By TIMOTHY MAGAW [email protected]A rea hospitals are trying to strengthen their ranks of physicians in a concerted effort to ramp up for an expected influx of newly insured patients brought on by federal health care reform. The movement comes as hospitals address the concept of accountable care organizations — a small facet in the new health care reform law that could have major implica- tions for the ways care is delivered. Exactly what these organizations will look like has yet to be deter- mined, but the idea is to band together medical providers and reward them with financial incentives By JAY MILLER [email protected]Cleveland casino developer Rock Ventures LLC and lake shippers could be on a collision course at Collision Bend. Rock Ventures has proposed narrowing the channel of the Cuyahoga River at Collision Bend to accommodate its planned, $600 million gambling complex behind Tower City Center. But it will take an act of Congress to allow it, and the plan is alarming ship operators and their captains who must navigate their ships through the narrow, winding river channel. In August, Cleveland Cavaliers owner Dan Gilbert’s Rock Ventures bought from Forest City Enterprises Inc. a 16-acre site for the new By JAY MILLER [email protected]John Kasich during his run for governor largely avoided specifics about how he’d fill an expected $8 billion hole in the next two-year state budget. But the man who now is the governor-elect is finding no shortage of outside interests who are willing to lend him a hand in that effort. The Greater Cleveland Partner- ship is among the business groups eager to gain the ear of Mr. Kasich, who last week defeated Gov. Ted Strickland by a 49%-47% vote. So, too, is the Ohio Society of CPAs, whose vice president of govern- ment affairs, Barbara Benton, was among the 750 lobbyists and policy advocates gathered last Thursday, Nov. 4, at the Columbus Convention Center for Impact Ohio, a post-elec- tion conference sponsored every two years by a Columbus lobbying firm. A year ago, the Columbus-based trade group for the accounting profession created a state budget task force and in June released a 23- page report that offered large and $1.50/NOVEMBER 8 - 14, 2010 Vol. 31, No. 44 SPECIAL SECTION SMALL BUSINESS Lake County store owners find value in their own brand, RediGo ■ Page 17 PLUS: HOLIDAY HIRING ■ MARKETING LEADS ■ TAX TIPS ■ & MORE NEWSPAPER INSIDE Start me up Northeast Ohio startups say venture capital investments are percolating. Local firms raised $143 million in venture capital during the first three quarters of 2010 — a big increase from a year earlier. Read Chuck Soder’s story on Page 3. Kasich to find no shortage of budget advice Organizations jockey to voice suggestions to governor-elect on plugging $8B hole See BUDGET Page 7 See CASINO Page 26 See DOCTORS Page 22 Casino developers gamble with Cuyahoga River space Rock Ventures wants to narrow channel for complex JESSE KRAMER Dr. Jeffrey Galvin ran a solo private practice in Fairview Park for about 10 years before joining MetroHealth in August. RISING TO NEW LEVELS Hospitals shore up staffing by partnering with independent doctors amid projected rise of newly insured patients INSIDE: Federal government may provide incentives to entice students to pursue medicine. Page 22 EDITORIAL: John Kasich must act now to devise a budget blueprint by working with legislative leaders and other organizations. Page 10
Area hospitals are trying tostrengthen their ranks ofphysicians in a concertedeffort to ramp up for an
expected influx of newly insured patients brought on by federalhealth care reform.
The movement comes as hospitalsaddress the concept of accountablecare organizations — a small facet
in the new health care reform law that could have major implica-tions for the ways care is delivered.Exactly what these organizationswill look like has yet to be deter-mined, but the idea is to band together medical providers and reward them with financial incentives
Cleveland casino developer RockVentures LLC and lake shipperscould be on a collision course atCollision Bend. Rock Ventures hasproposed narrowing the channel ofthe Cuyahoga River at CollisionBend to accommodate its planned,$600 million gambling complex
behind Tower City Center. But itwill take an act of Congress to allowit, and the plan is alarming ship operators and their captains whomust navigate their ships throughthe narrow, winding river channel.
In August, Cleveland Cavaliersowner Dan Gilbert’s Rock Venturesbought from Forest City EnterprisesInc. a 16-acre site for the new
John Kasich during his run forgovernor largely avoided specificsabout how he’d fill an expected $8billion hole in the next two-yearstate budget. But the man who nowis the governor-elect is finding noshortage of outside interests whoare willing to lend him a hand inthat effort.
The Greater Cleveland Partner-ship is among the business groupseager to gain the ear of Mr. Kasich,who last week defeated Gov. TedStrickland by a 49%-47% vote. So,too, is the Ohio Society of CPAs,whose vice president of govern-
ment affairs, Barbara Benton, wasamong the 750 lobbyists and policyadvocates gathered last Thursday,Nov. 4, at the Columbus ConventionCenter for Impact Ohio, a post-elec-tion conference sponsored everytwo years by a Columbus lobbyingfirm.
A year ago, the Columbus-basedtrade group for the accounting profession created a state budgettask force and in June released a 23-page report that offered large and
$1.50/NOVEMBER 8 - 14, 2010Vol. 31, No. 44
07148601032
644 SPECIAL SECTION
SMALL BUSINESSLake County store owners find value in their ownbrand, RediGo ■■ Page 17PLUS: HOLIDAY HIRING ■■ MARKETING LEADS ■■ TAX TIPS ■■ & MORE
NEW
SPAP
ER
INSIDEStart me up
Northeast Ohio startups say venture capital investments are percolating. Local firms raised$143 million in venture capital during the first threequarters of 2010 — a big increase from a year earlier. Read Chuck Soder’s story on Page 3.
Kasich to findno shortage ofbudget advice Organizations jockey to voice suggestionsto governor-elect on plugging $8B hole
See BUDGET Page 7
See CASINO Page 26
See DOCTORS Page 22
Casino developers gamblewith Cuyahoga River spaceRock Ventures wants to narrow channel for complex
JESSE KRAMER
Dr. Jeffrey Galvin ran a solo private practice in Fairview Park for about 10 years before joiningMetroHealth in August.
RISING TO NEW LEVELSHospitals shore up staffing by partnering with independent
doctors amid projected rise of newly insured patients
INSIDE: Federal government may provide incentives to entice students to pursue medicine. Page 22
EDITORIAL: John Kasich must actnow to devise a budget blueprint byworking with legislative leaders andother organizations. Page 10
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3
INSIGHT
THE WEEK IN QUOTES“We’re concerned,because this is a tightriver to start with.Every inch of that river is needed forcommercial naviga-tion.”— Glen Nekvasil, vice president-corporate communications forthe Lake Carriers’ Association.Page One
“We’re excited aboutthe (Cleveland Metropolitan SchoolDistrict) plan itself.We’re now looking tosee how it can be sustained over the nextfive, seven or 10 years.”— Joseph Roman, president of the Greater Cleveland Partnership. Page 9
“The consumer stillbelieves more water isbetter, and that’s notalways the case.”— Kevin Campbell, director ofretail marketing for Moen Inc.Page 16
VC funds still flowing to startupsHelped by that financing through recession,young companies blossoming at right time By CHUCK [email protected]
Northeast Ohio startups say it’sstill tough to find venture capital.Somehow, though, they’re startingto find it.
Local companies raised $143 million in venture capital during thefirst three quarters of 2010, morethan double the $63 million raisedthrough the third quarter of 2009,according to figures from startupbusiness development group Jump-
Start Inc.More capital is on the way: North
Coast Angel Fund, a group of indi-viduals who finance high-tech com-panies in the region, last Thursday,Nov. 4, was scheduled to put $4 million into its second fund, whichcould grow to $8 million. Plus, theOhio Public Employees RetirementSystem has committed another $100million to the Ohio-Midwest Fund,which invests in venture capital and
private equity funds throughout thestate.
Programs such as those havehelped keep Northeast Ohio’s mostpromising young companies alivethrough the recession, according toseveral industry experts.
Now many of those startups arematuring just as the economy startsto improve, which helped boost theregion’s investment numbers, said
See VC Page 8
See ROSETTA Page 24
DOUG BARDWELL/FOREST CITY ENTERPRISES
Forest City Enterprises now manages 12,000 units of military housing, like thisMarine Corps Base in Hawaii’s Kaneohe Bay area.
Rosetta’sgrowth goalto benefitlocal office Digital marketer seeksbigger piece of global pieBy CHUCK [email protected]
Chris Kuenne has his sights set onthe other half of the pie. And North-east Ohio stands to get a piece.
Acquisitions have helped interactivemarketing firm Rosetta LLC grow tomore than 1,000 people from about600 in July 2008, when it bought Brulant Inc. of Beachwood.
All those employees are based inthe United States, which accounts
for just half of the worldwidemarket for digitalmarketing ser-vices, said Mr.Kuenne, CEO ofRosetta. That’swhy the Hamilton,N.J.-based com-pany plans to startlooking abroad
for future acquisitions.“It’s now time to really globalize
Rosetta,” Mr. Kuenne said.Northeast Ohio can expect to
benefit from coming growth, Mr.Kuenne said. Rosetta has addedabout 50 people to its NortheastOhio staff since buying Brulant,bringing the company’s local staff toabout 400. The company is posi-tioned to expand its presence in theregion further now that it is consoli-dating its three previous NortheastOhio offices into new space in down-town Cleveland.
Rosetta a few months from nowwill finish occupying 80,000 squarefeet on six floors at 629 Euclid Ave.Before, the company’s largest localoffice consisted of 33,000 square feeton Park East Drive in Beachwood.The company plans to move intomore space as needed.
Plus, Mr. Kuenne said he’s “bullish”on the Cleveland office’s ability towin clients and recruit top talent. Heexpects it will grow as quickly as therest of the company.
“Our intent is to grow this busi-ness 15% to 20% per year,” he said.
Rosetta has done plenty of growinglately. The company bought LevelStudios of San Luis Obispo, Calif., in
When actors for the steamyCBS action drama“Hawaii Five-O” recentlyran through a neighbor-
hood of contemporary suburbanhomes occupied by families of U.S.Navy personnel, it gave a nationalaudience a peek at one of Forest CityEnterprises Inc.’s less-heralded —but quite significant — projects.
The Battleship Cove developmenton Ford Island in Hawaii is part ofthe giant developer’s Military Com-munities subsidiary — a segment ofForest City’s business that has blos-somed from an unheralded start.
In just six years, projects for themilitary have produced billions ofdollars of construction work andmillions in management fees forForest City. It now manages 12,000units of military housing for the Navyand Marines in eight locations, and itrecently won an Air Force contractthat will add 2,000 more. That’s14,000 military housing units in ahalf-decade, compared with 33,000
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Keith E. Crain: ChairmanRance Crain: PresidentMerrilee Crain: SecretaryMary Kay Crain: TreasurerWilliam A. Morrow: Executive vice president/operationsBrian D. Tucker: Vice presidentRobert C. Adams: Group vice president technology, circulation, manufacturingPaul Dalpiaz: Chief Information OfficerDave Kamis: Vice president/production & manufacturingKathy Henry:Corporate circulation/audience development director
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700 W. St. Clair Ave., Suite 310,Cleveland, OH 44113-1230Phone: (216) 522-1383Fax: (216) 694-4264www.crainscleveland.com
FirstEnergy GenerationCorp. said it has installeda fuel cell energy storage
system at its coal power plant inEastlake.
The company, a subsidiary ofFirstEnergy Corp. in Akron, plansto test the performance of the fuelcell system for five years, saidMark Durbin, senior communica-tions representative for the utility.The system was developed recently by Ballard Power Sys-tems Inc. of Burnaby, Canada.
The one-megawatt unit, designed to provide enoughelectricity for 500 homes, will beused when demand for electricityis high. It is housed in a trailer soit can be moved by truck to othersites if needed.
The fuel cell system produceselectricity, as well as water andheat, by combining hydrogenand oxygen, FirstEnergy said.
— Chuck Soder
ON THE WEB Story from www.CrainsCleveland.com.
said. In Strongsville, it occupiesspace emptied by an MC Sportsstore.
Keith Hamulak, a CB Richard Ellisretail sales associate, said some owners of higher-quality shoppingcenters aggressively are courting BigLots and other discount stores suchas Family Dollar and Dollar Generalbecause they are among the few expanding retailers.
“In the past, they were afraidcloseout stores would stigmatize thecenter,” Mr. Hamulak said. “Or itwould show weakness from thelandlord’s side. Now it’s a good deal;it generates revenue.”
Owners of better shopping centersare reducing rents to win discoun-ters, he said, but discounters arepaying more for better locations.Historically, discounters went intoweaker shopping centers costing $3to $6 per square foot.
Now, Mr. Hamulak said, they arepaying rents of $10 or more persquare foot.
There’s another incentive forlandlords to make space available todeep discounters. Shopping centerowners may need higher occupancylevels to satisfy lenders or the leaserequirements of other tenants.
Downturn chic also aids discoun-ters.
“Now it’s cool to say, ‘I can get thisat Big Lots. I’m not afraid of beingseen in the store,’” Mr. Hamulaksaid.
Big Lots stores average 20,000square feet of selling space and employ at least 40. ■
Big Lots, a closeout retailer basedin Columbus, is taking advantage ofhigh retail vacancies to snap uphigher-quality shopping centerspace and add new locations inNortheast Ohio.
Big Lots just opened a new store at Strongsville Town Center inStrongsville and plans to open another this Friday, Nov. 12, at theMarketplace at Four Corners shop-ping center in Aurora. The retaileralso is negotiating for locations inGeauga, Lake and Medina countiesfor stores it plans to open next year,according to Big Lots spokeswoman
Toni Fink.Including the Aurora and
Strongsville stores, Big Lots has 18stores in Cuyahoga, Geauga, Lake,Lorain, Medina and Summit coun-ties. Among them is a store it openedin October in Cuyahoga Falls.
“The real estate market has beenreally good for Big Lots,” Ms. Finksaid. “We’ve been able to make itinto nicer shopping centers that wehave not been able to get into before.” She declined to disclosesales, but said a store Big Lotsopened this year in the posh Polarisshopping center in Columbus is “doing really well.”
In Aurora, Big Lots is going into aformer Linens ‘N Things store, she
20101108-NEWS--5-NAT-CCI-CL_-- 11/4/2010 9:35 AM Page 1
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Change to overdraft protection rules hurts bank revenueOfficials say high opt-in rates for servicesuggest strict regulations were unnecessaryBy MICHELLE [email protected]
It is one of the first measurableblows of financial reform: Banks areblaming multimillion-dollar dropsin third-quarter revenue on a regu-latory change that prohibits themfrom charging overdraft fees unlesscustomers elect for overdraft pro-tection on electronic transactions.
Several banks that do business inand around Cleveland cited in theirquarterly reports a negative impactfrom amended overdraft rules thatbecame effective for new bank cus-tomers July 1 and for existing onesAug. 15. The amended rules, underthe Federal Reserve Board’s Regula-tion E, pertain only to overdrafts atautomated teller machines anddebit card transactions, not writtenchecks.
Huntington Bank reported thatrevenue from service charges ondeposit accounts in the third quarterfell $10 million, or 13%, from thesecond quarter and nearly $15 million,or 18%, from a year ago. Those
declines, it stated, represented a decrease in overdraft fees.
Likewise, KeyCorp cited thechange to Regulation E, which coversvarious aspects of the electronictransfer of funds, as the reason for a$5 million decrease in service chargesfrom $80 million in the second quarter.
Pittsburgh-based PNC, with significant operations here, said itsservice charges on deposits in thethird quarter fell $45 million, or22%, compared with the secondquarter mainly due to the imple-mentation of the change. The bankalso indicated that it anticipatesrevenue from service charges todrop about $55 million in the fourthquarter for a two-quarter decreaseof $100 million.
And Fifth Third Bank said thenew policy was largely the reason itsretail service charges declined 13%from the previous quarter and 24%from the third quarter of 2009.
David Schamer, a 16-year bankerand director of deposits for Hunt-ington, said the amendment to Regulation E has been one of the
biggest disruptions to the bankingindustry he has seen.
“A lot of banks have come to relyon these fee revenue streams,” saidMr. Schamer, who noted that banks“are having to recast their strategies”when it comes to how they makemoney. “A lot of the industry is goingthe path of, ‘OK, how do we replacethese fees? How do we fill the bucketback up?’”
A spokeswoman for the FederalReserve Board, which approved thechanges to Regulation E last November,said the Fed would offer no reactionto the banks’ statements.
Are you in, or out?The Fed’s final rule and commen-
tary about the electronic overdraftchanges, issued Nov. 12, 2009, high-lighted arguments for and againstoverdraft protection as it used to be,when many banks automatically enrolled customers for the service.
The banking industry asserted the overdraft protection providescustomers access to funds in urgentsituations and also spares them theembarrassment of declined transac-tions. On the flip side, consumer advocates called overdraft transac-tions a high-cost form of lending thattraps low- and moderate-income
consumers into paying high fees.Banks have found that more
customers are opting in — or electingfor overdraft protection — than anticipated, though fee revenuesstill declined much as expected,said Nessa Feddis, vice presidentand senior counsel for the AmericanBankers Association.
Opt-in rates of 50% to 60% arenot unusual, she said.
According to Huntington’s Mr.Schamer, 80% to 90% of customerswho’ve returned election forms toHuntington chose to have overdraftprotection. He would not disclosehow many returned the forms, butsaid it was hundreds of thousandsof the bank’s more than 1 millioncustomers.
Daniel E. Klimas, president andCEO of Lorain National Bank, esti-mated his bank’s rate of opt-ins aresimilar, while David Shaw, seniorvice president and secretary forFirst Federal of Lakewood, said hisbank saw a low return rate of elec-tion forms from consumers and alower opt-in rate of 33%.
Mr. Klimas sees the high opt-inrates as proof that overdraft fees were“not something that consumerswere looking for someone to protectthem from.” The real impact of Regulation E is the added expense,he said, noting banks are spendingmoney and time just to provide customers the same service they’dbeen receiving.
From June to September, LorainNational saw a slight drop in servicecharge income, Mr. Klimas said.The full impact of Regulation E willbe more evident after the holidayseason, he said, because it’s a timewhen people who don’t typicallyoverdraw their accounts and whomay not have opted in to overdraftprotection tend to overspend.
Credit unions have been affected,too, but minimally, said PatrickHarris, spokesman for the OhioCredit Union League. Some havefelt no impact, he said, while othershave lost up to 10% in overdraft feerevenue. Mr. Harris noted creditunions “typically charge lower fees,so the impact will naturally be less.”
Checking into checkingSeveral local banks said they have
not made and are not planning tomake changes to fees or offerings tooffset their lower fee revenue. Many
noted that overdraft fees are an important revenue stream, but notthe most important.
KeyCorp executives are keepingrecent regulatory and legislativechanges in mind as they review thebank’s free checking products,spokesman David Reavis said. Thebank is considering a variety of options— possibly new offerings — that Mr.Reavis said he cannot disclose.
Huntington has widely publicizedits changes. It announced in mid-September its new “24-Hour Grace”benefit, which provides customers24 hours to resolve an overdrawnaccount before they incur fees. Inaddition, Mr. Schamer said the bankhas eliminated so-called nuisancefees, such as fees charged for balancesthat are negative by less than $5.
Asked if the measures were intro-duced to entice more customers toopt in, Mr. Schamer said, “Not nec-essarily.” The intention, he said, isto increase Huntington’s marketshare of deposits.
“We feel like a lot of the banks aregoing the other way — ‘We just lostX percent of fee revenue, where dowe make it up?’ ” Mr. Schamer said.“We view this as an opportunity togo the other way.”
Bob Patten, managing directorand senior bank analyst for invest-ment firm Morgan Keegan, followssome 20 banks, including Hunting-ton, Fifth Third and Key, and predicted institutions will try to recoup what they can.
Both Mr. Patten and Ms. Feddisof the American Bankers Associa-tion noted some banks already haveeliminated free checking. Banksthat continue offering it, Mr. Pattenpredicted, will begin bundling ac-counts, or requiring consumers toaccept multiple products from thebank in order to have free accounts.
Ms. Feddis said there already hasbeen a re-emergence of monthlyfees on checking accounts wherespecific minimum balances are notmaintained. She also said there willbe a movement toward limited servicechecking accounts, such as accountsthat only process electronic depositsand electronic payments.
“Ultimately what impacts thebank impacts the customer,” shesaid. “If the bank’s costs increase,the customer’s price increases.” Ei-ther that, she said, or services will bereduced. ■
THE SKINNY ON ‘REGULATION E’Banks doing business in North-
east Ohio are blaming a changein the Federal Reserve Board’sRegulation E for millions in lostrevenue.
The change: Banks customersnow are required to opt in to allowbanks to cover overdrafts on ATMand debit card transactions for a
fee. Otherwise, those electronictransactions simply would be declined.
Since the change, many banks saya great majority of customers haveopted in to the service, proof theydidn’t need protection in the firstplace; they also say the process andpaperwork required are quite costly.
small ways to trim state spendingand streamline government. Sincethen, it has issued five more reportsoffering more detailed analysis.
The CPA group’s latest round ofreports examined ways other stateshave tightened their budgets in fiveareas: pension reform, performanceaudits, privatization, strategic planningand streamlining and efficiency.
“We have already reached out togovernor-elect Kasich’s staff and expressed our willingness to dowhatever we can to help,” said Ms.Benton, speaking by phone from theconference.
Call for shared sacrificeJohn Begala, executive director of
the Center for Community Solutions,a human services advocacy nonprofitin Cleveland, also was in Columbuslast week, speaking to Ohio Senatestaffers and moderating a panellooking at the budget challenges atthe Impact Ohio conference.
Mr. Begala’s group completed itsown comprehensive state budgetanalysis last June and titled it,“Thinking the Unthinkable: FindingCommon Ground for Resolving Ohio’sFiscal Crisis.” Reached in Columbuslast Wednesday, Mr. Begala, a formerstate representative, said his reportfavors what he calls a balanced approach to closing the budget gap.
“Everybody needs to sacrifice a little something,” he said.
To that end, Mr. Begala doesn’texpect cutting costs alone will fill thebreach.
“We think still that spending reductions and reductions in tax expenditures and some new revenueare all going to have to play a role inthis,” he said.
Mr. Begala said promises that former Gov. Bob Taft’s business taxreforms would maintain existingstate revenue levels aren’t being met,falling short by as much as $2 billion. Ohio in 2005 replaced thecorporate franchise and tangible
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Budget: Groups advocate for reduction in spendingpersonal property taxes with thecommercial activity tax, or CAT, a broad-based tax on business revenue.
To close the gap, Mr. Begala’sgroup will advocate strategies suchas expanding the reach of the statesales tax to include taxing servicesand cutting tax credits and tax deductions.
Chambers to chime inNine of Ohio’s largest chamber
of commerce groups also will beweighing in with one voice on thebudget issue. They hope to deliverto the governor-elect before the endof this month a report that outlinesa long list of their own proposals to cut
costs and streamline government.“There are indications that John
Kasich will be a positive thing forus,” said Carol Caruso, senior vicepresident of the Greater ClevelandPartnership, one of the regionalchambers. “We believe he will beopen to ideas to make governmentmore efficient.”
Ms. Caruso wouldn’t discuss thespecifics of the chambers’ report,which has been months in the making, saying final decisions onwhat will be included have not yetbeen made. However, GCP revealedin a post-election report to its con-stituents last week that it alreadyhad reached out to Mr. Kasich andhis key advisers to brief them on the
study.Speaking only for the Greater
Cleveland Partnership, Ms. Carusosaid her group is likely to supportGovernor-elect Kasich’s intention,which he disclosed last week, toabandon the proposed Cleveland-Columbus-Cincinnati passengerrail line. But she said GCP wouldadvocate for an east-west lakeshoreline running west to Chicago andwould like him to consider a linethat links Cleveland, Youngstownand Pittsburgh.
Although Mr. Kasich to this pointhas offered few details for how he’dhandle the budget, the Republicaninsisted throughout the campaignthat he would balance the budget
without raising taxes. His commentsthat he believes school districtsshould look to save money by sharingthe cost of administrative serviceswith neighboring districts also sug-gests possible cuts to education.
While billions of dollars are involved in bringing the budgetinto balance, Mr. Begala and othersmaintain the problem is not beyond repair.
“It’s important for people not topanic,” Mr. Begala said. “If sharedacross the board, we have cause tobe optimistic that we can comethrough this process with mini-mum damage and maybe somenew initiatives that will help makegovernment more efficient.” ■
Even collegesdevelop apps
All five of Northeast Ohio’slargest higher educationinstitutions are going
mobile and are planning to release— or have done so already —applications for smart phones.
Kent State was the latest torelease such an application. ItsiPhone application includes uni-versity news, a map and phonedirectory. More features, includ-ing the ability to access the uni-versity’s library database, will beavailable in the future. A versionfor Blackberry and Android alsowill be released.
Cleveland State University re-leased an iPhone app in Septem-ber that allows users to locatebuildings and check out informa-tion about academic programs.
Representatives from Universityof Akron, Cuyahoga CommunityCollege and Youngstown StateUniversity said they are all in theprocess of developing smartphone applications that will bereleased in the coming months.
Nationwide, venture capital investing has fluctuated throughout2010, according to statistics fromthe MoneyTree Report, compiled byPricewaterhouseCoopers and theNational Venture Capital Associa-tion.
Venture investments dropped to$4.8 billion in the third quarterfrom $6.9 billion in the secondquarter, which was the best three-month period since the stock marketplummeted in fall 2008, accordingto the report. Venture investmentsin the third quarter of 2009 werehigher, too, at $5.2 billion.
However, Ms. Belk and others
expect venture investing to improveslowly but steadily, because boththe economy and the market for acquisitions appear to be improving.
“I think the national trend is stillpositive,” Ms. Belk said.
The return of ‘old mo’A few big deals helped Northeast
Ohio’s numbers. The biggest wasthe $50 million that payment pro-cessing firm Financial TransactionServices LLC of Highland Hillsraised in the third quarter.
That three-month period also included $20 million raised bymedical imaging firm ViewRay Inc.of Oakwood Village and $14.6 million that went to spinal implantdeveloper AxioMed Spine Corp. of
Garfield Heights.Baiju Shah, president of Bio-
Enterprise Corp., which assists healthcare companies in Northeast Ohio,noted that the region’s health caresector showed solid improvementduring the first three quarters. Thatimprovement came even thoughinvestors are concerned about theeffects of health reform and the expectation that federal regulatorsare about to tighten standards fornew devices.
“The momentum is once againwith us,” Mr. Shah said.
The state’s Third Frontier eco-nomic development program andseveral initiatives meant to promoteentrepreneurship in Northeast Ohiohave helped the region maintain
what Mr. Shah called a “rich earlystage pipeline,” while startups else-where have suffered as venture investors have turned their atten-tion to later-stage deals.
“We are able to fill the gap thathas been created as venture movesdownstream,” he said.
Mr. Shah referenced the recapi-talization of the Ohio-Midwest Fundas a sign of continuing progress.The size of the $100 million com-mitment shows the Ohio PublicEmployees Retirement System’sconfidence in the fund. The systeminvested just $50 million when itcreated the fund in 2005 beforeadding another $50 million in 2007.
The system also plans to increasethe amount the fund invests each
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VC: ‘Early stage pipeline’ fares better here than nationallycontinued from PAGE 3 year to $33 million from $25 million,
said OPERS spokeswoman Julie Graham-Price. She noted that the retirement system wants to increaseits private equity investments andexpects to find good deals because ofthe recession. Fund manager PermalCapital Management of Boston hascommitted another $2 million to thefund, bringing its total size to $102million.
‘The money is out there’North Coast Angel Fund also is
often cited as an important part ofNortheast Ohio’s venture capitalcontinuum.
Fund executive director Todd Federman said he isn’t sure if it’s gotten easier for startups to find moneylately, but he noted that North CoastAngel Fund was able to get individualinvestors to pony up $2 million tomatch a $2 million Third Frontiergrant the group received in May. Other individuals have committed toputting in another $2 million if thegroup receives a second grant.
Some companies the group has financed recently have been able toraise money from other investors,but Mr. Federman said he’s unsurewhether that’s a sign of improve-ment.
“It certainly remains a challengingenvironment,” he said.
SparkBase LLC of Cleveland wasscheduled to be the first company toreceive money from North Coast Angel Fund’s second fund. With thatmoney, the company, which processestransactions made with gift cardsand loyalty cards, will have raisedmore than $1 million over the lastfew months from North Coast AngelFund, the Ohio TechAngel Fund in Columbus and individual angel investors.
SparkBase CEO Doug Hardmansaid investors are still “a lot moreprotective of their money” than theywere before the recession. Thus, thecompany — which is in the processof hiring a few executives and expanding its sales team — startedlooking for money earlier than it otherwise would have.
“It just takes longer, but the moneyis out there, especially in Ohio,” hesaid.
Windows start to openA startup aiming to raise money
will have an easier time doing so todaythan it would have a year ago, saidWarren Goldenberg, CEO of FluenceTherapeutics Inc., an Akron companythat uses light to activate a topicaldrug meant to fight skin diseases.
Many investors, however, are focusing on companies that are furtheralong in the commercialization cycle, Mr. Goldenberg said.
“The window is open and dealsare getting done, but they tend to belater-stage companies,” he said.
John Steidley, CEO of mobile software provider Intelligent MobileSupport LLC in Solon, said investorshe’s talked to are putting more emphasis on companies with someform of revenue. Still, the economy isimproving, which should translateinto increases in venture investing,he said.
Mark Heesen agrees. The presi-dent of the National Venture CapitalAssociation in Arlington, Va., saidthat, despite a slow third quarter,venture investing appears to be onthe way back up.
“I’d say that most VC’s believe thatwe’ve hit bottom and things areslowly coming back,” he said. ■
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
Business community waits to back school plan financiallyTransformation would take $12M fromprivate sector, but aid is slow to come By TIMOTHY [email protected]
Eugene Sanders needs cash, anda lot of it — but a big chunk of themoney isn’t going to come withoutsome heavy-duty convincing of thebusiness community.
The CEO of the Cleveland Metro-politan School District is countingon as much as $12 million from thebusiness community to help financehis five-year, $72 million transfor-mation plan to remake the strug-gling district. But business leaders,while supportive of the concept, areholding back on putting their moneybehind an ambitious initiative thatmay lack the financial legs to be carried out over the long haul.
Dr. Sanders said he has met regularly with business leaders overthe last several months through theGreater Cleveland Partnership, thecity’s chamber of commerce, todrum up support for his transfor-mation plan, which he introducedin January. The organization endorsedthe plan in June, but stopped shortof encouraging its members to opentheir checkbooks.
“There’s hesitancy to make surethe plan can be a sustainable one,”said Joseph Roman, president of theGreater Cleveland Partnership.“We’re excited about the plan itself.We’re now looking to see how it canbe sustained over the next five, sevenor 10 years.”
Dr. Sanders said the districtcounted on support from the privatesector when it initially looked athow to pay for the bold reform effort, and he hopes to lock downthe rest of the money by the end ofthe current school year. Dr. Sanderswouldn’t go as far as saying a lack offinancial support from area busi-nesses would scuttle the transfor-mation plan, but he noted that “wecannot achieve our goals completely”without that aid.
Evaluating the long termThe district’s projected budget
deficit for its next fiscal year, whichbegins in July 2011, is roughly $58million. It’s an amount Mr. Romancharacterized as a “challengingnumber,” and it’s indicative of thebudget pressures the district is likelyto feel going forward.
Mr. Roman noted that the districthasn’t passed a new operating levy
in 15 years, which, in addition todwindling property values and aloss of population, have contributedto the district’s financial woes. So,determining how the district is going to implement and pay for anexpensive overhaul plan over thenext several years is paramount.
“These issues not only have to beaddressed for the private sector andfoundations, but they have to be addressed for the citizenry,” Mr. Roman said.
Mr. Roman said his group is seekingvolunteers from the private sector topair up with the district’s financialteam to offer ideas on how to bettermanage the school system’s finances.Mr. Roman said the Greater Cleve-land Partnership also is counting onits members to help fund a $250,000study to evaluate the financial sustainability of the district, whichhe noted was the organization’s“sole goal” in deciding whether toencourage its members to financiallyback the reform effort.
Dr. Sanders agreed with Mr. Romanthat, considering the economic climate,it makes sense for the businesscommunity to be somewhat timidbefore investing millions of dollars.
“This is the most comprehensivereform initiative placed before thebusiness leaders in a generation,”Dr. Sanders said. “It rightfully requirescareful and reflective thought.”
So far, the district has about $60.4million committed toward the trans-formation plan from a variety ofsources, but nothing from the businesscommunity. Considering the districthad nothing on hand when it announced the plan earlier this year,Dr. Sanders said that’s a good start.
The money thus far comes fromfederal grants and nonprofits, suchas the Cleveland and Gund founda-tions. Much of the governmentmoney, however, relies on the districtover the next few years meeting acombination of objectives, whichinclude improving student gradua-tion and attendance rates andboosting proficiency in math orreading. Under the terms of thestate’s school improvement grantprogram, the objectives are set bythe district and a failure to meetthem could put continued financialsupport in jeopardy.
Here comes the pitch …Besides working through the
Sanders Roman
Greater Cleveland Partnership, Dr.Sanders has made direct pitches tovarious area businesses. For instance,Dan Davis, a spokesman for Key-Corp, said the banking company isin talks with the school district abouta possible contribution but has yet tosign on to support the transforma-tion plan financially. Mr. Davis noted that KeyCorp already is in thefinal year of a three-year, $600,000commitment to provide money forthe city’s “STEM” schools, whichstress science, technology, engineeringand math coursework.
Like KeyCorp, Lubrizol Corp. inWickliffe also has voiced its supportfor the plan through the GreaterCleveland Partnership. However,Lubrizol spokeswoman Julie Youngsaid the only financial support themaker of lubricant additives andspecialty chemicals has extended tothe district to date is by funneling an
undisclosed amount of moneythrough the Greater Cleveland Part-nership for the financial sustain-ability study.
It isn’t that local companies loatheputting their money behind urbaneducation. Cliffs Natural ResourcesInc. recently pledged $1 million to EPrep Schools, a charter school oper-ator, to help fund the expansion ofits elementary school building onEast 36th Street in Cleveland.
Cliffs spokeswoman Patricia Persico said the Cleveland-basediron ore and coal producer donatedto the charter school, which is affil-iated with the Cleveland school district, because it was “impressedwith the high standards and disci-plined environment the schoolhas.” Cliffs, however, would notcomment whether the foundationhas considered contributing to thedistrict’s reform efforts.
Unusual bedfellows?It isn’t unusual for school districts
to tap businesses for money because at the end of the day,“money is money,” said Ned Hill, aneconomist and dean of the MaxineGoodman Levin College of UrbanAffairs at Cleveland State University.
For instance, Dr. Hill noted that
the Harlem Children’s Zone in NewYork, which runs three public charterschools, is financed largely by WallStreet firms. But Dr. Hill was quickto say Cleveland is no Wall Street.
“Most companies can only reallycontribute time and personnel andsometimes internship experiences,”Dr. Hill said. “You can’t look at privatebusinesses as a major revenuesource for public schooling. That isa public responsibility.”
Dr. Sanders, however, cited therecent $100 million donation to theNewark, N.J., schools by FacebookCEO Mark Zuckerberg as an exampleof the private sector supporting a financially troubled public schoolsystem. Like Dr. Sanders, NewarkMayor Cory Booker had looked forsupport from business.
Mr. Roman said businesses already are supporting the city’spublic schools through propertytaxes and agreed with the notionthat it shouldn’t be the private sector’s responsibility to continuallyfinance public education. However,a one-time investment could makesense in the long run.
“It’s a matter of understandingthe value of the plan and the valueof a competitive school system toour economy,” Mr. Roman said. ■
Ethan Cohen hasbeen named interimCEO of software developer Easy2 Technologies Inc.in Cleveland.
Mr. Cohen fills a position that hasbeen vacant since former CEO JohnBukovnik Jr. died in July, after collapsing at the company’s down-town headquarters. The companysells products and services for online retailers, including softwarethat allows them to create their ownonline product demonstrations.
Mr. Cohen will help Easy2 developa strategic plan and will stay on afterward if the company’s boarddecides he is the best fit to executethat plan, he said.
He laudedEasy2’s productlineup as well as
technologies it’s developing, includinga way to automate the process ofcreating online product demos. Healso noted that Easy2 works withbig names such as Amazon and Dell.
“It’s a very cool company,” hesaid. “It’s great to have a companylike this in Cleveland.”
Mr. Cohen most recently waspresident of medical transcriptionservices provider SPi Healthcare,based in Tinley Park, Ill. He also hasheld top positions at two local tel-eradiology firms: Franklin & Seidel-mann and Telerad Express.
— Chuck Soder
Software specialist Easy2 taps interim CEOON THE WEB Story from www.CrainsCleveland.com.
The Grand Old Party better spendno more time celebrating itsbroad victories in Ohio last weekand buckle down to what very
well could be the singularly most impor-tant project they’ve ever faced: craftingthe next biennial budget.
Pundits already are speculating a gapof some $8 billion (that’s right,“billion,” with a “b”) and pre-dicting cuts in one of the onlyareas they can — and the worstarea they can — education. FewOhioans spend time trying todecipher the two-year budgetcycle, but understand onething: Government-mandatedprograms such as Medicaid eatup more and more of the state’sgeneral revenue funds, andthose same funds are at historic lows because of record unemployment.
Governor-elect John Kasich — eventhough it will be against his nature andnot instinctively the right thing for a first-term governor to tackle — should assemble a bipartisan task force to tearapart Ohio’s bloated tax code and strip
away generations of legislated loopholes.Then the governor and his team couldrearrange government to do the thingsmost needed by Ohioans and make thehard choices about those programs andservices that the state helps finance butthat aren’t critical to the future.
During the campaign, the governor-elect kept to his script of gettinggovernment out of the way ofbusiness, making governmentsmaller, instituting no new taxes,and so forth. Heck, he even saidhe’d like to do away with the income tax. Well, now the can-didate must govern and thatmeans making brutally hardchoices.
This is what I would like tohear from Mr. Kasich in his
inaugural speech:“Ohio and its residents face tough
times ahead, and there will be no easyanswers to what we face. We are gettingolder and poorer and federal mandatesrequire that more and more of our revenuesmust be spent serving those in most need.
“We must find a way to turn around
our economy. We can’t wave a magicwand and conjure up new jobs, so wehave to stay the course with programslike the Third Frontier, which has a successful track record of creating thou-sands of new, well-paying jobs in Ohio.
“And while we might have to cuteverywhere — including higher ed — I’lldo my best to minimize those becauseour best hope is to raise the educationlevels of our citizens.
“We might not be able to fund thingslike parks or local arts programs. It’s notthat I don’t consider them important; Ijust know that we should look at this as a blank canvas. We need to have a com-petitive tax system that pays for essentialservices but enables businesses to grow.
“Let all of us — regardless of party —set aside personal or party politics andconcentrate on doing what’s right for thestate, and our future generations.” ■
Governor-elect John Kasich... should assemble a bipar-tisan task force to tear apartOhio’s bloated tax code.
1100 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
Get to workJ
ohn Kasich and Ed FitzGerald — the two menwho with their election last week suddenly maybe the most powerful figures in Ohio politics —can’t afford to celebrate their victories for long.
Not with the budget woes that face the state’sgovernor-elect and the first Cuyahoga County executive, respectively.
Unless the economy unexpectedly perks up, thegap between revenues and expenses in the state’stwo-year budget that begins next July could reach$8 billion. Mr. Kasich during his campaign did agood job of beating up incumbent governor TedStrickland over Ohio’s recession-induced job losses,but the Republican standard-bearer avoided specificsof how he planned to bring the budget into balance.
The time for political coyness is over. The governor-in-waiting should begin meeting with legislativeleaders — both Republican and Democrat — in theOhio House and Senate to devise a budget blueprint.
There is no shortage of organizations willing tofeed them ideas of how to go about this process.Last week, the Greater Cleveland Partnership revealed in a post-election report to its constituentsthat it already had reached out to Mr. Kasich and hiskey advisers to brief them on a study by GCP andeight other chamber of commerce groups that explores ways to reduce the state’s cost of doingbusiness.
GCP said the joint study “outlines numeroussteps Ohio’s state government can take to cut costsand implement long-overdue efficiencies.” Thechamber groups expect to release the study laterthis month, and it will be interesting to see howtheir ideas intersect with recommendations alreadymade last June by the Budget Advisory Task Force ofthe Ohio Society of CPAs.
The task force’s report smartly lays out short- andlong-term strategies for addressing government inefficiencies. For example, it pushes for state officialsin putting together the 2012-2013 budget to deter-mine whether various agencies, divisions and pro-grams provide a core function of government andshould continue to receive money, while also callingon leaders to develop a plan to sunset state agenciesby evaluating all of them at least every 10 years.
Mr. Kasich also can draw on the contents of thesurprising report, “Thinking the Unthinkable: FindingCommon Ground for Resolving Ohio’s FinancialCrisis,” put forth last June by the Center for Com-munity Solutions in Cleveland. It advocated a give-and-take approach toward achieving a balancedbudget by recommending such steps as eliminatingdozens of special-purpose tax credits while increasingcost controls on Medicaid spending.
In Cuyahoga County, Mr. FitzGerald can tap theadvice of multiple task forces that have examinedhow the operations of county government can beimproved under its new structure of a single countyexecutive and an 11-member county council.
He’ll need the help. As current county Commis-sioner Tim Hagan noted a couple weeks back, thecounty’s budget picture “is worse than it’s everbeen.”
So, Messrs. Kasich and FitzGerald, get to work.You’ve got big jobs ahead of you.
FROM THE PUBLISHER
BRIANTUCKER
No time to celebrate big GOP wins
By LONZO COLEMAN
It’s no secret that manufacturers inOhio and across the nation havebeen forced to slash costs to survivethe recession.
Too often, these cuts come at the expense of workers in the form of layoffs,hiring freezes and salary reductions.Meanwhile, another top cost is frequentlyoverlooked, and that’s energy.
Among the most economically benefi-cial opportunities for savings, energy-efficiency initiatives can help improvebusiness competitiveness and profits foryears. One particularly ripe area forOhio, and one that could also reduce thestate’s carbon footprint, is called energyrecycling.
Dating back to Thomas Edison and
the dawn of the electrical age, energy recycling is now helping economiesaround the world produce more goodswith less fossil fuel and lower pollution,yet it is woefully underused in the UnitedStates.
When fossil fuels like gas and coal areburned to produce electricity, as muchas two-thirds of their energy is lost in theform of waste heat. For energy-intensivebusinesses — such as Ohio’s paper andpetrochemical plants and the metal andglass makers vital to Ohio’s auto assemblies— this waste heat is simply vented intothe atmosphere. Recycled energy tech-
niques allow manufacturers to capturethat waste and turn it into 100% cleanpower, thus lowering energy costs andraising productivity.
Here’s one example just west of us inIndiana.
At ArcelorMittal’s East Chicago steelplant, energy recycling projects captureand harness the manufacturer’s wasteheat to generate 220 megawatts of power— more clean electricity than all the solar panels connected to the U.S. elec-tric grid. Recycling energy saves the plant$100 million annually, while reducingCO2 emissions by the equivalent of removing 166,000 cars from the roads.
Industrial energy efficiency experts estimate that smelters here in Ohio could generate similar amounts of power
through energy recycling. In fact,Ohio is home to nearly one-quarterof the country’s integrated steel mills,many of which are ideal candidatesfor this technology. If every Ohiomanufacturing plant recycled itswaste heat, companies could savemillions, create thousands of jobsand reduce pollution.
Just across our southeast border,West Virginia Alloys melts quartzrock and converts it into silicon, ametal used to make hundreds ofproducts. For 75 years, the companyvented its 1,400° F waste heat intothe atmosphere. Now, the companyhas embarked on a project to recyclethis heat and convert it into 65megawatts of pollution-free power.In addition to slashing their emis-sions, savings from lower energycosts will allow the plant to increaseits work force, expand productionand bring more silicon manufacturingback from overseas.
These need not be isolated examples. In Ohio, nearly 60 indus-trial facilities are prime candidatesfor energy recycling projects.
According to Oak Ridge NationalLaboratory, a large-scale expansion
of energy-recycling efforts couldprovide up to 20% of U.S. electriccapacity by 2030 and create nearly 1million new jobs. With Ohio’s 10.1%unemployment rate, is there anythingmore important?
Despite its significant savings, energy recycling requires a great dealof capital investment. With a still-sputtering economy, this is a toughsell for many business owners wholack access to that level of capital.
Fortunately, Congress is consid-ering investment tax credits for industrial energy efficiency, includingcombined heat and power and otherenergy recycling projects. The proposed bipartisan legislation,supported by numerous Ohio busi-nesses, will maximize the economicand environmental benefits of energy recycling, giving business themeans to make their energy worktwice. With that help, more Ohiobusinesses can thrive, putting moreOhioans back to work.
Ohio’s congressional delegationfrom both parties should supportthis legislation. It’s an opportunityto help keep industrial jobs in Ohiowhile massively slashing green-house emissions. ■
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11
Larry PollockLeading Change in a Consumer-Centric World?
PILLIOD LECTURE SERIES 2010
Wednesday, Nov. 17, 2010
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END-OF-YEAR NUMBERS WORTHY OF A HIGHLIGHT REEL? CELEBRATE HERE.
BOB RAINSClevelandWe don’t like Barack Obama or his policies orthe people around him.
➤➤➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
THE BIG ISSUEWhat kind of message do you think the American people sent with the outcome of Tuesday’s elections?
BECKY FINNICKChagrin FallsJobs were on the forefrontand the economy.
DAN MARDOVINMedinaDefinitely that it was timefor change. The people didnot like the direction of thecountry.
BILL HEGARTYNewburyA more balanced legisla-tive agenda, and I thinkwhat we heard from President Obama (Nov. 3)is that he’s more inclinedto in his cabinet have improved representationfor business.
continued from PAGE 10
View: Recycling action needed
A. Schulman plans expansion into IndiaMove comes as country’s consumer market booms completed a fiscal year in which
overall sales grew 24% to almost $1.6billion. The company also showed a$44 million profit after losing morethan $2 million in fiscal 2009.
In the Asia Pacific region, A. Schul-man’s sales grew 87% to almost $85million, while gross profit from theregion shot up 83% to almost $12million. ■
Frank Esposito is senior reporter atPlastics News, a sister publication ofCrain’s Cleveland Business.
By FRANK ESPOSITOPlastics News
Plastic resin supplier A. SchulmanInc. will open its first plant in Indiaby the end of 2011.
Derek Bristow, A. Schulman Asiageneral manager and chief operatingofficer, said in an interview at therecent K 2010 plastics industry tradeshow in Germany that the 25-employee Indian plant will makeadditive masterbatches for poly-propylene film and other products.India’s flexible packaging sector hasenjoyed strong growth in recentyears as India’s massive consumermarket has blossomed.
The plant will be A. Schulman’sfifth in the Asia Pacific region, joininglocations in China, Indonesia,Malaysia and Australia. The lattertwo plants were added to the A.Schulman stable earlier this yearwhen the company acquired ICOInc.
Mr. Bristow said the Asian marketin 2010 has recovered from anyslowdown in business it may haveexperienced in 2009.
“There was a bit of a slowdown,but now there’s a lot of activity,” he said. “A lot of (processing) machin-ery guys are selling equipment toAsia.”
1122 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
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TAX LIENSThe Internal Revenue Service filed taxliens against the following businessesin the Cuyahoga County Recorder’sOffice. The IRS files a tax lien to protectthe interests of the federal government.The lien is a public notice to creditorsthat the government has a claimagainst a company’s property. Liensreported here are $5,000 and higher.Dates listed are the dates the documents
Target Human Resource Co.13605 Detroit Ave., LakewoodID: 34-1563994Date filed: Sept. 14, 2010Type: Employer’s withholding, failureto file complete returnAmount: $27,189
J R Fine Construction Co.25100 Euclid Ave., Suite 27, EuclidID: 34-1398889Date filed: Sept. 8, 2010Type: Employer’s withholding, civilpenalty assessmentAmount: $23,767
Tree of Life Daddys Daycare14920 Euclid Ave., East ClevelandID: 20-8354916Date filed: Sept. 23, 1020Type: Employer’s withholdingAmount: $22,203
20101108-NEWS--12-NAT-CCI-CL_-- 11/4/2010 9:32 AM Page 1
ZelmanDeLongKlein
StewardPokornyFowler
SnyderBozzelliMoulagiannis
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 13
GOING PLACESJOB CHANGES
EDUCATIONKENT STATE UNIVERSITY: WandaThomas to dean, Regional Collegeand associate provost, Kent State system integration.
FINANCEHUNTINGTON BANK: Mike DiCeccoto senior vice president and chiefcommercial officer, Equipment Financedivision; Angela Neal, Monica Masterson and Bryan Pogue to senior business bankers; Steve Lucas to business banking teamleader; Kelli Cox to vice president,senior business banker. OHIO COMMERCE BANK: StevenSkaggs to vice president, credit manager.
MANUFACTURINGCHART INDUSTRIES: Rita Carrollto director of corporate development.
MARKETINGHITCHCOCK FLEMING & ASSOCIATESINC.: Adriane Smith to research anddatabase analyst. LIEF KARSON COMMUNICATIONS:Emily Ouzts to account executive. TRIAD COMMUNICATIONS INC.:John Moulagiannis to director, interactive and digital marketing.
NONPROFITAKRON GENERAL DEVELOPMENTFOUNDATION: Karen. A. Bozzellito president. LUTHERAN HOME AT CONCORD
RESERVE: Janice K. Snyder to mission outreach liaison.
REAL ESTATEDEVELOPERS DIVERSIFIED REALTYCORP.: Robert McGovern to leasingdirector, northern region. MOHR PARTNERS INC.: AdamWolinetz to account executive.
SERVICEATLAS ELECTRIC CO.: Tim Fowlerto vice president. BROCKMAN DESIGNS: MichelleHritz to interior designer. FINDLEY DAVIES: Nancy Pokorny,Gail Steward and Matthew Klein tomanaging consultants. KELLY SERVICES: Terri Criss andLori Lange to area managers;Frank Zamary to Ohio sales leader;Robin Eglin to Cleveland district
branch manager; Natalie Zalenga toaccount manager; Rich Struble tovice president, Cleveland and Cincinnati.QUADEX INC.: Anthony W. Petrasto executive vice president, chief operating officer, EDI Services division. THINK MEDIA STUDIOS: ChrisWiegand to video editor/animator. TIMELESS LASER AND SKINCARE: Jaudon Sunde to permanentcosmetics technician/instructor. UTILITY CHOICE INTERNATIONAL:Jim DeLong to director of energyservices.
TECHNOLOGYEVOLVE CREATIVE GROUP:Stephanie Kress to seniorweb/video designer.
BOARDSNORTHEAST OHIO COMMUNICA-
TIONS ADVOCATES: JimTabaczynski (JPT Group) to president; Dick Clough to past president; Jean Gianfagna to vicepresident.
AWARDSLUTHERAN METROPOLITAN MINISTRY, CLEVELAND: JaniceK. Snyder (Lutheran Home at Concord Reserve) received the 2010Peacemaker Award. ORT AMERICA, CLEVELAND REGION: Dan Zelman (Paro Services Co.) received the Man of theYear Award. WOODRUFF FOUNDATION: VadyVega (Recovery Resources) receivedthe 2010 Woodruff Prize.
FINANCIAL SERVICEBROCKMAN, COATS, GEDELIAN &CO. AND BCG SYSTEMS INC.:Claire Marron to marketing and communications associate. COHEN & CO.: Haleigh Berg, Angel Rice, Joe DiFranco, MaggieDonnelly and Marilyn Surbey tostaff accountants; Laura Keck to senior staff accountant. Cohen FundAudit Services, Robert Cross to senior staff accountant; Gordy Jones,Ashley Tonkovich, Anna Inglerightand Kevin McNamara to staff accountants; Tim Allen to manager;Nicole McTaggert to office servicesassistant; Erin Clark to marketing assistant; Christine Picard Bowers tomarketing communications specialist.CROWE HORWATH LLP: AndreaMolitoris and Aaron Pike to staff,audit and financial advisory.
LEGALBENESCH: Carrie Benedict, KristenCady and Julia Leo to associates.DREYFUSS WILLIAMS & ASSOCIATESLPA: Jennifer L. Gardner to associate. SCHOTTENSTEIN ZOX & DUNN LPA:Melanie Shwab to associate.
1144 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
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E!CLEVELANDEvery Thursday, Crain’s Cleve-
land Business sends to more than20,000 readers an arts and leisure e-mail called e!Cleveland.
The e-mail highlights at least 10 events that are worth your time outside work. We’re fortunate in NortheastOhio to have a vibrant arts commu-nity, and each editionof the e-mail features amix of local music, theater, dance,film and other activities.
To sign up for this and all our e-mails, visit www.CrainsCleveland.com and click the “Register forCrain’s alerts” icon at the top left ofthe home page.
If you have events you’d like us toconsider for inclusion in future
editions of the e-mail, send infor-mation to managing editor ScottSuttell at [email protected].
What a crimeEvent: “Inside Job”Venue: Cedar Lee Theatre, Cleve-
land HeightsWhen: Now playingWhy you might be
interested: If you enjoy a crime story. A
really big crime. The well-reviewed“Inside Job” bills itself as a compre-hensive analysis of the global finan-cial crisis of 2008, which caused theworst economic downturn since theGreat Depression. Through film itoffers exhaustive research and in-terviews with key financial insiders,politicians, journalists and academics,
and it traces the rise of rogue ele-ments in the financial industry. It’sdirected by Charles Ferguson, whoseAcademy Award-nominated 2007 film“No End in Sight” stands as the bestdocumentary about the war in Iraq.
On the web: www.ClevelandCinemas.com
Body workEvent: “Anatomica Aesthetica”Venue: Cleveland Institute of Art,
Reinberger Galleries, 11141 EastBlvd. in University Circle
When: Now through Saturday,Dec. 18
Why you might be interested: Ifyou have sick tastes. “AnatomicaAesthetica: Photographs from the Mütter Museum, and H. F. Aitken Illustrations from the Dittrick Med-ical History Center,” looks at howdisease, tumors and teratology havebeen fertile subjects for artists. The
exhibition includes contemporaryworks by renowned photographersof Philadelphia’s Mütter Museum ina collection that extends “theboundaries of traditional photo-graphic subject matter,” accordingto CIA. Images from the museum’shistorical photography archive areincluded, as is a collection of biomedical art.
On the web: www.cia.edu/anatomica
Starry nightEvent: “Moon Over Buffalo”Venue: Kleist Center for Art and
Drama, 95 E. Bagley Road, BereaWhen:Wednesday, Nov. 10, through
Sunday, Nov. 14, and Wednesday,Nov. 17, through Sunday, Nov. 21
Why you might be interested: Ifyou enjoy a madcap flavor to yourcomedy. This popular comedy byKen Ludwig has the same flair and energy that made the playwright’s
“Lend Me a Tenor” a big hit. In“Moon Over Buffalo,” George andCharlotte Hay, fading stars of the1950s, are performing “Private Lives”and “Cyrano De Bergerac” in reper-tory in upstate New York. They’re onthe brink of a split due to George’sdalliance with an ingénue, but thenthey receive word that Frank Caprais coming to town, and if he likeswhat he sees, he might cast them inhis movie remake of “The ScarletPimpernel.” Bonus points to you ifyou guessed that everything that cango wrong does go wrong in thisshow, staged by Baldwin-Wallace’stheater department.
On the web: www.bw.edu/academics/theatre/season/mob/
Glory daysEvent: Book discussion with
author John VachaVenue:Hudson Library & Historical
SocietyWhen: Wednesday, Nov. 10, at 7 p.m.Why you might be interested: If
you want to go back to a time whenCleveland was America’s sixth-largest city. That’s just what it was inthe mid-1930s, the period featuredin Mr. Vacha’s new book, “Meet Meon Lake Erie, Dearie! Cleveland’sGreat Lakes Exposition, 1936-1937.”The exposition along Lake Erie wasscheduled to commemorate the cen-tennial of Cleveland’s incorporationand was conceived as a way to ener-gize a city hit hard by the Depres-sion. (Hey, maybe we should try thisagain!) In its first summer, the expo-sition drew 4 million visitors, and 3million more came for the second.The main entrance of the Expositionwas on the mall between St. Clairand Lakeside avenues.
Online: www.HudsonLibrary.org
Kiss and makeupEvent: “Pagliacci” and “La Voix
Humaine”Venue: State Theatre, Playhouse-
SquareWhen: Thursday, Nov. 11, Saturday,
Nov. 13, and Sunday, Nov. 14Why you might be interested: If
you’ve always been a little afraid ofclowns. Leoncavallo’s “Pagliacci” isamong the most popular of all operas.It’s a play within a play featuring anacting troupe presenting a comedyto the audience while being tornapart behind the scenes by jealousyand betrayal. It’s fraught with lurid,emotional turmoil — exactly whatyou want in opera. In Poulenc’s “LaVoix Humaine,” based on a play byJean Cocteau, the torment and despair of a jilted lover emerges in anenthralling monologue. Sounds likethis Opera Cleveland show will makea very intense date night.
ON THE WEB Crain’sWhat’s Cooking blog appears on our web siteeach Monday and at otherintervals throughout theweek. Visit www.Crains
Cleveland.com for the latest newsfrom the restaurant industry.
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 15
• •
MERCY MEDICAL CENTER, ST. VINCENT CHARITY MEDICAL CENTER, ST. JOHN MEDICAL CENTER*, SISTERS OF CHARITY FOUNDATION OF CANTON,
SISTERS OF CHARITY FOUNDATION OF CLEVELAND, EARLY CHILDHOOD RESOURCE CENTER, JOSEPH’S HOME, BUILDING HEALTHY COMMUNITIES,
CATHOLIC COMMUNITY CONNECTION**, LIGHT OF HEARTS VILLA***, REGINA HEALTH CENTER
WHAT’S COOKINGTo submit business news about
Northeast Ohio restaurants, breweries,wineries or the agriculture industry,send an e-mail to assistant editorKathy Carr at [email protected].
■■ Zagat Survey on Oct. 27 released the results of its2011 America’s TopRestaurants Guide, whichnames the highest-rated restaurants inlarge cities throughoutthe U.S.
The Cleveland area’stop five are: Chez Fran-cois, Vermilion; Johnny’s Bar,Cleveland; Parallax, Tremont; Lola,Cleveland; and Crop, Cleveland.
Other notable restaurants includeDowntown 140, Hudson; Red TheSteakhouse, Beachwood; Dante,Tremont; Flying Fig, Ohio City; andL’Albatros, University Circle.
The conductor of consumer surveysalso released its annual report onthe habits of more than 153,000 diners nationwide. Not surprisingly,the overarching theme is that thelimping economy continues to cutinto dining habits, with 39% of participants saying they are moreattentive to prices and 33% eating inless expensive places.
“The percent of meals eaten outand taken out has steadily decreasedfrom 52% pre-recession to 47% thisyear,” said Tim Zagat, CEO of ZagatSurvey. “These changes are subtleyet powerful when looking at long-term behavior.”
Green restaurants are drawing
greenbacks, however.When it comes to healthy eating,
68% of surveyors say it’s importantthat the food they eat is locallysourced, organic or sustainablyraised, and 60% are willing to pay
more for it. About 61% Ohio surveyorsare willing to pay more for
healthier food; Port-land, Ore., had thehighest number ofconsumers, at 76%,
willing to pay more. Miami/South Beach had the fewest, at
49%.
Let’s put on a show■■ This year’s Fabulous Food
Show at the International Exhibi-tion Center in Cleveland — whichruns this weekend, Nov. 12-Nov. 14— will feature two new food-writingseminars, one of which aims to helplocal chefs and industry-relatedbusinesses build their brandthrough cookbooks, memoirs orblogs.
Cleveland-based food writer LauraTaxel and California-based writingcoach and author Dianne Jacob,during the two-hour session thatbegins at 10:30 a.m. on Friday, willdiscuss the process of writing andpublishing a book, how to navigatethe world of agents and photogra-phers, and whether blogging bene-fits a business.
The cost of the seminar is $50 —which includes all-day admission to the show — and is open to chefs, restaurant owners and staff, culinary entrepreneurs and other
food and hospitality industry profes-sionals.
The other two-hour workshopthat also costs $50 begins at 10:30a.m. on Saturday, is for amateurwriters and food enthusiasts whowant to articulate their interests either in written form or through ablog. Topics include how to start andmaintain a blog, how to write arecipe and a cookbook, and how tobreak into freelancing.
Ms. Taxel is the author of “Cleve-land Ethnic Eats, A Guide to Authen-tic Ethnic Restaurants and Marketsin Greater Cleveland.” Ms.Jacob is the author of “WillWrite For Food: The Com-plete Guide to WritingCookbooks, Blogs, Reviews,Memoir, and More.”
For more information,visit the show’s web site at www.FabulousFoodShow.com.
This event was a monsterAttendance at Cleveland
Beer Week’s Oct. 23 Brewzillaevent was 1,500, double lastyear’s figure because the beertasting extravaganza wasmoved to The Galleria at Erieviewfrom the Arcade, according to eventorganizer Christine Montague.
“The Arcade is a beautiful and historic venue and we would haveloved to have stayed there, but wesold out so early in our first year thatwe realized we needed a largerspace to accommodate communityinterest in our event,” she said. “We are very pleased with patronand brewery response to the newvenue.”
More than 80 breweries and 207beers were offered at Brewzilla.Cleveland Beer Week plans to announce late this month theevent’s net proceeds, which willbenefit the Malone ScholarshipFund. The fund has raised morethan $1 million to help 100 studentsattend college.
During its second year, morethan 100 breweries featured theircraft beers at about 400 eventsthroughout Northeast Ohio Oct. 15-Oct. 23.
Cleveland Beer Week, a nonprofitthat is dedicated to craft beer
education, is distributingthis week independent sur-veys to ticket purchasers,breweries, distributors andretailers about attendanceand revenue, as well as to pa-trons about their experiencesso the organization can developan action plan for 2011.
Cleveland-Columbus culinary connections?
A Columbus-based foodblogger is intrigued by thedepth of Cleveland’s culinaryscene, and plans to continue
researching Northeast Ohio’s meccaof restaurants through several visitsin the coming months.
Jim Ellison said in his Oct. 28CMH Gourmand blog entry that heis seeking more inspiration and collaboration with Cleveland’s foodindustry and hopes Columbus cantake more cues from his experi-ences so it can develop its local foodscene.
“In Cleveland, innovation in food(plus green restaurants, sustainableagriculture and urban gardens)comes from the collaborationamong chefs, suppliers and thecommunity,” he wrote.
“We have some of that in Colum-bus but we do not have the samezeal and passion for it — yet. Jeni’sSplendid Ice Cream is soon to opena location in Chagrin Falls. Maybethat can be a link to bring our twocities into the start of a culinary collaboration.”
Positively Cleveland earlier thismonth hosted a culinary press tripfor eight travel and/or food writers,including Mr. Ellison, from aroundthe country, during which the convention and visitors bureau escorted them on a three-night,four-day tour of Cleveland’s culi-nary scene.
“I want to find a way to supportand work on growing a culinaryconnection between Cleveland andColumbus. Our cities count andcannot be discounted as flyovercities, rust belt write-offs or thirdrate restaurant regions any longer.Columbus and Cleveland are goingto have a role in the future of food inthis country. We can collaborate onpromoting two Ohio cities that areproud of our food and the peoplepreparing it,” Mr. Ellison wrote onhis blog.
20101108-NEWS--15-NAT-CCI-CL_-- 11/4/2010 9:34 AM Page 1
1166 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
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Moen aims to turn customers on to perks of water-saving faucetsBy DAN [email protected]
Moen Inc. has a new strategy:more faucets using less water.
The North Olmsted companyhopes consumers will increase theirfocus on water conservation — goingblue, as well as going green — andMoen has been working to developfaucets and showerheads that useless water. The company’s effortsgarnered this year’s WaterSensePartner of the Year award from theU.S. Environmental Protection Agency,an honor for which it unseated amain rival, Kohler. The strategy alsois providing Moen with a new marketing pitch for consumers.
Company hopes products, environmental awareness grow market shareYes, Moen’s executives and
marketing people have seen the“Seinfeld” episode in which the castfights against low-flow shower-heads incapable of removing sham-poo from hair. (Hard to believe weworried about such things in the’90s, isn’t it?)
“We know all about that,” saidKevin Campbell, Moen’s director ofretail marketing. That’s one reasonit first targeted bathroom sinks, hesaid.
Faucets for bathroom sinks arethe low-hanging fruit. They’re simplerin design than showerheads, and
Moen said it has designed a newaeration system that makes a littlewater feel like a lot. Moen becamethe first company to convert all itslavatory sink faucets over to thenew system in 2009, Mr. Campbellsaid, which was one reason it wonthe EPA’s award.
Next are showerheads, but thoseare more complex and have morevaried designs. Perhaps more importantly, they are a greater risk, Mr. Campbell said, because consumers are more wary aboutbuying water-saving showerheads.
“The consumer still believes
more water is better, and that’s notalways the case,” he said.
So Moen tests its products exten-sively. That includes letting peopletake showers in its testing facility inCleveland, where over the years ithas learned a lot about people’sshowering habits and how they usefaucets and showerheads.
Is it, or isn’t it?Moen does not disclose sales for
its specific models, but Mr. Campbellsaid about 10% of the company’sshowerhead sales are representedby water-saving devices, and the
company says it now can engineerthem so well that consumers can’ttell them from regular faucets.
“We’ve gotten to the point wherewe test them against other, non-water-saving showerheads and theytell us it’s a better shower,” Mr.Campbell said.
Moen has not said how many ofthe new devices it is selling so far.The sales don’t necessarily representnew revenue, but the company thinksthe new products will help it gainand keep market share as consumersbecome more water-conscious.
Next, it hopes the EPA’s Water-Sense label, which it applies to approved products, will become aspopular with consumers as the Energy-Star rating for appliances.
“Over time, as the confidencebuilds with WaterSense as it has withEnergyStar, we believe it will,” Mr.Campbell said.
Holly Harlan, president of Cleve-land-based Entrepreneurs for Sustainability, or E4S, applaudedMoen’s efforts and says consumersare becoming more conscious abouthow they use water.
“Water is going to be what warswill be fought over in the future, notoil,” Ms. Harlan said. “It’s not alwaysobvious to us in Ohio, because wehave the Great Lakes, but it is moreobvious to people in other parts ofthe country — and the world — howimportant water is becoming.” ■
A landmark agreement betweentwo high-profile Ohio businesseswill begin to close the loop on glassrecycling in the state.
Facilitated by the Ohio Depart-ment of Natural Resources’ Divisionof Recycling and Litter Prevention, theagreement will enable waste haulerRumpke Inc. to provide recycledglass feedstock to Owens-Illinois Inc.— the world’s largest manufacturerof glass containers, which is head-quartered in Perrysburg.
“Instead of looking outside of thestate, Ohio companies, such as Owens-Illinois, can now utilize a valuable resource — locally recycled glassmaterials from Ohio’s communityrecycling programs — which provideseconomic as well as environmentalbenefits to Ohioans,” Gov. TedStrickland said. “This partnershipwith the private sector will provide animportant service and help encourageglass recycling throughout Ohio whilealso facilitating the growth of two major Ohio companies.”
The agreement calls for Owens-Illinois to provide technical assis-tance to Rumpke in the develop-ment of a recycled glass treatmentcenter that will provide up to 40,000tons of ground glass annually. Owens-Illinois agreed to buy the majority ofrecycled glass cullet handled byRumpke. Rumpke’s plan to expandits Dayton processing plant will cre-ate at least 20 jobs. ■
Bobby Colagross would liketo do some seasonal hiring,but he’s still concerned howbusiness might pan out this
holiday season.That’s the mood echoed by many
small business owners who wouldlike to hire some holiday workers —or perhaps workers in general. Andif they’re lucky enough to hire anyseasonal work, it’s oftentimes nomore than last year.
Mr. Colagross’ Avon Lake company,Awesome Wares Inc., customizesapparel and other merchandise —typically a hot commodity for cor-porate customers who often wooclients or employees with personal-ized gear over the holiday season.
His business took a dip last yearwhen his clients’ budgets for suchexpenses evaporated, but so far thisyear, Mr. Colagross said he has seena slight rebound.
And if that translates to the holi-day season, he might have to beefup his ranks from more than ahandful of people, even if it’s onlyfor the short term.
“We do have a couple temp agencies that we might need to callon,” Mr. Colagross said, “but we’rekind of waiting to see.”
On the national front, analystsexpect seasonal hiring to be slightlyup from last year.
The Chicago-based recruitingfirm Challenger, Gray & ChristmasInc. forecasts that retailers will addas many as 600,000 jobs during October, November and December.
Last year, there was a net gain ofabout 500,000 holiday jobs. Whilean increase in sales over the lasttwo months may trigger a slight increase in seasonal hiring, it is notexpected to propel seasonal hiringto pre-recession levels, according tothe firm.
Best Buy, for one, is hiring 29,000employees, the same as last year.Hudson-based fabric and crafts retailer Jo-Ann Stores Inc. announcedplans in October to hire 3,000 seasonal workers nationwide, increasing its work force by 15% forthe holidays.
Toys R Us, meanwhile, is increasingits holiday hiring by about 10,000workers to a total of 45,000.
SueAnn Naso, president ofStaffing Solutions Enterprises, aMayfield Heights-based temporaryhiring agency, said her firm hasseen about a 50% increase in busi-ness this year compared to thesame point last year. Still, she doesn’tnecessarily attribute that to anuptick in seasonal hires.
See HOLIDAY Page 21
MINDING THEIRSTORES TOGETHER
A group of Lake County shop owners who founded their own brand, RediGo, touts benefits of operating through partnership
There can be strength in numbers.Just ask a group of store owners inLake County who banded togetherin 2007 to form their own brand.
And now the group behind RediGo FoodMarts is looking to get stronger with the addition of two stores this fall and poten-tially more on the horizon.
Three years ago, the owners of six formerlyfranchised convenience-style stores formedtheir current partnership in search of a better way to do business.
“The amount of experience that broughtthis group together is tremendous,” said
JANET CENTURY
John Mazhar, the owner of a new RediGo store in Perry, said there was no question as to the benefits of signing on with RediGo, the concept of whichwas formed and branded in 2007 by a group of store owners in Lake County.
See REDIGO Page 20
PHOTO PROVIDED
The founders of RediGo stores, seen in 2007, are from left, BillStange, Betty Stange, Lynn Mitchell, Woody Jedlicka, Frank Gross,Angela Broski, Steve Broski, Joe Prezioso and Bill Stange Jr.
18 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
WHY IS MY SEWER BILL GOING UP ?
SEWAGE OVERFLOWSTHE HIGH COST TO REDUCE
Higher sewer rates are necessary to repair and maintain our existing sewer system. But the bulk of the cost can be attributed to reducing sewage overflows into the environment, to comply with the federal Clean Water Act.
LEARN MORE:ATTEND A PUBLIC MEETINGAll meetings begin at 7:00 p.m.
Thu. 11/4 South Euclid Community Center 1370 Victory Drive, South EuclidMon. 11/8 Barlow Community Center 41 S. Oviatt Street, HudsonTues. 11/9 Mt. Sinai Baptist Church 7510 Woodland Avenue, ClevelandWed. 11/10 Maple Heights Library 5225 Library Lane, Maple HeightsTues. 11/16 Gunning Park Recreation Center 16700 Puritas Avenue, ClevelandWed. 11/17 Parma Memorial Hall 6617 Ridge Road, Parma
For more information, visit neorsd.org/cso or contact Jean Chapman at 216.881.6600 or [email protected].
NORTHEAST OHIO REGIONAL SEWER DISTRICT
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SMALL BUSINESS
Marketers have bevy of ways to pursue new leads Companies increasingly tap social networks,though telemarketing still serves a purposeBy KATHY AMES [email protected]
When Laurie Mitchellbegan her career as anexecutive recruiter ather one-person firm 26
years ago, she made 100 cold callsa day to companies on behalf ofmarketable candidates whom shewas trying to place in jobs.
She now makes the occasionalcold call to a prospective client,but not without researching orconnecting first through social media.
In fact, Ms. Mitchell said socialmedia has helped to promote her operation, Laurie MitchellMarketing & Communications Executive Search, to a whole newlevel.
“Social media has made it easierfor people to find me, review myexperience and comments fromother clients on my LinkedIn page,and ask better questions when weconnect,” the Cleveland marketingheadhunter said.
Ms. Mitchell’s experience is notunique, with others agreeing thatsocial media channels — such asTwitter, LinkedIn and Facebook —have become virtual Rolodexes ingenerating business leads.
For many, gone are the days ofblindly making phone calls anddropping in on potential new customers. Instead, the layers ofinformation available through social media are enabling compa-nies to more directly target newcustomers, with whom they arecommunicating through blogs,tweets and messaging.
“(Social media) has led to significant assignments for me,”Ms. Mitchell said.
Social media clicksDominic Litten, founder of the
Social Media Club Cleveland chapter,said businesses are becomingmore familiar with how to applysocial media to their new businessefforts, rather than just viewing the medium as a consortium ofpersonal diaries.
Indeed, companies appear to beinvesting in social media, continuingto shift marketing spending towardthose resources and away frommore traditional forms of generatingleads, such as telemarketing.
According to data provided byeMarketer, a New York-based marketing research firm, telemar-keting advertising and marketingspending will grow about 2% eachyear between 2008 and 2012, from
$47.1 billion in 2008 to a projected$51 billion in 2012, while Internetspending during the like period willrise by double digits each year.
Internet marketing and advertisingspending in 2008 was $17.8 billion,and it is projected to increase about76%, to $31.4 billion, by 2012.
“Telemarketing spending stillcomprises a larger share of spendingoverall, but companies are cuttingback on how much they spend onit, while increasing their allocationto online,” said Clark Fredricksen,an eMarketer spokesman.
However, while Twitter, Face-book and LinkedIn all are useful inconnecting to potential customersand sharing a firm’s brand, thework cannot stop there.
“The most important site is stillyour web site,” said Mr. Litten, who also is leader of interactivemarketing at Beachwood-basedPoint to Point Inc. “That’s the hubof activity.”
Web sites should be updatedwith information about new products and services and uniquecontent, which can be relayedthrough blogs and e-mail blasts.
“When someone gets to your web pages, they are one step awayfrom becoming a lead or buying aproduct. That’s half the battle,” Mr.Litten said.
Doing it the old-fashioned way
One of the pitfalls businesses face
in using social media is becominglost in the noise of followers andconnections.
Joel Goldstein, president of theGreater Cleveland chapter of thePublic Relations Society of America,said firms have more of a chance atgenerating leads if they make suretheir “sweet spot” is identifiableamong the clutter.
“It’s marketing 101. There arecertain areas and disciplines each firm can highlight that distinguishes them,” said Mr.Goldstein, president of GoldsteinGroup Communications, a Solon-based full-service public relations agency that serves busi-ness-to-business clients. “An elec-tronics firm located in New YorkCity saw our firm’s specialty on LinkedIn, and now they’re a potential client.”
Still, some firms are more restrained with how and whetherthey use social media because itactually can deter new business,depending on the industry.
Mitch Frankel, a financial adviserat Pepper Pike-based LakesideWealth Management Group of
Wells Fargo Advisors, said he primarily uses LinkedIn as a networking resource.
“We have strict guidelines. Ourcompliance department has to approve what we write,” on thepage, Mr. Frankel said. “I tend touse LinkedIn mostly for connectingpeople with one another, such asjob seekers for potential jobs, andfor overall networking.”
Meanwhile, employees are notpermitted to mention their associ-ation with the firm on their Face-book and Twitter pages, which isnot uncommon in fields such aslaw and finance in which socialand professional worlds are meantto be more definitive.
Mr. Frankel said he and other financial advisers at LakesideWealth still have the option ofreaching out to potential clientsthrough cold calling or going door-to-door, as well as meetingprospects through traditional networking and referrals.
“I don’t think social media is going to ever replace those ways.It’s just one more way of connectingwith people,” he said. ■
“Telemarketing spending still comprises a larger shareof spending overall, but companies are cutting back onhow much they spend on it.”
– Clark Fredricksenspokesman, eMarketer
GRANDOPENINGSHEALTH AID OF OHIO INC. 5230 Hauserman RoadParma 44130 www.healthaidofohio.comHealth Aid of Ohio has opened a retaillocation where customers can receiveconsultations, answers to equipmentquestions and demonstrations of prod-ucts. The aim is for the retail store tobe a one-stop resource for seniors;caregivers; people in need of mobilityor accessibility aids; and people usingsleep therapies and wound-care products. Phone 216-252-3900
DAZZLE … WHERE A GIRL CAN SHINE100 N. Main St., Suite 145Step NorthChagrin Falls 44022Dazzle … Where a Girl Can Shine,owned by Marcy Wrobel and Missy Natale, is a retail shop with girls fash-ions in sizes 4 through 16, acces-sories and room décor. The store also
offers birthday parties, both in a teaparty and fashion party style. 440-247-4858
BUILD A DREAM PLAYHOUSESP.O. Box 264Gates Mills 44040http://buildadreamplayhouses.comBuild a Dream Playhouses of GatesMills sells blank cardboard designs —in the form of everything from space-ships and cars to houses and lemonadestands — that supply a blank canvasfor children to paint and create one-of-a-kind playhouses. The firm wasfounded by Clevelander Mike Welsh,who recruited recent college gradsAndy Carcioppolo and Sam Cahill, and in collaboration with Nottingham-Spirk Design Associates and theSmurfit Stone Container Corp.’sRavenna plant. 877-404-DRMS (3767)[email protected]
TRAINING@WORK, LLC 8870 Darrow Road, Suite F106-234Twinsburg 44087 www.mytrainingatwork.com Training@Work LLC, under the directionof president Sue Helke, is a Twinsburgtraining and consulting business that offers products and services to developemployees. Training@Work, a strategicpartner of Texas-based 360 Solutions, is dedicated to helping businesses of all sizes hire the right people, grow bydesign and engage employees.Phone 330-425-1310Fax [email protected]
To submit a new business, e-mailsections editor Amy Ann Stoessel [email protected], or call 216-771-5155 with questions.
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19
SMALL BUSINESS
PATRICKCOOK
ADVISER
Security threats, viruses unfortunate realities in workplace
Viruses. Spam. Malware.Botnets.
Chances are you’re atleast somewhat familiar
with these words — and you should be — since these threats areimpacting the security of local busi-nesses, including small and mid-size companies.
It has become imperative forbusiness owners to be aware ofthese security risks and of actionsto take to educate a work force insafer security practices.
Where do you begin? Conductinga general online search for securitythreats will bring up a plethora ofinformation.
Wading through all that data can be time consuming, and it candistract one from focusing on busi-ness priorities.
There are free resources. Microsoft,for one, has its Security IntelligenceReport, which compiles all relevantsecurity information and providesproactive tips for businesses basedon the most prevalent threats.
Some of the most common secu-rity threats a small business ownershould be aware of include:
■ Viruses: Typically, viruses arespread from computer to computerby way of a network or the Internetand also can be carried on remov-able devices, such as CDs and USBdrives.
Often, a virus is contracted througha malicious web site that has the lookand feel of a legitimate site. If oneperson’s computer becomes infectedwith a virus in your company, thevirus can stealthily spread it to othercomputers, potentially damagingyour work computer or, worse, yourentire business network.
Luckily, today’s more advancedweb browsers come equipped withautomatic filters to track and alertusers of potentially harmful webpages and files.
It’s important to ensure that youroffice computers are using one ofthe newer web browsers to eliminatethe guesswork on whether a certainweb site may pose a security risk.
■ Spam: Yes, we’ve all receivedunsolicited e-mail, commonly referred to as spam. Not only doesspam mail clog inboxes for you andyour work force, but it also creates asecurity risk where phishing — attempts to access and compromisesuch critical company data as usernames and passwords — can prolif-erate.
To prevent these threats, yourcompany can take a few proactivemeasures to reduce the risks andoverall inconvenience of unwantede-mail, including implementing e-mail authentication techniquesfor your work force, which oftencan be activated in your e-mail account settings.
Additionally, knowledge is power.It’s best to educate your employeesand implement guidelines for sendingand receiving e-mail — such as notopening mail from an unknownsender or messages that look suspi-cious — so personnel are equippedto observe these best practices.
Look for obvious misspellings in
e-mail messages, and be sure tocopy and paste links into yourbrowser, instead of clicking on thelink directly from the e-mail.
■ Malware: Malware is softwaredesigned to access a computer system secretly, without the owner’sinformed consent, to impact yourbusinesses’ computer network. The types of malware that mostcommonly affect businesses include worms, Trojans (programsthat appear legitimate but are malicious) and unwanted software.
To protect your business frommalware, a business consistentlyshould install the latest security updates as they are released for thepurposes of automatic protection.
■ Botnets: Botnets are a network
of compromised computers. Thecreators of botnets — called botherders — actually make money byselling access to cyber criminalswho then distribute scam e-mailsand phishing and spam attacks thatcan lead to identity theft.
Botnets are one of the most com-mon security threats facing today’sbusinesses. They are reported to beresponsible for 87% of unsolicitede-mail, which amounts to nearly151 billion spam e-mails that aresent each day.
To prevent botnet attacks, yourorganization must be certain to
have the latest security protectionfrom a trusted software or servicevendor that automatically scans (and deletes) these potentialthreats.
Also, by educating oneself on the current security landscape, abusiness owner can be equipped toshare best practices with the team,ensuring that the business informa-tion remains, in a word, secure. ■
Patrick Cook serves as Dynamicssales manager for Microsoft Corp.and is based in the company’s Independence office.
Educate employeeson common problemsto help prevent issues
Angela Broski, one of the originalstore owners who now is presidentof RediGo.
Woody Jedlicka, another of theoriginal store owners, describedthe collaboration as a group of independent business owners whoknew each other very well that nowshares a name and buying power.
All eight of RediGo’s stores are inLake County, with the two newestin Perry and Painesville. Collec-tively, the stores do about $15 million in inside sales a year, not including gas or lottery sales; andthey employ about 70 to 75 people.
In addition to sharing an adver-tising program, the store ownerssay that as a group they can bargain for better rates on products that the stores sell. Work-ing together also can mean moreleverage in other negotiations,such as with banks and credit cardcompanies and for workers com-pensation and health insurance.
Additionally, the store owners
meet once or twice month to shareinformation and collaborate.
“We all kind of knew each otherbefore, but we’re twice as closenow,” said founding member LynnMitchell, who has owned his store inPainesville for more than 25 years.
‘As flexible as they come’Instead of operating in a more
traditional franchise format, thefounders opted instead to issue licenses to the brand — a businesssetup that generally means moreautonomy for the individual stores.
The cost savings for the storeowners, they say, also has beensubstantial in comparison to whenthey were part of a larger franchise.
Yearly costs to be part of RediGocan range from $3,400 to $3,600,depending on the payment plan,compared with an amount thatpreviously could reach into the tensof thousands of dollars in fees depending on store sales. There is noadditional startup fee for a licensee.
John Mazhar, the owner of thenew Perry store, said there was noquestion as to the benefits of signingon with RediGo. Coincidentally, hewas drawn to the store brand whenhe moved to the area because inTexas he operated a store under thesame name, but with no connection.
For the annual cost of participa-tion, Mr. Mazhar said he couldbarely buy an advertisement.“Plus, I got a lot of help from thegroup,” he said.
Jack Kurant, an attorney withWachter Kurant LLC in PepperPike, said while there is no specifictest in determining the differencebetween a franchise and licensingarrangement, it all comes down toone word: control.
However, Mr. Kurant said it canbe a fine line; the more require-
ments that are put in place forowners, the closer the arrange-ment moves toward being a fran-chise, which then opens it up tomore outside regulation.
As for RediGo, Ms. Broski saidthere are a handful of general requirements it looks for from itslicensees: Stores must use the RediGoname; comply with certain stan-dards, such as a minimum salesamounts; maintain clean, orderlybusinesses; and promote adver-tised items.
As for the future, the membersof the original group are open tomore licensees, but they are inclinedto stay local at this point. “Right now,we want to hold our cards close toour chest,” Mr. Jedlicka said.
The next step may be to addsmaller shops to the brand in aRediGo Express format. But nothingis set in stone, which by its very nature is the beauty of the partner-ship, according to the owners.
“We’re about as flexible as theycome,” Mr. Jedlicka said.
Making a nameOne of the biggest hurdles for
the group in the beginning waspretty basic: deciding on a name.
“We’re a convenient stop. All ofus had that in mind,” said Ms.Broski, who sold her store to a licensee in 2008 to lead the brandand work with vendors. “It was truly the first big obstacle we had.”
Laura Sheridan, president of VivaLa Brand, a Cleveland-based mar-keting strategy and ad agency searchfirm, said in marketing, a businessshould first consider what it is about— what problem is being solved.
“The strongest brands … own aplace in a consumer’s mind,” saidthe 25-year marketing veteran,whose clients include Post-UpStand, Resilience Capital Partnersand ToolingU.
A name should be selected thatreflects the organization’s mission,is memorable, easy to read andshort, she said. It’s also beneficialto make sure that the correspondingInternet domain is available.
As for RediGo, after months ofthe owners considering variousnames, the brand and look evolvedfrom the concept of a stoplight. (Aconsulting group actually suggestedthe name Red Go, to which theowners added the “i.”)
Once the name was developed,Ms. Broski said it was essential tosend the message to customers thatthe look and name may havechanged, but the stores were still thesame.
The stores sent out between3,000 and 5,000 mailers — twice —with the store owners’ photos, emphasizing “we’re still here.”
“A lot of our customers thoughtwe were bought by a nationalchain,” Ms. Broski said. ■
20 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
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Although this has been the lawaround cell phones for some time,few business owners have gone tosuch lengths to substantiate theirdeductions for cell phones. Imaginethe toll it would take on employeesand the loss of productivity if everybusiness owner were to requireevery employee to document theircell phone use to such lengths.
The change in cell phone treat-ment gives business owners a greatermeasure of comfort that claiming adeduction related to cell phones nolonger will put the taxpayer atincreased risk if the business is underaudit. But it also produces some other consequences.
First, it means the IRS no longerwill demand evidence that the cellphone is used at least 50% or morefor business purposes. If a companypays for a cell phone for its employ-ees, it’s automatically understood thecell phone is meant for business purposes and no further documenta-tion of that will be required.
Second, it means providing a cellphone to an employee no longer willraise questions with the IRS aboutwhether the cell phone should beregarded as an excludable “workingcondition fringe benefit.”
That means the IRS no longer will
look at a cell phone as a possiblesource of taxable income to the employee for the business-use por-tion of the cell phone. The law stillrequires the employer to includethe “value” of any personal use of acell phone as income taxable to anemployee unless it qualifies as a “deminimis fringe benefit.”
It also means companies won’tface as many limitations on depre-ciating cell phone costs. If a companydecides to claim a cell phone contract as a capital purchase, forexample, it may have more optionsto consider with regard to how thecost of that contract will be depreci-ated over time.
Finally, it also makes it easier foremployees who pay for their owncell phones to claim deductions fortheir business use of their personalcell phones. Under the old rules,employees had to be able to showthat they used their cell phones forthe convenience of the employerand as a condition of employment,which are conditions that can bedifficult to document.
Now that cell phones are no longerlisted property, employees still mustbe able to show that the deductionsthey claim are in connection withtheir employment, but that’s aneasier documentation standard formost employees to meet.
Beginning with the 2010 tax year,business owners and their employeescan take some comfort in knowingtheir cell phones are a little lesslikely to trigger an audit. ■
Peter A. DeMarco is vice presidentand director of tax services for theregional accounting and businessconsulting firm of Meaden & Moore.
Proprietors no longerneed to document use on tax returns
As common as cell phoneshave become, it may comeas a relief to small businessowners that claiming a
deduction for a cell phone no longerwill be viewed as a potential red flagto the Internal Revenue Service.
The 2010 Small Business Act included a provision to update thetax law regarding cell phones.
The recent law provided that cellphones no longer will be treated as“listed property.” “Listed property” isan IRS label for issues in tax returnsthat require extra documentationand plenty of scrutiny because thetaxpayer might be using it to try toavoid paying taxes related to them.
The documentation requirementsfor anything “listed” in tax law areonerous. In the case of cell phones, ifa company wanted to take a deduc-tion for a cell phone used in businesswithout any worry of having it disal-lowed by the IRS, it would have todocument the amount of time andthe reason the cell phone was usedfor business purposes, not to men-tion the actual expenditures relatedto the cell phone.
The only way for a company toprovide that kind of documentationis to require employees who usecompany-paid cell phones for busi-ness purposes to keep a log of allbusiness-related calls they make orreceive, documenting how long theyare on the phone for each call andwhat each call is about.
RediGo: Owners issuelicenses, rather thanfranchise operationcontinued from PAGE 17
“Right now, we want to hold our cards close to our chest.” – Woody Jedlicka
“Business is picking up, whichis a good thing, so hopefully it willlast even longer,” Ms. Naso said.“It’s been a nice mix of some special project work as well as permanent hiring.”
’Tis the seasonLike large retail stores, holiday
destinations long have been asource of temporary work. Thejobs are short-lived and typicallylow-paying, but in this tepid economy, a job is a job.
For James Langa, producer at
Kringle’s Inventionasium at TowerCity Center in downtown Cleve-land, his business is seasonal bynature. Therefore, he only needsenough staff to squeak throughthe 20 days that his holiday spec-tacular is open from Black Fridayto just before Christmas.
Even so, the interactive holidayextravaganza has seen such anuptick in business each year thatMr. Langa hired an additionaleight people, boosting his staff to33 this season.
“Hiring on our end is definitelyup,” Mr. Langa said. “We had to
come up with some additionalcharacters for children to meet inside as well as revamp our wholehost of activities for our guests toexperience.”
Mr. Langa, who opened Kringle’sInventionasium in 2007, expectsat least a 20% increase in visitorsthis year. Last year, Mr. Langa saidhe had to turn people away becausethere weren’t enough performersto handle the influx of visitors.
Meanwhile, A Christmas StoryHouse — you know, the placewhere Ralphie almost shot his eyeout — hired five seasonal employees
this year, which is typical, accordingto Angela Dickerson, the museum’sbusiness manager.
Ms. Dickerson said there usuallyisn’t much turnover in the seasonalhelp year to year. Seasonal hiring iscompleted around September forthe few slots that might be available.
She noted there wasn’t a barrageof people looking for work this yearmostly because the house didn’tpost any employment ads and instead relied on word of mouth.
After a newspaper published astory a few years ago, however,Ms. Dickerson said the house was
flooded with phone calls, faxesand knocks on the door from people looking for work.
“It was ridiculous,” she said. “Wehad to keep the doors locked. Somany people were showing up.”
In Akron, Don Drumm Studios& Gallery hired six seasonal workers,which gallery manager MaggieGuthrie said is pretty usual.
She said business this summerwas fairly good, and she’s hopefulit’ll translate to holiday sales.
“It’s looking to be a good holidaybusiness wise,” she said. “We’rehoping and preparing for it.” ■
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 21
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IN BRIEF■ BUNDLING UP: Weiss Furs isback in the region with a store inWestlake that opened last Monday,Nov. 1, and plans for a 15,000-square-foot facility in Woodmereslated to open in March. JustinWeiss, a fourth-generation memberof the Weiss furrier family, is leadingthe current business effort, whichalso includes a temporary store location in Legacy Village. Lastyear, Weiss Furs shut its NortheastOhio stores after more than 100years in business in NortheastOhio. Following a career in NewYork, along with a current venture in Alaska, Mr. Weiss said he had a desire to return to his roots. “It wasimportant to me to return to Cleve-land to carry on the family business,” he said.
■ LOOKIN’ GOOD: Lee Zapis,principal of Westlake-based ZapisCapital Group, has created9Threads, a new multimedia mar-keting agency specializing in thefashion, beauty and retail industries.The agency is a merger of West-lake-based Symphony PublishingGroup publishers of Earnshaw’sand Footwear Plus and digital mar-keting services firm ‘peeps creativein Akron. 9Threads provides strate-gic marketing and custom content services to companies in the fashion,beauty and retail segments that areseeking ways to broaden their online exposure. 9Threads is headquartered in New York City,with an office in Akron.
■ SHINING BRIGHT: Vanity LabSalon Spa Shop has added an on-site local artisan jewelry collectionunder the name Sparkle Jewelry.Sparkle features the work of morethan 50 local artists, and a portionof the proceeds, along with a matchfrom Sparkle, support an area non-profit. Contributions currently arebenefiting The Gathering Place.
■ THE BUZZ: Acclaimed pianistJim Brickman has teamed upwith Cleveland-based Beecologyfor a special promotion to markthe release of Mr. Brickman’s newCD, “Home.” Beecology is a manufacturer of natural skin care,hair and body products. Throughthis Thursday, Nov. 11, the first1,000 people who purchased Mr.Brickman’s CD from his web sitegot an autographed copy of theCD plus a tube of Beecology’s“Brick Balm.” The lip balm normallysells as “Buzz Balm” but was renamed in a limited edition run forinclusion with the CD.
Hospitals are encouraging inde-pendent physicians either to alignclosely with their systems — withperks, of course — or simply to signon as full-time employees. It’s not anew idea, but it’s becoming more
2222 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 8-14, 2010
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Doctors: Health care reform prompts actioncommon as physicians are lured byincentives such as access to top-notchelectronic medical records systems.
“It seems like physicians are feelingthey’ve got to make a choice to go some-where,” said Thomas Campanella,director of the health care MBA pro-gram at Baldwin-Wallace Collegeand a longtime health care observer.
The tighter connections also arebeneficial for hospital systems, Mr.Campanella said. More physiciansand specialists under the systems’umbrellas can boost their market shareand leverage in given communities.
Making the pitchMetroHealth, for one, recently
launched an aggressive effort to entice independent practices ofphysicians and specialists in thesuburbs of Cuyahoga County to jointhe health system. The move is partof an overall growth strategy for thecounty-subsidized hospital, whichhas charted a new course over thelast few years after facing a series offinancial setbacks.
At the moment, MetroHealth hasabout 500 physicians on staff, in-cluding about 130 at its communityhealth centers located around Cleve-land. The idea isn’t only to take overexisting practices but to form part-nerships with those doctors thatwould prefer to remain indepen-dent, said Dr. Bill Lewis, a Metro-Health cardiologist leading the effort.
Dr. Lewis wouldn’t cite the num-ber of physicians MetroHealth islooking to employ or partner with,but said MetroHealth is interestedin “as many quality physicians aswe can find.”
Incentives MetroHealth is toutingare better pay, enrollment in thesystem’s benefits packages, accessto the Ohio Public Employee Retire-ment System and the handling ofadministrative functions associatedwith running a doctor’s office.Those interested in just partneringfor the sake of remaining indepen-dent, Dr. Lewis noted, can have access to some of the benefits, suchas MetroHealth’s electronic medicalrecords system or some administra-tive support.
“We want to give them support tobe doctors, not be chief, cook andbottle washer,” Dr. Lewis said.
Dr. Jeffrey Galvin was one ofthose doctors. He ran a solo privatepractice in Fairview Park for about10 years but joined MetroHealth inAugust. He uprooted his practiceand moved to a facility in Cleve-land’s West Park neighborhood,and so far, most of his patients havecome along with him.
The administrative work, longwork days and the cost of installingan electronic medical systems wereamong the factors that ultimatelyled Dr. Galvin to join MetroHealth.
“Oh my lord, it is amazing howmuch I put up with for so long,” Dr.Galvin said about his time as a pri-vate practitioner.
If anything, the change has madehim a more peaceful and collectedphysician, he said.
“I’ve had three patients just lookat me and cock their heads to oneside and say, ‘What’s different?You’re just so much calmer,’” Dr.Galvin said. “In my mind, I’m still
the ornery pain in the backside I’vealways been, but they look at me andsee some other kind of demeanor.”
A simple partnershipThe Cleveland Clinic has made a
name for itself by acquiring physi-cian groups and branding them inits image across the region. For instance, the Clinic formed its Community Physician Partnershipalmost four years ago when itmerged the physician groups atFairview Health System, LakewoodHospital, Marymount Hospital andthe Meridia Health System.
Earlier this year, the Clinic broad-ened its efforts of integrating carewith the formation of its Quality Alliance, in which private practicedoctors must agree to maintain theClinic’s quality standards and, in return, the Clinic will work with thedoctors to negotiate reimburse-ment rates from insurers.
Dr. Tarek Elsawy, medical directorfor the Quality Alliance, said themodel of buying practices is a thingof the past as some hospital systemsare so large that physicians wouldn’twant to be so far from their centralhubs. However, partnering withphysicians will help integrate all aspects of a patient’s care to betterprepare for changes to reimburse-ment models and ultimately to forman accountable care organization.
“At some point, we’re all going tobe judged by how we’re doing interms of outcomes. It’s very difficultto do that in a solo private practiceby yourself,” Dr. Elsawy said.
University Hospitals has lookedto partner with independent doc-tors since the health system createdits physician services group late last year Furthermore, University Hospitals has laid the groundworkfor its own accountable organiza-tion and is looking for more inde-pendent physicians to take part inthat initiative, according to Dr. EricBieber, president of the system’s accountable care organization.
Dr. Bieber said the hospital systemsent about 550 letters to indepen-dent providers inviting them topartner on the system’s account-able care project. University Hospi-tals’ accountable care organizationwill focus on caring for a group of25,000 patients, who are enrolleesin the system’s benefits plan.
“We value our colleagues that areindependent and part of our staffs,so it’s really about agreeing to workwith us on optimizing the care delivery for, in this case, employeesand families,” he said. ■
TAKING INDUSTRY’S TEMPERATURE
Primary care physicians are goingto be a key component of the healthcare overhaul when 32 million morepeople join the insurance rolls in 2014,but these doctors are becoming increasingly difficult to find.
Between now and 2015, the short-age of primary care doctors likelywill increase significantly, accordingto the Association of American Med-ical Colleges. Previous projections,according to the group, showed abaseline shortage of 39,600 in2015, but new estimates bring thatnumber to 63,000.
Thomas Campanella, director ofthe health care MBA program atBaldwin-Wallace College, said because of a stronger need for primary care doctors, the federalgovernment ultimately will need tocome up with inducements to encourage young people to shift toprimary care, such as loan forgive-
ness or increasing Medicare supportfor residency training.
Meanwhile, the Northeastern OhioUniversities Colleges of Medicine andPharmacy, based in Rootstown, islooking to encourage its students topractice medicine in underserved rural and urban communities, whichhave the greatest need for medicalproviders. To do so, the school isbuilding an endowment for an “education for service” program toprovide full-tuition scholarships tostudent doctors or pharmacists whoagree to practice in an underservedcommunity for four years.
“We want to place people in appro-priate places,” said Dr. Jay Gershen,the university’s president. “Whetherit’s an accountable care organizationor an independent clinic, we justwant the providers to be out in thecommunity and provide the care.”
— Timothy Magaw
20101108-NEWS--22-NAT-CCI-CL_-- 11/5/2010 11:27 AM Page 1
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 23
LARGEST HOSPITALSRANKED BY 2009 NET PATIENT REVENUE
23Robinson Memorial Hospital6847 N. Chestnut St., Ravenna 44266(330) 297-0811/www.robinsonmemorial.org
121.4 120.8 0.5 394.9 141 1,091 1894 Summa Health System Stephen Colecchipresident, CEO
24Saint Vincent Charity Medical Center(1)2351 E. 22nd St., Cleveland 44115(216) 861-6200/www.stvincentcharity.com
113.6 121.5 (6.5) 288.3 163 927 1865 CSAHS~Cuyahoga, Inc. Judith Ann Karampresident, CEO
25Fisher-Titus Medical Center(1)272 Benedict Ave., Norwalk 44857(419) 668-8101/www.fisher-titus.com
108.7 98.0 10.9 199.6 144 689 1957 NA Patrick J. Martinpresident
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee theselistings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual business lists and TheBook of Lists are available to purchase at www.crainscleveland.com. (1) Information is from the American Hospital Directory, www.ahd.com. Employee numbers represent totalemployees, not full-time equivalent employees. Staffed beds is the number of total complex beds. (2) Includes Rainbow Babies & Children's Hospital and MacDonald Women'sHospital. (3) Numbers are estimates.
RESEARCHED BY Deborah W. Hillyer
20101108-NEWS--23-NAT-CCI-CL_-- 11/4/2010 10:29 AM Page 1
September, upping its staff by 215and its revenue by $45 million.Rosetta also acquired Wishbone ofNew York City at the start of theyear, adding 60 to its staff and $15million to its sales.
Those acquisitions are expectedto help boost Rosetta’s revenue to$215 million this year. They are aboutmore than just numbers, though.
Each deal has helped broadenthe company’s skills and in somecases the geographies it serves, Mr.Kuenne said. For instance, LevelStudios strengthens Rosetta’s skillsin mobile marketing and user inter-face design. It also gives the companythree offices on the West Coast,where it wanted a larger presence.
Now, in addition to plans to makeacquisitions outside the country,
Rosetta is looking for companiesthat would increase its skills in areassuch as customer relationship man-agement and search engine marketing.
The company’s goal is to becomea firm that can help a companytransform the way it markets itself,Mr. Kuenne said.
“It’s all about finding the rightcompany, the right culture, theright capability,” he said.
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NOTICE TO VENDORSNotice is hereby given that sealed proposals will be received in the Board ofCounty Commissioners Office of Procurement & Diversity, Room 100, CountyAdministration Building Annex, 112 Hamilton Court, Cleveland, Ohio 44114until 11:00 A.M. local time on December 01, 2010 for lease of office space for aJuvenile Court Westside Regional Probation Office for the period July 01, 2011 toJune 30, 2016.
Note: The Office of Procurement and Diversity is moving and may be relo-cated by the time the proposals are due. Please be sure to call ahead216.443.7200 for their new address.
Required geographic locations: The space must be in an area bounded approxi-mately by:
North: I-90 East: West Blvd.South: West Avenue / Chatfield West: Western border of Cleveland
The official closing time shall be determined by the wall clock located in theOffice of Procurement & Diversity.(SAME ADDRESS)Late proposals will be returned unopened.
There will be a Pre-proposal Conference on November 16, 2010 at 10:00 A.M.local time at The Department of Central Services, 2nd floor conference room, 1642Lakeside Avenue, Cleveland, Ohio 44114. IT IS STRONGLY RECOMMEND-ED THAT INTERESTED VENDORS ATTEND.
Specifications and proposal blanks may be obtained at the Board of County Com-missioners Office of Procurement & Diversity. (SAME ADDRESS) Questionsmay be addressed to Mr. John Myers, Real Estate Manager at 216.698.2517.
Payment will only be made upon approval of the Board of County Commission-ers and payments will be warrants issued by the County Auditor upon notificationfrom the Commissioners.
The Board of County Commissioners reserves the right to accept or reject anyproposals or any part or all parts of any proposal submitted, and waive alltechnicalities.
Each proposal must state in full the name and address of each person, firm orcorporation interested in the proposal submitted.
BY ORDER OF THE BOARD OF COUNTY COMMISSIONERS OFCUYAHOGA COUNTY
JIMMY DIMORA TIMOTHY F. HAGAN PETER LAWSON JONES
LENORA M. LOCKETT, DIRECTOROffice of Procurement & Diversity
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Rosetta: Acquisitions diversify expertise Even without acquisitions, Rosetta’ssales would be in the $150 millionrange today — up significantly from$125 million in 2008. Combined,sales at Rosetta and Brulant totaled$98 million in 2007. Mr. Kuenne attributed the organic growth to thecompany’s entrepreneurial culture,its broad range of capabilities and a “massive shift from traditionalmarketing to digital and direct marketing.”
Rosetta was the ninth-largest digital marketing firm in the countryin 2009, according to Advertising
Age, a sister publication of Crain’sCleveland Business. AdAge also hasreferred to Rosetta as “the last remaining independent digital agencywith major scale.” Many other inde-pendent agencies have been boughtor are pursuing acquisition, accordingto the publication.
Brad Nellis, president of theNortheast Ohio Software Associa-tion, described Rosetta as a “greatcompany” that could have a largeimpact on the region.
“I know that they’re growing likecrazy,” he said. ■
20101108-NEWS--24-NAT-CCI-CL_-- 11/5/2010 11:47 AM Page 1
apartment units it has retained in itsportfolio from over the past 60 years.
Ironically, Cleveland-based ForestCity was reluctant to enter the mili-tary arena — a surprise for a real estate company that has taken onpioneering roles in the past.
Robert O’Brien, Forest City chieffinancial officer, recalled that whena Hawaii-based builder approachedthe company about partnering on aNavy project in 2004, Forest City’sinvestment committee questionedthe assignment because it resem-bled simple fee-income work.That’s the stuff for builders whoconstruct projects to sell and moveon rather than a diversified real estate company that prides itself onownership and a long-term approachto projects, even if it manages themfor others.
However, Forest City decided topursue a job that would wind up incorporating 4,200 homes in thatfirst agreement because it was similarto senior housing and other work itperforms for public entities anduses the company’s entire skill set.
David LaRue, Forest City’s chiefoperating officer, said the companyoriginally thought working on mili-tary housing would mean renovating1950s- and 1960s-vintage single-family homes. However, it generallyfound the properties so dilapidatedthey needed to be replaced.
“It’s a great service we’re providingto the families,” Mr. LaRue said.
The long viewThe original Hawaii assignment
is now nearing completion of its$1.3 billion building phase, but ForestCity will continue providing leasingand management services for thehomes, which military personnelreceive a stipend to rent. Militaryfamilies may rent from Forest Cityor from competing private com-plexes nearby.
“It’s turned into a great long-termvalue,” Mr. LaRue said.
Forest City manages the priva-tized properties under 50-year leaseswith the federal government, the ultimate creditworthy tenant.Moreover, the military portfolio hascontinued to grow even while Forest City spent the last two yearsmeeting the desires of securities analysts and investors that it reduceits development risk and slash debt.
The work for the military has putForest City employees in communi-ties such as the Puget Sound area inWashington state, the Air Force
Academy in Colorado, and, increas-ingly, in the southeastern UnitedStates. And it isn’t Forest City’s onlydiversification effort in the face of atight credit environment that makespursuing megaprojects a challenge.
Another avenue Forest City haspursued is undertaking propertymanagement and third-party con-sulting work on a fee basis for banksand others with troubled propertiesor development plans.
In one case, Forest City analyzedand devised strategies for 15 retail andoffice properties in the loan portfolioof a financial concern with billionsof dollars of properties. Forest Cityestimated how to maximize the values of the assets, and in some cases,Mr. O’Brien said, recommended thelender to foreclose immediately.
“We have experience in multi-family, in retail and mixed use all in one company. That’s why theyasked us,” Mr. O’Brien said. He declined to identify the company.
Through that assignment andothers, such as helping the city ofSan Juan, Puerto Rico, plan to rede-velop its waterfront, Forest Citycontinues to use the skills of its development team, Mr. LaRue said.
A ‘good first step’All the work on military housing
occurred amid a severe recessionthat many in the real estate fieldconsidered a depression. CharlesRatner, Forest City CEO, put thecompany’s mission during this period in a single word: survive.
If Forest City had not had a diver-sified, $12 billion portfolio and a diversified team, Mr. LaRue said,“We wouldn’t be the ones sittinghere talking to you.”
Recognizing the company’s efforts,Moody’s Investor Service recentlyincreased Forest City’s credit out-look to stable from negative.
“It’s a good first step,” Mr.O’Brien said, because the other bigcredit rating agency, Standard &Poor’s, left the company’s ratingunchanged at B+, or speculative.
The military work has put ForestCity in some unusual situations.
Last May 15, for example, a leveeon the Cumberland River gave way,flooding a Forest City-operatedNavy family community in Milling-ton, Tenn. Forest City employeeshelped Navy personnel pluck Navyfamilies from their homes and placethem in temporary quarters. After-wards, Forest City repaired thedamage so the Navy families couldreturn home. ■
casino; the site runs from HuronRoad behind Tower City down to theriver bank. The purchase includeda parking lot along the river at Col-lision Bend, the tightest turn on thenarrow river.
“We’re concerned, because thisis a tight river to start with,” saidGlen Nekvasil, vice president-corporate communications for theLake Carriers’ Association. “Everyinch of that river is needed for com-mercial navigation.”
The association is a Cleveland-based nonprofit that represents the18 companies that operate American-flagged ships on the Great Lakes.The vessels bring iron ore, stoneand bulk chemicals to docks alongthe Cuyahoga, with the farthesttrips ending at the ArcelorMittalSteel ore dock five miles upriver.
Schematics for the change pre-sented last month by Rock Venturesat a meeting with the U.S. Army Corpsof Engineers show a desire to movethe existing shoreline bulkheadingout into the river almost 29 feet.
The plans indicate the casino operator would like to replace 686feet of the existing bulkhead to accommodate more parking and toprovide a buffer for a cantilevered
section of the casino building that,without bumping out the shore-line, would reach the river’s edge.
Rock Ventures spokeswomanJennifer Kulczycki responded to aphone call about the proposedchange to the channel with an e-mail that stated the company has“had brief exploratory discussionswith the Corps and (Greater Cleve-land Partnership) to inform our discussions, but no final decisionshave been made.”
Rock Ventures representativesmet Oct. 21 with the Army Corps ofEngineers officials in Buffalo, saidAlan Sisselman, chief of the Corpsof Engineers’ Ohio Application Eval-uation Section. He described thesession as a pre-application meeting.The Corps of Engineers is responsiblefor dredging the channel to keep itnavigable for commercial vessels.
Mr. Sisselman said proponents ofthe shoreline change were told thatany modifications in the depth orwidth of a federally authorized andmaintained navigation channel,such as the upper Cuyahoga River,would require congressional action.
Twists and turnsSuch legislation for a specific
project is possible, if not routine.
Allison Preiss, a Washington,D.C.-based spokeswoman for U.S.Sen. Sherrod Brown, D-Avon, saidstaff members in the senator’sCleveland office have been contactedby casino officials and are workingto find an amicable solution.
“While the project is still in thepreliminary stages, Sen. Brown believes that it’s important to find asolution that allows this project —which would bring hundreds ofconstruction and permanent jobsto Northeast Ohio — to move forward in a way that works for allusers of the Cuyahoga River,” Ms.Preiss said in a prepared statement.
Carol Caruso, vice president ofgovernment advocacy for theGreater Cleveland Partnership, saidher business advocacy group hasbeen speaking with Sen. Brown’soffice and is setting up a meetingwith all the concerned parties.
“We’re optimistic we can find ahappy solution,” she said.
Mr. Nekvasil of the Lake Carriers’Association said navigating thetwisting river requires considerableprecision for the big ships, some ofwhich, at more than 700 feet long,would be taller than the TerminalTower, which the captains can seeabove them as they make the turn
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Casino: River constriction concerns ships just sneaking byat Collision Bend. He said one of thebiggest ships, the American Republic,which regularly brings iron ore tothe ArcelorMittal steel mill, was fittedwith eight rudders to allow it tosteer precisely through the narrowchannel without tugboat assistance.
Mr. Nekvasil said he has beenhearing from captains of the bigships who are concerned about anyconstriction of the river channel.Several have told him that now,when their ships make the turn atCollision Bend, they come within 30feet or less of the bulkhead.
The ship owners and ArcelorMittal
are concerned that a narrowing ofthe channel could require usingmore smaller ships to make deliveriesupriver, which could increase thecost of iron ore and other materials.
In a statement, an ArcelorMittalspokeswoman said the steel com-pany “is reviewing the proposedplan for the casino and its potentialimpact on the Cuyahoga River.”
“ArcelorMittal Cleveland’s primaryobjective is to ensure that waterbornevessels have the ability to efficientlytransport materials to our opera-tions and other businesses alongthe river,” the spokeswoman said. ■
Military: Work helps to increase company’s stability
20101108-NEWS--26-NAT-CCI-CL_-- 11/5/2010 11:41 AM Page 1
L.A.: City of angelsCleveland: City of marts■ Cleveland eventually is going to have amedical mart (or so we’ve been told), so whynot a manufacturing mart as well?
Two women who long have advocated forinnovation in manufacturing in NortheastOhio think it can, and on Dec. 1 they plan toopen The Manufacturing Mart at the Galleriaat Erieview.
Mary Kaye Denning, founder of Capital ofKnow-How, a for-profit organization
that links inventors and manufac-turers, and Pamela Holmes, a
former vice president of Cleve-land manufacturing support
group Wire-Net, are teamingup for the effort. They’re
starting out small, as martsgo, with about 3,500 square feet
in what used to be a Williams-Sonomastore. They have two tenants signed up —New Wave Plastics of Medina and Richard’sGrinding of Cleveland — but said they’retalking to others they hope will be on boardby opening day.
Manufacturers will be able to display theirproducts and capabilities at the mart, whileinventors and others with product-innova-tion ideas will be able to present their potentialproducts to manufacturers. Ms. Holmes andMs. Denning will serve as sales reps for thecompanies that display at the mart. Theyhope to expand to take up more space in theGalleria mall.
“We intend to pump up their work. I wantto be known as the lady with the new businessorders,” Ms. Denning said. — Dan Shingler
Akron Law sets up rent-a-clerk site■ Employers seeking a law clerk but whodon’t need or want one on a permanent basis now may hire students of the Universityof Akron School of Law through the school’sonline tool, Law Clerk for Hire.
The school’s career planning and placementoffice unveiled the service in late October. Itallows firms to hire law students on an as-needed, hourly basis to complete taskssuch as document review and legal research,said Barbara Weinzierl, director of the school’scareer planning and placement office.
More than 25 students have signed up,creating profiles and résumé pages that employers who also sign up can search. Ms.Weinzierl said the page was launched for anumber of reasons, not the least of which isthe cutback in hiring by firms.
“We kind of saw it as a perfect match between students needing practical, substantive experience and those smallfirms and solo practitioners needing some-one on an as-needed hourly basis,” she said.
Amid an intensely competitive job market,the more experience students can gain during law school, the better, Ms. Weinzierlsaid. Pay is negotiated between studentsand employers.
The service, developed by the schoolalong with the Small and Solo PractitionersSection of the Akron Bar Association, is freeto students and employers. To register, employers can log on to http://lawclerk.uakron.edu; they also can contact the officeat 330-972-5321 or at [email protected]. — Michelle Park
Hospice doesn’t brush off offer of Brush office space■ Brush Engineered Materials Inc., a makerof beryllium alloys and specialty metalsbased in Mayfield Heights, has donated40,000 square feet of office space at its former headquarters on St. Clair Avenue inCleveland to Hospice of the Western Reserve, which will use the space as thehome for the nonprofit’s leadership team.
The property is on 18 acres with ampleparking and storage, which hospice CEODavid Simpson said will allow for further expansion. The agency already plans to start construction early next year of a $20 million,32-bed facility in Westlake.
“With the addition of this building, ouragency is poised to continue to provide thecommunity with the support and care theydeserve, while reaching underserved popu-lations,” he said.
The new building will house about 200 of the hospice’s employees. It’s about 2.5miles from the nonprofit’s current head-quarters, which is alongside its 42-bed hospice facility on East 185th Street near LakeErie.
Brush spokesman Patrick Carpenter saidthe company had owned the property since the mid-1940s. The property served as Brush’s headquarters and research-and-development center at various times during the company’s history. In 2008,Brush moved its headquarters to MayfieldHeights.
“This transaction was viewed by our company as the best possible outcome forthe building,” he said. — Timothy Magaw
The company’s Ferro Electronic Materialsunit, a supplier of materials for fabricatingphotovoltaic silicon solar cells, last month introduced the contact pastes at tradeshows in Taiwan and India.
The two new products “improve solar cellefficiency and throughput rates, enabling solar energy to become a more cost-compet-itive energy generation alternative,” Ferrosays. Both are RoHS-compliant (Restrictionof Hazardous Substances Directive) and arelead- and phthalate-free.
NS 33-512 front contact paste increaseselectrical efficiency by up to 0.6% and enablesfast printing of three bus bar cell designs.Aluminum BSF paste AL 53-140 lowers cellcosts by reducing paste lay down by asmuch as 25%.
“These new products address both factorsin the equation to make solar energy morecost-competitive — they increase cell effi-ciency and reduce manufacturing costs,”said Todd Williams, business manager forFerro Electronic Materials. The company saidit believes the products meet all global envi-ronmental regulations.
For information, visit www.Ferro.com.
Send information about new products to managing editor Scott Suttell at [email protected].
REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS
THEINSIDER
THEWEEK NOVEMBER 1 – 7
The big story: Republicans came up bigstatewide in last Tuesday’s election, with JohnKasich winning the gubernatorial electionagainst incumbent Gov. Ted Strickland and RobPortman winning in the U.S. Senate race to replacethe retiring George Voinovich. The GOP alsoswept all state offices and will hold a 13-5 edgein the delegation to the House of Representative.Closer to home, Lakewood Mayor Ed FitzGerald,a Democrat, won the race for the new CuyahogaCounty Executive position. He and the county’snew 11-member council will be sworn in on Jan.1. See story, Page One, and editorial, Page 10
He’ll manage: Developer MMPI Inc. namedTyrone Williams project manager for the Cleve-land Medical Mart & Convention Center complex.MMPI said Mr. Williams, a Cleveland native, willbe responsible for managing constructionschedules and budgets, reviewing submittals,and handling general coordination with contrac-tors and engineers. Mr. Williams has served in avariety of capacities with Hammond Construc-tion Co. in Canton for the past seven years.
Big temper (mill): Steel distributor OlympicSteel Inc. plans to invest about $25 million in anew temper mill and cut-to-length line at U.S.Steel’s Gary Works in Gary, Ind. Olympic Steelsaid the temper mill equipment is expected to beoperational in the first half of 2012. The companyalso has an option with the equipment manufac-turers to buy a second temper mill and cut-to-length line. Once fully operational, the newequipment will add 150,000 to 180,000 new tonsper year of high-quality tempered sheet capacityfor Olympic Steel.
State of the art: Directors of the Museumof Contemporary Art Cleveland voted to proceed with construction of a $26.7 millionhome for the institution in the Uptown develop-ment in University Circle. Groundbreaking forthe building should take place in December.MOCA Cleveland by fall 2012 expects to open thebuilding, which is designed by Foreign OfficeArchitects in London. The four-story, 34,000-square-foot building at the intersection of EuclidAvenue and Mayfield Road will be 42% largerthan MOCA Cleveland’s current leased space at8501 Carnegie Ave.
Howdy, partner: Lincoln Electric HoldingsInc. of Euclid, a maker of welding equipment,said it has formed a strategic partnership withIPG Photonics Corp., a company based in Oxford,Mass., that makes high-power fiber lasers andamplifiers. The two companies said they willwork jointly to provide “welding solutions to industrial customers around the world” by creating high-power laser welding equipment.
This and that: Apple Growth Partners, a regional accounting and business advisory firmheadquartered in Akron, has opened a new office just off Interstate 77 at Rockside Road inIndependence. ... Medical therapies developerAthersys Inc. of Cleveland received $730,000 ingrants made available by the health care reformbill that President Barack Obama signed inMarch and another $140,000 grant from theMichael J. Fox Foundation.
To keep up with local business news as it happens, visit www.CrainsCleveland.com.
NOVEMBER 8-14, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 27
Excerpts from blog entries on CrainsCleveland.com.
BEST OF THE BLOGS
They all look in the mirrorand see a president, right?■ Slate.com came up with aformula to rank the most vainU.S. senators, and Ohio Demo-crat Sherrod Brown earned theNo. 15 spot in the world’sgreatest deliberative body.
In a slideshow, Slate.comnoted that Sen. Brown has sixpictures of himself in his office and that he “frames notonly his own speeches but alsostatements from fellow sena-tors commenting on hisspeeches.”
It should shock no one that the most egotistical senator is John Kerry, D-Mass.,whose office has 99 pictures of the senatorwith celebrities including Bono, the DalaiLama and Ronald Reagan.
In Cleveland, there’s a silverlining to Madoff’s misdeeds■ The Bernie Madoff mess was a disaster formost involved, but the bankruptcy of thePonzi schemer’s investment firm has been
quite lucrative to Cleve-land law firm BakerHostetler LLP.
Bloomberg reportedthat the trustee overseeingthe bankruptcy of Mad-off’s investment firm“spent $26.9 million inthe six months endedSept. 30 while recovering$849,000 over the same
period for victims of the money manager’sPonzi scheme, according to a report filed inManhattan federal court.”
The largest component of the expensesfor the period is $15.8 million in legal fees toBaker Hostetler, which is bankruptcytrustee Irving Picard’s law firm. Bloombergsaid most of the money recovered in thattime, $771,000, came from Madoff investors
who received payouts in the 90 days before the invest-ment firm’s bankruptcy filing, according to Picard’s report.
“The trustee said he hasevaluated 14,030 investorclaims; including 1,781 fromApril 1 to Oct. 22,” according toBloomberg. “He said he has allowed a total of 2,280. The report, which was made publicOct. 30, is the fourth filed by Picard.”
Mt. Picard told U.S. Bank-ruptcy Judge Burton Lifland in his latest report that he recovered a total of about $1.5billion for creditors of Bernard L. MadoffInvestment Securities LLC, Bloomberg reported.
Alcoa’s local wheel unittakes a shine to new Ferrari■ There’s a little bit of Cleveland in thebeautiful and pricey new Ferrari 458 Italia.
Web site iStockAnalyst.com noted thatthe Cleveland-based Alcoa Auto Wheelsunit of aluminum giant Alcoa is supplyinglightweight forged aluminum wheels for theluxury sports car.
The wheels are forged at Alcoa’s Clevelandworks plant. The use of forged aluminumwheel technology pioneered by Alcoa “ensures that the front wheel weighs just22.8 lbs., while the rear wheel weighs 25.3lbs., a saving compared to a cast aluminumwheel and a result that is only achievablewith a forging process,” the web site reported.
If you want the Ferrari 458 Italia, it will setyou back about $220,000.
