analysis” and “2009 Report on PET Water Bottle Recycling.” (PET stands for polyethylene terephthalate, a plastic resin and a form of polyester.) The usage of recycled PET resin has increased 37% as well, the organizations said. “Recycling rates for bottled water containers had a modest but positive increase in 2009; steady as we go,” said Tom Lauria, vice president of communications at the International Bottled Water Association. “The doubling of the recycling rates for bottled water containers over the past five years is encouraging but also a reminder that more needs to be done to expand recycling efforts and collection methods across the country,” he said. — Amanda Smith-Teutsch, Waste & Recycling News

DECEMBER 13 - 19, 2010

Hyland: Dividend recaps become more common continued from PAGE 1

Another Thoma Bravo company, Flexera Software Inc. of Chicago, is executing a dividend recapitalization deal as well. It aims to raise $215 million, $90 million of which will go to shareholders. A principal from Thoma Bravo declined to comment on the dividend recapitalization plan for Hyland Software. A spokeswoman from the Westlake company who spoke with Crain’s on Dec. 3 did not call back or respond to two follow-up phone messages and an e-mail sent last week. Such deals are becoming more common because they give investment firms — which often couldn’t sell companies for a good price during the recession — a quick way to return cash to investors, according to two experts who spoke with Crain’s. They added that some companies are executing dividend recaps now in case Congress chooses not to renew Bush-era laws that reduced tax rates on dividends and capital gains. The deal would burden Hyland Software with more debt, but the company should be able to handle it, according to the Moody’s and S&P reports. Moody’s reiterated Hyland Software’s B2 credit rating, and S&P reiterated its B+ credit rating. Both companies gave Hyland Software a “stable” outlook, citing its solid cash flow as well as its success in expanding its product lineup and sales channels through acquisitions. They noted, however, that the company faces competition from much larger companies, including

Microsoft, Oracle and IBM. Hyland Software had revenues of about $155 million in the 12 months that ended Sept. 30.

Reasons for recaps Software firms often can handle extra debt given their reduced need for capital, said Terence Tchen, managing director of Houlihan Lokey, a Los Angeles-based investment bank. “For that type of company, putting on some type of leverage isn’t unreasonable,” Mr. Tchen said. Dividend recap deals also can signify that investors have confidence in a given company’s ability to grow in value, Mr. Tchen said. “They’re saying, ‘Now is not the time we’ll get the biggest bang for our buck in terms of a sale or an exit,’” he said. A dividend recap deal also can indicate that a company is among the stronger businesses in the portfolio of its majority owner, said Alan Wink, a director with accounting firm EisnerAmper LLP of New York. “It might be one of the investments in their portfolio that, because of its performance, allows them to take money out,” Mr. Wink said. Dividend recaps can be an “attractive alternative” for owners, especially in a poor market for selling companies, Mr. Wink said. Still, the increased debt load could prove troublesome if the company’s profits start slipping, he said. “If their performance deteriorates and they have more debt on their balance sheet, that’s not a good thing,” he said. ■

REAL ESTATE CLASSIFIED REAL ESTATE FOR SALE

AUCTION

Water Park, Go-Cart and Mini Golf Complex - Port Clinton, Ohio

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This 33 acre site contains four pools with several water features, a mini golf course, Bumper Boat pond and Go-Cart Track. The property contains five outbuildings that house arcade games, kitchen facilities, office, locker rooms and storage. All equipment and fixtures are still intact and sell with the property. There are 17 acres of the site that are available for future expansion. Many upgrades and maintenance items were done in 2010 and the park is in operating condition. This is a great opportunity to purchase a turn-key business in the vacation heartland of Lake Erie, Marblehead and Catawba Island at a fraction of the cost to build.

For additional information or to view this property: Contact Dean Miller at 419-483-7340

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THEINSIDER

THEWEEK DECEMBER 6 - 12 The big story: Fortune Brands decided that it might not be the best idea for one company to sell products as unrelated as Titleist golf balls, Moen faucets and Jim Beam liquor. It plans to break the company into three separate businesses. “We see the potential for even greater value by separating our businesses into focused companies at a time when they have emerged from the economic downturn in such strong positions,” said Fortune Brands CEO Bruce Carbonari, who rose through the ranks of the company, in part, by serving as CEO of Moen and Fortune Brands’ Home and Hardware division prior to 2007. Moen’s operations are based in North Olmsted.

Partner in charge: Dennis M. Lafferty, a longtime leader in civic circles, joined Cleveland State University’s Division of University Advancement as an executive-in-residence. Mr. Lafferty will be responsible for developing partnerships between the university and various stakeholders and for fostering relationships between Cleveland State and the business community. He spent Lafferty the past 23 years with the Cleveland office of the Jones Day law firm, where he was executive assistant to the managing partner and office administrator.

New life: Premier Ventures LLC, an investor group based in Irvine, Calif., is the new owner of the mostly closed Rolling Acres Mall in Akron and plans to continue its conversion to a mixeduse property. Premier Ventures paid $3 million for the mall’s 600,000-square-foot common area. The seller was CB 225 LLC, an investor based in Beverly Hills, Calif., that acquired the property for $1.7 million in July 2006. Busy year: The Riverside Co. announced the pending sale of a company in Waco, Texas, for about $150 million in a deal that is expected to close by year’s end and should produce a return of $3 for every dollar invested by the global private equity firm. The sale of The Dwyer Group to TZP Group LLC, a private equity firm in New York City, will be Riverside’s ninth sale, or exit, of the year. Riverside bought Dwyer, a holding company of seven franchise businesses focused on residential and commercial services, for $54.5 million in 2003. Compound interest: Preferred Compounding of Barberton was purchased by a group consisting of some of its own executives and a Dallas-based private equity firm, Wingate Partners. Preferred Compounding produces custom rubber compounds for molders, extruders and other manufacturers and has about 200 employees. Terms were not disclosed. The sale marks the second time Watermill has bought and then sold a controlling interest in Preferred Compounding. It was the company’s majority owner from 1996 to 1999, before buying the company again in 2001.

School funding: The Charter School Growth Fund, a national nonprofit venture capital fund, is putting $2 million into Breakthrough Charter Schools, a local charter management organization, to help open four new schools in Cleveland. By August 2011, Breakthrough plans to open two new charter schools — Citizens Leadership Academy and Near West Intergenerational School — with the support of the money, which represents a combination of low-interest loans and grants to be fulfilled over the next four years. Two more schools are planned for the following year. Breakthrough runs four charter schools.

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

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Wheeling and dealing in his own backyard ■ Jergens Inc. CEO Jack Schron has been doing business everywhere from China to Europe in recent years. But his company, which makes vises, specialty fasteners and other industrial tools, didn’t need to look far for its latest acquisition. “They were about 800 yards down the road,” Mr. Schron said, referring to the business he just bought from George Whalley Co., which is a few doors down South Waterloo Road from his own quarters on Cleveland’s East Side. Like Jergens, George Whalley also distributes industrial tools. Proenza Jergens has purchased the assets of its industrial distribution business, which primarily serves Northeast Ohio manufactures, Mr. Schron said. George Whalley, with about 30 employees, will continue to sell and distribute its specialized cutting tools. Neither company disclosed revenues or the sale price when the transaction was announced last Thursday, Dec. 9. — Dan Shingler

Another Super Bowl, another U. of Akron ad ■ The University of Akron is wrapping up its 13th Super Bowl commercial, and once again it’s starring the university’s president, Luis Proenza. “He’s really good at that,” said Lori Meek,

WHAT’S NEW

the university’s advertising manager. “He’s become quite the professional actor, but he’s not really acting — he’s being himself.” Ms. Meek said the ad will air in the Cleveland market during the Feb. 6 nationally televised football game. She wouldn’t elaborate on details, but said the ad would play off the same “energy” theme the university has touted over the last five years. In recent ads, Dr. Proenza has been shown handling a glowing orb of sorts to symbolize the energy at the university. Ms. Meek would not disclose the cost of the producing the ad or of airing it because the school still is involved with production and negotiations. The University of Akron’s nearby rival, Kent State University, launched a million-dollar marketing campaign this fall with a series of new TV commercials. However, Tom Neumann, Kent State’s associate vice president of university communications and marketing, said the university had no plans to go head to head with the Akron Zips on Super Bowl Sunday. “We don’t anticipate doing any ad buys for the Super Bowl,” Mr. Neumann said. — Timothy Magaw

Jones Day lawyer translates Dodd-Frank for the Chinese ■ Foreign financial institutions with branches in the United States potentially will be exposed to greater regulation by the

BEST OF THE BLOGS Excerpts from blog entries on CrainsCleveland.com.

Learned Owl owner pleased as e-book venture takes flight

COMPANY: Audio-Technica, Stow PRODUCTS: QuietPoint noisecanceling headphones Audio-Technica has introduced some hightech headphones that won’t break a holiday shopper’s budget. Both the over-ear ATH-ANC27 ($99.95) and the on-ear ATH-ANC25 ($79.95) combine “combine immersive sound with long-wearing comfort and make high-quality active noisecanceling technology more affordable than ever,” Audio-Technica says. The ATH-ANC27 over-ear model has up to 85% active noise-cancellation, and the ATHANC25 offers up to 80% active noise-cancellation, the company says. Both headphones feature technology that detects environmental noise and applies a corresponding soundcanceling signal, according to Audio-Technica. They also “incorporate high-efficiency drivers, ergonomically designed earpieces and other refinements to deliver clear sound with impactful bass, richly detailed midrange and treble and precise imaging.” Both models have a detachable cord, enabling their use as cordless noisecanceling headphones. For information, visit www.Audio-Technica.com. Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.

United States as a result of The Dodd-Frank Wall Street Reform and Consumer Protection Act, a Jones Day partner recently explained to bankers and regulators in Beijing. Brett Barragate, who splits his time between the firm’s Cleveland and New York offices, traveled to China for two days to speak to the China Banking Regulatory Commission about Dodd-Frank’s foreign implications. Bob Graves, who co-heads the Jones Day banking and finance practice, accompanied him. The regulation creates opportunities for foreign banks, too, as U.S. banks likely will shed and sell certain businesses because of increased constraints, Mr. Barragate said. Chinese bankers were far more versed in Dodd-Frank than Mr. Barragate expected them to be. “They had been following it as close as anyone in the United States,” he said. China’s “significant banks” do business lending and investing via branches in New York, Mr. Barragate said, and Chinese institutions have stated openly that they intend to increase their investment in the United States. Unlike many here, Chinese bankers seemed less judgmental about Dodd-Frank, he said. Theirs is a practical approach, he said, an attempt to understand what DoddFrank is and how it affects them. The China Banking Regulatory Commission asked Mr. Barragate to speak, he said, noting a man who attended law school with a Jones Day partner now works for the commission. — Michelle Park

■ Count Liz Murphy, owner of the Learned Owl Book Shop in Hudson, among those eager to see what Google Inc. can do for the e-book world. Google last week unveiled the Google eBookstore, which could shake up the way digital books are sold. In a story that ran prior to the e-store’s unveiling, The Wall Street Journal said Google “hopes to upend the existing e-book market by offering an open, ‘read anywhere’ model that is different from many competitors.” Users are able to buy books directly from Google or from multiple online retailers — including independent bookstores — and add them to an online library tied to a Google account. Independent booksellers will be able to install Google technology on their web sites so they can sell e-books and receive a percentage of revenue. “If I don’t change with what is going on, I am going to be behind,” said Ms. Murphy, owner of the Learned Owl (a terrific store, by the way), who is eager to see what Google will enable. “People are getting e-books but they aren’t getting them from me.”

They might be mocking, but at least they’re watching ■ Parodies of LeBron James’ “What Should I Do?” Nike ad continue to outpace the real thing in online viewership, but that’s not such a bad thing, according to a short piece in The New York Times. Visible Measures, an online video measurement company, reported the Nike ad

was viewed 5.19 million times in the 27 days after its release, while parodies were viewed 5.86 million times. The company found a similar pattern with a Tiger Woods Nike ad aimed at rehabilitating the golfer’s image. Ads like these are “a necessary step in the rehabilitation of an athlete whose reputation has been damaged,” said Matt Cutler, chief marketing officer of Visible Measures. Nancy Mauro, a former associate creative director for McCann Erickson, told The Times, “Even if the benefits aren’t immediate for the athlete, they’re designed to be, in time — and you can bet the creative team is benefiting from the tidal wave of interest.”

Manufacturers may shift down a notch after stellar ’10 ■ Peter Klein, senior portfolio manager at Fifth Third Asset Management in Cleveland, was among the experts quoted in a Reuters story that said manufacturers likely will face a slower-paced 2011 than their relatively robust 2010. “Profit margins across the sector swelled this year as companies that cut costs to the bone during the brutal recession experienced a rebound in sales that helped the Standard & Poor’s capital goods industry index to rise about 14%, more than twice the gains of the broader U.S. stock market,” Reuters reported. Analysts still expects profits to rise next year, but at a slower pace than in 2010. As one analyst said, “The comparisons are going to be getting a lot tougher going forward.” Reuters said some investors see declining margins as inevitable, as companies will need to add staff after cutting their operations dramatically during the recession. “They’re going to have to start hiring people, so their personnel costs will start going up,” said Fifth Third’s Mr. Klein.


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