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A publication of

juLY 2013

Education + Business = BCSC School leaders run multimillion dollar corporation


Contents

Also inside Chamber Connection . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 On the Move . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Business Leads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Business Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Red Oak Industries page 7

Around the Watercooler . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Mark McNulty column . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

On the cover

Danielle McDermott graduated from Columbus Signature Academy New Tech High School May 31. Photo by Tommy Walker. Story page 4.

Morton Marcus column . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Former bank leaders face federal suit . . . . . . . . . . . . . 22

Retiring boomers sell businesses page 10

2 The Business Connection JuLY 2013

Comments should be sent to Doug Showalter, The Republic, 333 Second St., Columbus, IN 47201 or call 812-379-5625 or dshowalter@therepublic.com. Advertising information: Call 812-379-5652. Š2013 by Home News Enterprises All rights reserved. Reproduction of stories, photographs and advertisements without permission is prohibited.


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photo by Jade Sharp

The business of learning

Superintendent John Quick, center, meets with BCSC administrators, from left, William Jensen, Linda DeClue, Vaughn Sylva and Teresa Heiny.

Bartholomew Consolidated School Corp. operates a $100 million enterprise for its stakeholders By Barney Quick

“W

e’re kind of unique in that we define our product as learning,” says John Quick, superintendent of Bartholomew Consolidated School Corp. “The crucial question in any decision we make is, does this enhance learning?” He uses an analogy to distinguish learning from teaching: “You can work with a dog all day long, trying to get it to whistle. If at the end of the day the dog isn’t whistling, though, no learning has taken place.” Other parts of applying a business model to the corporation’s activities are somewhat unique as well. “Kids are customers in some ways, but they’re also part of our human resources,” Quick says. “They’re customers when they’re having lunch or riding the bus. However, because they’re helping us create our product, learning, they’re collaborators in production.” The Republic file photo

4 The Business Connection JuLY 2013


BCSC is “a little more than a $100 million operation,” according to Quick. It has 20 campuses, including the headquarters on Central Avenue, a food warehouse and transportation hub on Marr Road, and an information services center on Home Avenue. With approximately 1,800 employees, it is the county’s second-largest employer. Rich Stenner, president of the BCSC Board of Trustees, has a background in private organization direction as well as his school corporation involvement. He says that while there are differences in the functions of a school board and the board of a corporation, the similarities are actually more noteworthy. “A board of any kind lets all stakeholders know what the organization’s mission is and where it’s headed,” he says. “Clearly, a corporation’s main stakeholders include investors, whereas a school corporation’s would be taxpayers, but both consider residents of the communities where they have facilities to be stakeholders as well.” Stenner says that “both types of boards focus on money and human resources. I would say that, regarding their roles, they have a tendency to focus at a higher level than other groups in the organization. They are concerned with policy and vision rather than when the doors will be locked at night.” BCSC receives from $65 million to $70 million from the state of Indiana each year. Thirty-five percent of the budget, the portion used for debt service, transportation and building new structures, comes from local property taxes and excise taxes. Capital projects, such as acquisition of tables, chairs and desks, and specialized employees, are also locally funded. Utility bills are paid from a mix of the general fund and the capital fund. The corporation’s supplier base is large and varied. The ultimate purchasing agent for the various items it buys is Vaughn Sylva, assistant superintendent for financial services. There are thresholds of consumption that trigger the solicitation of quotes from vendors for various goods and services. Athletic departments are funded by a mix of corporation revenue and money that the schools raise on their own. “They buy their own balls and uniforms, but we pay the coaches’ salaries,” says Quick. “We pay most of the transportation costs, but we make sure they have some skin in the game.” see BCSC on page 6

The Republic file photo

Columbus North High School students use BCSC laptops in the library.

JuLY 2013 The Business Connection 5


bcsc continued from page 5 There is an egalitarianism to the way health care benefits work for BCSC employees. They all pay into a health trust and have access to the corporation’s in-house health clinic. Claims administration is outsourced to SIHO Insurance Services. The coverage is the same for everyone in the organization. The school board sets policy, and that drives the crafting of the budget, which is established every fall. “We try to project 12 to 18 months in advance,” says Quick. The state board of accounts performs an audit every two years. The corporation includes a rainy-day fund in its budget, which has proven worthwhile. “The $6 million we had in it when the economy went into its downturn bought me a little time,” says Quick. “Other school corporations had to lay off teachers and cut other costs. We’ve picked up some good teachers in the last few years because of their hiring freezes.” BCSC has what Quick characterizes as a “great relationship” with the Columbus Educators Association, the union that represents BCSC’s teachers. “We bring the union’s president and vice president into meetings with principals. We feel like you’re either at the table or on the menu. That gives us credibility. In the spring of 2009, when we didn’t replace 20 teachers, we also didn’t replace an administrator.” Continuous improvement is a key part of the BCSC ethos. “For the last few years, we’ve used the Baldrige framework,” says Quick, referring to the criteria set forth in the Baldrige Performance Excellence Program, part of the National Institute of Standards and Technology and named for former Commerce Secretary Malcolm Baldrige. Those criteria are in turn based on the concepts of noted 20th-century quality pioneer W. Edwards Deming. “For charter schools, we use a little different rubric,” Quick notes. BCSC has borrowed some Six Sigma black belts from Cummins Inc. to

devise projects in such areas as reading, special education, transportation, maintenance and remediation. The corporation has one staff member trained in Six Sigma methods. The concept of learning as the corporation’s product plays itself out as an array of pathways from which a student can choose. These include global studies, STEM (science, technology, engineering and mathematics), humanities, signature academies, the Rebound and Restart programs, and the alternative high school (for students at risk of dropping out) housed at McDowell Education Center. BCSC developed the pathway model to optimize each student’s learning style. The corporation has also joined the nationwide BYOD (bring your own device) trend that originated in workplaces to facilitate operations. BCSC has agreements with Dell and HP to offer discounts on those companies’ products, such as laptops and tablets, to students and their families. Even smartphones, those ubiquitous means of instant communication, are now considered essential. “It used to be that you’d get in trouble for bringing a smartphone to class,” says Quick. “Now it’s expected.” He has given a great deal of thought to the most effective way to produce the highest-quality learning. “I believe in getting the best bang for the buck,” he explains, “and that means focusing on the community’s 4-year-olds. That’s where you get a high return on investment, not trying to salvage them when they’re well into their teens.” He notes that Indiana lags behind most other states in pre-kindergarten funding. Still, the corporation is making inroads on that front with its Busy Bees Academy, which involves families in preparing young children for the journey through the grades of public school education. Quick is pleased overall with the way BCSC exercises stewardship over its finances. “Stability allows you to manage your way through issues. We have great people and a little money in the bank.”

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One enterprise, dual benefits Red Oak Industries employs business methods to fulfill social mission By Barney Quick n photos by Madeline Hodek

R

ed Oak Industries offers two rather disparate types of services — janitorial and data management. That’s because its mission is a bit different from most companies in either of those lines of work. This mission is succinctly explained in a paragraph on Red Oak website’s home page with the heading “Why We Do What We Do: lasting employment opportunities for people with disabilities of all kinds.” The organization also provides jobs for others. Of its 50 employees, approximately 70 percent have disabilities. Red Oak’s philosophy is that such an integrated environment makes possible solid progress in skill acquisition, and it’s achieving results. “One of our main metrics is looking at turnover rate,” says director Shannon Castetter. “It’s not unusual that we have people on our cleaning crews who came to work for us in 2006. That’s because we provide a safe, supportive environment. Some of our people have moved into supervisory positions.” see red oak on page 8 Left: Shannon Castetter is executive director of Red Oak Industries. Below: Shelly Hargett, left, and Angela Lape-Sidwell work in the Franklin Street location of the organization.

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Lape-Sidwell and Hargett perform janitorial services at the North Marr Road location of Red Oak Industries.

RED OAK continued from page 7 The commercial and specialty cleaning end of the business consists of basic office cleaning, stripping and waxing floors, and carpet and upholstery cleaning. The document management aspect includes document imaging, data entry, presort processing and data mining. Areas served include Bloomington, Columbus, Greenwood, Franklin, Richmond and Indianapolis. The document management portion operates from an office suite on Franklin Street. The janitorial operation is run from the Columbus offices of Centerstone of Indiana on Marr Road. Red Oak’s origins lie in a series of brainstorming sessions among some people at Quinco Behavioral Health Systems, the predecessor organization to Centerstone. Around 2005, Quinco CEO Bob Williams, vice president and vocational services specialist Kathy Christoff and assistant vice president Kevin McCracken began discussing ways to find work for Quinco clients. “Bob had previously been with Pikes Peak Mental Health Center in Colorado Springs,” explains McCracken. “They were on the leading edge of social enterprise efforts.” Williams, McCracken and some other interested people took a trip to Colorado Springs to see what the Pikes Peak approach was all about. “What they were doing was remarkable,” McCracken says. “They had set up an enterprise that was involved in a number of business pursuits.” Inspired by what they’d seen, they established Red Oak Industries. Shortly 8 The Business Connection JuLY 2013

afterward, Quinco became part of Tennessee-based Centerstone. In 2008, Red Oak became a joint project of Centerstone and Indianapolis-based Adult and Child Center. The Red Oak board consists of three members each from those two organizations. From 2006 to 2011, the sole focus was janitorial services. “Kevin did a lot of good work getting outside contracts,” says Castetter. In September 2011, she came on board as director. “My primary focus was improving our quality,” she says. “We had five managers and not everyone was on the same page.” Dave Clark, a Centerstone Six Sigma black belt, led the improvement program. “We made huge improvements in every area without losing any contracts,” says Castetter. In March 2012, the board decided to diversify. “The profit margin on cleaning is negligible, 1 to 3 percent at best,” she explains. “We thought about food, laundry and lawn care.” At that point, Bob Siegmann, a Centerstone vice president, told the board about Coleman Data Solutions in Akron, Ohio. He knew that firm’s CEO, Nelson Burns. “He was able to get them to meet with us,” says Castetter. “From March 2012 to March 2013, they mentored us in document management. I’ve probably taken five trips to Akron.” Castetter is pleased with the team she’s been assembling. Kaelee Gribbens


is the overall manager for the janitorial side. She performs site audits and checks in with supervisors. Carla Burge is the operations manager for data management. Burge is a Centerstone client and originally audited the cleaning services. “When this job came open, I wanted her over here with me,” says Castetter. The managers for the five service areas participate in a monthly conference call, and they physically come together with the Columbus management team quarterly to review financials. Castetter, who has an MBA from IUPUC, has a vision for Red Oak, but takes her cue regarding action from the parameters indicated by the budget. “It’s a factor in when or whether to put two supervisors in an area with a large crew.” Regarding customer satisfaction, she says, “I generally know what the solutions are to any remaining issues. It’s just a matter of having the budget to implement them.” She stresses that, while Red Oak is a social enterprise, it exists to make money. “We occasionally apply for grants, but that’s not how we run the business. Occasionally, Centerstone or Adult and Child will loan us money, but we pay it back.” Still, there are unique aspects to an organization like Red Oak. “We will hire someone with a felony, as long as it didn’t involve force,” says Castetter. “Sometimes a job coach comes along with the applicant. A lot of the supervisors have never had formal training in working with those with schizophrenia, depression or bipolar disorder.” She notes that Red Oak partners with Developmental Services Inc. for document shredding. “Any time we can partner with another not-for-profit, we’d love that opportunity.” Regarding her long-range vision, she says, “It would be nice to add another service line. I’d also like to be able to offer full-time jobs and insurance.” McCracken, now director for IUPUC’s Center for Business and Economic Development, is pleased with what has become of the organization he helped spawn. “For the past three years, the Leadership Bartholomew County course has had one entire session on social enterprise,” he says. “I’ve led that and invited Shannon to speak. The response from participants has been overwhelmingly positive A lot of them haven’t really known what social enterprises are, and they find it quite exciting.” Castetter would be gratified by such an observation. “I see part of my mission as educating the public,” she says. The most satisfying aspect of her work, though, is “seeing the difference that having someone believe in a client can make.”

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Retiring boomers

driving sales of small businesses

associated Press

Roberta Bonoff, owner of Creative Kidstuff in Minneapolis, expanded by buying an online and catalog toy retailer whose owner was ready to retire.

By Joyce M. Rosenberg n The Associated Press

NEW YORK — Baby boomers preparing for retirement are driving a surge in small business sales, as they find more buyers confident enough in the improving economy to expand their own businesses through acquisitions. In the first three months of this year, the number of sales that closed jumped 56 percent from the same time in 2012, according to BizBuySell.com, an online marketplace for small businesses. Retirement was the No. 1 contributor to business sales in the fourth quarter of last year and the first quarter of 2013, according to a recent survey. “It was almost like a light switch went on in January,” says Michael Schuster, a broker with World Business Brokers in Miami. “We started getting a lot of activity with sellers who said, ‘I don’t want to go through another downturn or tough time. I want to see if I could sell my business.’” Sales are so strong in Florida that Schuster’s brokerage is opening two more offices in the state. Three-quarters of the sellers or potential sellers that his company sees are baby boomers, most of whom 10 The Business Connection JuLY 2013

don’t have family members willing to take over their businesses. Some of these owners want to sell just part of their firms, essentially taking on a partner, because they don’t want to keep carrying all the risk themselves. Honey Rand fits the category. After 17 years of running her Tampa, Fla., public relations firm Environmental PR Group, she’s starting to think about selling. The 55-year-old wants to get away from the administrative work that goes into running a business and focus on working with clients. “Like most people who end up starting a business, I’m really good at the work I do, and I’d love the opportunity to wallow around in it,” says Rand. She’s optimistic that she’d be able to sell, because she was approached twice by prospective buyers in the last 10 years. And Rand expects that she would remain with the company for a period following a sale to help with the transition to new management — something that many business owners do. In California, the pace of sales is more of a “slow

pickup, not a huge spike,” says Dave Richards, owner of Keystone Business Advisors, a brokerage in Westlake Village, Calif. “Baby boomers are where we’re really seeing the growth. It’s pent-up demand,” Richards says. One of those boomers is Walt Pocock. In late 2011, Pocock met with a broker to discuss possibly selling his Chino, Calif., business, Palo Verde Landscape Management Co. But he and his wife, Dee, who also worked with the company, weren’t quite ready to let it go. However, selling became “something we were thinking about from then on,” Pocock said. Within a year, the 70-year-old decided he was ready to retire, and Dee, 78, agreed. The difficult business climate was a factor in their decision. “The economy had not been good, and it had been a struggle, and we got tired of the struggle,” he said. They put the company on the market in January and quickly had several bidders. Pocock got his full asking price, and the deal closed April 1. Now he and his wife are looking forward to traveling


around the country in their motor home. Sellers like Pocock are going to keep the market for small businesses thriving for years to come. “Trillions of dollars of business value are going to change hands in the next 10 to 20 years,” says Bob Balaban, managing director at Headwaters MB, an investment bank based in Denver. He believes so-called “strategic acquisitions” — purchases by companies looking to expand — will be a key factor in that trend. In a tight economy, companies looking to grow feel that it would take years to build up their businesses. “They have to do acquisitions to continue to grow and grow quickly,” Balaban says. Buyers appear to be ready to step up and are looking for companies that will be good fit with their existing operations. Health-care related businesses like medical billing firms, pharmacies and even medical and dental practices are particularly in demand, says Keystone’s Richards. He’s seeing less interest in restaurants and retailers, industries where profit margins are thinner and where many companies are still struggling. Schuster, the Miami broker, says he sees people who were waiting for the economy to pick up, and they’ve decided that business is good enough for them to take the plunge. “There’s a lot of people who were sitting on the sidelines and could not do that anymore — the election’s over and things are getting better,” he

says. Sellers are benefiting from this trend because buyers are willing to pay more money if a deal will quickly get them into the markets they want to serve, says Mike Carter, CEO of BizEquity, a company that helps businesses calculate their sales price. “For a growth company, we’re seeing them getting almost 15 percent more than what they were getting four years ago (during the recession),” he says. Creative Kidstuff, a toy retailer based in Minneapolis, just expanded by buying a 26-yearold online and catalog toy retailer, Sensational Beginnings. Roberta Bonoff, CEO of Creative Kidstuff, said the owner was tired and ready to sell. Bonoff declined to disclose the purchase price, but said “everybody walked away from the purchase with their needs met.” Both companies serve similar markets, but 87 percent of Creative Kidstuff ’s revenue comes from its six traditional brick-and-mortar stores. Buying Sensational Beginnings will allow it to expand its online operations. “We just found this as an opportunity to grow our online business and theirs and have more people get to know who we are,” Bonoff says. She has her ear to the ground for more opportunities to expand. “When the opportunity looks like the right fit,

we’ll do it,” she says. BCER, an engineering firm in Arvada, Colo., bought another engineering business, Rimrock Group, which specializes in designing technological systems for new buildings and renovations. The purchase allowed BCER to immediately expand into an area of expertise it didn’t have — and that would have taken it years to develop by putting a staff together one by one. “Growing things organically is very difficult,” says Marc Espinosa, president of BCER. “I had been discussing seriously for two years, how could we develop this specialty in our company?” Some buyers are looking to expand into a new geographic area. Jodi Hamilton now owns both of the Dream Dinners franchises in Chicago, giving her the entire territory for the stores where customers assemble ingredients for dinners that they can pack up and take home to cook. Hamilton opened a store two years ago in the city’s Ukrainian Village neighborhood and hoped to expand at some point. Then earlier this year, the owner of a Dream Dinners in the Roscoe Village neighborhood approached Hamilton and asked if she wanted to buy her store. It took Hamilton only about a week to say yes. She nailed down a private loan and closed the deal. “It was too good an opportunity to pass up, knowing that we would have the entire Chicago market,” Hamilton says.

JuLY 2013 The Business Connection 11


chamberc juLY 2013

Monthly publication of the Columbus Area Chamber of Commerc

From the President “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain This fall, I invite you to “throw off the bowlines” and explore new and emerging markets. I am convinced that our community’s business leaders will be more successful when they understand the global marketplace. This is why the Columbus Chamber has selected destinations with deep ties to our community and strong potential for business opportuniCindy Frey ties as part of our World Discoveries travel program. When you “explore, dream and discover” through this program, you will reap many benefits: * You will experience fun, adventure and a sense of discovery. New experiences result in new ideas and renewed creativity. * As you travel with fellow community members, you will create deep personal connections and continuing friendships. * You will benefit from affordable group rates. Furthermore, your Chamber membership enables you to receive a more substantial discount. * Your trip will be led by tour operators who are tested and trusted, which reduces your risk. The 2013-2014 travel opportunities are as follows:

Discover Cuba Oct. 6 – 16, 2013 Become part of a privileged few and discov-

12 The Business Connection JuLY 2013

er a country’s delightful people, unique history and beautiful landscapes. Havana, Hemingway’s Farm – Finca La Vigia, Plaza of the Revolution, the home and studio of artist Jose Fuster, Bocoy Rum factory, San Jose Craft Market and Art Center, Tropicana Show and Francisco Donatien Cigar Factory.

Treasures of Ireland Oct. 28 – Nov. 6, 2013 Experience all the charm of Ireland, from its vibrant, history-filled cities, to its green hills and dramatic coasts. Castle Hotel stay, Killarney, Dublin, Trinity College, Old Jameson whiskey distillery, Cliffs of Moher, Ring of Kerry, Limerick, Galway and Blarney Castle.

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July 31 — New Member Orientation, 4:30 p.m., Chamber office, 500 Franklin St. Your chance as a new member to learn about what the Chamber offers and how to make the most of your investment. Program begins promptly at 4:30 p.m. and will move into the Networking Event open to all members.

Our annual Women’s Professional Development Conference will be held Monday, Oct. 28, at the Clarion Hotel & Conference Center. Attendance averages around 240 women from all levels of the career spectrum. We’ll feature keynote speakers Mary Jane Mapes and Julie Shiffman. We will also have local women speak to us about their journeys and hear from a few not-for-profit organizations. Booth space is also available. Email or call Kami for more information: kadams@columbusareachamber.com or 812-379-4457.

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on the move Jennifer Clouse of Hope will work as a sales intern at AgriGold this summer as part of the sales internship program at Purdue University, where she is a student.

Teresa Henderson has joined TD Advertising in downtown Columbus as client relations and product manager. Her position will include project management, client service and product sales and support.

Teresa Henderson

Jeffrey Nolting

Jane Kennedy, associate broker with Century 21 Breeden Realtors, has earned the Graduate Realtor Institute Certification. The institute is designed to educate practitioners about local, state and national real estate practices that affect them, their clients and customers.

Tyler Nay of NTN Driveshaft and Ronald Allen of Toyota Industrial Equipment Mfg. recently received the Indiana Industrial Operators Association’s Operator Award, presented annually to recognize those “who have dedicated themselves to becoming better professional operators.” Jeffrey Nolting has joined JCB as assistant vice president, commercial banker. A Seymour native, he has over 15 years of sales and business development experience in addition to strengths in product management and sales training. At JCB, he is responsible for making and servicing business and individual loans personally or in conjunction with other officers. He has a bachelor of science degree in business administration from Valparaiso University.

Jane Kennedy

Dave Padgett

Sharon R. Barner

Submitted photo

Cally Morris, right, was named Schneck Medical Center’s 2013 Employee of the Year during the 38th annual Employee Recognition Dinner. Morris, who works in obstetrics and gynecology at the Seymour hospital, was nominated by her co-workers. Leslie Stevens, center, with diagnostic imaging was first runnerup, and Walter Hutchinson with plant operations was second runner-up. The program honored 96 employees who contributed 1,250 years of service and 12 retirees who gave 259 years of dedicated service. 14 The Business Connection JuLY 2013

Fred Armstrong

Dave Padgett recently joined the office of Matt Carothers at Northwestern Mutual Financial Network as an associate wealth management adviser. He is a graduate of Indiana University and has more than 15 years of experience in the field of financial services. Sharon R. Barner, vice president and general counsel with Cummins Inc., recently received the 2013 American Inns of Court Professionalism Award for the 7th Circuit. The award recognizes a lawyer or judge whose life and practice display upstanding character and integrity as well as dedication to the highest standards of the legal profession and rule of law. Before joining Cummins, Barner worked with the U.S. Patent and Trademark Office and was a partner at the Chicago firm of Foley & Lardner. She is a graduate of Syracuse University and the University of Michigan Law School. Former Columbus Mayor Fred Armstrong has accepted the part-time position of executive in residence for Ivy Tech Corporate College in Columbus. In this capacity, he will meet with CEOs, general managers and other high-level officials of business and industry in order to determine their training and service needs, evaluate current programming, recommend changes and new programs, and develop a strategic plan to implement long-term training programs. JCB won two MAXI Award(s) at the Mega Conference of the Indiana Bankers Association in Indianapolis. MAXI Awards are presented annually to IBA-member institutions to recognize bank marketing excellence in Indiana. JCB’s special event award was for JCB Neighborfest, a long-standing community event in Columbus held in partnership with the Columbus Area Arts Council. Katherine Smith, assistant vice president


Kim King Smith of Edinburgh was recently named technical editor of the third edition of “Wedding Planning for Dummies” wedding advice manual. Her business, Kim King Smith Events, is a bridal consulting and event management company specializing in coordination services, decor, entertainment, invitations and luxury destination/honeymoon travel. Information: 317-512-0172 or info@ kimkingsmithevents.com.

of marketing, accepted the award for marketing excellence. JCB also was recognized as a Five Star Member of the IBA. The bank earned the award in recognition of its commitment to the IBA in the areas of political awareness, issues advocacy, life-long learning, volunteerism and Preferred Service Provider utilization. Holly Sipe, vice president of organizational services, accepted the Five Star Member award. Katherine Smith

Holly Sipe

Pamela Rennekamp

Luke Clark

The cardiology practice of Indiana Heart Physicians–Columbus has begun transitioning to a new name, Southern Indiana Heart and Vascular. The new name reflects the practice’s heart and vascular services across the region, with offices in Columbus, Seymour, Greensburg and North Vernon. The practice is joining Columbus Regional Health Physicians, previously called Physicians Practice Organization. There are now 19 physician practice divisions representing primary care and specialty care with Columbus Regional Health Physicians. Physicians at the practice are David Hamilton, Mark Hatfield, Melinda Hunnicutt, Samantha Lucas, Soo Park and Kevin Preuss. Joining the practice this summer will be Drs. Firas Ghanem and Nandu Gourineni.

Kim King Smith

Southern Roofing Inc. of Columbus was recently presented the 2013 Master Contractor Award for roofing system excellence by Firestone Building Products Co. The award was given to just 260 of the more than 3,000 licensed contractors in the Firestone Red Shield network. In addition, the company was one of 174 firms chosen to receive the Firestone Inner Circle of Quality Award for maintaining a high level of quality execution over time. Kidscommons, 309 Washington St., has received the TripAdvisor Certificate of Excellence award. The award, which recognizes hospitality excellence, is given only to establishments that consistently achieve outstanding traveler reviews on TripAdvisor. — Staff Reports

Pamela Rennekamp has accepted the position of executive director of human resources at Ivy Tech Community College – Columbus/Franklin. She will be responsible for staffing, recruitment, affirmative action, college policies and procedures, legal compliance, compensation, benefits, performance management, employee relations, and training and development. She holds an associate degree in accounting, a bachelor’s degree in business management, and a master of business administration with a human resource focus. Previous positions include vice president and director of human resources at Rush Memorial Hospital and regional human resources/employee relations support for Trilogy Health Services. She has had extensive experience in developing comprehensive wellness programs for employees and occupational health clients, in administering employee benefits, and in coaching and mentoring administrators on proper documentation for disciplinary and performance improvement plans. Luke Clark has accepted the position of assistant director of admissions at Ivy Tech Community College–Columbus/Franklin. He will participate in recruiting services; make personal contacts; attend college fairs, middle and high school visits, information events, and community activities; assist with the development of collaborative relationships with personnel on campus and at local schools, colleges, universities, and community agencies; and assist with the development and implementation of communication and information tools to prospective students in order to boost college recruitment throughout the Columbus/Franklin region. He has a bachelor’s degree in organizational leadership and supervision from the Purdue College of Technology. Prior positions he has held include program coordinator with Allegis Group Services for the Cummins Engine Business Unit and staff recruiter and activities director at SpringHill Camps in Seymour.

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JuLY 2013 The Business Connection 15


BUSINESS LEADS COMMERCIAL BUILDING PERMITS 806 2ND ST DEMOLITION $0 CLAYCAMP, MATT,OWNER/ CONTRACTOR DEMO REMC BLDG 8929 W RAINTREE DR S COMMERCIAL REMODEL $9,000 HARRISON LAKE ASSOCIATION, OWNER/CONTRACTOR ACCESS BLDG REMODEL 12550 PRESIDENTIAL WAY NEW COMMERCIAL BUILDING $1,787,604 TSUNE REALTY LLC, OWNER FORCE CONSTRUCTION CO INC, CONTRACTOR TSUNE AMERICA, LLC 1604 CENTRAL AVE COMMERCIAL REMODEL $8,000 KRAMER, JOE F. OWNER HOPE HOODS, CONTRACTOR KRAMER KITCHEN REMODEL 11750 NE EXECUTIVE DR COMMERCIAL REMODEL $102,000 SCHALINAKE, BRENDA, OWNER MANAGEMENT RESOURCE SYSTEMS, CONTRACTOR COM REMODEL CARTER’S KIDS

3989 S 525 E COMMERCIAL ADDITION 02 $12,000 CERALAND PARK, OWNER KEVIN RUCKER CONSTRUCTION, CONTRACTOR BLDG ADDN CERALAND 720 SF 5400 ROCKY FORD RD NEW COMMERCIAL BUILDING $282,000 CALVARY NAZARENE CHURCH, OWNER BUILDING CONCEPTS OF INDIANA, CONTRACTOR NEW CHURCH BLDG/CAL NAZARENE 305 4TH ST NEW COMMERCIAL BUILDING $800,000 ZHUO, LIN, OWNER LARRY E VEST JR SEASONS, CONTRACTOR NEW COM BLDG/RESTAURANT 6175 SF 9600 N US 31 COMMERCIAL REMODEL $15,000 LEMLEYS ALEXA M, OWNER/ CONTRACTOR 240 SWEET/LEMLEYS CATERING REM 1400 25TH ST DEMOLITION $0 BARTH CONS SCHOOL CORP/C NORTH, OWNER

May

2225 CENTRAL AVE COMMERCIAL REMODEL $10,000 WILLMORE, GREG H, OWNER/ CONTRACTOR INTERIOR REMODEL

DUNLAP GENERAL CONTRACTOR DEMO BLEACHERS COL NORTH 3300 FAIRLAWN DR COMMERCIAL REMODEL $70,000 FIRST BAPTIST CHURCH, OWNER DRIFTWOOD BUILDERS, CONTRACTOR FIRST BAPTIST CHURCH REMODEL 400 SF

RESIDENTIAL BUILDING PERMITS 4671 BAYVIEW DR $175,000 NEW 2024 SF RES/GAR REYNOLDS, TOM, OWNER REYNOLDS BUILDERS, CONTRACTOR

2501 LINCOLN PARK DR COMMERCIAL REMODEL $195,000 HAMILTON CENTER ICE ARENA, OWNER DRIFTWOOD BUILDERS, CONTRACTOR COM/REM HAMILTON CENTER

2774 BUTTERCUP CT E $150,000 NEW 4928 SF RES/BMT/GAR PHILLIPS DEVELOPMENT INC, OWNER/CONTRACTOR

3040 COLUMBUS CENTER COMMERCIAL REMODEL $50,000 BRIXMOR PROPERTY GROUP, OWNER TAYLOR BROTHERS CONSTRUCTION, CONTRACTOR COM REMODEL 3393 SF

2676 DAFFODIL CT WEST $222,000 RES/NEW M/I HOMES OF INDIANA, OWNER/CONTRACTOR 1945 LAKECREST DR $161,500 NEW 3170 SF RES/GAR BEAZER HOMES, OWNER/ CONTRACTOR

3045 COLUMBUS CENTER COMMERCIAL REMODEL $50,000 BRIXMOR PROPERTY GROUP, OWNER TAYLOR BROTHERS CONSTRUCTION, CONTRACTOR COM REMODEL 2770 SF

2045 LAKECREST DR $146,700 NEW 2909 SF RES/GAR

Business Indicators for Bartholomew County Percent changes APR 13/ APR 13/ Description APR 13 MAR 13 APR 12 MAR 13 APR 12 Labor Force

41,439

41,010

40,734

1.0

1.7

Household Employment

38,920

38,078

38,298

2.2

1.6

Unemployment Rate (pct)

6.1

7.1

6.0

— Center for Business and Economic Research, Ball State University 16 The Business Connection JuLY 2013


BEAZER HOMES, OWNER/ CONTRACTOR

CONSTRUCTION, OWNER/ CONTRACTOR

(lawn care), 1130 W 230S, Columbus

2115 LAKECREST DR $141,000 NEW 2909 SF RES/GAR BEAZER HOMES, OWNER/ CONTRACTOR

5070 SOMERSET CT $679,000 NEW RES HERNDON, FERNDON, OWNER COLUMBUS CONSTRUCTION, CONTRACTOR

Jared Lemert Sr., DBA Jared’s Remodeling and Repair Services, 4103 S 1000E, Columbus

2160 LAKECREST DR $174,100 NEW 3766 SF RES/GAR BEAZER HOMES, OWNER/ CONTRACTOR 6770 N RIVER RD $155,000 NEW 3519 SF RES/GAR SHATTO, GREG, OWNER TK CONSTRUCTORS INC, CONTRACTOR 2054 PAWNEE CT E $290,000 NEW RES THOMPSON CONSTRUCTION, OWNER/CONTRACTOR 3788 PAWNEE TRL $259,000 RES/NEW THOMPSON, KEVIN, OWNER THOMPSON CONSTRUCTION, CONTRACTOR

3772 TAYLOR CT $300,000 NEW RES BREEDEN CONSTRUCTION, OWNER BREEDEN, GEORGE, CONTRACTOR 2618 VIOLET WAY $200,000 RES/NEW MILLER, BILL, OWNER/ CONTRACTOR 2638 VIOLET WAY $200,000 NEW 4361 SF RES/BMT/GAR PHILLIPS DEVELOPMENT INC, OWNER/CONTRACTOR

Elsa Miller, DBA Miller & Associates, 1800 Park Valley Drive, Columbus Emily Phelps, DBA Eccentric Photography, 1640 Maple St., Columbus

Christopher T. and Daphne D. Sweet, DBA Sweet’s Furniture and Décor (retail), 935 Second St., Columbus

LuAnn and Douglas E. Thomas, DBA Shabby Sheep & Ewe (retail knitting and yarn), 1113 16th St., Columbus

Uriel D. Franco and Bonfilio Franco, DBA Excel Cleaning Services (janitorial), 6834 Continental Drive, Columbus

Tyra Newsome, DBA Ty’s Home Services Inc. (residential/commercial cleaning and services), 8656 Garrity Road, Freetown

Brian S. and Leah M. Seniour, DBA S&L Lawncare, 209 E. Park Drive, Edinburgh

Tonya Jifkins and Cheryl Starks, DBA Bubba Licious (slushies and food), Hope

Larry Rowe Jr. and David A. Darnall, DBA New View Painting Co. (residential painting), 4420 W. Lowell Road, Columbus

Stacey Gross, DBA GSH Graphics (graphic design and vinyl cutting and application), 9936 W. Raintree Drive N., Columbus

2658 VIOLET WAY $200,000 NEW 4050 SF RES/BMT/GAR PHILLIPS DEVELOPMENT INC, OWNER/CONTRACTOR

FOR

6209 REGENCY DR $150,000 NEW 2181 RES/GAR BROWN, CARL, OWNER PRATT, TIM/BREEDEN INC, CONTRACTOR

2815 W 300 S $200,000 NEW 3024 SF RES/BMT/GAR BOAS, TRACEY D, OWNER COLUMBUS CUSTOM BUILDERS, CONTRACTOR

INDUSTRIAL • RESIDENTIAL COMMERCIAL ROOFING SPECIALISTS

15440 S 525 W $500,000 NEW RES ENGELAU, EDWARD, OWNER EMP CONSTRUCTION, CONTRACTOR

918 WESTCREEK DR $349,000 NEW 6143 SF RES/BMT/GAR KHAN, ADIL, OWNER SUBLETTE CONSTRUCTION LLC, CONTRACTOR

2313 SHADOW BEND DR $130,000 NEW 2570 SF RES/GAR BEAZER HOMES, OWNER/ CONTRACTOR

CERTIFICATES TO DO BUSINESS UNDER ASSUMED NAME

2333 SHADOW BEND DR $129,000 NEW 2331 SF RES/GAR BEAZER HOMES, OWNER/ CONTRACTOR 6205 SHERIDAN DR $195,000 NEW 2094 SF RES/GAR WAGNER, KENT

Slate roof and lead coated copper steeple at North Christian Church, Columbus

James D. and Pamela H. Faber, DBA Faber Property Management, 619 Lafayette Ave., Columbus James D. and Pamela H. Faber, DBA Faber & Associates (consulting), 619 Lafayette Ave., Columbus Richard C. Leslie, DBA D&R Property Management

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JuLY 2013 The Business Connection 17


Around the WATERCOOLER Fair Oaks foreclosure sale set

A court-ordered sheriff ’s sale of Fair Oaks Mall is back on the calendar for a July 9 auction to the highest bidder, the Bartholomew County sheriff ’s office said. The biggest question now becomes how many bidders will show up that day for the 10 a.m. sale, designed to settle debts the mall’s owners ran up with lenders. Secondly, will a serious buyer emerge with the real estate skill to give the struggling property a fresh chance for success as a shopping center? The sheriff ’s sale originally was scheduled to take place May 14, but attorneys representing lead lender Wells Fargo Bank asked the sheriff ’s department for a delay. Fair Oaks, on 25th Street near Central Avenue, has been dealing with several dozen store vacancies and dwindling interest from consumers for years.

Swap approved

Columbus City Council has approved a land swap between the city and Bartholomew Consolidated School Corp. The school district will receive property surrounding Richards Elementary School, and the city will receive a large field between Noblitt and Mill Race parks along the People Trail.

Columbus among growth leaders

The city of Columbus added residents at a faster rate than about 93 percent of the nation’s cities and towns between 2011 and 2012, according to Census Bureau data. Compared with the rest of Indiana, Columbus fared even better. The city’s growth rate of 1.71 percent ranked higher than all but 26 of the state’s 569 cities and towns included in the data. State demographer Matt Kinghorn said that while communities around Indianapolis continued to post strong population gains — though smaller increases than before the recession — much of the rest of the state saw population declines. That’s a worrisome sign, he said. 18 The Business Connection JuLY 2013

About 71 percent of the state’s cities and towns posted no population gain between the summer of 2011 and the summer of 2012. The state grew at a mere 0.3 percent, Kinghorn said, which was the slowest annual growth since 1986.

Garden City possible Superfund site

A federal agency wants to add Garden City to its high-priority cleanup list because of its contaminated groundwater and wells. The unincorporated town of about 50 homes lies between downtown Columbus and the Bartholomew County 4-H Fairgrounds along State Road 11. The U.S. Environmental Protection Agency suggested adding the town and eight other hazardous waste sites nationwide to the National Priorities List of Superfund Sites. The federal program investigates and cleans up hazardous waste sites. According to an EPA fact sheet, Garden City drinking-water wells have shown intermittent trichloroethene, or TCE, contamination since 1990. The source of the contamination is unknown, according to the EPA, and the underground plume covers about 3.4 acres.

SCI buying Stewart for $1 billion

HOUSTON — Service Corp. International plans to buy Stewart Enterprises Inc. in a cash deal valued at about $1.13 billion that combines the two largest funeral home and cemetery operators in the United States. Houston-based Service Corp., parent company of Hathaway-Myers Chapel and Myers-Reed Chapel in Columbus and Bond-Mitchell Funeral Home in Nashville, will pay $13.25 for each share of Stewart, based in Jefferson, La. Service Corp. said the combined company will operate 1,653 funeral homes and 515 cemeteries in the United States, Canada and Puerto Rico. The boards of directors for both companies have approved the deal, which adds up to $1.4 billion when counting Stewart’s debt, but Stewart

shareholders still need to vote on it. The companies expect to close it by the end of the year or in early 2014.

Prudential Realty part of growing trend

Prudential Indiana Realty Group Cos., headquartered in Indianapolis, ranked 82nd in the 2012 REAL Trends list of the 500 largest residential real estate brokerage firms in the nation. Prudential Indiana Realty includes offices located in Columbus and Seymour, locally owned by Lonn and Cheryl Stuckwish. While the REAL Trends 500 represented less than three-fifths of one percent of all brokerage firms in the country, they controlled close to 30 percent of all new and resale transactions completed by brokers during the year. REAL Trends Inc. is a Denver-based research, publishing and communication company.

Financial firm coming to Columbus

Grabovsky and Associates, an Ameriprise Platinum Financial Services practice located in Indianapolis, plans to open an office at 832 Washington St. in downtown Columbus. The family owned and operated firm provides personalized financial planning and investment management services to individuals, families and small businesses.

New bioscience center

INDIANAPOLIS — Some of Indiana’s top life sciences companies and research universities have formed a biosciences institute Gov. Mike Pence calls “a big deal” that will spur scientific innovation and lure new jobs, investment and leading scientists to the state. The new Indiana Biosciences Research Institute is a collaboration involving Eli Lilly & Co., Dow AgroSciences, Roche Diagnostics, Cook Group, Biomet Orthopedics, Indiana University Health and the life sciences industry group BioCrossroads. Purdue University, Indiana University and the University of Notre Dame have also joined the institute, which will help turn scientific discoveries


made at those schools into commercial products. The institute has received $25 million in startup funding from the state Legislature and is seeking another $25 million from industry and philanthropic sources.

Impreza small car there in 2016. Lafayette Mayor Tony Roswarski says the factory that opened in 1989 has far exceeded expectations. He says he’s pleased with Subaru’s continued confidence in the city.

Indiana moving business filing reminders online

IU names business school dean

INDIANAPOLIS — Indiana Secretary of State Connie Lawson is moving away from paper to email for reminders for Indiana businesses to file their annual reports with the state. Lawson said the state will stop mailing paper reminders to businesses and is shifting everything online. She’s asking businesses to update their email addresses with the state. Indiana businesses must file annual business entity reports with the state. Businesses that file online will also receive a discounted fee. Lawson expects the change will save roughly $100,000 a year.

Subaru plant growing

LAFAYETTE — State and local leaders are praising Subaru’s plans for a $400 million expansion of an Indiana factory that is expected to add 900 workers. The factory now has about 3,600 employees. Subaru says it will double capacity at one of the factory’s two assembly lines and start building the

BLOOMINGTON — Indiana University has chosen interim dean Idalene Kesner to become the next dean of its Kelley School of Business. Kesner was associate dean of faculty and research and the Frank Popoff Chair of Strategic Management before becoming interim dean when predecessor Dan Smith left last October to become president of the IU Foundation. IU President Michael A. McRobbie says Kesner is an internationally recognized business scholar and a renowned teacher who has had several key leadership roles during her 18 years at the Kelley School. IU says Kesner’s appointment comes after an exhaustive national search.

Carbon Motors pulls equipment

CONNERSVILLE — A company whose plans to build high-tech police cars stalled when the federal

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government rejected its loan request has taken its equipment from an eastern Indiana plant. Crews cleared out the Carbon Motors plant in early March. City workers have painted over the Carbon Motors logo on the entrance and exit signs at the plant. The company had leased part of a vacant Visteon plant, but that agreement expired at the end of March. Carbon Motors arrived in Connersville in 2009 with pledges to build its high-tech police cars at the idled auto parts plant. But the U.S. Department of Energy rejected its bid for a $310 million loan in March 2012. Company officials had been seeking private funding for the project.

Duke has new economic plan

PLAINFIELD — Duke Energy, the state’s largest power company, says it’s revamping its Indiana economic development program to improve opportunities for communities to attract jobs and capital investment. Duke said that its new “Site Readiness Program” will provide funding and expertise to help communities promote industrial sites in its service territory. It says three to five projects may be selected annually and that it may invest up to $30,000 per property. Bart Beal, Duke Energy Indiana community

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coach’s corner

Mark McNulty

The feeding and watering of your business team While you are busy growing your business, who is taking the time to water and feed your employees? There is only so much time in your day for you to do things, and as the business grows you need to rely on your employees, your team, more and more. The worry that your team can’t do it as well as you can has probably crossed your mind and even prevented you from delegating something. If you don’t make a plan to get out of that rut, you are guaranteed to remain stuck in it. In the past, I have written that one of the characteristics of a winning team is that the team knows and shares the goals. We usually talk about this at the business or departmental level, but it also applies at the individual level. How

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can we expect our employees to be super achievers if we haven’t told them what we expect of them and had them agree to do what we expect? There are two parts to getting this agreement — the first is having a position description for each employee, which outlines the key responsibilities (not all) and the results you expect from the person in that position. Don’t confuse this with a job description, which is typically an attempt to list every possible task you might ask someone to do. Those don’t work, as they miss the point by leaving out the most important thing, the results you expect. The second part is the position skill matrix. This document lists the skills you expect the person to learn and more importantly, the extent to which you expect them to learn each skill. There may be anywhere from 10 to 50 specific skills or tasks you expect someone to have some level of expertise in, and you need to get agreement with each team member on their skill requirements, their current level of achievement and the expected level of achievement. Creating a skill matrix is a two-step process. Step 1 is the easy one, identifying all of the skills/tasks you feel they need to master. I highly recommend asking your team for ideas on the skills to be listed as well. The second step is a little harder, but vitally important. You need to determine to what level each position should master a skill. I use four levels of achievement: aware, user, specialist and expert. • Aware — This means that the employee needs to be aware of the skill/task and understand why it is important and how it fits into the big picture. They are not expected to be able to perform this task, but understand it well enough to perform their other tasks more productively as a result of the awareness. • User — This means that the employee is expected to be able to perform the task with moderate supervision and understands the expected result of the activity. This means the employee has been trained and performs this task regularly enough to maintain a basic level of competence at performing the task and getting the desired result. • Specialist — This means that the employee is expected to perform the task at a highly productive rate with little or no supervision. The specialist is also expected to train other team members to the aware and user levels. The specialist is also expected to identify improvements in how the tasks can be performed and better results achieved. Specialists may have certifications and other evidence that they have mastered a particular area/function. • Expert — This means that the employee has achieved complete mastery of the task/activity and can teach others both inside and outside your company. Your experts will have advanced certifications and perhaps industry recognition of their skills and may be involved in industry efforts to improve the state of the art in their areas of expertise. Armed with a simple skills spreadsheet and these four basic definitions, you now have a powerful assessment and development tool for your team that you can use to grow their ability to help you achieve your mission. Your team is your biggest asset. Don’t forget to keep them watered and fed. Mark McNulty is a business coach with ActionCoach Business Coaching. He can be reached at 372-7377 or mark@coachmark.biz.


Eye on the pie

Morton Marcus

More than jobs should be considered When you come down to it, having a job isn’t enough to make it in modern America. With a lowpaying job, you are likely to be on food stamps, your kids in the federal school lunch program and your parents on Medicaid. Thus, while it is wonderful for governors and mayors to announce new jobs, the level and growth in the average compensation of those jobs are of equal importance as the jobs themselves. First, three explanations: In the following paragraphs jobs refer to both full-time and parttime jobs. Metropolitan statistical areas (MSAs) cross state lines; the Chicago MSA includes northwest Indiana; Louisville and Cincinnati MSAs both extend into parts of southeastern Indiana. Compensation includes wages, salaries, bonuses, as well as company-paid benefits such as health insurance. In 2011, average compensation per job in 366 metropolitan areas equaled $52,581. Six of the 16 MSAs containing Indiana counties exceeded this level: Chicago (19th in the nation) at $67,867 was far ahead of Cincinnati (70th) at $58,062. These were followed by Columbus (79th), Indianapolis

(80th), Kokomo (120th) and Louisville (137th). These six metro areas suggest that the bestpaying jobs are in or near the biggest cities and perhaps in those smaller towns dominated by a single company where labor and management work together well. The next five MSAs tell different stories: Evansville, Fort Wayne, Lafayette, Elkhart-Goshen and South Bend-Mishawaka fall into a narrow range between $48,300 and $50,800. The final five include Michigan City-La Porte, Terre Haute, Bloomington, Anderson and Muncie. The last two are ranked 351st and 353rd of the 366 metro areas of the nation. These last five are towns that once had thriving manufacturing establishments but have seen off-shoring plus productivity enhancements diminish their employment status. The average annual growth rate of per job compensation was 3.4 percent for the 366 metro areas. The rate of increase in consumer prices for 2001 to 2011 averaged 2.2 percent per year. Only seven of the 366 MSAs fell below 2.2 percent and showed no real growth in compensation per job. In that group of seven were Anderson (ranked 364th)

watercooler continued from page 19 relations and economic development vice president, says the new program is aimed at improving a community’s competitive edge by providing more certainty for businesses to locate and develop projects quickly. Duke Energy has nearly 800,000 customers across central and southern Indiana.

Informatics and Computing. The winning teams will work with a mentor group of CEOs and entrepreneurs. Fourteen private business owners who invested in the 2013 competition judged the 32 submissions received from IU-Bloomington students. Company officials say the investment will help preserve 1,650 jobs at the four plants.

2 student start-ups win IU competition

FedEx building new distribution center

BLOOMINGTON — Two student teams from Indiana University are sharing a $200,000 investment for their ideas for startup businesses. The university says one of the teams created a real-time, interactive social platform for users to experience sports and live events with friends and other fans. The other created an Internet-based tuxedo rental business that provides online fittings via webcams. Each company will receive a $100,000 investment. The companies were founded by students from Kelley School of Business and the School of

ZIONSVILLE — FedEx is set to start building a new, 300,000-square-foot package distribution center in Zionsville a couple of miles north of Interstate 465. The company says the new facility will cost $40 million. The company plans to open the center in August 2014 with about 200 workers, although most will be transferring from an existing Indianapolis FedEx facility. FedEx says that Indianapolis center will remain open, and both sites are expected to add employees over time.

and last place (366th) reserved for Kokomo. A high level of compensation may be a legacy of growth in the distant past. For example, Boulder, Colo., ($66,800) ranked 22nd in average compensation per job, but only 341st in growth of such earnings from 2001 to 2011. Detroit ($63,200), a better-known example, ranked 38th in compensation per job but 358th in its growth rate. The fastest-growing MSAs were places where there are significant military installations. For example, Jacksonville, N.C., is home to Camp Lejeune, while Lawton, Okla., serves nearby Fort Sill. Columbus’ growth rate was Indiana’s only representative in the top half of all MSAs in the country. Economic development agreements should include the level and growth rate of compensation per job a company offers before tax breaks are considered. Morton Marcus is an independent economist, writer and speaker. Contact him at mortonjmarcus@ yahoo.com.

Fertilizer group to continue

INDIANAPOLIS — Pakistan-based developers who want to build a fertilizer plant in southwest Indiana say they’ll continue with the project despite the withdrawal of state incentives. Midwest Fertilizer Corp. issued a statement in response to Gov. Mike Pence’s announcement that he had ordered financial support for the Posey County plan withdrawn due to concerns about whether its Pakistan-based owners are doing enough at its overseas operations to keep the potentially explosive material from being used against U.S. troops. The company says the Fatima Group has begun tracking its product and suspended sales of a chemical used in both fertilizer and explosives in some Pakistani provinces. Midwest says it’s still exploring options with local economic development officials. The company says the plant is expected to create 300 permanent jobs. see watercooler on page 22 JuLY 2013 The Business Connection 21


Ex-Irwin leaders face federal suit FDIC: Bank approved 19 faulty loans, causing millions of dollars in losses By Boris Ladwig n The republic

A $42 million lawsuit by Federal Deposit Insurance Corp. alleges that four former Irwin Union Bank officers approved risky loans for millions of dollars — including one to a broke college student without income — without properly examining whether the debtors could make the loan payments. FDIC, the agency that helps oversee the nation’s financial industry, said in its lawsuit that the four executives “negligently, grossly negligently and in breach of their fiduciary duties approved 19 poorly underwritten” development and commercial real estate loans. The lawsuit, filed in U.S. District Court in the Southern District of Indiana, contends that the banking executives disregarded clear deficiencies in the loan applications, resulting in millions of dollars in losses for the Columbus-based bank. The former bank officers named in the suit are Bradley J. Kime, Irwin Union’s president of commercial banking; Duncan Burdette, Irwin Union’s chief credit officer; Kim Roerig, executive vice president of U.S. banking; and Michael Waters, senior vice president. According to court documents, one case involved a planned 107-unit apartment complex in Glendale, Ariz., for which all four officers approved issuing a $4 million loan to a 24-year-old college student whose prior three years’ tax returns reflected no watercooler continued from page 21

Foes of fertilizer plant cite Texas explosion

ROCKPORT — Opponents of a proposed southern Indiana fertilizer plant are arguing that state officials should block the project because of dangers highlighted by April’s deadly explosion at a Texas fertilizer manufacturer. An Illinois businessman is seeking permission to build a fertilizer plant projected to cost $950 million near the Ohio River city of Rockport. John Blair of the environmental organization Valley Watch says the proposed Rockport plant is much larger than the one in Texas where 14 people died in an explosion. The Indiana Department of Environmental Management is considering an air pollution permit for the plant site about 30 miles east of Evansville.

Jeffersonville to overhaul marina

JEFFERSONVILLE — The city is working on plans to overhaul its public downtown marina along 22 The Business Connection JuLY 2013

income and whose reported net worth of $7.5 million “was adjusted to zero after removing $7 million in property owned by his mother and $500,000 in cash that could not be verified.” According to the FDIC suit, the loan went into default and caused a loss of at least $2.59 million. FDIC wrote that Kime, Burdette and Roerig also approved a loan of roughly $15 million for a planned 330-unit condominium development, Tuscany Villas in Phoenix, for which the property, valued at $31 million, was to serve as collateral. However, FDIC wrote that the property would be valued at $31 million only after the 330 units were completed. At the time the loan was issued, the land was bare and valued at $10.8 million. The borrowers defaulted on the loan, FDIC wrote, causing a loss of at least $2.23 million. On Sept. 18, 2009, Irwin Union Bank became the first failed bank in Indiana in 17 years. The bank had been an entrenched and historic hometown business whose roots dated to a mercantile store in the 1850s. Irwin Financial Corp., the parent company of Irwin Union, lost more than $450 million in its last six quarters before it failed, in part because people struggled to repay loans, particularly high-risk, home-equity loans and mortgage loans in Western markets that were heavily affected by the recession. IFC’s collapse wiped out shareholder value of roughly $1 billion. The corporation’s CEO at the time, Will Miller, was a fifth-generation descendent of J.I. Irwin, who in 1850 launched the mercantile store that would become IFC. The corporation’s demise came about in part through a failed expansion strategy in the western

U.S. and risky home-equity loans. Irwin Union routinely issued home-equity loans without collateral, a practice that worked as long as real estate prices kept rising: A few months after obtaining the home and the loan, the owner could sell the home for a tidy profit — even after paying back the mortgage and home-equity loans. That mechanism faltered when the recession began and home prices plummeted. The Western expansion strategy, selling mortgages in high-growth areas such as Phoenix and Las Vegas, initially produced healthy profits for IFC. But when the economy soured and expelled millions of workers, and properties started losing value, people began struggling to pay back loans, especially in the West. In 2006 in southern Indiana, about 1 in 714 of Irwin Union‘s borrowers defaulted on their loan, according to filings with the Securities and Exchange Commission. In 2007, the rate grew to 1 in 189. In 2008, it fell to 1 in 263. In Las Vegas, however, the default rate of Irwin Union-issued loans in 2008 jumped to 1 in 5.6. The four former Irwin Union officers and their attorney, Jim Knauer, of Indianapolis, could not be reached Tuesday. A spokeswoman with the FDIC said the agency does not comment on pending litigation. A similar lawsuit that sought more than $570 million from three former IFC executives, including Miller, was dismissed last year. Elliott Levin, the trustee assigned to the Irwin Financial bankruptcy, had filed the suit, but Judge Sarah Evans Barker dismissed all claims against the former executives, ruling that only the FDIC had standing to bring such a suit.

the Ohio River. Jeffersonville officials say the city has received a $100,000 state grant toward the venture. The city’s plans for the nearly $400,000 project include a new fishing pier, 23 new floating boat slips and a reconstructed boat ramp. A second state grant for $53,000 will help pay for work to reduce the amount of boat sewage pumped into the river from the city just north of Louisville, Ky.

month that it also plans to close this summer. Allied executive Hans Heinsen says production from the Elkhart ambulance plant will be moved to a Florida factory in the coming months.

New owner closing ambulance plant

ELKHART — The new owner of an Elkhart factory that builds ambulances has decided to shut it down, eliminating 165 jobs. SJC Industries has notified the state that it will start terminating employees in July as it completes production work there. The decision to close the Elkhart factory comes two weeks after Allied Specialty Vehicles bought SJC Industries. The subsidiary of a New York-based private equity firm also bought a Monoco RV factory with 520 workers in nearby Wakarusa this

GM investing $30 million in Bedford

BEDFORD — General Motors says it plans to invest nearly $30 million for the production of two new engines and other auto parts at its Bedford Castings plant. GM said the Bedford plant will receive $19 million to produce components for a small gas engine and $10.4 million to produce components for a new 8-speed and existing 6-speed transmissions. The money is part of a $332 million investment GM plans to make at four plants in Indiana, Ohio and Michigan. The money will finance production of new, small V-6 engines and more fuel efficient 8-speed transmissions. — Staff and Wire Reports


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Business Connection July 2013  
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