$2.00/JULY 11 - 17, 2011 NEWSPAPER Looking to save money on your health insurance? Look inside for more details... DON’T STICK A FORK IN THE WAREHOUSE DISTRICT JUST YET Its restaurants lie amid $2 billion in development. But will safety issues and competitors derail their place in Cleveland’s culinary landscape? VOL. 32, NO. 28 INSIDE: BANKRUPT CARDINAL FASTENER SEEKS OUTSIDE INVESTMENT TO AVOID SALE PAGE 3 By KATHY AMES CARR [email protected]as the Warehouse District restaurant scene lost its mojo? Some say what was once the sizzling restaurant hub of downtown Cleveland is fizzling. Others reject that view, contending instead that the district’s restaurant mix is undergoing a transition and is poised to gain steam when the city’s $2 billion in development projects materialize. “The casino, medical mart and convention center and Flats East Bank form a triangle, and the Warehouse District is right in the middle of it,” said Thomas Yablonsky, executive director of the Historic Warehouse See WAREHOUSE Page 9 H
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DON’T STICK A FORK IN THEWAREHOUSE DISTRICT JUST YET
Its restaurants lie amid $2 billion in development. But will safety issues and competitors derail their place in Cleveland’s culinary landscape?
VOL. 32, NO. 28
INSIDE: BANKRUPT CARDINAL FASTENER SEEKS OUTSIDE INVESTMENT TO AVOID SALE PAGE 3
as the Warehouse District restaurant scene lost itsmojo?
Some say what was once the sizzling restauranthub of downtown Cleveland is fizzling. Others reject
that view, contending instead that the district’s restaurant mix is undergoing a transition and is poised to gain steam when thecity’s $2 billion in development projects materialize.
“The casino, medical mart and convention center and FlatsEast Bank form a triangle, and the Warehouse Districtis right in the middle of it,” said Thomas Yablonsky,executive director of the Historic Warehouse
section, Crain’s identifies andprofiles 15 ofNortheastOhio’s leadingbusinesswomenwho are making a difference in their respectivecommunities.
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BEHAVIORAL HEALTH CARE DIVIDEPrivate insurance is considerably less likely to be tapped to cover behavioralhealth care than it is to cover other health services, according to Kaiser Foundation data included in a new Center for Health Affairs report, “BehavioralHealthcare Checkup: Are We Where We Need to Be?” (Behavioral health disorders include mental illness and substance abuse disorders.) The Centerfor Health Affairs report finds that more than 2.8 million Ohioans have a diagnosable mental illness and more than 850,000 have a substance abusedisorder. Here’s how treatment for those problems is paid:
Behavioral health care All health servicesMedicaid 26% 17%
Private insurance 24 37
Other state and local 21 6
Out of pocket 11 13
Medicare 7 18
Other federal 7 5
Other private 4 4
SOURCE: KAISER COMMISSION ON MEDICAID AND THE UNINSURED, APRIL 2011
A Page One, June 27 storymisidentified the vice president ofmarketing and business developmentfor the International ExpositionCenter. He is Eric German. The storyalso stated that the city of Clevelandbought the I-X Center from Park Corp.for $30 million. While the city did pay$30 million in cash for the facility, italso gave Park Corp. use of thebuilding rent-free through 2014, whichmakes the total value of the transac-tion more than $30 million, accordingto a Park Corp. representative.
JULY 11 - 17, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3
THE WEEK IN QUOTES“(The Warehouse Dis-trict is) still a viablelocation for somerestaurants, but it’snot a good fit for myconcepts.”— Chef Zachary Bruell, whose fifthlocal restaurant, Cowell & HubbardCo., will be in the PlayhouseSquaretheater district. Page One
“For a building withthis kind of vacancyissue, financing ishardly a gimme.”— Neil Viny, principal, DaladGroup. Page 11
“If you’re not going todo anything else withsocial media, at leastlisten.”— Rose DiPietro, director of online marketing, Council ofSmaller Enterprises. Page 15
“Our definition of asustainable operationis for your business torun on its own. As faras we’re concerned,we have a sustainableoperation … in moreways than one.”— Michele Bishop, co-owner, Urban Organics. Page 15
Cardinal piquesthe interest ofpotential buyersBankrupt manufacturer reorients courseafter financial issues disrupt operations By DAN [email protected]
Cardinal Fastener & Spe-cialty Co. plans to emergefrom Chapter 11 bankruptcyprotection and remain asignificant supplier of boltsto the wind energy industry,its president says. But thecompany in Bedford Heights likelywill have a big new investor — if nota new owner — when the reorgani-zation process is finished.
Cardinal filed for Chapter 11 June30, and has revealed in court papersthat it’s talking to at least four possible buyers that have expressedinterest in the company. One is anunidentified German company thatvisited Cardinal last Thursday, July7, to conduct due diligence. Cardinalsaid in the filings that this potentialbidder might serve a stalking horseto help set a price for a sale of thecompany, though the German com-
pany ultimately could buyCardinal outright.
Cardinal president JohnGrabner said he hopes andexpects to stay on, even ifthe company is sold, andhe believes other employeesand company officers willremain as well.
“From everything anyonehas told us, they want to buy Cardinalfor its people and its culture,” Mr.Grabner said in an interview lastweek. “It’s not just the equipment.”
Mr. Grabner’s first choice, though,is to recapitalize the company withthe help of an outside investor,rather than sell it. Cardinal officialsare talking with at least three poten-tial investors as well as buyers, according to Mr. Grabner and courtdocuments.
Cardinal is up and running withabout 20 employees now, Mr. Grabnersaid, though that’s less than half its
Grabner
Court-appointed receiver to take reins of ailing Parmatown MallBy STAN [email protected]
Prospects for Parmatown Malland Shopping Center are so chal-lenging that its owners — membersof Forest City Enterprises Inc.’sfounding families — have agreed to let a court-appointed receiver assume control of the 1 million-square-foot landmark that played a big part in Forest City’s early
growth.U.S. Bank, which serves as
trustee for a $60 million securitizedloan against Parmatown, received approval last Wednesday, July 6,from Cuyahoga County CommonPleas Judge John O’Donnell tomake the Cleveland office of CBRichard Ellis the receiver for theproperty.
The move puts an outside groupin control of the mall and associated
shopping center for the first timesince their inception in 1962 and1960, respectively. Parmatown OneLLC, consisting of members and heirsof the Ratner, Miller and Shafranfamilies that founded Forest City,owns the property.
Parmatown is separate from thepublic company’s multibillion-dollar real estate portfolio. RMS Investments — which takes itsname from the initials of the
founders — manages it.Court documents filed by U.S.
Bank said Parmatown has lost halfits value over the last seven years. It also indicated that unless the receiver is able to change the prop-erty’s course, the lender will be unable to recoup its investment.
Rising vacancy — partly due tothe non-highway location and ageof Parmatown and partly due to retail hemorrhaging in the last
recession — means its value hadplummeted to as little as $25 mil-lion in 2008, according to courtdocuments filed by US Bank.
Robert Gephart, RMS executivevice president, said in an interviewlast Wednesday that the ownersknew the June 24 filing by U.S.Bank was coming. They do not planto contest it, according to Mr.Gephart.
See MALL Page 5
See CARDINAL Page 21
INSIGHT
CUYAHOGA REBOOTS Jeff Mowry is tasked with streamlining IT functions among
web of agencies within a county recuperating from corruption
As Cuyahoga County’s firstchief information officer, Mr.Mowry inherited a hodge-
podge of IT employees, hardwareand software scattered across adozen county agencies.
Now he’s been tasked with turningthat mishmash into a unified IT
department.The Bellville, Ohio, native — who
started his job in April after spendingmore than two years as CIO ofBroward County, Fla., which includesFt. Lauderdale — says he relishesthe chance to come back to Ohioand transform an IT department asbig as Cuyahoga County’s. Not thatit will be easy.
On his long list of priorities is aplan to combine the 97 IT employees
See MOWRY Page 20
JANET CENTURY
Jeff Mowry faces a roster of challenges as Cuyahoga County’s new chief information officer.
“I’ve played Barrington afew times. I know the course.I always enjoyed it,” Mr.Ahuja said. “When I heardthe bank was marketing thenote, the purchase was madequickly. I wanted to makesure the members are sup-portive — and they are. I’m hopingand counting on keeping the gloryof Barrington, a beautiful courseand club, and making it grow.”
Banks typically sell troubledmortgages to get them off of theirbooks, typically at a substantial dis-count. Buying a mortgage providesa back-door way for a new prospec-tive owner to secure the ownershipof the property.
Mr. Ahuja declined to disclosehow much the family-led BGC LLCpaid for the mortgage. PortageCounty land records show BGC acquired the note June 16, but theydo not disclose the price paid for it.
Norman Wells, a past presidentof the club who ran efforts to cureits financial woes, said the club was
seeking a solution whenMr. Ahuja’s mortgage pur-chase presented it with one.
“It’s not one we courted,”Mr. Wells said, “but it appears to be a terrific solution.” He said the clubwas not in foreclosure buthad been trying to workwith the bank because the
club had financial issues.“Typical of a lot of clubs, we were
fine until the economy turneddown,” Mr. Wells said.
The club’s debt resulted from a2006 purchase of the property bythe nonprofit Barrington Golf Clubfrom the estate of the late Bertram“Bart” Wolstein, who developed theJack Nicklaus-designed course andthe tony residential subdivision surrounding it.
Mr. Ahuja said he plans to keepthe Barrington name intact andcontinue to operate it as a privateclub. However, he said he is lookingat making some improvements tothe property because it is approaching20 years of age. The club opened in1994. ■
44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JULY 11 - 17, 2011
After 25 years of dedicated and loyal service... THIS WAS THE COMPANY’S WAY TO THANK YOU.
The Law Firm of David A. Young, LLC represents long-term, highly compensated executives during the termination process. We represent individuals, not corporations.
Crain’s Cleveland Business hasbeen honored with three awards inthe annual Editorial ExcellenceAwards competition staged by theAlliance of Area Business Publica-tions, the industry group for regionalbusiness publications.
Former Crain’s finance reporterArielle Kass won a gold, or first place,award in the category of Best Scoopamong large tabloids for breakingthe story that the Federal Deposit Insurance Corp. had sued AmTrustFinancial Corp. (now AmFin Finan-cial) for $518 million because of thecompany’s alleged failure to serve asa “source of strength” for its formersubsidiary, AmTrust Bank, which theFDIC took over in late 2009.
Government reporter Jay Millerwon a bronze, or third place, awardin the category of Best Local Coverageof National Business or EconomicStory for his look at how public companies in Northeast Ohio thatsuddenly were flush with cash because of a rebounding economywere hoarding their dollars insteadof investing them for fear that the recovery may not be sustained.
And assistant editors Kathy AmesCarr and Joel Hammond won abronze award in the category of BestSpecial Section Design for Crain’s30th Anniversary Issue.
The awards were judged by theUniversity of Missouri’s School ofJournalism and were presented lastmonth at the association’s annualsummer meeting, which took placethis year in Providence, R.I. ■
HammondCarrMiller
Ahuja now a player on golf sceneBusy philanthropistbuys note on Aurora’sBarrington Golf Club
Philanthropist and industrialistMonte Ahuja is in position to add“golf course owner” to his name after recently acquiring the $5.7 million note that Youngstown-basedHome Savings and Loan Co. held onBarrington Golf Club in Aurora.
Mr. Ahuja told Crain’s that he isreviewing his options for how toconvert the debt position to owner-ship of the club, which is possiblebecause the note is nonperforming.He said he wants to take the leastdisruptive course to consolidate hisownership to avoid hassles and tokeep the focus of the operation andthe club’s members on golf.
An ardent golfer, Mr. Ahuja said itwas an easy decision to buy the mul-timillion-dollar mortgage after he
Ahuja
Small law firm mergersoutpace 2010 activityWith dearth of bigger targets, many with agingleadership see acquisition as succession planBy SCOTT [email protected]
The April purchase of Clevelandlaw firm Millisor + Nobil by a Georgiafirm was part of a significant pickupin small law firm merger activity inthe first half of 2011 compared withthe like period a year ago, accordingto data compiled by Altman WeilMergerLine.
Altman Weil, a legal consultingfirm headquartered in NewtownSquare, Pa., reported last week thatthere were 12 law firm mergers andacquisitions announced in theUnited States in the second quarterof 2011 and 28 for the first sixmonths of 2011. The total numberof 2011 combinations at the mid-year point was up 47% from the firsthalf of 2010.
Ten of the 12 deals reported inApril, May and June of this year, including the Millisor + Nobil deal,were acquisitions of law firms with20 or fewer lawyers. The other twodeals were acquisitions of firmswith fewer than 50 lawyers.
Fisher & Phillips LLP, a nationallabor and employment law firm outof Atlanta, absorbed Millisor + Nobilon April 16. Nineteen attorneysfrom Millisor + Nobil, which alsospecializes in labor law, joined Fisher& Phillips. Financial terms of thetransaction were not disclosed.
Altman Weil said the dominanceof small-firm deals continues a
trend that has emerged during therecession. In 2007, before the reces-sion hit, 63% of mergers involvedfirms of 20 or fewer lawyers, accordingto Altman Weil data. For the firsthalf of 2011, that number has jumpedto 86%.
“We see a couple of things drivingthis shift,” said Altman Weil principalEric Seeger in a statement. “In themost desirable acquisition markets,there are few prime law firm targetsleft. Many midsize firms have eitheralready merged, have decided tostay independent, or have spun offfrom larger firms and don’t want togo back, so demand is outpacingsupply in many markets.”
Mr. Seeger said interest amongsmaller firms in being acquired is“driven largely by demographics.”
“A lot of smaller firms are findingthemselves with aging leaders andrainmakers who are getting ready toretire,” he said. “Being acquired canbe a good succession plan for a firmin that situation.”
The Millisor + Nobil deal is illus-trative of this practice.
Steven Nobil and Ken Millisorformed their law firm in 1975. Mr.Nobil continues with the combinedfirm, but Mr. Millisor is retiring.
The complete list of law firmmergers and acquisitions announcedto date in 2011 as well as an archivefrom prior years and a four-yeartrend summary are available atwww.altmanweil.com/mergerline. ■
The lender controlling the 23-story office building at 800 SuperiorAve. in downtown Cleveland is goingthe auction route to find a way out ofowning KeyBank Center, betterknown as the former McDonald Investments Center.
LNR Partners, the real estate financing and investment concernbased in Miami Beach that took titleto the 440,000-square-foot buildingin February 2010, has listed theproperty at Real Estate DevelopmentCorp.’s website Auction.com for anonline auction running from 10 a.m.July 25 to 10 a.m. July 27.
The property carries an askingprice of just $3.5 million, well belowthe $44 million market value theCuyahoga County assigns it forproperty tax purposes.
Alex Jelepis, a Grubb & Ellis Co. senior vice president who is marketingthe property with Guggenheim Real-tors in Beachwood, said the lowstarting price is to attract interest inthe offering. He said he expects thebuilding to sell for more than theasking price.
Michael Guggenheim, whoseGuggenheim Realtors is meeting
with prospective bidders to tour theproperty, did not return three callsabout the sale.
The building, which dates from1969, will have occupancy of just 37% when the Calfee Halter &Griswold law firm exits for a nearbybuilding next year. Its owner, LNRPartners, handles bank-owned prop-erties and invests in buying defaultedloans or distressed properties frombanks.
Dallas-based real estate firmBehringer Harvard handed over thekeys to LNR rather than face thedaunting task of finding new tenantsfor the building after Calfee moves.The red-brick KeyBank Center is adifferent structure from Key Tower,the tallest building in the state andKeyCorp’s headquarters.
Joseph Marinucci, president ofDowntown Cleveland Alliance,which markets downtown as a busi-ness and redevelopment location,said the building at 800 Superiorstands to play a prominent role inthe future of the recently designatedNineTwelve District.
The NineTwelve District is a concept the alliance and the city ofCleveland are using to craft a newstory for what once was the city’s finance district.
The concept emphasizes pedestrianactivity and a future as a mixed-useresidential, entertainment and officedistrict.
“We’re cognizant of the challengeand the opportunity,” Mr. Marinuccisaid of the building.
Hope of an improving market
The departures of banks, law firmsand corporations from East Ninthleave the corridor that includes East12th Street (hence the NineTwelve)with significant and growing officevacancies. Longtime Clevelanderswill recall the district was formed byurban renewal efforts in the 1960sand 1970s.
Unlike some buildings in the areafrom East Ninth to East 12th thatDowntown Cleveland Alliance sees ascandidates for conversion to apart-ments or hotels, KeyBank Centerlikely is best used as an office tower,Mr. Marinucci said. Its floors arelarge and suited to offices, and theywould be costly and difficult to carveinto residential suites.
Although the last auction of a vacancy-riddled downtown officetower came to naught in April 2010when the dark, mothballed 1717 EastNinth St. building (formerly the EastOhio Gas Building) drew no takers, ex-perts believe the market is improving.
David Browning, managing directorof the Cleveland office of CB RichardEllis, said private equity groups and real estate investment trusts areable to buy with less reliance on borrowed funds as they adapt to atight lending environment. Buyersalso are starting to look beyond thenation’s coasts for investments, hesaid.
An LNR spokeswoman declinedcomment on the planned auction of800 Superior. ■
Mall: Parma mayor keepsfingers crossed on futurecontinued from PAGE 3
Mr. Gephart said paying themortgage has become “harder andharder” given a 30% vacancy rate atParmatown. He said the owners donot want to invest more in the retailcomplex after putting more than$40 million into the property thelast several years.
A Walmart was added to Parma-town in 2004 at the site of a formerDillard’s department store, but itspresence hasn’t prevented the lossof small-shop national retailers, Mr.Gephart said.
Court records said ParmatownOne consented to the receivershipafter the loss of such tenants as TheGap, the Disney Store, Lane Bryantand even McDonald’s. ParmatownOne has been unable to replacethose national retailers with com-parable tenants, according to U.S.Bank’s suit.
Small-shop tenants are crucial toa shopping mall’s viability, in partbecause anchor retailers receivesweet terms for operating at a mall.
Parma Mayor Dean DiPiero saidhe wasn’t surprised by the receiver-ship. He emphasized the potentialpositives the receivership may pro-duce and the city’s readiness toback the mall.
“I believe this opens the door forsomeone (else) to invest in theproperty,” Mayor DiPiero said. “Ithink the community will support a
property that meets their needs. Ithink this is an opportunity, and I’mhopeful about the property.”
Solid anchors remainThe mayor said the city has met
frequently with Parmatown’s man-agers and the city even leased spacethere for its recreation and fire departments. He said it’s his under-standing from RMS and merchantsthat foot traffic has increased at theproperty since Walmart opened.
Mayor DiPiero said Parmatownalso has key anchor tenants — retailassets other troubled malls in theregion lack. Macy’s, J.C. Penney andDick’s Sporting Goods occupyspace in the complex. All told, thereis nearly 1.2 million square feet atthe property, including offices atParmatown Medical Center.
Mr. Gephart acknowledged thatthe receivership action itself doesnot spell the end of ParmatownOne’s ownership at the property.
Redoing such huge propertiesnot only takes vision but also a hugesum of cash that is likely to provedifficult to obtain these days.
Rich Moore, a Solon-based ana-lyst who follows public realty com-panies at RBC Capital Markets,views the lender action as makingthe best of a difficult situation.
“Receivership is a way to disposeof something that no one wants,”Mr. Moore said. ■
66 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JULY 11 - 17, 2011
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Study: Ohio manufacturing solid, but tax climate lagsOhio gets mixed results in survey by Ball StateBy DAN [email protected]
Ohio leads the class in manufac-turing but needs to make good on apromise to bone up on its economicdevelopment studies by improvingthe tax climate for business.
If that sounds like something writtenon your kid’s report card, it’s not bycoincidence. They are the conclu-sions reached by Mike Hicks, a researcher and director of the Centerfor Business and Economic Researchat Ball State University in Indiana.And yes, Dr. Hicks is a teacher, a college professor, as well.
Each year Dr. Hicks and the centergive states a “manufacturing and logis-tics” report card, measuring eachstate’s performance in areas such asthe strength of its manufacturing base,logistics, work force and tax climate,plus a few other key indicators.
Ohio isn’t doing that badly — andin manufacturing, it gets a solid A,Dr. Hicks said. The study looks at numerous indicators, including howmuch value is added to goods by
manufacturers in the state, as well astheir share in overall U.S. industrialproduction.
The Buckeye State’s manufacturingbase is doing well and has the strongcompanies and facilities needed tocompete, he said. On top of that, Dr.Hicks gives the state an A in logistics,for its strong transportation abilitiesand robust infrastructure.
Dr. Hicks said he believes Ohio isone of a few Rust Belt states that isgoing to prove the nation’s manufac-turing heartland not only has somelife left in it, but also will rebound asit becomes more productive andbetter competes with other nations,where wages now often are risingfaster than in the United States.
Asked if the old states with theirold plants and factories were at a disadvantage, Dr. Hicks said that nolonger seems to be the case.
“I don’t think that’s true anymore,I think we’ve turned the corner,” hesaid. “I’m fairly optimistic about theMidwest over the next century.”
But that’s not to say there aren’tchallenges. Ohio needs to improveits tax climate — an area in which Dr.Hicks’ center gave the state a D-minus.That puts him in agreement withGov. John Kasich, who consistentlyrails against the state’s taxes as beingtoo high and a detriment to attractingand keeping businesses in Ohio.
There are other opinions, of course.An April study by the accountingfirm Ernst & Young, for instance,found Ohio was the third-best statein the nation in terms of having afriendly tax climate for new invest-ments. Other studies, however, areless optimistic.
Sensitive subjectAs for Dr. Hicks, he applauds Gov.
Kasich’s efforts to reduce or eliminatethe estate tax and other burdens onbusinesses and wealthy businessowners. The latest of the governor’sinitiatives to combat that problemcame June 16, when he proposedwhat amounts to a capital gains taxexemption for investors who investin an Ohio company and hold thatinvestment for at least two years.
Dr. Hicks said in the current
business environment, companies aremore sensitive to tax issues than theyare to work force issues. That’s acomplete reversal from about fiveyears ago, when workers were toughto find, he said, but in today’s marketthey are plentiful.
That situation might play intoOhio’s favor, he said, because tax issues can be fixed more quicklythan work force issues. Ohio got a Cgrade in the latter area, which Dr.Hicks terms “human capital.”
“You can change the tax problemquicker — you can go from a C to an Ain one (legislative) session,” Dr. Hickssaid.
The challenge, he said, will be forOhio to change its tax climate whilestill investing enough in training andeducation to ensure it has a strongfuture work force.
“If you can pull off lower taxes andstill have great human capital at thesame time, you’ll be going crazy inmanufacturing,” he said.
Balancing actThe state needs “a fiscal austerity
plan, combined with a real focus onschool reform,” Dr. Hicks said.
“It sounds like it’s right out of theRepublican play book, but I’m tooliberal to be picked up in any Repub-lican primary — even in Massachu-setts,” he quipped.
But taxes can’t be viewed in a vacuum, said Ned Hill, dean of theLevin College of Urban Affairs atCleveland State University.
“Considering tax climate withoutthinking about services is like talkingabout the bill you get at a restaurantwithout considering the food,” Dr.Hill said.
That’s not an alien concept to Dr.Hicks, either, though. He notes thatOhio somehow must balance itsneeds so that it doesn’t just end upwith low taxes, but also continues tosupport its infrastructure and workforce development. ■
THE GRADES ARE INBall State University’s Center
for Business and Economic Research each year gives statesa report card on manufacturingand logistics. Here is how Ohiofared:
■■ Manufacturing: A■■ Logistics: A■■ Tax climate: D-minus■■ Work force: C
Sidestepping the expense of new facilities, Northeast Ohio health systems are setting up shop in super-markets as a way to bolster access topatients while holding down theircosts by heading off unnecessaryemergency room visits.
A handful of clinics already offerroutine medical services, and otherson the way. Some officials at the region’s health care systems say theclinics can help them inexpensivelytap into underserved markets andgenerate more revenue, while otherssuggest they’re simply a way to offerpatients quality care at convenienthours and locations.
The clinics are little more than aprimary care doctor’s office in a rented space at a supermarkets.They’re geared toward treating minorillnesses and injuries, which oftenclog emergency rooms and inflatethe bill for patients and hospitals.
Summa Health System in Akronoperates a clinic inside a WadsworthGiant Eagle, which will be fully oper-ational by the end of the summer,and is looking to open another onein Stow.
For Summa, the goal of the clinicsisn’t “about driving revenue, butrather the element of controllingcosts,” said Dr. Bryan Fredericks,chief operating officer for SummaPhysicians Inc, the system’s physi-cian network.
“This is a much more cost-effec-tive delivery process,” Dr. Frederickssaid. “In many senses, you’re avoidingunnecessary costs.”
Likewise, University Hospitals latelast month opened its fourth clinic— known as UH FastCare — in Will-oughby inside a Giant Eagle. The healthsystem opened its first site in LegacyVillage about a year ago, accordingto Dr. Michael Nochomovitz, presidentof University Hospitals Physician
Services.“UH has a presence in all these
areas,” he said. “It’s more about addressing the needs of the publicand the needs of employers. Manyemployers need various screeningsdone for work-related health care orsome on-the-job injury. These canall be done in these settings.”
Tapping new marketsUnlike University Hospitals and
Summa, Lake Health is using a clinicinside a Walmart Supercenter inMiddlefield in Geauga County to
increase its market share by attract-ing patients who otherwise wouldfall outside the system’s reach, saidSteve Karns, Lake Health’s seniorvice president of administrative services. Since the clinic openedlast November, the site has treatedmore than 2,500 patients, most ofwhom are new to the system.
“It’s a business strategy,” Mr.Karns said. “It was an underservedpopulation in terms of providers.We thought this was a good idea as itdovetails with Walmart’s philosophyof affordability.”
Lake Health recently opened another Walmart clinic in Madisonto replace the urgent care centerthe system closed to make way for a10,000-square-foot, freestanding
emergency department that openedlast month at its Madison Campus.
The clinics inside these bigger retail venues are patterned after theclinics that have become morecommon inside drugstores.
With two new locations in Solonand Aurora, MinuteClinic is perhapsthe most visible retail clinic avail-able, with 11 sites at CVS stores inNortheast Ohio. Care at the clinicsis overseen by medical staff at theCleveland Clinic, but the clinics arestaffed and operated by Minute-Clinic, a division of the CVS Care-mark Corp.
“Patient expectations havechanged. We are a time-pressuredsociety,” said Dr. David Longworth,chairman of the Cleveland Clinic
Medicine Institute. “Customer ser-vice is being emphasized in manyindustries, and health care has finally caught up.”
A clinic in a retail store is a low-cost way to make a statement in acommunity where a health systemwouldn’t necessarily have enoughvolume to build a new communityhealth center, said Bill Ryan, presi-dent and CEO of the Center forHealth Affairs, an advocacy grouprepresenting area hospitals.
“It’s a way to generate some revenue outside the hospital walls,”he said. “I think it’s a relatively low-cost model, and it’s one way to deliver some primary care in an environment where you can standto make a little bit of money.” ■
“In many senses, you’reavoiding unnecessarycosts.” – Bryan Fredericks, chief operatingofficer, Summa Physicians Inc.
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■ The Morning Roundup: Acollection of the day’s businessnews from Ohio’s daily papers
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Parma retailer gives credit toto American-made merchandiseU.S. Mart’s inventorystocked with a varietyof domestic goods By DAN [email protected]
If American manufacturing isdead, that’s going to put a severecrimp in the business of U.S. Mart —a small retailer in Parma that carriesnothing but U.S.-made merchan-dise.
“It can be tough to find,” admitsstore co-owner Brenda Forristell,who said she andpartner Joe Sessaregularly scour theInternet for Ameri-can-made goodswith mass appealfor their lone retailoutlet.
Some of the best-known and biggestmanufacturers in this country tendto make things not for consumers,but for industry. Think Caterpillarand its big construction equipmentor even companies such as ParkerHannifin or Eaton locally. They’resuccessful, but you generally won’tfind their products in Walmart.
U.S. Mart, though, has found anample supply of consumer productsstill made in the United States. The3,400-square-foot store at 5690 RidgeRoad has pet supplies, lawn and garden tools, automotive chemicals,household cleaning supplies, can-dles, toys, bakeware, backpacks,cups, glasses and Okabashi flip-flops.
Okabashi flip-flops?“Yep — Hawaii,” not Japan, Ms.
Forristell says, knowing the nameraises eyebrows in her store. Andsure enough, Okabashi’s websitetouts the company as the only U.S.-based maker of flip-flop sandals.
The average consumer couldn’tdo all of his or her necessary shop-ping at the store, but they could fulfill a lot of their needs with Amer-ican products — and that’s what U.S.Mart is betting they’ll do.
So far, so good, said Ms. Forristell,who said initial sales have met herexpectations, though the privatestore does not disclose its sales fig-ures. During a recent visit by a reporter,
a volunteer at alocal church waslooking for toysto use in a charityevent and toldMs. Forristell,“We’d like to buyAmerican-madetoys, if we could.”And, of course,
they could, because U.S. Mart carriesitems from Streetsboro-based Step2and other toy makers.
Ms. Forristell, a former program-mer at auto insurer Progressive Corp.,said neither she nor Mr. Sessa, who isher uncle, had any retail experiencebefore they opened the store — justa hunch local shoppers would sup-port U.S. manufacturers.
A heart for Hartz MountainGetting customers has not been
as great a challenge as stocking thestore, according to Ms. Forristell,who said she wants to find more U.S.goods. Even when she does find asupplier, it often doesn’t make alltheir products in the United States,she said. For example, AmericanGreetings makes cards here, butsome gift bags and other items aremade overseas, so U.S. Mart has thecards, but not the bags.
“We’ve had to send at least onething back from most orders we’vereceived” from all the suppliers U.S.Mart has found so far, Ms. Forristellsaid.
But she also has found items shedidn’t expect, such as a full line ofpet products made by New Jersey-based Hartz Mountain Corp.
She also has found a good numberof items made by local manufactur-ers. Besides stocking Step2 andAmerican Greetings products, U.S.Mart carries bakeware made byCleveland’s G&S Metals, and back-packs and other small luggage itemsmade by Drifter Sport and TravelBag Inc. in Parma.
Manufacturing advocates heregenerally applaud efforts to supportAmerican-made goods. But they’re
not as surprised as many, or perhapseven Ms. Forristell, at the number of things still made in the UnitedStates. After all, they say, Americastill churns out roughly 25% of theworld’s manufacturing output —and some of it is still in the form ofconsumer products.
“Heck, she could have a ‘made inNortheast Ohio store’ if she wantedto,” said Greg Krizman, spokesmanfor the manufacturing advocacy andconsulting group, Magnet.
“Just around here, there’s Gracomaking stuff for babies, AlphaMi-cron makes motorcycle helmets and ski goggles, Wayne-Daltonmakes garage doors, Audio-Technicamakes headphones, there are severalpaint-makers, Barbasol makes shavingcream here. And then there’s food,like Nestle’s, Pierre’s Ice Cream andShearer’s potato chips,” Mr. Kriz-man said.
Not ready to chow downU.S. Mart is not yet using all its
floor space and has room to expand,and Ms. Forristell said it plans to dojust that.
“We don’t carry food yet. Eventu-ally, maybe, we’ll get to food —clothing is next,” Ms. Forristell said.
That will be tough, she said, asmost clothing is made outside of theUnited States. But she expects tofind enough to provide some selec-tion to her customers.
The store is still young — it onlyopened at the start of June — so it’stoo early to call U.S. Mart a qualifiedsuccess. But so far, Ms. Forristellsaid, the store is doing the samething as its suppliers — making ithere. ■
DAN SHINGLER
Brenda Forristell, co-owner of U.S.Mart in Parma, is sold on U.S.-mademerchandise.
“Heck, she could havehad a ‘made in NortheastOhio store’ if she wantedto.” – Greg Krizmnan, spokesman,Magnet
District Development Corp. “Restau-rants are going to benefit from theincreased traffic because people aregoing to be looking for high-qualityplaces to eat when they’re visiting ordoing business here.”
Restaurant industry insiders aren’tso sure. They question the Ware-house District’s ability to competewith newer crops of restaurants onEast Fourth Street and in the city’sOhio City and Tremont neighbor-hoods, and say its eateries don’t provide the same culinary experienceas emerging, chef-driven conceptselsewhere.
Other insiders, including formerand current Warehouse Districtrestaurant operators, are concernedabout the neighborhood’s safety,given the sporadic violence and unrest that have occurred since lastsummer in and around the districtand its West Sixth Street nightclubs.
“I had well-to-do customers spend$400 on dinner, then leave at 11 andwalk into an intimidating streetscene,” said Steve Schimoler, chefand owner of Crop Bistro & Bar,which opened in 2007 but moved inApril from the Warehouse District toOhio City. “They would tell me,‘Steve, I’m not coming back.’
“I think the Warehouse District ishaving an identity crisis,” he said.
However, the discord with thenearby bar crowd wasn’t the mainreason Mr. Schimoler moved thebistro from 3,500 square feet on WestSixth to 16,000 square feet in thefledgling Market District in OhioCity. The primary motivator was theneed for more space to accommo-date his restaurants and retail market,where he sells freshly prepared foodsand wine, and his research and development operations.
“If I had been just a restaurant, Iprobably would’ve stayed,” Mr. Schi-moler said. “I’m an eternal optimist.The Warehouse District has restau-rants as solid as a rock. It should be a huge beneficiary of the casino,convention center and medicalmart.”
Changing the menuThere are comings and goings
aplenty these days in the WarehouseDistrict.
About one month after Crop leftthe district, nearby Metro Bar +Kitchen, which a year earlier had undergone a $500,000 makeover afternine years as the Metropolitan Café,announced it had been bought byrestaurant chain Bar Louie.
Waterstreet Grill, which opened10 years ago on West Ninth Street, inlate June was sold to Wiggins Invest-ments Inc., which said it was trans-forming the eatery into Sixth CityDiner with menu prices less than$12.
Joe Saccone, co-principal of theBeachwood-based Hyde Park Groupof Restaurants, which owned MetroBar + Kitchen, said the concept was“not a growth vehicle” for the steak-house-focused operation that runs16 restaurants, most of which areunder the Hyde Park Prime Steak-house banner.
“Bar Louie had been waiting in thewings, and again made an offer tobuy the space, which Hyde Parkcouldn’t refuse,” said Mr. Saccone,referencing Bar Louie’s initial interestin the property three years ago.
Meanwhile, Taza, a Lebanese grillthat already is in Woodmere, will assume the former Crop space,
JULY 11 - 17, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
continued from PAGE 1
Warehouse: District backers rebuff security concerns
which is owned by Joe Santosuossoof nearby Johnny’s Downtown.
“When Crop left, we could’ve hadthat space rented in five minutes,”Mr. Santosuosso said. “We had aton of inquiries about the property,but we wanted to be selective.
“These guys (with Taza) want tobe long-term tenants, and it’s a newconcept” for the area, he said.
Also slated to open in mid-July isThe Prime Rib Steakhouse on Supe-rior Avenue near West Ninth inspace formerly occupied by theHouse of Cues. Chef and owner Attila Salka describes Prime RibSteakhouse as “affordable fine dining,” with prices ranging from$29 to $45.
“The Warehouse District is thebest location for restaurants,” saidMr. Salka, when asked why he selected the site. “It’s in a central location and has beautiful views ofthe city.”
A taste for other choiceStill, the neighborhood hasn’t
been able to attract Cleveland’sname chefs, such “Iron Chef”Michael Symon, Jonathon Sawyerof Greenhouse Tavern fame and theprolific Zachary Bruell, even thoughall three and others steadily haveadded to their local restaurant port-folios.
Mr. Bruell, who announced July 1that he would be opening his fifthCleveland-area restaurant, Cowell
& Hubbard Co., at Euclid Avenueand East 13th Street in the Playhouse-Square district, said the last andonly time he looked at opening anestablishment in the WarehouseDistrict was in 1984. That was in theearly years of what would become asuccessful redevelopment effort totransform abandoned warehousebuildings dating to the 19th centuryinto commercial and residentialspace.
Mr. Bruell, who since 2004 hasopened Parallax in Tremont, L’Alba-tros Brasserie and Bar in UniversityCircle, Table 45 at the InterConti-nental Hotel Cleveland, and Chinatoon East Fourth Street, characterizesthe locations of his current restau-rants as growing neighborhoods,and said those areas are what drawnew opportunities.
“I look at the Warehouse Districtas an entertainment district, notnecessarily a dining district,” Mr.Bruell said. “It’s still a viable loca-tion for some restaurants, but it’snot a good fit for my concepts.”
Joe Gramc, who dines at Cleve-land-area restaurants about five tosix times each week and shares hisexperiences on Twitter, said Ware-house District establishments typi-cally are not on his plate of options.He prefers the bistros, cafés andtaverns on East Fourth Street and inTremont and Ohio City, in part because he finds those neighbor-hoods more walkable and their mix
of establishments more interesting.“The Warehouse District has bars
and nightclubs, but nothing else tokeep customers there besides dining,” said Mr. Gramc, vice pres-ident of finance at Five Star TruckingInc. in Willoughby. “It needs moreamenities.”
Mr. Gramc said chef-driven, ratherthan company-driven, restaurantconcepts also appeal to him, and hefeels the Warehouse District lacksthe former. Chef interactivity is adraw, too, he said.
Environmental issuesAs might be expected, George
Schindler and Rick Cassara takesome exception to those latter com-ments.
Mr. Schindler, chief operating officer for Hospitality Restaurantsin Rocky River, said chef interactionis part of the customer service approach at his company’s BluePoint Grille at West Sixth and SaintClair Avenue. And while Blue Pointis not chef-driven, its menu of seasonal, fresh seafood continuesto draw a loyal following, he said.
Mr. Cassara expressed a similarsentiment.
“Everyone has their own hard-working chefs that produce high-quality food,” said the owner ofJohn Q’s Steakhouse, which openedin 1979 on Public Square. “Theymay not be celebrity chefs, but theydo an outstanding job.”
Mr. Schindler also disputed theview of Warehouse District criticsthat the area’s dining scene has suffered because of racial tensionsand the unruly behavior of West Sixthclub patrons last summer, alongwith shootings that occurred just lastmonth around Public Square, nearthe district.
A bullet from the recent shootingsstruck a window at John Q’s, but Mr.Cassara dismissed the blemish it created and said his customers donot feel unsafe, noting that violencecan strike any area.
“The Warehouse District is moreviable than ever. I think we’re goingto go back to 1994,” Mr. Cassara said, referencing a downtown Cleve-land resurgence that occurred inpart after the opening of The Rockand Roll Hall of Fame and Museum, Jacobs (now Progressive) Field andGund (now Quicken Loans) Arena.
Mr. Cassara and other WarehouseDistrict restaurant stakeholders saythe media have sensationalized theunrest. They also scoff when askedwhether the Warehouse Districteventually could meet the same fateas Cleveland’s Flats, which drew bigcrowds in its heyday to its bars andrestaurants along the Cuyahoga Riveronly to crash and burn last decadeafter repeated episodes of rowdinessthat included the death by drowningof three patrons in 2000.
Public defenderJoe Cimperman, a Cleveland city
councilman whose Ward 3 includesdowntown Cleveland, bristled at thecomparison to the Flats.
“The Warehouse District is amixed-use neighborhood with office,residential and restaurants that con-tinues to thrive,” Mr. Cimpermansaid. “I think the best days of theWarehouse District are ahead.”
It’s a sentiment on which JesusDeManuel is banking.
The owner of Mallorca and Brasa,both on West Ninth, said businesshas been tough during the last coupleyears, although the recession has hitmany restaurant operations hard.Mr. DeManuel said he’s anticipatingtraffic from the nearby but still-unfolding Flats East Bank neighbor-hood, which its developers envisionas a combination of residential, office and hotel elements along theCuyahoga, will be a boon to his ethniceateries.
The Historic Warehouse DistrictDevelopment Corp.’s Mr. Yablonskyagreed, and cited the group’s PublicRealm street improvement projectas one example of the continuedreinvestment into an area that hasgarnered more than $500 million inpublic and private investment sincethe mid-1980s. Most of that moneyhas been private, with only about$30 million in public investment injected into the district, accordingto Mr. Yablonsky.
The public part includesstreetscape improvements, such asexpanded sidewalks and addedlandscaping, that began in 2009 onWest Sixth between Frankfort andSaint Clair avenues. Those improve-ments will continue in 2013 on WestSixth’s north end, according to Mr.Yablonsky, who maintains that gooddays are still ahead for the neighbor-hood and its eateries.
“The Warehouse District is greatlypositioned to capitalize on the growthwe’re seeing downtown,” he said.“The restaurants are a big part ofthat.” ■
Ask restaurateurs from theWarehouse DIstrict and elsewherein the city and other stakeholdersto gauge the area’s viability as arestaurant destination, and you’llget various answers.
Some are sold; others not somuch. Here’s a sampling:
■ “The Warehouse District ismore viable than ever. I thinkwe’re going to go back to 1994.”
— Rick Cassara (above), owner, John Q’s Steakhouse, which sits on
the northwest corner of Public Square
■ “The Ware-house District is greatly positioned tocapitalize onthe growthwe’re seeingdowntown. Therestaurants are
a big part of that.”
— Thomas Yablonsky, executive director, Historic Warehouse District
Development Corp.
■ “I see theWarehouse District as anentertainmentdistrict, notnecessarily adining district.It’s still a viablelocation forsome restaurants, but it’s not agood fit for my concepts.”
— Zack Bruell, owner of Parallax, L’Albatros, Table 45 and Chinato
If anyone needs evidence that FrankJackson puts serving his city and itsresidents before personal politics,they need to look no further than
last week’s news story about the mayorand charter schools.
It’s no secret that unions — and espe-cially the powerful teachers’ unions —are the core of the DemocraticParty’s traditional power base.So when a big-city mayor,namely Cleveland’s (who alsohappens to be in charge of thepublic schools), threatens thatrelationship with a considerationof more charter schools, thatmakes news.
Cleveland is Ohio’s only cityin which the mayor, by speciallegislation, also has ultimateauthority over the public school system.Now, by virtue of the recently approvedstate budget, any Cleveland school thatis converted to a charter school would beexempt from collective bargaining rulesas soon as an existing contract expired.
That means that one key element ofthe good charter schools, such as thethree in the Breakthrough Schools group,can be instituted in the newly mintedcharters. That means teachers will bekept, paid and promoted based on their excellence, not on seniority or by possessing advanced degrees, two key
elements of traditional unioncontracts in public school systems.
This means an opening forthe mayor, who is facing thefact that his best-performing,most innovative schools —such as the newly renovatedSchool of Science and Medicineand the district’s two new STEM(science, technology, engineeringand mathematics) schools —could lose their best teachers as
financial pressures force district layoffs.While Mayor Jackson has said only
that he’d “consider” such a move, I believe it’s a done deal. Under schoolsCEO Barbara Byrd-Bennett, the districtpoured millions into infrastructure
investments, and some of that went intobuildings that could be closed as the citycontinues to shrink in population. Whatbetter way to use them than create well-run charter schools free to deliver exciting educational opportunities forCleveland’s children?
“Am I willing to do what is necessaryto educate children?” the mayor askedrhetorically in a Plain Dealer story. “ThatI’ll do. If this gets me there, I’ll do it.”
So while the mayor, school boardpresident and schools CEO all say theyhave no specific new charters in mind,and nothing could be done in time forthe coming school year, you can bet thatCleveland will have new charter schoolsthe following school year.
The mayor knows that nothing holdsback the revitalization of an urban cen-ter than doubts about its schools. If hemakes them better, through whatevermeans possible, he would lay the foun-dation for young families to return to hiscity, and thus create a legacy as one ofCleveland’s best chief executives. ■
1100 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JULY 11 - 17, 2011
At the limitT
he last six months of activity in the GeneralAssembly only have reinforced in our mindthe belief that legislative term limits are doing more harm than good in Ohio.
The churn in the Legislature that term limits forcehas created a body of lawmakers short on experiencewho are giving lobbyists, via their legislative minions,far more influence than they should have in craftingbills tailored to their clients’ desires.
We are not naïve. Lobbyists always have played abehind-the-scenes role in the legislative process,and their fingerprints are visible on many of thepages of certain measures.
However, in the current session of the Legislature,the lobbyist tail has wagged the legislative dog sovigorously that the content of various bills has seemedto be hand-written by lobbyists for particular clients.
Consider the changes related to the regulation ofcharter schools that were included in the OhioHouse’s version of the state budget. The changeswere sought by White Hat Management, the charterschool management company built by Republicancampaign supporter David Brennan; among theprovisions were amendments that would have allowed for-profit companies such as White Hat torun charter schools without sponsors and wouldhave let operators open an unlimited number ofnew schools even if they had spotty track records attheir current schools.
As The Columbus Dispatch reported last month,Mr. Brennan’s chief lobbyist, Tom Needles, not onlyhad extensive talks with Republican lawmakersabout the provisions, but he also sat down with thenonpartisan Legislative Service Commission to draftcertain amendments with no lawmaker present.Now that’s access.
In a similar vein, The Plain Dealer reported lastmonth that Senate Republicans, without any publicdeliberation, included in their version of the budgetbill language that outlined how the Ohio Lotterywould be privatized. The PD said the ready-madelanguage was submitted by Mike Dawson, a lobbyistfor GTECH, a company that wants to run the lottery.
With each session of the Legislature that goes by,lawmakers seem more willing to make the statebudget a dumping ground for measures favored bylobbyists and their clients. Many of these measuresshould be deliberated on their own merits, but lobbyists and their legislative sidekicks appear inclined to sneak them through the back door toavoid public scrutiny and debate.
Our sense is that lobbyists did not have quite asmuch run of the legislative asylum in the days before term limits. An abundance of veteran lawmakers could pass their institutional knowledgedown to newer legislators, and so keep more controlof the legislative process in the hands of those menand women elected by the folks back home to represent their interests in Columbus.
Today, the interests of the chosen few who canhire top lobbyists often come ahead of the public atlarge. We maintain that ending term limits wouldhelp swing that pendulum back to the side of theaverage citizen. We’d love to see a good governmentgroup get behind a measure to repeal them.
STEVE BARBERCleveland HeightsI like the Lee Road-CoventryRoad area in Cleveland Heightsand Shaker Square. TheColony is a really great placefor burgers. There is a rangeof restaurants in those areaswith good service, and generallypeople are friendly.
➤➤➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
THE BIG ISSUE
JOHN GAMBRELLClevelandI’m a Vietnam vet and meat andpotatoes kind of guy, so I likeGeorge’s Kitchen on BereaRoad and Triskett Avenue. Mywife is a big fan of the FoodNetwork and of MichaelSymon. So we go to Lola onEast Fourth Street.
KATHI VAN HORNSeven HillsOne of my favorite places is LAPete’s in Independence. Theyhave the best breakfast intown. In the evenings, I like Versa in Seven Hills. I workdowntown, so I like to stayaway on the weekends.
ABRAM SCHWARZTwinsburgThere are a lot of restaurantsin Hudson that I like. The demographic in Hudson allowssome of the nicer restaurantsto come in. The RosewoodTavern is a favorite. It’s in theold Turner’s Mill complex. It’sreally neat.
Where do you like to dine, and what makes a fine dining district to you?
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LETTER
Legal Aid relies on vital trust interest■ Thank you for the June 27, Page 3story, “A troubling case.” The storyincreased public awareness aboutthe importance of Interest onLawyers Trust Accounts. IOLTA — atno cost to lawyers, their clients ortaxpayers — allow states to allocateinterest derived from lawyer trust accounts to organizations such asthe Legal Aid Society of Clevelandthat provide legal services to low-income individuals.
In recent years, the Legal Aid Society has faced severe budget cuts because of the drop in IOLTA rates.
Yet, under the leadership of an adeptboard of directors, the Legal Aid Society has increased its services toclients.
In the face of this decrease we haveexpanded our volunteer base and increased philanthropic funding. Inaddition, we have a strong and stablereserve fund that has allowed us toweather this storm.
The Legal Aid Society of Clevelandis not worried about the stability of
our organization. Instead, we are realistic about present-day challengesbut optimistic about the future. Because of the IOLTA decrease, weare a smaller organization than weotherwise would be, but we arestronger than ever.
Thank you again for the story. Wehope it encourages attorneys to negotiate rates of IOLTA productswith banks.
Colleen M. CotterExecutive directorLegal Aid Society of Cleveland
High vacancy rates dog the Rock-side Road office market, but that isn’tstopping Dalad Group from furtherinvesting there with the bargain-priced purchase of Essex Place, thatarea’s newest multitenant officebuilding.
“This is a good building with aleasing problem,” Neil Viny, a Daladprincipal, said of the acquisition ofthe decade-old building from EssexPoint Ltd., an investor group led byDonald King of King Group.
ES Investors Ltd., the Dalad-ledgroup, on June 30 paid $2.9 millionfor the 80,000-square-foot structure,which has an 80% vacancy rate.
Mr. Viny, whose Dalad groupmanages and owns more than 1 million square feet of office spaceprimarily in or near the southernsuburbs, said his group was attractedto the property at 6393 Oak TreeBoulevard because “in a soft market,pricing gets pummeled due to a highvacancy rate.”
Pummeled, indeed. The buildingcarries a market value of nearly $8million for property tax purposes,according to the Cuyahoga Countyauditor’s office. Moreover, the originaldeveloper had obtained a mortgageon the structure for $7.9 million in 2006 from Prudential MortgageCapital LLC of Newark, N.J.
Mr. King, president of King Group,said in an interview that there was“some (mortgage) restructuring thatallowed us to sell it at a reasonableprice.”
“It worked out well for everyone,”he said.
However, Mr. King would not dis-cuss the way the mortgages fromPrudential were restructured, andCuyahoga mortgage records do notshow what transpired. Mr. Viny saidhis group bought the building from
Mr. King’s group free of any priormortgage.
Bad leasing breaksMr. King said Essex Place had
been fully leased for years and thedevelopers profited on the propertyat the outset. He said he felt it wasbetter to sell the property now to reduce his group’s exposure to theRockside market, where it owns fiveother office properties.
The original partners in EssexPlace were developers and contrac-tors Greg and Fred Geis, owners of Geis Cos., whose constructionfirm built the structure. Greg Geis saidrecently that the two brothers had soldtheir interest to Mr. King three yearsago and held a note on the propertythat was satisfied by its recent sale.Mr. King declined to discuss hisdealings with his fellow investors.
Bad breaks with tenants accountedfor leasing woes at Essex Place ratherthan the sour market in the southernsuburbs, Messrs King, Viny and others say. Grubb & Ellis Co. puts vacancy in that market at 23%.
The structure lost its two majortenants due to corporate consolida-tions in larger offices: Medical Mutualconsolidated a unit from Essex Place to its Strongsville campus lastyear, and Sprint Corp. exited as it consolidated its local operationswith those of Nextel after their 2004merger.
Mr. Viny said he and a group of silent investors see opportunity in the purchase. He said the biggestchallenge is how long it will take to woo tenants back to the building.
Bank financing plays a roleDalad is ready to shoulder the risk
of the purchase because its portfoliohas little vacancy, which Mr. Vinyput at 8%. He said Dalad’s leasingteam can use the empty space topursue large prospective tenants in the 15,000-square-foot range itcould not accommodate easily in itsexisting portfolio.
A low purchase price — about 25%
of what it would cost to build EssexPlace today — should allow Dalad tooffer low, competitive rents toprospective tenants and make thingsrough for competing building owners,said Tom West, director of office ser-vices at the Cresco real estate brokerage.
Moreover, with a large portfolio of buildings in that area, Mr. Westsaid, Dalad also may be taking stepsto retain tenants desiring to expandwho currently are in its properties.
“It may be a good defensive as well asa good offensive move,” Mr. West said.
Mr. Viny said the purchase mayportend something positive for thereal estate market as a whole.
To buy the building, Mr. Viny said the group has obtained a loanfrom U.S. Bank for the acquisition,though he was precluded by a confi-dentiality provision from discussingits terms.
“For a building with this kind ofvacancy issue, financing is hardly agimme,” Mr. Viny said. ■
Investors bolster exposurewith Essex Place purchase
1122 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JULY 11 - 17, 2011
The largest pediatric health care provider
in NE Ohio.A K R O N C H I L D R E N S . O R G
Future Audiences is endowed by theMaltz Family Foundation, whichlast year made a lead gift of $20 million to kick off the audience development initiative.
“We are profoundly grateful forthe philanthropic leadership demon-strated by these new sponsorshipcommitments,” said Gary Hanson,the orchestra’s executive director,in a statement. “We thank these fivegenerous companies for embracingthe vision of the Maltz Family Foun-dation. Together they will helptransform the orchestra’s audiences.”
One of the orchestra’s majorgoals is to develop the youngest audience worldwide for a symphonyorchestra by the time of the orches-tra’s centennial in 2018.
To that end, with its performanceon July 3, the orchestra kicked off its“Under 18 Free” program to makeBlossom Festival concerts more affordable for families to attend. Patrons will be eligible for two “Under 18 Free” lawn tickets withevery paid lawn adult admission.Tickets can be ordered on the orchestra’s website. ■
The Cleveland Orchestra’s Centerfor Future Audiences, an initiativeaimed at drawing a new generationof patrons to one of the region’s sig-nature arts institutions, is receivinga big financial boost from five com-panies.
Baker Hostetler, Eaton Corp.,
Forest City Enterprises Inc., KeyBankand Nacco Industries Inc. havepledged a total of $6 million to fundthe launch of audience develop-ment programs that are part of theCenter for Future Audiences. Eachpledged gifts of $1 million or more,though the orchestra did not disclose the specific dollar amountof each company’s contribution.
The orchestra publicly recognized
the contributions last weekend at theopening night of the 2011 BlossomFestival. The benefit concert featuringthe Cleveland Orchestra with guestartist Idina Menzel, under the direction of conductor StevenReinek. The Center for Future Audi-ences anticipated the benefit event,sponsored by Goodyear Tire & Rubber Co., would raise an addi-tional $500,000. The Center for
Ed Kenty hopes a steady effort tobeef up the sales staff at Park PlaceTechnologies LLC will lead to moreof the sales increases the companyalready is starting to see.
Park Place, which helps companiesinstall and maintain computerservers and other hardware, is in theprocess of hiring the first membersof its new business development division, which will start off with sixto eight employees, said Mr. Kenty,who is CEO. The team likely will behoused in 3,000 square feet of officespace on Chagrin Road, next to thebuilding that houses the company’sPark Place International subsidiary.Mr. Kenty said he expects the divi-
sion to begin prospecting for salesleads this month.
Those leads will serve as fuel forPark Place’s sales team, which alsois largely new: Today the team has32 employees, up from six at thestart of 2009.
That added sales capacity helpedPark Place recover quickly from therecession, and it already is helpingboost 2011 sales to record levels,Mr. Kenty said.
“It’s really all about sales capacity,”he said.
Park Place saw its revenue dropfrom $39 million in 2008 to $29 mil-lion in 2009. That’s mainly becausethe recession decimated revenuefrom the Park Place Internationalsubsidiary, which helps companiesinstall and manage their computer
systems. Revenue from Park Place’score business — maintaining com-puter servers after their warrantiesexpire — held steady in 2009.
Sales picked up toward the end ofthe year, however, and by the end of2010 the company’s annual revenuewas back up to $39 million.
All the while, Park Place kept hiring,adding employees to its sales staffand throughout the company. Todayit employs more than 200, includingabout 100 at its three facilities in theChagrin Falls area. By comparison,the company employed about 130in October 2008, including about 50in Northeast Ohio.
“It’s been pretty staggering,” Mr.Kenty said.
Now that the company’s sales teamno longer is brand new, it’s startingto produce more impressive results,Mr. Kenty said. So far this year, salesare off to “an incredible start,” he
said. The company is aiming to hit$48 million in revenue this year,which Mr. Kenty described as “a realistic number.”
“We’ve never had a year like thissince I’ve been here,” said Mr. Kenty,who joined the company in 2004,when Park Place bought his previousemployer, Technical and LogisticalConsultants Inc. of Uxbridge, Mass.
Most of the growth comes fromPark Place’s post-warranty servermaintenance business, which bene-fits from contracts with customerswho come back, as long as they haveolder computers to maintain.
The market for hardware mainte-nance services isn’t expected togrow much over the next few years, butsome service providers are growingthrough acquisition or by stealingmarket share from competitors,many of whom are small, said RonSilliman, principal research analyst
for business research firm Gartner Inc.The recession has driven many
companies to re-evaluate their vendors,which opens opportunities for bettercompanies to win business, said Mr.Silliman. Park Place, he noted, is wellknown for its expertise related toservers made by EMC Corp. of Hop-kinton, Mass. “There certainly areopportunities,” he said.
Park Place might face problemsdown the road if “cloud computing”service providers such as Amazon —which lets businesses tap into itsservers via the Internet instead ofbuying their own hardware — decideto maintain their own servers, Mr.Silliman said. However, many ofthose companies might decide tooutsource the maintenance to thePark Places of the world.
Mr. Kenty noted that the trend toward cloud computing might have“some impact” on Park Place’s rev-enue years from now. For now, however,there are still lots of servers to serve.
“It’s so vast. It’s not going to goaway any time soon,” he said. ■
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In Memoriam
GOING PLACESJOB CHANGES
ARCHITECTUREMBI | K2M ARCHITECTURE INC.:Stephanie Cieszkowski to marketingcoordinator.
EDUCATIONCASE WESTERN RESERVE UNIVER-SITY: Julie M. Rehm to associatevice president, foundation relationsand strategic initiatives.CLEVELAND STATE UNIVERSITY:Carmen A. Brown to vice president,enrollment services.KENT STATE UNIVERSITY: SoniaAlemagno to dean, College of PublicHealth.MIAMI UNIVERSITY: Amy A. Bartterto director of regional development,Northeast Ohio.NORTHEAST OHIO MEDICAL UNIVERSITY: Dr. Marc StevenPenn to professor of medicine andintegrative medical sciences.NOTRE DAME COLLEGE: Beth L.Kaskel to chair, nursing division.SAINT JOSEPH ACADEMY: BlakeJ. Prewitt to principal. UNIVERSITY OF AKRON: ElizabethA. Reilly to vice provost, academicplanning, Office of Academic Affairs.
FINANCIAL SERVICEFIRSTCREDIT INC.: Robert Walkerto manager, IT services; Stacy Boddie, Rachael Hardbarger andMindy Weaver to patient accountrepresentatives; Alexa Simms-Wackerly to human resources coordinator. FAIRWAY WEALTH MANAGEMENTLLC: Charles Avarello to seniormanager; Brad Vitou to associate.
HEALTH CARECAMBRIDGE HOME HEALTHCARE: Paula Sparkman to regionaldirector, operations and quality im-provement, Medicare Division; CindyDaniels and Bobbi Jo Kumpfmillerto district managers, Private Division.LAKE HEALTH: Dr. David Sugermanto medical director, Lake HealthEmergency departments; Dr.Howard K. Mell to medical director,EMS Lake Health and associate medical director, TriPoint MedicalCenter Emergency department. ORTHOPAEDICS & SPORTS MEDI-CINE OF OHIO: Dr. James O’Reillyto president; Dr. Lisa Isphordingand Dr. Katie Eslich to managingphysicians; Dave O’Reilly to CFO.SUMMA CARDIOVASCULAR INSTI-TUTE: Dr. Marc Steven Penn to
director of research.
INSURANCEWICHERT INSURANCE: Al Korn toprincipal, senior account executive,commercial lines insurance.
MARKETINGADCOM COMMUNICATIONS INC.:Jessica Romano and Brian Kozelto account executives; Erin Connorto assistant account executive. INSIVIA: Alexis Hazboun and KylePetersen to account managers. PR 20/20: Dia Dalsky to consultant. ROSENBERG ADVERTISING: JennaTucci to senior account executive;Austin Rosenberg to account executive.
NONPROFITAKRON GENERAL DEVELOPMENTFOUNDATION: Steve Bossart to director of development. GREAT LAKES THEATER FESTIVAL:Holly Tomasch to development director.
REAL ESTATEPRECISION TITLE AGENCY INC.:Christopher Stafford to director ofbusiness development.
SERVICEROGERS CO.: Jeremy Goodmanto operations manager.
UTILITYFIRSTENERGY NUCLEAR OPER-ATING CO.: Eric A. Larson to vicepresident, nuclear support.
BOARDSNORTHEAST OHIO MEDICAL UNIVERSITY FOUNDATION: DerekR. Misquitta (Morgan Stanley SmithBarney) to president; James E.Merklin to president-elect; DouglasJ. Thorpe to treasurer; Albert J.Cook II, M.D. to secretary.PATHWAYS INC.: Steve Ciuni(Drake Construction Co.) to chair;Hector Martinez Jr. to vice chair;Keith Young to secretary; WilliamPattie to treasurer.
AWARDSCONSORTIUM AGAINST ADULTABUSE: Linda Dooley Johanek(Domestic Violence & Child AdvocacyCenter) received the 2011 Recogni-tion Award. INTERNATIONAL ASSOCIATIONOF BUSINESS COMMUNICA-TIONS, CLEVELAND CHAPTER:Bruce M. Hennes (Hennes PaynterCommunications) received the Communicator of the Year Award.
Sherwin-WilliamsCo. said it bought anindustrial paint manu-facturer in the United King-dom that has been owned by thesame family for 151 years.
The Cleveland-based paintmakerdid not disclose the purchase pricefor Leighs Paints of Bolton, U.K.,which makes marine and industrialfire protection coatings. Sherwin-Williams said Leighs’ Firetex brandhas been used on more than 400projects around the world protectingoffshore platforms, refineries, chem-ical plants, airports and hospitals.
Leighs, founded in 1860, has260 employees and operates onemanufacturing plant in the U.K.Sales and technical support centers
are in the U.K.,Germany, Canada, Indiaand the United
Arab Emirates. Leighs’ products aredistributed in 47 countries.
Chris Connor, chairman and CEOof Sherwin-Williams, noted in astatement that the two companiescombined “have nearly three centuries of experience in coatingsinnovation.” He added that the acquisition “reaffirms our strategiccommitment to growing globally.”
Brian Leigh-Bramwell, chairmanof Leighs, said in a statement thatSherwin-Williams “shares many similarities with Leighs Paints bothin terms of history, culture and customer focus.”
Sherwin-Williams acquires U.K. firmthat specializes in protection coatings
T-Mobile USA is in the process ofexpanding its office in Indepen-dence and ramping up the amountit spends on outdoor and sponsor-ship advertising in most of Ohio,Kentucky and western Pennsylvania.
The company, the fourth-largestwireless carrier in the United States,has hired people to fill seven newpositions at its Independence officesince April and still has a few morepositions to fill, said Larry Dolot,vice president and general managerfor the three-state region, which heruns from Independence.
Four of the new hires are focusedon marketing T-Mobile’s wirelesscommunications services to small
businesses in the three-state region,said Mr. Dolot, who was one of thenew hires.
T-Mobile also has provided newadvertising dollars to the Indepen-dence office, which oversees oper-ations in all three states. The moneymainly will be used to pay for outdoor advertising, ads related toevents and sponsorships, but itcould be used for other types of locally focused advertising in thefuture, he said.
T-Mobile already has agreed tosponsor the Cyber Café at theCouncil of Smaller Enterprises’2011 Small Business Conference inOctober. As another example of thetype of marketing the company islooking to do, Mr. Dolot noted thatT-Mobile has struck a deal to adver-
tise with the Florence Freedom, aminor league baseball team in Flo-rence, Ky.
“It’s really about getting closer tocustomers,” he said.
T-Mobile, which also is increasinglocal advertising in other regions,started pursuing the new strategylong before the March announce-ment that AT&T Inc. had struck adeal to buy T-Mobile from its Ger-man parent company, DeutscheTelekom, for $39 billion.
Mr. Dolot said he did not have information on how T-Mobile’s local operations might be affectedby the acquisition, which has yet tobe approved by federal regulators.
“Up until that point we’ll con-tinue to operate independently,” hesaid. ■
Steris ex-exec gives UH $2M for cancer geneticsBy SCOTT [email protected]
University Hospitals Case MedicalCenter will use a $2 million gift fromformer Steris Corp. CEO Les Vinneyand his wife, Linda, to bolster its
work in cancer genetics. The Linda and Les Vinney
Biorepository and GenomicsFacility “will play a key rolein advancing genomicknowledge and hasteningimportant discoveries andnew cancer therapies,” UHsaid in a news release announcing the gift.
“This newly established, state-of-the-art biorepository will fuel thedevelopment of novel geneticscreening tests, critical in the iden-tification of cancer-causing geneticchanges and help us devise preciseand effective treatments,” said Dr. Stan Gerson, director of the UH Seidman Cancer Center and the Case Comprehensive Cancer Center, as well as a professor ofmedicine at Case Western ReserveUniversity School of Medicine, in astatement.
Dr. Gerson said the gift also will support “program activities in informatics, biostatistics and cancergenetic counseling, which is criticalfor families with multiple cancers,giving hope to patients diagnosedwith cancer now, and for genera-tions to come.”
UH said by enhancing the abilityto code, store and analyze biologicalspecimens, the new Vinney Bio-repository “will increase the capa-
bility of UH Case MedicalCenter physician-scientiststo collect and study tissuesamples, critical steps incancer research.” Thou-sands of samples will bestored and coded in theVinney Bio-repository eachyear, which will lead to anacceleration of genetic
research in four specific cancer areas for which UH is an interna-tional leader: colorectal, brain,breast and esophageal, UH said.
Mrs. Vinney, a retired geneticcounselor, and Mr. Vinney havebeen longtime advocates for the importance of medical innovationand compassionate genetic coun-seling, UH said. Mrs. Vinney heldpositions at Akron Children’s Hos-pital and Morristown MemorialHospital in New Jersey.
“We believe strongly in the SeidmanCancer Center’s commitment tofinding a cure for cancer,” Mr. Vinneysaid in a statement. “Advances incancer genetics will lead to betterunderstanding of risk factors, earlydiagnosis through genetic testing,and powerful and personalizedcures. We are honored to supportUniversity Hospitals’ physician-scientists and their tireless efforts tomake the next major discovery incancer genetics.” ■
The Rutledge Group has six employees.Three of them help manage thecompany’s Facebook page.
Even though the insurancebrokerage can’t spend much time onFacebook — which is why the companyhasn’t started a Twitter account — theeffort is worthwhile, said DeborahRutledge, chief operating officer forthe Cleveland company. Posting tipsabout insurance as well as photosand tidbits about employees hashelped the Rutledge Group buildname recognition and credibilityamong people employees know personally or professionally.
“That at some point will pay dividends,”she said, adding that the page already hashelped the company land a few new customers,she added.
Even the smallest companies should consider using social media websites and other online toolsthat can help them protect and promote theirbrands, according to several marketing experts inNortheast Ohio.
See SOCIAL Page 16
JANET CENTURY
Michele Bishop is co-owner of UrbanOrganics, which converts horse ma-nure into SweetPeet organic mulch.
Organic mulchproducer laysground formore growthSweetPeet a boon forBrunswick Hills venture
The location for Urban Organics is marked by nothing more than a largeboulder at the end of a
gravel driveway in Brunswick Hills.Down that nondescript path,
though, is a compelling story — interms of both the business that’splanted there and the couple culti-vating its growth.
Owned by Mark and MicheleBishop, Urban Organics is the licensed Ohio producer of the organic mulch known as SweetPeet.The pair also is behind two other,newer ventures, FreeBirdFarms andFreeLandSoils.
The Bishops are an unlikely duo to have started a business that involves hauling horse manure and turning it into growingmaterial.
Mrs. Bishop is a hair stylist bytrade. Mr. Bishop, meanwhile,studied restaurant and hotel management at Cornell University,and has run resorts and hotels,worked as an investment broker forGrubb & Ellis and helped takeBoykin Lodging public as its seniorvice president of acquisition anddevelopment.
Twelve years ago, however, Mr.Bishop was diagnosed with a slowprogressing form of Lou Gehrig’sDisease, or ALS, which eventuallyled him to resign his position in thecorporate world.
See MULCH Page 17
20110711-NEWS--15-NAT-CCI-CL_-- 7/7/2011 11:03 AM Page 1
With the right tools and a clearset of priorities, companies withonly a handful of employees cankeep tabs on what people are sayingabout them online, find new customers and serve existing clientsbetter, said Rose DiPietro, directorof online marketing for the Councilof Smaller Enterprises.
Ms. DiPietro was one of a few local marketing experts who saidthat small businesses, in particular,need to focus on their biggest prior-ities when using social media tools.The Rutledge Group’s main goal,for instance, was to make more potential customers familiar withthe company’s brand. Other companies use social media toolsto communicate with customersthey already have, and some justwant to know what people alreadyare saying about them online.
Companies that have establishedtheir goals then need to figure outwhich online tools will help thembest achieve them. Companies thatsell to other businesses, for example,might want to spend more time onLinkedIn, while a restaurant ownermight want to join Foursquare, whicha lot of eateries use to offer deals topatrons. Small companies, in par-ticular, may just want to use only onesocial media tool, at least at first,said Ms. DiPietro, who has providedadvice to the Rutledge Group.
Companies that create accountson a bunch of social media sitessometimes end up abandoning allof them, she said.
‘At least listen’Though different companies
have different goals, Ms. DiPietrosaid many businesses can benefitby signing up for Google Alerts, asentiment that other expertsechoed. The free service, whichsends the user an email whenever agiven word or phrase is mentionedonline, gives companies an easyway to “listen” to conversations
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continued from PAGE 15
Social: Online presencekey part of outreach, butallocate efforts wisely
that mention their names, theircompetitors or their industry.
Then a company has the option tothank customers who post glowingreviews, respond to complaints andanswer questions, Ms. DiPietro said.
“If you’re not going to do anything else with social media, atleast listen,” she said.
Even small companies, though,should go a step further and use Face-book, Twitter, LinkedIn or some othersocial media tool, the experts said.
Writing a weekly blog is a partic-ularly effective way for a small com-pany to get its name to show uphigher in the rankings when peoplesearch for the company’s name orrelated terms on Google, said JoelGoldstein, president of GoldsteinCommunications Group Inc. of Solon.
“It used to be real estate in themall. Now it’s real estate on thefront page of Google,” he said.
However, starting a blog can be asignificant time commitment, saidChristina Klenotic, a vice presidentat communications firm Dix &Eaton Inc. of Cleveland.
“You have to make the case thatit can really help with your Googlerankings,” she said.
Small companies who want tospread the word about their busi-nesses can do so by catering tobloggers and people who use socialmedia heavily, Ms. Klenotic said.
She noted the Cleveland restau-rant AMP 150 drummed up interestonline by holding a “Twestival” forheavy Twitter users in March.
“The ripple effect can spreadquite dramatically,” she said.
Don’t ignore itSmall companies using social
media to answer customer questionsneed to let customers know that theymay not always be able to respondimmediately, Ms. Klenotic said.
Those using social media formarketing also have to set aside timeboth to post new content and to engage with customers. “Engaging”might mean writing a traditional response, “liking” a customer’s poston Facebook or “re-tweeting” amessage posted on Twitter.
Though it may take time, evensmall companies should respond tocustomer comments online, saidDominic Litten, who is president ofthe Cleveland chapter of the SocialMedia Club and is head of interac-tive marketing at marketing firmPoint to Point in Beachwood. Com-pliments deserve “thank yous” andcomplaints should be addressed,even if it means giving the customer a way to reach you byphone or email, Mr. Litten said.
“Always respond directly,” he said.Just make sure you have something
of value to add before injecting yourcompany’s name into a conversation,especially if no one is asking for input,said Ms. Klenotic, of Dix & Eaton.
She described how she and twoof her friends were sending Twittermessages back and forth trying tofigure out where they might go for amassage on Cleveland’s East Side.Then a chiropractor nowhere nearthe East Side jumped in.
“It just felt so creepy,” she said. ■
PETERDEMARCO
TAX TIPS
Tax credit may fuel vehicle switchEconomic incentivescould drive proprietors to convert to electric
of the Ford Escape are eligible for thecredit. The rated battery capacity is akey criterium for eligibility for thecredit, and the IRS has establisheddetailed guidance for how it applies.
The Internal Revenue Service hasestablished a special form forclaiming the credit, and not sur-prisingly it has found a high rate oferrors among taxpayers trying toclaim the credit. That means theIRS is likely to develop some addi-tional measures that taxpayers willhave to navigate to substantiatetheir claims.
It’s not clear exactly how long thecredit will remain in place becauseit gradually phases out as manufac-turers sell more qualifying vehicles.
The credit for plug-in electric vehicles is more generous than thecredit for hybrid vehicles that wentinto effect in 2005, but it’s still con-ceivable that taxpayers could findtheir credits reduced by 25% or moreif they purchase their qualifying vehicles later rather than sooner.
The credits could increase if Congress decides to expand them.There are members of Congresswho are pushing proposals to raisethe number of vehicles that wouldqualify for the full credit, and Presi-dent Barack Obama has said hewould like to see 1 million plug-inelectric vehicles on America’s high-ways by 2015.
There are other tax incentives fortaxpayers to consider as well. Thereare a variety of state and local creditsthat might apply, and rechargingequipment may be eligible for credits.
More innovative car owners whodecide to convert their existing ve-hicles to plug-in electric vehicles alsocan be rewarded with certain credits.
As with so many tax issues thesedays, the criteria for qualifying forthe credit can be complicated andcan create some hurdles that aredifficult to clear. For business owners who are fed up with thehigh cost of gasoline, however, theyare credits worth exploring. ■
Mr. DeMarco is vice president and director of tax services for theregional accounting and businessconsulting firm Meaden & Moore,headquartered in Cleveland.
service by a given taxpayer — whetherthat’s an individual or business —is eligible for the credit, so long asthe vehicle is used by the taxpayer.
The credit is available for vehiclesthat have been purchased by thetaxpayer, but not those leased bythe taxpayer. For dealers, the creditcan apply to vehicles that have beenacquired to lease to others, but notvehicles acquired to be resold.
There are other limits based onwhether the vehicle is for businessor personal use. For business-usevehicles, the credit is treated as partof the general business credit andtherefore is subject to certain liabilitylimitations.
For personal vehicles, the creditis treated as a nonrefundable personal credit and therefore is limited by the total amount of taxliability for the year the vehicle isput into service.
Vehicles such as the Nissan Leaf,the Ford Focus Electric, theChevrolet Volt and certain versions
Tough economic times andhigh gasoline prices are inspiring business ownersto take a closer look at
electric vehicles. If the fuel savings alone aren’t
enough to get a business owner’sattention, the income tax creditmight make a switch to an electricvehicle all the more appealing.
The car manufacturers finally arecatching up in producing electricvehicles that can qualify for tax in-centives meant to spark some growthin alternative ways to power vehicles.
As part of the Emergency EconomicStabilization Act of 2008, Congressestablished an income tax credit fornew qualified plug-in electric drivemotor vehicles, including passengervehicles and light trucks.
Each qualified vehicle is alloweda credit of $2,500, with additionalcredits added up to $5,000 based on the number of kilowatt hours ofrechargeable battery power that thevehicle offers.
That means business ownerscould earn a potential tax credit of$7,500 for purchasing an electricvehicle that will reduce exposure tovolatile gasoline prices.
Each qualifying vehicle put into
20110711-NEWS--16-NAT-CCI-CL_-- 7/7/2011 11:03 AM Page 1
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Mr. Bishop then learned ofSweetPeet and the chance to license its production through a“Martha Stewart Living” segment.
Soon after, the Bay Village couplepurchased 27 acres in BrunswickHills, and Urban Organics becamea licensed SweetPeet producer. Thecompany has been making the mulchsince 2002, and today it employs 10full-time workers year-round.
“We went all in,” Mr. Bishop said.“It had to work.”
Not horsing aroundMore than 50 farms from within a
50-mile radius pay Urban Organicsto haul away horse manure, and thebusiness recently signed a long-term agreement with Caesars Entertainment to manage the manure removal at Thistledownrace track in North Randall.
The hauling itself is generally abreak-even operation for Urban Organics, according to the couple,but it supplies the Bishops with thematerial needed to create theSweetPeet in a patented compostingprocess.
The material is transported to theBishops’ Brunswick Hills property,where it becomes part of threeenormous piles — each standingabout 45 feet tall — that arearranged in a horseshoe formation,all at various stages of SweetPeetgeneration.
To make SweetPeet, the mixtureof manure and bedding is turnedover and watered in a process thatnaturally generates heat; the elevatedtemperatures, which range from160 to 180 degrees, kill any harmfulbacteria, the Bishops said. It can takeup to 10 months for the finishedproduct to be ready for consumer use.
SweetPeet is then sold by UrbanOrganics to about 100 wholesalecustomers; for the past two years,the product has sold out by June,with demand far outpacing availablesupply, according to the Bishops.
“We have nothing but good feedback,” said Todd Kruse, generalmanager for Chagrin Pet, Garden & Power Equipment Supply Inc.,which has sold SweetPeet for thepast 10 years.
With an average of 1,100 horsesstabled at Thistledown from mid-April to the beginning of November,the Bishops anticipate that the part-nership with the track eventually willresult in about a 40% increase inSweetPeet inventory.
David Ellsworth, the track’s director of operations, said he firstwas approached several years agoby the Bishops to haul away manure, but at the time Thistledownwas bound by another contract.
Even so, Mr. Ellsworth said hewas intrigued by the operation andimpressed at how it helped “closethe loop” on the green process. Sowhen the opportunity opened thisyear to work with the Bishops, hetook it.
“I’m just really glad to be a part-ner with them,” Mr. Ellsworth said.“It’s everything that we like.”
On the growAfter finding a fertile ground for
SweetPeet, the Bishops opted in2010 to reinvest in the business andexpand their operations, adding thebrands FreeBirdFarms and Free-
LandSoils to the mix.As part of FreeBirdFarms, this
will be the first season duringwhich the business is growingplants for sale in a new 11,000-square-foot organic hydroponicgreenhouse. The heat generatedfrom the process of creatingSweetPeet is even applied towarming the water used in thegreenhouse.
The goal is to harvest 3,000heads a week from April to lateNovember, and eventually, theBishops will have the capacity togrow 18,000 heads at a time,
producing a variety unusual redand green leaf lettuce and a varietyof Asian greens. The Bishops haveplans to work with wholesalers,specialty stores and communitysupported agriculture programs tosell the greens.
The main focus, however, still ison SweetPeet and the soil opera-tion, FreeLandSoils.
As part of FreeLandSoils, theBishops now are producing theirown brand of potting soil, offeringcustom soil blending services andtaking to market a plant food calledRootBooster, which is made withorganic composted worm castings.(The Bishops are raising more than1 million worms on their property— red wigglers, to be exact.)
As if that is not enough, UrbanOrganics also makes GardenSoxx,a self-contained mesh garden sys-
tem that the Bishops hope toeventually use in doing more outreach to schools.
While Urban Organics, with all ofthese efforts, is no doubt a greenoperation with a commitment tosustainability, Mr. Bishop is adamantthat it’s more than that — it’s agood business and SweetPeet is agood, versatile product, he says.
“Our definition of a sustainableoperation is for your business torun on its own,” Mrs. Bishop said.“As far as we’re concerned, wehave a sustainable operation … inmore ways than one.” ■
continued from PAGE 15
Mulch: Inventory may increase with race track contract“I’m just really glad to be a partner with (UrbanOrganics).”
– David Ellsworthdirector of operations,
Thistledown
20110711-NEWS--17-NAT-CCI-CL_-- 7/7/2011 11:04 AM Page 1
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ADVISER
Be proactive to stymie Internet misuse
Workplace managers today know that socialmedia, other online distractions and out-
right Internet misuse are deprivingbusinesses of productive hours,draining bandwidth and jeopardizingcompany networks and reputations.
But what can they do about it?First, how bad is the situation?
Studies show that the average employee spends between one andtwo hours a day using the Internetfor personal reasons, indulging in activities such as accessing social networks, playing games, answering email, sending instantmessages and even watchingpornography and gambling.
According to uSamp, an onlinesurvey company, this translatesinto about $10,000 lost each yearper employee.
What’s more, unauthorized web surfing uses up precious band-width and illicit downloading can both imperil a company’s computer network and tarnish itsgood name.
There are several ways to addressthe problem. Here are three basicsolutions that can be applied sepa-rately or in combination: Internet
would face disciplinary action, including dismissal.
Content filteringManaging a business would be
easier if signing an agreement wasby itself a sufficient deterrent to Internet misuse.Unfortunately,human naturebeing what it is,sterner measuresoften are calledfor.
The next stepI recommend isthe installation of a filtering appli-cation, such as artificial contentrecognition (ACR) software.
ACR analyzes the context of aWeb page, automatically classifiesit into categories such as shopping,sports, sex, gambling, violence, etc.and compares it to a company’s usage policy.
Settings are flexible and can beadjusted as needed. The technologycan cover the entire Internet inreal-time with reasonable accuracy,categorizing content the way a human being would.
Also available are applicationsthat enable managers to make spe-cific websites off limits or enforcestrict limits on what subjects searchengines may seek out.
Appliance-based controlsA web filter appliance is a device
that enables companies to filter online content, blocking or removinglinks, downloads and email that maycontain offensive or dangerouscontent.
Ideally, Web filtering hardwareshould support a unified threatmanagement architecture that
transforms the firewall into an all-inclusive security product that canperform multiple security functions.
These protections should include, in addition to firewalling,network intrusion prevention, gateway anti-virus and anti-spam,
Load balancingrefers to the abilityof a networkedge applianceto handle two or
more connections to the Internetsimultaneously. On-appliance reporting refers to the ability of the filtering appliance to furnish reports of activity directly to themanaging user.
Each company has its own cor-porate culture that determines whatonline behavior is acceptable. Situ-ations vary but my experience showsthat some level of Internet behaviormodification usually is needed.
When I am consulted by clientsconcerned about their vulnerabilityto Internet misuse, I will perform afull network audit to reveal who isdoing what online.
Depending on the seriousness ofthe situation, I will recommendsome combination of the aboveremedies; I am so confident of theireffectiveness that in every case Iguarantee results. ■
Mr. Husni is president of Acendex,an information technology servicesfirm in Beachwood. Acendex is aconsultancy that advises small andmedium organizations on how toachieve and maintain vital IT func-tionality. www.acendex.com.
usage policy agreement; software-based content filtering; and appli-ance-based controls.
Internet usage policyI always recommend to my
clients that their first order of business should be for human resources to institute an Internetusage policy agreement to besigned as a condition of employ-ment by all staff members with webaccess. (There are several templatesavailable on the Internet.)
By signing the agreement, employees promise that they willnot use the Internet in an unac-ceptable way or create unnecessaryrisks to the company’s computernetwork or reputation.
Violations of the agreementwould include unreasonable per-sonal use of a computer, visitingwebsites containing obscene orhateful content, emailing offensiveor harassing material, or downloadingunauthorized software.
Employees failing to comply
PROTECT YOUR COMPANY FROM INTERNET MISUSECompanies are challenged by
employees’ potential misuse ofthe Internet, with social mediaand other online distractionscontributing to productivity loss.Here are five ways to protectyour business from web misuse:
■ Institute an Internet usage policy agreement to be signed as acondition of employment by all staffmembers with Web access.
■ Obtain a detailed audit of company Internet usage, measuringbandwidth and checking for the existence of any malware that might
have already penetrated the firewall.■ Install artificial content recogni-
tion software. It analyzes and classi-fies Web page material and com-pares it to your company’s usagepolicy.
■ Install appliance-based controlsfeaturing a unified threat manage-ment architecture. It can transformyour firewall into an all-inclusive secu-rity product.
■ Increase awareness and boostmorale by involving employees in periodic discussions of the problemand soliciting their suggestions.
Instituting Web policiesshould help minimizeunproductive surfing
GRANDOPENINGSPURA VIDA BY BRANDT RESTAURANT170 Euclid Ave., Public SquareCleveland 44115www.PuraVidaByBrandt.comBrandt Evans — the chef behind theBlue Canyon Kitchen and Tavern inTwinsburg — has opened Pura VidaRestaurant in downtown Cleveland.Dishes at Pura Vida, which means“pure life,” are made with fresh, localingredients. The restaurant is open forbreakfast, lunch and dinner, and italso can host private parties, cater ordeliver breakfast or lunch to down-town [email protected]
SMITH HOUSE CALLSP.O. Box 772Berea 44017www.smithhousecalls.comDr. Rhonda Smith offers full-service in-home veterinary care for householdpets in Cleveland’s western suburbs.Dr. Smith and her technician will come
to the pa-tient’s hometo provide a variety ofpet services,includingwellness exams, vaccinations,
flea/heartworm prevention and more.Procedures requiring more intensivecare are offered through an affiliationwith Emerald Animal Hospital in Cleve-land.Phone 440-678-VETS (8387)Fax [email protected]
MUSE CONTENT GROUP1165 Royalwood RoadBroadview Heights 44147MuseContentGroup.comMuse Content Group — headed byJackie Bebenroth — is a marketingfirm that is exclusively dedicated tothe emerging field of content strategyand development. A collective of pro-fessional writers, photographers andvideographers develop clever, cost-effective social media posts, imagesand videos that keep client audienceseducated and engaged. Strategic con-tent services help clients maximize theirinvestment by choosing the best con-tent distribution methods to broadenreach and exposure for their [email protected]
To submit a new business, send thefollowing information by email toAmy Ann Stoessel at [email protected]: business name; address;city and ZIP; website; brief descrip-tion of business; business phonenumber; business fax number; busi-ness email address; and date thatbusiness opened. Call 216-771-5155with questions.
Each company has its owncorporate culture thatdetermines what onlinebehavior is acceptable.
20110711-NEWS--18-NAT-CCI-CL_-- 7/7/2011 11:04 AM Page 1
JULY 11 - 17, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19
who work at the county’s Informa-tion Services Center, which servesall county agencies, with another 96who work for those agencies. Thecenter, the closest thing the countyhas to a centralized IT department,lost its director, Dan Weaver, abouta year ago, after he was indicted onbribery charges as part of the cor-ruption scandal that has ensnareddozens of county officials and busi-ness people.
“We’re going agency by agencyby agency,” Mr. Mowry said.
That decentralized structure hascreated all sorts of problems, hesaid. For instance, county agenciestypically bought their own hard-ware and software, so one agency’ssoftware often doesn’t work withprograms run by another agency.Mr. Mowry said the county admin-istration building alone has fourcomputer networks, each requiringdifferent log-in passwords.
The structure also drove theagencies to focus on narrow IT pro-jects instead of broader, county-wide goals, said Mr. Mowry, whoalso spent nearly 20 years as an ITexecutive within DaimlerChrysler,eventually becoming CIO of its Detroit Diesel subsidiary.
Plus, because agencies did theirown purchasing, they missed outon discounts organizations oftenget when buying big numbers ofproducts or software licenses, he said.
“Now we have to think as an enterprise instead of an agency,”Mr. Mowry said.
Where’s the help desk?There are other problems, too,
such as a lack of consistent man-agement goals and performancemetrics, weak disaster recovery andsuccession plans, and a county ITboard that approves almost all majorpurchase requests that come its way.
“We don’t even have a help deskhere,” he said, noting that he plansto address all those issues.
Many of the county’s IT prob-lems were cited in a report issuedlast September by the InformationTechnology Task Force, part of theCuyahoga County Transition Advi-sory Group. The group was formedto help the county move from a tra-ditional form of government withthree county commissioners to oneled by an executive and a countycouncil — a response to the samescandal that ensnared Mr. Weaver.He pleaded guilty twice, in August2010 and again last week, to
charges that he conspired to bribethen-County Auditor Frank Russo.
The task force’s report said a restructured IT department undera CIO would allow the county to domore while also saving $8.3 millionannually, after new expenses aretaken into account. The savingswould be achieved mainly throughconsolidating the county’s IT teamsand the hardware they use. The figureincludes $1.5 million in savingsachieved through the elimination of“duplicative roles,” the report stated.
Mr. Mowry, who makes $178,000a year, said he expects there to bestaff reductions, but added that hedoesn’t yet know how many. Thetask force’s annual savings estimateis realistic, he said.
A matter of executionMany of Mr. Mowry’s goals
match those set by the task force,which was led by John Hunter, whobecame director of the county Information Services Center afterMr. Weaver’s troubles began, andBill Blausey, CIO of Eaton Corp., the Cleveland-based manufacturingcompany.
In addition to consolidating theIT department, a process that startedin May, one of Mr. Mowry’s main
goals is to install a system that willallow the county to post its con-tracts and purchase orders online,which is mandated by county ordi-nance.
“That’s a big project for sure, because of the ethics issue,” Mr.Mowry said.
The county also is reviewing itsexisting software to see if it makessense to buy an enterprise resourceplanning system for managing internal processes across all countyagencies. Such an investment couldcost between $10 million and $50million, he said.
Another goal is to generate morerevenue for the county by providingservices to other government enti-ties. For instance, the county’s web-site development team — whichboth Mr. Mowry and the task forcereport described as one of the county’sexisting strengths — already pro-vides services to a few area munic-ipalities.
Mr. Blausey, who helped lead thetask force, interviewed Mr. Mowrywhen he was under considerationfor the position. Mr. Blausey saidone of Mr. Mowry’s strengths wasthat he had experience managingIT departments in private industryand government. ■
2200 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JULY 11 - 17, 2011
Source: Company proxy statements. 2010 net income and net income % change provided by Compustat, www.compustat.com. Crain's Cleveland Business does notindependently 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 informationor clarifications in coming issues. The Book of Lists and enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com.(1) Not a named executive officer for 2009.(2) Mr. Andersson was named president, North American Tire effective Feb. 16, 2010.(3) Mr. Jones was named senior vice president and president, FirstEnergy Utilities on April 1, 2010.
RESEARCHED BY Deborah W. Hillyer
Mowry: Disorganization plagues departmentcontinued from PAGE 3 PE firm Cyprium
makes investmentCleveland private equityfirm Cyprium InvestmentPartners LLC said it has
made a subordinated debt andequity investment in NetworkHardware Resale, a California-based supplier of new and usedIT networking equipment.
Cyprium focuses on non-con-trol investments in privately heldcompanies in the United Statesand Canada. It said the invest-ment will enable the Santa Barbara, Calif., company to “refinance existing indebtednesswhile providing capital to furtherfuel efforts relating to the nextphase of the company’s expan-sion.”
John Sinnenberg, chairman ofCyprium, said Network Hardware“represents a compelling invest-ment opportunity” for the Cleve-land firm. The investment and finance teams at Key PrincipalPartners in Cleveland resignedfrom that firm and on June 1formed Cyprium as an indepen-dent entity. — Scott Suttell
employment level before the Chapter11 filing in U.S. Bankruptcy Court inCleveland. Court documents indi-cate the company had been main-taining its facilities with a skeletonstaff of employees, friends and familymembers of Mr. Grabner who vol-unteered their time, even as Cardinaltemporarily suspended the bulk ofits manufacturing operations.
That situation lasted only a fewdays, while Cardinal and its chieflender, Wells Fargo, haggled overwhether the company could accessits cash accounts with the bank, Mr.Grabner said. Once an agreementwas reached last Tuesday, July 5, toallow Cardinal to access thosefunds, manufacturing operationsresumed, Mr. Grabner said.
The troublesBut employment at the company
is still way down. It had about 50employees before filing for bank-ruptcy and had 64 at its peak in2010, Mr. Grabner said. In between,a lack of access to working capitalcaused the company to shrink em-ployment and kept Cardinal fromgrowing the way it wanted, espe-cially in the wind industry, he said.
Most employees were told to gohome June 17, when Wells Fargopulled Cardinal’s line of credit andcut off Cardinal’s access to its cashwith the bank, leaving the companyunable to make payroll, accordingto court filings. Cardinal owes WellsFargo about $1.16 million, bank-ruptcy documents show.
For its part, Wells Fargo was reacting to Cardinal’s violation ofsome of its loan covenants, includinga failure to meet profitability stan-dards required under its loan agree-ment, court documents state. WellsFargo in August 2010 cited Cardinalfor being in default, the companytold the Bankruptcy Court, but themanufacturer was able to work withthe bank under a forbearanceagreement until May of this year. Itwas then that Wells Fargo reduced
the amount of money Cardinalcould borrow as well as the amountof cash the company could be advanced based on the value of itsmachinery and equipment.
“As a result, Cardinal entered intoan over-advanced position underthe working capital line of credit asof May 30, 2011,” Cardinal wrote ina June 30 motion. “Based on this default condition, Wells ceased providing additional advances andprohibited Cardinal from using theproceeds from its cash collections.Throughout this time, Cardinal nevermissed a payment of principal or interest to Wells Fargo.”
But Cardinal might have donesomething worse, as court docu-ments show it made a significantaccounting error that affected boththe valuation of the company andits profitability.
According to the company’scourt filings, Cardinal had to reclas-sify $1.7 million in inventory as“property, plant and equipment”and had to reclassify another $1million in inventory as expenses related to the company’s expansioninto the wind energy industry.
Cardinal informed Wells Fargo ofthe accounting issues in May. Thatmonth, the bank indicated it wantedto liquidate Cardinal’s assets to collect on its loans to the companyand began sweeping money out ofCardinal’s accounts, “leaving Cardinallargely unable to pay day-to-daybusiness expenses,” according to acourt filing. In mid-June, Cardinalwas unable to pay employees, causingit to lay off 34 workers and to idle itsplant.
Back up and runningSince then, however, the two
sides have reached an agreementunder which Cardinal again can access its cash with the bank andcan resume operations under a mutually agreed-upon budget, saidChristopher Meyer, an attorneywith Squire, Sanders & Dempsey inCleveland who represents Wells
JULY 11 - 17, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 21
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Cardinal: Bank, company realign relationshipcontinued from PAGE 3 Fargo in the case.
As to what caused Cardinal to fallout of compliance with its loancovenants in the first place, Mr.Grabner said it was general busi-ness conditions and not the resultof either the accounting error or alack of growth or profitability in itswind business.
“We were the only company, apparently, to lose money in 2009,”Mr. Grabner quipped, jokingly referring to a year in which many, ifnot most, American manufacturerslost money as the economy doveinto a deep recession.
Cardinal’s court documents statethat its wind business continued togrow, driving overall company salesgrowth of 38% in 2010 comparedwith 2009. Mr. Grabner said whileforeign competition is affecting someaspects of the wind industry, he so farhas not seen it in the bolts business.
“To the best of my knowledge,there are no Chinese fasteners inthese things,” he said.
“The problem isn’t the wind industry or federal policies” relatedto that industry, Mr. Grabner said.“It’s more an issue of the bankingenvironment in our country. …Banks are not supporting smallbusinesses.”
Mr. Meyer tells a different story.He said both business conditionsand the accounting problem con-tributed to Wells Fargo’s decision tomove on Cardinal and to seek a liq-uidation of its assets.
“It’s not just a question of an accounting snafu,” Mr. Meyer said.“There were defaults under thelending agreement related to theiroperations.”
However, Mr. Grabner said thelosses took place in 2009 and weresmall. The company since has
returned to and maintained its prof-itability, he said.
“We’re positive cash flow, wehave been positive cash flow, andwe have profitable operations,” Mr.Grabner said.
Bright past, hopeful futureNonetheless, the company’s pre-
sent situation is a far cry from justtwo years ago.
President Barack Obama visitedCardinal in 2009 and held it out asan example of a U.S. manufacturerlifted by the nation’s increasing development of wind energy. In itsChapter 11 filing, Cardinal notes that,after the visit by President Obama,“Cardinal became a national facefor American manufacturing andjob growth.”
In 2010, the company was named“Supplier of the Year” by the Amer-ican Wind Energy Association.
Now, time will tell if Cardinal canreclaim that role.
One reason buyers and investorsare interested, Mr. Grabner said, isbecause they say they want Cardinal’sposition in the wind industry. Thatposition tends to rely upon local orregional suppliers whenever it can,giving Cardinal a strong opportunityto grow further in the Americanwind energy market.
Mr. Grabner said he hopes thebankruptcy will be short.
“My goal is to run the companyand continue to build it and tomake sure everyone gets paid fromthis,” he said.
Mr. Meyer said a short bankruptcyprobably would make creditorshappy as well.
“I hope it’s not going to be a long,drawn-out bankruptcy,” Mr. Meyersaid. “It’s in everyone’s interest topreserve the value of the company.” ■
Study: Businessrelocations fuelCleveland sprawl
A study that claims to bethe largest ever done inthe United States of subsi-
dized business relocations indi-cates that property tax breaksgiven to entice companies tomove within the Cleveland areahave worsened wealth inequitiesin the region and have fueledsuburban sprawl.
The study, released by thenonprofit research center GoodJobs First and financed by theFord Foundation, is titled, “Paidto Sprawl: Subsidized Job Flightfrom Cleveland and Cincinnati.”
The study cites 164 compa-nies that were given what it called“lucrative property tax breaks” asthey moved facilities around theCleveland and Cincinnati metroareas. Good Jobs First said thesubsidized relocations, affectingan estimated 14,500 workers,“were overwhelmingly outwardbound and by many measures fueled suburban sprawl, espe-cially in the Cleveland region.
“By dispersing jobs away fromthe urban cores, the relocationsworsened inequalities in wealthand opportunity,” the nonprofitsaid.
To address the problems cre-ated by the tax breaks, the studyrecommends that the state en-courage anti-poaching agree-ments like those in effect inSummit County and that are un-der consideration now in Cuya-hoga County.
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CLASSIFIEDThe Jointly Administered Trust Fund for the Benefit of Lorain CitySchool District Employees is requesting quotes from qualifiedinsurance carriers and/or third party administrators to administerits employee health benefits programs which include medical,pharmacy, dental and vision benefits. Additionally, proposals areinvited for wellness, disease management and populationmanagement programs. Interested parties can bid on any one or acombination of the above services and programs.
Interested parties should contact Jeff Smith directly for a copy of therequest for proposal documents.
Proposals are due no later than 4:00 pm (EDT) Tuesday, August2, 2011. Potential bidders should not contact The District or any ofThe District employees directly.
The University of AkronDirector, UA Lakewood Location
Lakewood, OHDirector is responsible for the operation, organizational management,enrollment (credit and non-credit), and community engagement ofThe University of Akron Lakewood. A relevant Bachelor’s degree &6 years management/leadership experience required.
For complete information on duties, qualifications & to ap-ply visit www.uakron.edu/jobs. Requisition #6774. EEO/AA.
Director forGrants, Research and Development
Notre Dame College is seeking a Director for Grants, Research andDevelopment. The successful candidate will have a demonstratedability in successful researching and writing grant proposals; abasic knowledge of funding opportunities in higher education;creative program development skills; superior writing and editingskills; a basic knowledge of local foundations and program officerswho offer support to educational institutions.
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That man is Zell, and he’s back in NE Ohio■ Sam Zell, the famed Chicago investormore successful as a real estate bottom-fisherthan media magnate, again is investing inNortheast Ohio’s property market.
Equity Investment Co., the vehicle for Mr.Zell’s personal real estate investments, lastmonth acquired the Courtyard by Marriottin Willoughby for $6.7 million, according tothe Lake County auditor’s office.
Typical of a deal by Mr. Zell, the seller —TIC CY Willoughby LLC, an investor groupled by Moody National Cos. of Houston —had shelled out $15.3 million for the 90-roominn in 2007, the last time it changed hands.
Terry Holt, a spokeswoman for Equity,said in an email that the company has beenactive recently in recapitalizing hotels. Shesaid the Willoughby hotel is the only invest-ment the privately held Equity concernowns in Northeast Ohio. Equity Residential,the Chicago-based, publicly traded apartmentcompany formed by Mr. Zell, also ownsnothing in the region, accordingto its website.
Mr. Zell, long known in realestate circles as the “grave dancer”for making big bets on sourdeals to reap sweet profits later, returns to the region topick through the detritus of the2008 financial crisis. His formerholdings in the region rangedfrom Lakewood to Mentor andincluded apartment, hotel, retailand office properties. — StanBullard
For-profit South U. looks to head north■ A for-profit college with campuses primarilyin the southern part of the country is poisedto open a location in Cleveland Heights,though the school is mum on the details.
Georgia-based South University is recruitinga campus president, a campus dean and asenior director of admissions for a Cleve-land Heights location, according to postingson HigherEdJobs.com.
However, Heather Askew, assistant chan-cellor for communications at the university,said in an email that “while preliminarysteps are under way (such as postings employment opportunities), I am not ableto confirm any additional details about theuniversity’s pending arrival in Ohio until allnecessary regulatory approvals to operate inthe state are secured.”
South University has 11 campuses acrossthe country, including sites in Austin, Texas;Richmond, Va.; Montgomery, Ala.; and
Novi, Mich. The university offers associates, bachelor’s and master’s
degree programs in a numberof fields, such as nursing, information technology, para-legal studies and graphic design.
Education ManagementCorp. in Pittsburgh, the college’s parent company,also operates Brown MackieCollege, which has campusesin Akron and North Canton. —Timothy Magaw
Skoda Minotti, Hilty Moore hook up■ The menu of services offered by SkodaMinotti has grown by way of acquisition.
The CPA, business and financial advisoryfirm, with offices in Mayfield Village andFairlawn, has acquired Chagrin Falls marketing firm Hilty Moore & Associatesand Hilty Moore’s visual marketing division,BrandEyeD. Terms of the June deal were notdisclosed.
The merger affords Skoda Minotti capa-bilities it didn’t have before, including marketresearch and visual marketing, saidJonathan Ebenstein, managing director ofmarketing services. The additions meanSkoda Minotti now has the expertise to assist clients in understanding the marketsthey serve and in retail planning and designbranding, Mr. Ebenstein said.
A few members of Hilty Moore havejoined Skoda Minotti’s staff, which numbersabout 135. They include John Moore, whoco-founded the acquired company. HiltyMoore typically employed between a half-dozen and eight people, Mr. Moore said.
Mr. Moore said he was attracted to joiningSkoda Minotti because of the added servicesfor his clients, which include accounting, tax planning and information technology services.
“I saw a real opportunity for growth formy business just having the resources thatSkoda provides,” said Mr. Moore, now managing director of strategic marketingprograms. “Second, I looked at how I couldenhance the services that Skoda currentlyprovides.” — Michelle Park
The company says its ReStor-It line extendsthe useful life of office furniture — and doesit pretty fast, too.
“Each ReStor-It Quick 20 repair kit allowseasy repair of moderate furniture and seatingdamage in 20 minutes,” Master Manufacturingsays. Compounds are applied simply, withoutthe need for heat, and they dry within 20 minutes. To match colors and grains, eachkit comes with seven intermixable colors, acolor mixing guide, mixing cups and an appli-cator, according to the company.
For repair of moderately damaged furniture, flooring, paneling or other hard surfaces, the company says the Quick 20 Fix-A-Chip repair kit fixes chips, cracks, scratches,blemishes, imperfections and burn holes.The Quick 20 Leather/Vinyl Repair Kit repairsburns, holes, rips, and tears on leather andvinyl. For repair of damaged fabric upholsterycommon in seats, sofas, chairs, and booths,the Quick 20 Fabric Upholstery Repair Kit’scolor fabric fibers allow repairs to any colorfabric upholstery.
The company, founded more than 50years ago, is a certified Women’s BusinessEnterprise.
For information, visit www.MasterMfgCo.com/restorit.html.
REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS
THEINSIDER
THEWEEK JULY 4 - 10
The big story: A local investor is at the helmof a group that has bought for an undisclosedprice the former General Motors transmissionplant in Parma. The ownership group, 54 ChevyLLC, is co-managed by Joseph Greenberg, an industrial real estate broker in Solon who oper-ates Greenberg Realty Advisors and handlesbrokerage for Chelm Properties in NortheastOhio. Mr. Greenberg said the former transmissionplant can become home to companies as smallas 50,000 square feet or that want the entirebuilding, which is 527,000 square feet. The formertransmission plant was one of three former GMproperties sold in separate transactions by TheRACER Trust. The others are in Moraine, Ohio,near Dayton, and Wyoming, Mich.
German engineering: OM Group Inc. ofCleveland signed a definitive agreement to buyVacuumschmelze GmbH & Co. (VAC) of Hanau,Germany, a producer of advanced materials andspecialty magnetics, for about $1 billion. VACwas founded in 1923 and has production opera-tions in China, Finland, Germany, Malaysia andSlovakia, with sales offices in 16 countries. Thecompany employs 4,500 people globally, including160 scientists and engineers. Excluding one-timeitems related to the acquisition, OM Group said, itexpects the acquisition to be accretive to earningsin fiscal 2011.
Exploring space: The Cleveland Metropoli-tan School District is looking for new officespace to house its central office staff and possi-bly will auction its longtime headquarters build-ing at 1380 E. Sixth St. near the Cleveland Med-ical Mart and Convention Center constructionsite. The district released requests for proposalsfor new space. Options include finding space ina downtown office building or renovating eitherEast or South high schools — two recently closedschools. Weston Development Co. will handleboth the relocation effort and possible auctionof the district’s current headquarters.
A numbers guy: Energy Focus Inc. hired theformer chief financial officer of Keithley Instru-
ments Inc. as its vice president of financeand CFO. The Solon-based producer
of energy-efficient lighting productssaid Mark Plush brings to his new
job more than 28 years of financial management expe-rience with Keithley Instru-
ments, a maker of sophisti-cated measurement instruments
where he was CFO for 12 years.Keithley was acquired late last year by
Danaher Corp.
Name that team: The great mystery sur-rounding the Cleveland Cavaliers’ next NBA Development League affiliate was solved. Afterthe team last month ended its relationship withthe Erie (Pa.) Bayhawks — its affiliate for threeyears — and subsequent rumors about buying ateam and locating it in Youngstown, the Cava-liers acquired the New Mexico Thunderbirdsand will move them to Canton. The team willplay its games at the Canton Memorial CivicCenter. Fans are invited to suggest names by vis-iting www.CantonNBA.com.
This and that: The Riverside Co. sold a DesPlaines, Ill., manufacturing company for what ittermed a “solid” return of $3.50 for every dollarinvested. Terms of the sale of Justrite Manufac-turing Co. were not disclosed. The buyer wasBaird Capital Partners. … TravelCenters ofAmerica LLC opened a Petro full-service travelcenter in Raphine, Va. Westlake-based Travel-Centers said the new Petro features 250 truckparking spaces, 16 fueling lanes, 11 privateshowers and a 175-seat Iron Skillet Restaurant.
JULY 11 - 17, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 23
BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com
Northeast Ohioans stay loyalto their carmaking heritage■ If you’re trying to convince a consumer tobuy an American car, Cleveland is one ofthe best places to do it.
That was the conclusion of CarGurus.com, an auto research and shopping site,which for the last six months has trackedthe behavior of consumers using its flagshipDealFinder car shopping service. CarGurus.com then ranked 50 U.S. metro areas according to the percentage of total dealerinquiries submitted by consumers thatwere for American-brand cars.
It’s no surprise that the city with the highest percentage of inquiries aboutAmerican cars, 67%, was Detroit. (It wastied with St. Louis.) Cleveland was third,with 59% of buying inquiries for Americanbrands, while just 29% werefor Asian brands and 12%were for European brands.
The metro areas with thelowest relative interest inbuying American-brandcars all were on the WestCoast: Los Angeles (27%American car brand interest),San Francisco (27%), andSan Diego (27%).
For the full Hamptons experience, get there in style■ The Wall Street Journal really likes its newJet Tracker database — almost as much asRandy Lerner likes flying to the Hamptons.
The newspaper has been writing quite afew stories of late stemming from the data-base. One of the more lighthearted effortslooked at what The Journal calls “the sliver
of the Hamptons crowd that can afford tobypass the chronically congested roadwayson corporate-owned private jets.”
It turns out the most frequent flier to theHamptons is a jet owned by the ClevelandBrowns, with 390 trips to East Hampton inthe four-year period (Jan. 1, 2007, to Jan. 1,2011) examined by The Journal. Mr. Lerner,owner of the team, maintains an estate inAmagansett Lanes on East Hampton.
“More than 60 of the flights by theBrowns-owned plane that landed in EastHampton originated from either New York’sLaGuardia or Teterboro in New Jersey — apricey way to travel a fairly short distance,”The Journal said.
Hell frozen over: Cleveland’sweather an advantage■ When it comes to climate change, Cleve-land is in a very good place.
In a piece that ran on environ-mental news website Grist.org, writer Jeff Oppermanranked cities based on theirresilience to climate change.Factors considered weredisruptions to water supplies,increased risk of naturaldisasters (such as floods andhurricanes), and heat itself.
By these standards, thefive U.S. cities that are most
resilient/least vulnerable to climate changeare, in order, Cleveland, Milwaukee, De-troit, Chicago and Minneapolis. The least re-silient cities are Phoenix, Houston, Sacra-mento, Las Vegas and Miami.
Why do Rust Belt cities do so well?“They have a sustainable water supply;
their heat stress rankings are relatively low;and they are less vulnerable to natural dis-asters that will be exacerbated by climatechange, such as floods, landslides and wild-fires,” Mr. Opperman wrote.
BMW Cleveland6135 Kruse Dr. • Solon • 1-866-210-6710
www.BMWCleveland.comMonthly lease payments of $599.00 for 36 months based on MSRP of $56875.00. Vehicle may need to be ordered. Excludes tax, title, license and registration fees. 1st payment, $3500.00 downpayment and Bank fee and $0 security deposit program are due at delivery. Program available to qualified customers and not everyone will qualify. Subject to credit approval. Dealer contributionmay affect terms. Lessee must cover insurance and all items not covered under the BMW Maintenance Program. Excess mileage charges of $.20 per mile for miles driven in excess of 10,000 milesper year. Purchase option at lease end for $33556.25 excludes taxes. Lessee acquires no ownership interest unless purchase option is exercised. Expires 7/30/2011.
The traction to handle anythingthat crosses your path.Lease for:
$599/mo.*36 monthlease
2011 BMW 535i xDrive SedanWith the hum of 300 horses underneath its hood, this is one powerful ride. And with the addition ofxDrive, BMW's intelligent all-wheel drive, it will keep you safe, no matter what Mother Nature throwsyour way. Well equipped with, Automatic, full power. Leather seating, universal garage door openers,satellite radio, ipod connector, heated front/rear seats and steering wheel.
BMW Ultimate Service™You pay nothing for 4 years or 50,000 miles. BMW no-cost maintenance covers everything but gas and tires**
HHAANNDDLLIINNGG TTHHAATT CCAANNHHAANNDDLLEE AALLMMOOSSTT EEVVEERRYYTTHHIINNGGElectronic traction control, Dynamic Stability Control,Cornering Brake Control, Roll Stability Control, HillDescent Control. That’s an awful lot of control, and ina world as unpredictable as the one we live in, it’s goodto know it’s there.**
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LEASES STARTING AT$499* 48 MOS.MSRP $38,100
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* Jaguar Platinum Coverage includes all factory recommended scheduled maintenance for 5 years or 50,000 miles, whichever occurs first. Wear and tear items are limited to brake pads, brake discs, brake flu-id changes and wiper blade inserts based on factory specified wear limits or intervals. All work must be performed by an authorized Jaguar dealer. For complete details on Jaguar Platinum Coverage, includingwarranty and maintenance coverage and exclusions, please visit your local Jaguar dealer. ** With approved credit. 39 month lease. Total due at signing $4,795. Includes $4,196 down payment, $0 security de-posit plus tax, title and fees extra. Customer responsible for excess wear and tear. 10,000 miles per year, 30¢ per mile over. Expires 7/31/11. Jaguar Platinum Coverage includes all factory recommended sched-uled maintenance for 5 years or 50,000 miles, whichever occurs first. Wear and tear items are limited to brake pads, brake discs, brake fluid changes and wiper blade inserts based on factory specified wear lim-its or intervals. All work must be performed by an authorized Jaguar dealer. For complete details on Jaguar Platinum Coverage, including warranty and maintenance coverage and exclusions, please visit yourlocal Jaguar dealer.
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6137 KRUSE DR., SOLON (440) 542-0601www.jaguarcleveland.com C L E V E L A N D
>> 2011 XF LEASE$599DUE AT SIGNING: $4,795 + TAX, TITLE AND FEES$0 SECURITY DEPOSITBASED ON $53,375 MSRP
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Factory certified Sales associates and Factory trained technicians
MMAASSEERRAATTII OOFF CCLLEEVVEELLAANNDD6137 KRUSE DR. • SOLON • 1-866-210-6707
11-17maseratiAAA.indd 1 1/14/09 2:21:56 PM
LAND ROVER SOLON
www.landroversolon.com
MASERATI OF CLEVELAND
20110711-NEWS--24-NAT-CCI-CL_-- 7/8/2011 11:06 AM Page 1
