$1.50/APRIL 5 - 11, 2010 Vol. 31, No. 14 SPECIAL SECTION We spotlight some of Northeast Ohio’s family businesses ■ Page 15 NEWSPAPER CrainsCleveland.com/30thanniversary ShoreBank scales back lending In response to FDIC mandate, community institution focuses on raising capital levels By ARIELLE KASS [email protected]ShoreBank, a Chicago-based bank focused on community development in urban areas, has curtailed its lending in Cleveland and across its footprint as it tries to raise at least $159 million. Brian Berg, a spokesman for Shore- Bank, said the bank is “continuing to take care of our existing customers” and is raising deposits, but has “curtailed small business lending and real estate lending for several months bank-wide.” In addition to its Cleveland and Chicago branches, ShoreBank also is in Detroit. A Pacific Northwest branch is separately chartered and is unaffected by a cease-and-desist order ShoreBank received last July from the Federal Deposit Insurance Corp. and the Illinois Division of Banking that claimed the bank was engaging in unsafe or unsound practices. The practices ShoreBank was rebuked for include “operating with an inadequate level of capital protec- tion for the kind and quality of assets held,” “engaging in hazardous lending and lax collection practices” and “operating with an excessive level of adversely classified loans.” The bank also was operating with policies that jeopardized the safety of its deposits and resulted in inad- equate earnings, the order said. ShoreBank was ordered to return the bank to a “safe and sound” condition, including increasing its capital levels. ON THE WEB Crain’s fans, listen up There’s another avenue for you to cull business news from Crain’s. Our reporters each week take you behind the news and offer an in-depth analysis of some of the week’s most notable stories. For more perspective on this week’s news, visit CrainsCleveland.com /section/audio. Opportunity Corridor plan moves ahead Committee conceptualizes development along I-490, University Circle link By JAY MILLER [email protected]A sour economy and a lack of firm financing haven’t deterred state highway planners and Cleveland community leaders from pressing ahead with the Opportunity Corridor, a $350 million plan to create a 2.75- mile boulevard and development zone that would connect the eastern stub of Interstate 490 with University Circle. The Ohio Department of Trans- portation expects to select a final route for the four-lane road by early 2011, with construction likely to begin in 2015 and to be completed in 2019. That’s a long way off — too long for some advocates — but the project is in a better position now to move ahead than it has been since it was first proposed in 2003 during planning for reconstruction of Cleveland’s Inner Belt. Terri Hamilton Brown, a consultant to the Greater Cleveland Partnership business advocacy group who’s heading a public-private steering committee planning the corridor, said she hopes the committee can complete a community and economic develop- ment plan for neighborhoods along the route by Jan. 1 and can win the city of Cleveland’s approval of a land use plan before year-end. The project still needs to line up federal, state and perhaps local money See CORRIDOR Page 13 See LENDING Page 6 MELT SPREADS Lakewood’s master of the grilled cheese preps for East Side restaurant opening, sees further growth potential By KATHY AMES CARR [email protected]S ince Melt Bar and Grilled opened its doors in September 2006, the local culinary desti- nation has developed its own brand, a tattoo fan club and a loyal following of customers for the humble grilled cheese. Now the popularity of the Lakewood establishment — with its whimsical variations of the classic American sandwich along with an expansive beer selection — has prompted chef and owner Matt Fish to expand with a second location that is set to open May 21 at Cedar and South Taylor roads in Cleveland Heights. With the new location, Melt will employ a total of about 110 people, most of whom work full time. If all goes well at the East Side digs, the sandwich artist hopes to expand the Melt concept further; See MELT Page 5 JASON MILLER Chef Matt Fish is opening a second Melt location in Cleveland Heights. FROM START TO FINISH The Parmageddon, named after Mr. Fish’s hometown of Parma, begins with sharp cheddar and potato and cheese pierogi. The sandwich also includes grilled onions and napa vodka kraut, and is served with sweet slaw and fries. The Parmageddon is served.
Transcript
$1.50/APRIL 5 - 11, 2010Vol. 31, No. 14
07148601032
614 SPECIAL SECTION
We spotlightsome of
NortheastOhio’s familybusinesses ■■ Page 15
NEW
SPAP
ER
CrainsCleveland.com/30thanniversary
ShoreBank scales back lendingIn response to FDIC mandate, community institution focuses on raising capital levelsBy ARIELLE [email protected]
ShoreBank, a Chicago-based bankfocused on community developmentin urban areas, has curtailed its lendingin Cleveland and across its footprintas it tries to raise at least $159 million.
Brian Berg, a spokesman for Shore-Bank, said the bank is “continuing totake care of our existing customers”and is raising deposits, but has “curtailed small business lending andreal estate lending for several monthsbank-wide.”
In addition to its Cleveland and
Chicago branches, ShoreBank also is in Detroit. A Pacific Northwestbranch is separately chartered and isunaffected by a cease-and-desist orderShoreBank received last July from theFederal Deposit Insurance Corp. andthe Illinois Division of Banking thatclaimed the bank was engaging in unsafe or unsound practices.
The practices ShoreBank was rebuked for include “operating withan inadequate level of capital protec-tion for the kind and quality of assets
held,” “engaging in hazardous lendingand lax collection practices” and “operating with an excessive level ofadversely classified loans.”
The bank also was operating withpolicies that jeopardized the safetyof its deposits and resulted in inad-equate earnings, the order said.
ShoreBank was ordered to returnthe bank to a “safe and sound” condition, including increasing itscapital levels.
ON THE WEB
Crain’s fans, listen up There’s another avenue for you to
cull business news from Crain’s. Our reporters each week take you behind the news and offer an in-depth analysis of some of theweek’s most notable stories. Formore perspective on this week’snews, visit CrainsCleveland.com/section/audio.
OpportunityCorridor planmoves aheadCommittee conceptualizesdevelopment along I-490,University Circle linkBy JAY [email protected]
A sour economy and a lack of firmfinancing haven’t deterred statehighway planners and Clevelandcommunity leaders from pressingahead with the Opportunity Corridor,a $350 million plan to create a 2.75-mile boulevard and developmentzone that would connect the easternstub of Interstate 490 with UniversityCircle.
The Ohio Department of Trans-portation expects to select a finalroute for the four-lane road by early2011, with construction likely to begin in 2015 and to be completed in2019. That’s a long way off — toolong for some advocates — but theproject is in a better position now tomove ahead than it has been since itwas first proposed in 2003 duringplanning for reconstruction ofCleveland’s Inner Belt.
Terri Hamilton Brown, a consultantto the Greater Cleveland Partnershipbusiness advocacy group who’sheading a public-private steeringcommittee planning the corridor, saidshe hopes the committee can completea community and economic develop-ment plan for neighborhoods alongthe route by Jan. 1 and can win the cityof Cleveland’s approval of a land useplan before year-end.
The project still needs to line up federal, state and perhaps local money
See CORRIDOR Page 13
See LENDING Page 6
MELT SPREADSLakewood’s master of the grilled cheese preps for
East Side restaurant opening, sees further growth potential
Since Melt Bar and Grilledopened its doors in September2006, the local culinary desti-nation has developed its own
brand, a tattoo fan club and a loyalfollowing of customers for the humble grilled cheese.
Now the popularity of the Lakewoodestablishment — with its whimsicalvariations of the classic American
sandwich along with an expansivebeer selection — has prompted chefand owner Matt Fish to expand witha second location that is set to openMay 21 at Cedar and South Taylorroads in Cleveland Heights.
With the new location, Melt willemploy a total of about 110 people,most of whom work full time.
If all goes well at the East Sidedigs, the sandwich artist hopes toexpand the Melt concept further;
See MELT Page 5
JASON MILLER
Chef Matt Fish is opening a second Melt location in Cleveland Heights.
FROM START TO FINISH
The Parmageddon, named after Mr. Fish’shometown of Parma, begins with sharp cheddar and potato and cheese pierogi.
The sandwich also includes grilled onionsand napa vodka kraut, and is served withsweet slaw and fries.
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22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
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A BAKER’S DOZEN
Company City Product Jobs Investment
V&M Star Steel Youngstown Steel 350 $650M
Whirpool Corp. Clyde Washing machines 100 175
GE Aviation Evendale Aircraft parts NA 161
Alcoa Inc. Cuyahoga Heights Aluminum products NA 111
Battelle Memorial Institute West Jefferson Biotech research 150 100
Gatling Ohio LLC Racine Coal mining 100 75
Ford Motor Co. Brook Park Motor vehicle engines 250 55
2009 won’t go down as anyone’s idea of a great year for Ohio (or anywhere else, really), but the statenonetheless was able to attract 13 development projects that each involved an investment of at least$50 million. In all, the state attracted 364 projects above $500,000 last year, with a total investmentof $3.4 billion. Here are some of those projects:
SOURCE: OHIO PRIVATE INVESTMENT SURVEY 2009
BASF Catalysts LLC Elyria Chemicals 20 50
20100405-NEWS--2-NAT-CCI-CL_-- 4/2/2010 11:14 AM Page 1
He knocks on wood as he says it,but Ohio Bankers League presidentand CEO Mike Van Buskirk thinksthe March 19 failure of AmericanNational Bank in Parma is the lastthe state will see this recession.
“I’m hopeful Ohio will workthrough the rest of the recessionwith no more failures,” he said.“Based on the information I haveaccess to, I don’t expect anotherbank failure in Ohio.”
With 702 banks on the FederalDeposit Insurance Corp.’s problembank list and more than a handful ofOhio banks operating under cease-
and-desist orders and regulators’watchful eyes, that’s hardly a sure bet.
More than 200 banks, includingthree in Ohio, have been closed byregulators since 2008. In addition toAmerican National, AmTrust Bankin Cleveland was closed last Dec. 4,and Peoples Community Bank inWest Chester, near Cincinnati, wasshut down in July 2009.
But Mr. Van Buskirk is not theonly one optimistic about the futureof the state’s troubled banks. ScottO’Donnell, retired state superinten-dent of financial institutions, saidhe thinks the problem bank list has“reached its maturity” and thatOhio banks “have to be better than
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3
INSIGHT
THE WEEK IN QUOTES“When you don’t havea job, it doesn’t matterwhat the terms are orhow we rework theirloan, it’s a real stumbling block.”— Brian Berg, ShoreBankspokesman. Page One
“What you’ll see is organizations thatwant to be ahead of thecurve starting to putthese charging stationsin so there is a basicinfrastructure inplace before the (elec-tric) vehicles arrive.”— Nathaniel Smith, president,Recharge Power. Page 3
“Growing up, the dinner conversationswere always centeredaround business, and(my siblings and I)were like sponges,soaking it in.”— Dan Malley, grandson of Malley’s Chocolates’ founderMike Malley. Page 18
“I never felt pressureto go into the business,but when you comeinto it, you certainlywant it to do well. Youfeel a special respon-sibility for it.”— Al Hilkert, fourth-generationowner of Botzum Bros. Hardware.Page 19
Bank failures inOhio likely done,at least for nowOfficials optimistic that recent successful capital-raising efforts are positive signs
Gates Mills company eyes a jolt from budding electric-car marketRecharge Power will pitch charging station to garages, other lot operatorsBy JAY MILLER
A fledgling company in Gates Millsis trying to get in on the emergingmarket for electric-powered vehicles.
Recharge Power LLC has devel-oped a vehicle-charging station thatit hopes to sell to parking lot opera-tors, hospitals, universities and citiesto accommodate an expected boomin the number of vehicles that can berecharged.
Nathaniel Smith, president ofRecharge Power and former chieffinancial officer of toy maker LittleTikes Co., said the company plansto introduce its two-unit chargingstation to the public in May duringthe International Parking Instituteshow in Las Vegas.
“We’ve chosen to focus on thecommercial garage environment,”
he said. “We think it’s going to be agreat opportunity.”
Mr. Smith said the company’smain proprietary advantage will beits ability to track and bill vehiclesthat use parking spaces equippedwith its chargers. Drivers alsowould be able to find an availablecharger by using a GPS navigationsystem.
Plug-in vehicles, such as theChevrolet Volt and Nissan Leaf thatare due out in the next 12 months,rely on rechargeable batteries topower their engines rather than thecombination of gasoline and battery power that run the hybridengines found in vehicles such asthe Toyota Prius. Most plug-in ownerswill use home chargers to power
their engines, but scattered publicchargers will reduce what is called“range anxiety” because of the limitson how far the vehicles can go on asingle charge.
Mr. Smith believes that placessuch as universities and hospitalswill be good, early markets for hischargers.
“What you’ll see is organizationsthat want to be ahead of the curvestarting to put these charging
See RECHARGE Page 8
See BANKS Page 9FILL ’ER UP!Arena officials are charged with booking their venues
as fully as possible. Trust them when they say it isn’t easy.
Leave it to the, ahem, prowrestling outfit WWE toillustrate the very realcomplexities of arena
scheduling.WWE last May put the NBA in a
pickle: The Denver Nuggets wereto play host to the Los AngelesLakers in Game 4 of the WesternConference Finals, except ninemonths earlier WWE had reservedDenver’s Pepsi Center for thesame night. Grappling of a differentsort ensued, and NBA, Pepsi Center and WWE officials talkedtough before eventually moving
Story by JOEL HAMMOND ■■ Illustration by KRISTEN WILSON
wrestling to Los Angeles.All the while, arena executives
the country over nodded theirheads knowingly: Satisfying primary tenants — the Cavaliersand Lake Erie Monsters, in thecase of Quicken Loans Arena — isjob No. 1, but filling the arena’sdatebook with concerts and otherspecial events is a close second.
“It’s a fascinating process,maximizing these schedules,”said Lee Esckilsen, who isfounder of ESVenues, a venuedevelopment and management
44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
Business as usual
At FirstMerit, usual business is extraordinary. We’ve been providing our customers with more for over 165 years, which is why we’ve enjoyed 43 consecutive quarters of profit. For our customers, this means that we continue to offer uninterrupted service, a full array of business checking benefits,
and a team of bankers focused on you and your business. We will partner, listen and work with you to build your business as big as you dream. It’s what we provide each and every day – business as usual.
Crain’s is seeking potential pro-filees for its Women of Note section,which will run in the July 19 issue.
To submit a nomination, use theonline nomination form at our website, www.CrainsCleveland.com.You also may send a nomination toeditor Mark Dodosh via e-mail [email protected]. The nomina-tion should be no more than onepage. Please put “Women ofNote” in the subject line.
Nominations via regular mail canbe sent to Mr. Dodosh at 700 W.St. Clair Ave., suite 310, Cleveland,44113. The deadline is 5 p.m.Tuesday, April 13.
Bingham apartments in a jamDevelopers default on downtown building’s loanBy STAN [email protected]
The developers of the BinghamBuilding, the largest of the apartmentconversion projects that have givendowntown Cleveland a residentialneighborhood over the last 20 years,have defaulted on their first mortgageloan insured by the Federal HousingAdministration.
The Bingham’s $46 million firstmortgage is among 26 defaulted loanstotaling $306 million that are part ofan auction held on behalf of the U.S.Department of Housing and Urban
Development that will dispose of theloans. A bidder has won the auctionfor the loan on the Bingham, butHUD will not reveal its identity untilthe loan sale closes.
Whoever wins the auction — intimes past, financial concerns wereprimary bidders due to the vast cashrequired — wins the right to forecloseon the building at 1278 W. Ninth St. inthe Warehouse District. Exercisingthat right would allow the replace-ment lender to sell the property to recoup the debt, with the sale displacing as owner the Chicago-basedinvestment group that invested $80
million to redevelop the property.The investors in Bingham Burnside
LLC, which converted the building,were principals of Burnside Construc-tion Co., formerly a Chicago home-building concern.
Despite the default on the FHA-insured loan, Tom Yablonsky, execu-tive director of the Historic WarehouseDistrict Development Corp. and exec-utive vice president of the DowntownCleveland Alliance, said the BinghamBuilding was crucial to downtown because it was large enough to add agrocery store, Constantino’s Market.The lack of a place to buy food essen-tials was a shortcoming of downtown.
“It’s the biggest apartment buildingin the Warehouse District,” he said.
Mr. Yablonsky said he did notknow if vacancy or inadequate rentstorpedoed the project. Others putBingham’s occupancy above 80% —lower than most downtown rentalproperties — and its rents in therange of $600 to $2,500 monthly.
As with many downtown projectsthat recast old office or warehousebuildings as lofts, FHA insured the firstmortgage. When the Bingham andother downtown buildings were under-going conversion, developers said the FHA insurance was vital becauselenders otherwise would not fundrisky projects in untested markets.
However, if a developer or ownermisses a few loan payments, a lenderautomatically can recoup the principalfrom HUD in weeks by turning overthe loan to the agency. The agencythen disposes of the loans for whateverit can. Receipts from loan sales go backto FHA, and, like the premiums prop-erty owners pay for FHA insurance,support the efforts of HUD, which receives no taxpayer funds.
PFC Corp., a lender in NewportBeach, Calif., that loaned the Bing-ham’s developers $45 million in 2003,assigned the mortgage to HUD March16, according to public records.George “Bud” Arquilla, a member ofBingham Burnside, did not return twomessages at Illinois Flush Co. of Chica-go, a company he recently sold, andthere was no answer at Chicagophones listed in his name. ■
“I was fascinated that a Cleveland restaurant could havethat long of a wait on a Tuesday night.” – Geoffrey P. Loree, founder, Gloree Group
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5
Joe Cal lahanChairman Emeritus , Swagelok Company
InRecognition
Case Western Reserve University announces the newly endowed
F. Joseph Callahan Distinguished Lecture and is proud to honor his legacy of innovation and leadership in our community and beyond.
Melt: Restaurant draws tattoo ‘subculture,’ food show hosts
pansion approach, and said he wants toensure the long-term viability of theCleveland Heights restaurant beforehe takes the next expansion step.
Even though dents to consumers’discretionary income have hurt therestaurant industry in general, and fine-dining establishments in particular, the recession has provideda window for strong businesses toexpand, said Geoff Hetrick, presi-dent and CEO of the Ohio Restau-rant Association.
“I like to refer to this as the opportunity economy,” Mr. Hetricksaid.
Tat-mania It doesn’t hurt that Melt’s
mystique has garnered nationalmedia exposure.
Most recently, Adam Richmanfrom the Travel Channel flew in onFeb. 27 to film a “Man v. Food”episode and to take the Melt Chal-lenge.
In the episode, Mr. Richman declares war on nearly five poundsof food — 3.5 pounds of 13 differenttypes of cheese stuffed among threeslices of bread with fries and slaw —and tries to eat it all.
The show is scheduled to air thissummer, and Mr. Fish is sworn to
secrecy about whether Mr. Richmanwas able to finish the monstrosity.
Mr. Fish also was featured constructing Melt grilled cheeses onFood Network’s Feb. 8 episode of“Diners, Drive-Ins and Dives,”during which host and Clevelandfood aficionado Guy Fieri exclaimsto Melt’s mastermind, “You arecrazy!”
Crazy and committed, indeed. Mr.Fish began last September offering25% lifetime discounts to peoplewho got variations of a Melt tattoo,and more customers bought into itthan he expected.
“I thought we’d get maybe 10 to15 people a year,” Mr. Fish said.“Now it’s like a subculture.”
Currently, there are 97 Melt disci-ples, and besides receiving the fooddiscount, they also were invited tothe “Man v. Food” taping and likelywill be a part of the new location’sgrand opening.
Mr. Fish also is covered in ink; histattoos include Cleveland iconssuch as the Terminal Tower, LTVSteel and the West Side Market.
As to whether he has a Melt tattoo, he shook his head, referencingsuperstition steeped in folklore.
“I don’t want to jinx anything,”Mr. Fish said. ■
sites Mr. Fish is considering includeAvon, Avon Lake or Strongsville, andother outside markets such asColumbus, Cincinnati or Pittsburgh.
“The demand is there,” the Lake-wood resident said.
Indeed, from 2007 to 2009, theneighborhood bar more than doubled its revenue, according toMr. Fish, although he declined todiscuss specific revenue numbers.
In the beginning, the long hourswere hard to swallow, but now Mr.Fish shrugs at his 80-hour-per-weekaverage.
“It’s not bad,” he said. “I used towork between 100 and 110 hours aweek.”
Worth the wait Melt during its first few months
was busy, but like many restau-rants, it had its down time in the afternoons, when traffic tapered off.
Now the establishment is knownfor an hour-long wait even duringthe afternoon on a weekday.
“It sucks for the customers,” Mr.Fish said. “We don’t want to turnbusiness away.”
Perhaps the wait won’t be asmuch of an issue at the new loca-tion, a 4,500-square-foot space thatwill seat 160 people. The 3,600-square-foot Lakewood Melt seats100. The new location’s kitchen alsois about double the Lakewoodkitchen’s current size, which Mr.Fish said is a reason for the long
waits because cooks can’t handleorders as quickly as demand warrants.
Mr. Fish said he hopes the EastSide Melt, with its proximity to CaseWestern Reserve and John Carrolluniversities, will serve a new clientelethat is not always willing to drive tothe West Side.
The chef said the total cost of theCleveland Heights project, which islocated in a building that had beenvacant for about two years before he gutted it, was about $650,000, financed in part through privateloans. Lakewood Melt’s total projectcost was $210,000.
Geoffrey P. Loree, owner of theCleveland Heights building, said hewas intrigued after his first visit to Melton a weekday night in October 2008.
“I’m an impatient man, and wewere on a two-hour wait,” said Mr. Loree, who also is founder ofStow-based Gloree Group, a private equity firm. “I was fascinated that a Cleveland restaurant could havethat long of a wait on a Tuesdaynight, so I started walking aroundand looking at the red brick and thedécor.”
Melt’s interior had characteristicssimilar to those of his own building,Mr. Loree said.
He envisioned another Melt inCleveland Heights, so he invited Mr.Fish out to tour his fixer-upper, forwhich Mr. Loree paid $265,000 in2007.
“He saw the potential, and nearly
two years later, here we are,” Mr.Loree said.
Opportunity knocksRobert Welcher, president of
Restaurants Consultants Inc. inColumbus, said independent restau-rants run the risk of diluting the individuality of their brands duringexpansion, depending on howquickly they grow and whether theyhave a strong operating infrastructure.
“Three to five (restaurants) is themagic number,” Mr. Welcher said.Even then, restaurant owners needto have a sound growth plan beforeexpansion takes place, he added.
Mr. Fish said his strategy is toavoid the cookie-cutter approach byexposing an old building’s character-istics while sprinkling the walls withunique Melt deco.
Mr. Fish also is methodical in his ex-
continued from PAGE 1 THE DISH ON FISH Chef Matt Fish, 37, graduated in
1997 with a degree in culinary artsfrom Cuyahoga Community College.He has been a chef for 17 years,and has cooked at local restaurantsthat include Johnny Mango and FatFish Blue in Cleveland.
While Mr. Fish has been consumed by the opening of hissecond location, he said he does enjoy rockin’ out on the drums whenhe can and has played in various local bands.
20100405-NEWS--5-NAT-CCI-CL_-- 4/2/2010 11:59 AM Page 1
That original order was updatedin late March to require the bank to“promptly increase” its Tier 1 andtotal risk-based capital ratios to 9%and 12%, respectively, Mr. Berg saidin a statement. As of Dec. 31, thelevels were 1.8% and 4.6%, respec-tively, according to the bank’s FDICcall report.
The quest for capitalThe bank has been meeting with
potential private sector investorsand intends to reach the new requirements “as expeditiously aspossible,” Mr. Berg said.
“We’re moving forward with ourefforts to raise capital,” Mr. Bergsaid, noting that because the bankis privately held, he could not discuss details of the efforts.
“We’re being assisted by Chicagobanking and community leaderDavid Vitale and other expert adviserswho understand the importance” ofthe bank, Mr. Berg stated.
Mr. Vitale, a former chief adminis-trative officer for the Chicago PublicSchool System, president and CEO ofthe Chicago Board of Trade and vicechairman and director of Bank OneCorp., will become ShoreBank’s executive chairman once the capital-raising effort is complete.
The bank also has applied for financing under the U.S. Departmentof Treasury’s new Community Devel-opment Capital Investment Program,which is intended to increase lendingto small businesses and communitydevelopment projects, Mr. Berg said.
Crain’s Chicago Business reportedMarch 15 that ShoreBank was talkingto a group of banks and the John D.and Catherine T. MacArthur Founda-tion about the possibility of infusingmore than $200 million into the bank,which would allow it to qualify for$70 million in federal funds.
Banks contacted to help includeJ. P. Morgan Chase & Co., Bank ofAmerica Corp. and Citigroup Inc.,Crain’s Chicago reported.
Mr. Berg said ShoreBank simplywants to put the capital issues behind it so it can return to lendingin its niche.
Embedded in the communityHere in Cleveland, the bank lends
in underserved communities, Mr.Berg said. It specializes in lending tosmall businesses such as day carecenters, faith-based community institutions and health clinics.
Mr. Berg said in the recession,small business borrowers in particularhave struggled to pay back loans.
“When you don’t have a job, itdoesn’t matter what the terms areor how we rework their loan, it’s areal stumbling block,” he said.
After the bank works through itscapital issues, Mr. Berg said, “we’llbe able to continue lending to smallbusinesses and other developmentprojects. I’m confident we will beable to continue to serve the smallbusinesses.”
Duane Thornton, executive director of The Presidents’ Council —a network of CEOs of African-Ameri-can-owned businesses in Cleveland
— said “no one is doing what ShoreBank does” to help minorityborrowers in this community. Thebank has helped with a $25 millionfund for minorities with business visions and has been focused oncommunity development, he said.
“They’re really in the community,”Mr. Thornton said.
Mr. Berg said when ShoreBankfirst came to Cleveland in 1994, ithad a $7 million loan fund in thisarea. That $7 million since has beenleveraged to allow for $200 millionof loans over 16 years, he said.
The bank, which had $2.2 billionin assets on Dec. 31, posted a loss of$105 million in 2009.
“Once we get through this mess,we just want to get back to our knit-ting,” Mr. Berg said.
Mr. Berg said that while lendinghas been curtailed, there still areopportunities for loans to good customers who need lines of creditextended or for loans made via theSmall Business Administration.While SBA loans were not a focus ofthe bank in 2009, there are about sixin the pipeline in Cleveland now.
ShoreBank also is continuing itsoutreach to individuals who do nothave traditional bank accounts andMr. Berg emphasized that ShoreBankEnterprise Group — the nonprofitarm of the bank — is unaffected bythe capital situation and is continuingbusiness as usual. ■
Steve Daniels of Crain’s ChicagoBusiness contributed reporting tothis story.
66 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
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Lending: Bank working quickly to raise moneycontinued from PAGE 1
20100405-NEWS--6-NAT-CCI-CL_-- 4/2/2010 11:49 AM Page 1
Nonprofit culls newfunding outside ofRace for the Cure
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7
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Having once been a grassroots organization that largely relied onvolunteers for guidance, the North-east Ohio affiliate of Susan G. Komenfor the Cure has grown up.
In the last five years, the nonprofitthat funds breast cancer researchand services has instituted multiplebusiness practices that have enabledit to increase and diversify revenue,support more research and provideadditional services to a growing population base, said Sophie Sureau,who joined Komen in 2005 as its ex-ecutive director in Northeast Ohio.She previously was co-founder ofEntraide Grandes Brules, a Canadi-an nonprofit that provides servicesto burn victims and their families.
“When I arrived, this was a reallywell-oiled machine, but it prettymuch was run by volunteers,” shesaid. “My first thought was that weneeded to build a structure for thisorganization to be operated morelike a business.”
Ms. Sureau hired two employeesto add to the existing three and ledthe change to a new software systemthat allowed the local affiliate to better track its donors. Additionalevents also have been added to raisemoney so the organization isn’t sodependent on the Race for the Curein the fall, she said.
Komen’s dependence on the racelast year caused the organization tofall $200,000 short of its $2.6 millionfundraising goal for the fiscal yearthat ends March 31, she said.
Though there always will be people who don’t pay to participatein the race, last year about 10,000 of the estimated 25,000 to 30,000 people who raced did not pay theentry fee, which culminated in a lossof $250,000 in entry fees Komen shouldhave collected, Ms. Sureau said.
“The race is a wonderful commu-nity event, but it’s a fundraiser,” shesaid. “This is where we get at least60% of our income.”
Komen’s income ratio was evenmore lopsided in 2003, when about86% of its revenue came from therace, Ms. Sureau said. That wassomewhat remedied with the intro-duction of new fundraising vehiclessuch as Volley for the Cure, throughwhich high school students raisemoney for the organization with
volleyball tournaments held fromSeptember through November, shesaid. The tournaments raised $100,000for Komen last year, she said.
“It’s a good way to engage andempower young people to get involved in breast health,” she said.
Many small grantmakers acrossOhio are trying to find new ways tomake money in a struggling economy,and it’s an uphill battle, said GeorgeEspy, president of the Ohio Grant-makers Forum.
“It’s hard to raise money now because people aren’t able to giveas much as they did before,” hesaid. “And more people are comingto them for help than before.”
However, such efforts have paidoff for Komen. In the fiscal year that
ended March 31, Komen’s revenueis expected to be $2.4 million, upfrom just $1.1 million in the fiscalyear that ended March 31, 2005,Ms. Sureau said. Komen also provided $1.5 million in grants tosupport research and programs,compared to just $865,000 in grantsfive years ago, she said.
The fundraising goal for the fiscalyear that began April 1 has been setat $2.64 million, she said. The non-profit’s work hasn’t gone unnoticedby the national arm of Susan G.Komen for the Cure, which recentlynamed the Northeast Ohio organi-zation its affiliate of the year for itsturnaround efforts.
Though the Northeast Ohio affiliatehas implemented some successful
measures, it still has some hurdlesto clear in the road ahead.
Ms. Sureau said Komen is workingto better inform the public of whatthe organization does and how itraises money. Among those efforts,she said, is meeting personally withlocal businesses to urge them tosponsor a team for the Race for theCure, or at least encourage employeesto register and participate.
About 6,000 people participatedin the race last year through company teams, which is 40% lessthan the 10,000 team participantsin 2006, she said.
“We’re doing more outreach tocompanies and making sure to givethem ideas,” such as how to incor-porate the race as a team building
or wellness exercise, Ms. Sureausaid.
The organization throughout theyear also will videotape peopletelling their story of breast cancersurvival and the videos likely will beavailable on Komen’s Facebookpage, YouTube and its web site, shesaid.
Komen also agreed to begin serving seven more counties, bringingits service area to 22 counties, shesaid.
That means the organizationwill have to raise more money for research and services even as theneed for breast cancer servicessuch as mammograms increasesin its original 15 counties, shesaid. ■
“What you’ll see is organizations that want to be aheadof the curve starting to put these charging stations in sothere is a basic infrastructure in place before the vehicles arrive.” – Nathaniel Smith, president, Recharge Power
88 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
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BRING YOUR GROUP FOR THE SPLASHIEST, DRENCHINGEST FUN AROUND! stations in so there is a basic infra-
structure in place before the vehiclesarrive,” Mr. Smith said.
The company is largely privatelyfinanced, Mr. Smith said, thoughRecharge Power also has won threeeconomic development loans totalingnearly $200,000 from CuyahogaCounty. The latest, a $98,000 NorthCoast Opportunities TechnologyFund loan, will help the companyinstall and monitor 21 trial chargers.
Recharge Power sought but didnot win a $1 million Ohio ThirdFrontier grant to assist in the devel-opment and testing of the rechargingstations’ sensor technology over thenext 18 months. The grant listedCase Western Reserve University,I2C Technologies of Uniontown,Honeywell Microelectronics & Pre-cision Sensors of Plymouth, Minn.,and Youngstown State University’sCenter for Transportation and Materials Engineering as collabora-tors.
Gregory Zucca, senior develop-ment finance analyst with CuyahogaCounty, said Recharge Power is “using off-the-shelf technology in a
new way.”“It has a lot of potential,” said Mr.
Zucca, who noted that employees atinstitutions such as hospitals anduniversities already are asking forworkplace charging stations.
Jeanne Trombly, managing directorof Plug In America, a Californianonprofit electric-vehicle advocatethat grew out of a network of elec-tric-vehicle drivers and enthusiasts,said several companies are workingon a variety of charging technologies.One in particular, Coulomb Tech-nologies Inc. of Campbell, Calif.,has several dozen ChargePointbranded recharging stations in operation, mostly in the West andthe Chicago area.
The Recharge Power technologythat links drivers to charging stations through a GPS system intrigued Ms. Trombly, who saidthe recharger market still was wideopen.
“It’s hard to tell where the tech-nology will shake out,” she said.But, Ms. Trombly added, the winners likely will be decided byshopping mall and parking lot owners,not by consumers. ■
Recharge: Station marketwide open, advocate sayscontinued from PAGE 3
20100405-NEWS--8-NAT-CCI-CL_-- 4/2/2010 11:15 AM Page 1
they were.”The only question, Mr. O’Donnell
said, is the FDIC. He wondered howpatient it would be going forwardand what its posture would be towardworking with troubled institutions.Thus far, he said, the agency hasbeen more than patient.
‘It had to happen’Dick Wise, the former president
and CEO of American National, wasnot at the bank when it was takenover by regulators March 19. He saidby mid-March, the bank had almostno capital left and had been unsuc-cessful in its efforts to raise $7 million.
“I knew the end had to be coming,”he said. “I pretty much had resignedmyself. I knew it had to happen.”
In November, Mr. Wise said hethought regulators would be flexibleif the bank was unable to meet highercapital levels by year’s end, as required.American National was able to sellsome of the mortgage servicingrights that got it into trouble in thefirst place, but in the end, it was itsinability to raise enough capital thatled to its demise.
“We got part of it, but we couldn’tget it all. We couldn’t get close,” Mr.Wise said. “We talked to so manypeople, different groups. It’s almostimpossible to raise capital. It’s a verybad time to do that.”
American National’s new owner is The National Bank and Trust Co.in Wilmington, Ohio. As of Dec. 31,2009, American National Bank hadabout $70.3 million in total assetsand $66.8 million in total deposits.
Mr. Wise, 77, took lead of the bankout of retirement last October following the death of presidentDavid Null in August 2009. An FDICspokesman said American Nationalcame onto the troubled bank list that month. Mr. Wise previously hadbeen a member of the bank’s boarduntil 2007 and served as its presidentfrom 1988 until 2003.
The bank had been on the edgebefore; two embezzlement schemesin the 1980s by a former vice chairmanof the board and a former bookkeeperleft American National with estimatedlosses of more than $8 million, according to news reports at thetime. However, the bank was able toraise from local investors the moneyit needed to stay solvent.
Bucky Kopf, a local homebuilderwho was chairman of American National’s board at the time of itsclosure, did not return a phone callseeking comment about the bank.
Dean DeBuck, a spokesman at the Office of the Comptroller of the Currency — American NationalBank’s regulator — said for AmericanNational, the core issues were incommercial lending and its mort-gage servicing rights.
“Basically, you got to the pointwhere the bank needed to have additional capital to cover its losses,”Mr. DeBuck said. “That just was nothappening.”
Getting past ‘trouble spots’But Charlie Crowley, managing
director of investment banking in
“While there are still trouble spots in the economy, the banks areon better standing.” – Charlie Crowley, managing director of investment banking,Stifel Nicolaus & Co.
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
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Banks: American National hurt by niche, limited footprint continued from PAGE 3 Cleveland for Stifel Nicolaus & Co.,
said the inability to raise capital isbecoming a problem for fewerbanks.
Park View Federal Savings Bankand its parent company, PVF Capital Corp., recently raised $30million to increase capital levels, asregulators demanded. Ohio LegacyBank in Wooster also was able toput together a capital infusion of$17.5 million that Mr. Crowley said
was likely a savior for the bank.“Their days were numbered,” he
said. Mr. Crowley said with so many
troubled institutions, he would notbe surprised to hear of another failureas banks continue to deal with non-performing assets and other issues.
“It’s a function of how long ittakes to go through the financialprocess,” he said of banks’ continuingproblems. “It would appear that
while there are still trouble spots inthe economy, the banks are on better standing.”
Mr. Van Buskirk, of the OhioBankers League, said banks are always a lagging indicator. But hesaid American National’s failurewas likely an anomaly, as it was aniche bank lending to small busi-nesses that didn’t have consumerdeposit accounts to fall back on. Ontop of its other challenges, it also had
to contend with Mr. Null’s death.American National was also hurt
by its narrow geography, he said.Mr. Van Buskirk noted that
compared to the number of failuresin states such as California, Floridaand Georgia — which saw a combined total of 80 failures since2008, as of last Thursday — Ohiohas little to worry about.
“Relatively speaking, the bankshere are doing pretty well,” he said. ■
There has been plenty to criticizeabout the federal stimulus pro-gram, which was launched to avertwhat could have been a global
economic meltdown last year. However,there have been success stories, and one ofthem was here in Northeast Ohio, whereRaymond Jackson Enterprises (RJE), amember company of the GreaterCleveland Partnership’s MinorityBusiness Accelerator, won a$400,000 project from the StarkMetropolitan Housing Authority.
RJE will make interior and exterior improvements to housingunits as a subcontractor; theproject probably would nothave been done, at least thissoon, without funds from theAmerican Recovery and Rein-vestment Act. And in this case, GCP’s Minority Business Accelerator is doingexactly what it was created to do: helpgrow minority-owned businesses. It wasinstrumental to RJE in gaining access to other GCP companies, according to com-pany president and CEO Phillip Moore.
“The accelerator also has provided
significant financial support in our efforts to fortify our technological infra-structure,” Mr. Moore said. “RJE wasable to purchase and implement an inte-grated construction management andaccounting software program, thanks tothe accelerator’s generous funding.”
Andrew Jackson, executive director ofGCP’s Council on Economic Inclusion, said this was a greatexample of a regional success: financing a minority-owned,Akron company that then wins anice contract in Stark County.
“A ‘win’ in Stark County ultimately benefits the entireregion,” Mr. Jackson said.
The accelerator, along withprograms like those from thePresidents’ Council (an organiza-
tion that supports business developmentin the African-American community), arehaving tangible effects on advancing theinterests of minority entrepreneurs andbusiness owners in the region.
“Three years ago, we had one office inAkron, with a 90-mile service area,” RJE’sMr. Moore said. “Today, we have offices
in Akron, Dayton and Indianapolis, withexecuted contracts for projects in Toledoand Louisville, Ky., in addition to activepursuits in both North Carolina and Tennessee.”
Now, I hope Mr. Moore becomes aproselytizer for the Minority Business Accelerator and helps support other minority businesses that are on the cusp ofsustainable economic growth. It will bethrough such efforts that we make an impact on economic growth that cutsacross all boundaries, real and imagined,in our region.
Wouldn’t it be terrific if within a fewyears we had economic development offi-cials coming to Northeast Ohio fromacross the country to learn about the Minority Business Accelerator, the Cleve-land Foundation-sponsored cooperativelaundry and solar-energy company, and allthe other innovations being created here?
And wouldn’t it be good if we started believing in ourselves? How many moretimes do we need to hear from newcomersthat we are our own worst enemy when itcomes to appreciating what we have ratherthan whine about what’s wrong? ■
1100 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
Big zeroH
eads up, Gov. Strickland and Ohio legisla-tors who haven’t shown a whole lotta loveto charter schools. You could cost thestate a whole lotta money from the federal
government if you don’t start embracing the rolecharter schools can play in educating Ohio’s youngpeople.
We issue the warning in light of the first round ofgrants that were awarded last week by the Obamaadministration under its Race to the Top program,which is intended to reward states for progressiveapproaches to education. Only two states out of 16finalists received money in Phase One of the $4 billion program, with Tennessee snatching ahealthy $500 million and Delaware snaring $100million. Ohio was among the states shut out.
The message Obama education officials sent ingiving a single state such a fat share of the pot is thatmodest attempts at change won’t cut it, nor will reform initiatives that lack buy-in from teachers’unions and school leaders. It’s going to take a sharpdeparture from the status quo to gain a piece of theprize in this race.
The model of education reform that the Obamaadministration has set before the other states isTennessee. And a key part of Tennessee’s reform effort was the decision by its lawmakers to lift theceiling on the number of new charter schools allowed in the state.
These independently run schools that receivepublic support haven’t found much favor with Gov.Strickland, who used the occasion of last year’s statebudget crunch to push for a 20% cut in state support for charter schools. The governor’s lack ofenthusiasm for charter schools seems tied to thesupport he covets from the Ohio Federation ofTeachers, which has opposed charter school expansion in the state.
The union’s dislike of charter schools is so strongthat its president, Sue Taylor, last May sent a letterto President Barack Obama — a supporter of charterschools — “to educate him about the vastly failingcharter school program in the Buckeye State,” according to a federation news release.
“We need him and his staff to understand thatwhen he talks about expanding charter schools,Ohio parents, teachers and taxpayers bristle because of their experience with our state’s failedcharter schools,” Ms. Taylor said at the time.
Perhaps what Ms. Taylor, Gov. Strickland and various lawmakers need to understand is that thispresident sees well-run charter schools as a valu-able alternative to traditional urban education, andthat they better learn to dance to his tune, ratherthan the other way around.
New York City Mayor Michael Bloomberg gets it.Last week, he took New York lawmakers to task forfailing to pass certain laws — including a measureraising the limit on charter schools — that wouldhave improved their state’s chances of winningRace to the Top money.
“We are not going to qualify unless the state understands this,” Mayor Bloomberg said.
Officials in Ohio better gain a similar understandingif they hope to cash in on this program in a big way.
Crain’s Cleveland Businessis celebrating its 30th yearas Northeast Ohio’s premiersource of business news witha special double issue, whichwill feature profiles of the 30most influential Clevelanders.
As part of the celebration,we also are reflecting on themost memorable events ofthe past three decades withweekly polls — some of whichcan be found in this space— trivia questions, onlinecontent and video interviews.
You can get in on the funby visiting CrainsCleveland.com/30thanniversary.
What is the most significant new company or organization to come out of Northeast Ohioover the last 30 years?
SHERYL BENFORDShaker Heights “I was going to say ClevelandState University. It’s a little olderthan that, but it has made atremendous impact on this region. … I went to law school atnight (at Cleveland-Marshall College of Law) and I’m so gladit was there.”
TRACEY TOMASZEWSKI Lorain “Progressive Insurance (foundedin 1937, but grew a lot in recentdecades). It’s provided a lot ofjobs for Cleveland. … They alsodid the check — like if youcheck their insurance rates, thenthey check everyone else’s. Itmade everyone else more competitive.”
JACK LANDSKRONER Moreland Hills (Indians season ticket holderand former tenant of abuilding owned by Jacobs) “Dick Jacobs (individually andthrough the Richard E. JacobsGroup LLC) has probably hadone of the most significant impacts on Cleveland.”
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11
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Equalize pay in public, private sectorsStreet Journal relates how the city ofToledo, whose police union refusedto agree to cuts, had its city councildeclare “exigent circumstances,” under which the city can decree unilateral cuts.
Bob FritzBrecksville
Vote ‘yes’ for Issue 15■ The League of Women Votersstrongly supports Issue 15, the Cuya-hoga County health and human services levy on the May 4 ballot.
This is a renewal of the current 2.9mill levy, with no tax increase. Thelevy amounts to 29 cents for everyone hundred dollars of valuation,and will be in place for four years,commencing in 2010, first due in calendar year 2011.
Issue 15 will generate funds for thevital care and protection of morethan 200,000 people every year inevery community of CuyahogaCounty.
It will ensure the continuation ofcritically important services, includingemergency services at MetroHealthMedical Center, Life Flight, the Severe Burn Treatment Center and
Northeast Ohio’s only Level 1 traumacenter.
Services funded by the levy include health and social serviceprograms that benefit children, senior citizens, the disabled and thepoor. It is a much-needed helpinghand in these difficult times.
For these reasons, the Leagues ofWomen Voters of the ClevelandArea, Cuyahoga Area and ShakerHeights recommend a “yes” vote forIssue 15 on May 4.
Susan JankiteCo-president League of Women VotersCuyahoga Area
LETTERS
■ Your March 29 editorial, “Get theax,” states pretty clearly that stateand local governments have notstepped up to the plate to reduce expenses. In your issue before that,plus a Plain Dealer article lastmonth, we learned that a $7 billionto $8 billion budget deficit is loomingfor the state.
A good first step would be to harmonize pay between public andprivate sector jobs. Although I don’thave data for Ohio, in the U.S. overall,public employees are now paid 42%higher than their private sectorcounterparts. Next, the retirementage should be made 65, not “30 andout.”
Why pay people in their early 50sto sit around and do nothing andthen have to pay others to replacethem? That would include police officers. If they’re too old to chasecrooks, they could direct traffic oranswer phones or enter data.
Finally, eliminate defined benefitpension plans, as most of industryhas done. Let them have Social Securityor the equivalent plus whatever theychoose to contribute to a 401(k) typeof plan.
The unions would likely balk atthis. The March 31 issue of The Wall
By BILL BREGARPlastics News
Another vacant superstore inNortheast Ohio has found new life,thanks to plastics.
Quality Blow Molding Inc. plansto move its warehouse and ship-ping operations to a Value City department store in Elyria that hasbeen closed for about a year. Thestore is about a quarter-mile fromQuality Blow Molding.
The industrial blow molding company runs 16 machines thatmake parts for the automotive, lawnand garden, and appliance markets.Once the company relocates ship-ping to the Value City store, presidentand owner Ron Matcham said, hewill use the extra room in his factory
to expand blow molding.“I needed more space for manu-
facturing, and my lot was prettymuch maxed out here. So it was easier and cheaper for me to buy thatbuilding than it was to add onto thefactory for shipping,” he said.
It would be too expensive to relo-cate the blow molding factory to theValue City building, which wouldneed a major investment for plasticsmanufacturing, Mr. Matcham said.But the building is well-suited forwarehouse space. A rail line runs bythe Value City building, so a rail spurto the warehouse is possible, he said.
Mr. Matcham said Quality BlowMolding will use about 20,000 squarefeet of the total 110,000-square-footValue City for warehouse and ship-ping. He plans to market the rest of
the building for lease as retail space.An operating grocery store and a gasstation are included in the property.
Value City Department Storesfiled for Chapter 11 bankruptcy in2008 and liquidated its stores.
The recession has left big retailstores sitting empty in many towns.In Ashland, Hedstrom Plastics ismoving its rotational molding facto-ry into a closed Walmart, a 129,000-square-foot building left vacant in2006 when a Walmart Supercenteropened across town.
Hedstrom is moving its headquar-ters into a smaller, unused JCPenneystore in the same strip mall. ■
(Bill Bregar is senior reporter withPlastics News, a sister publicationof Crain’s Cleveland Business.)
1122 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
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consultancy in Providence, R.I., andthe former manager of arenas suchas the Providence Civic Center. Mr.Esckilsen said arena officials ‘arecharged with maximizing revenue,but they also have to juggle two orthree main tenants while maintainingflexibility for other events that popup.”
In The Q’s case, that means sendingboth the NBA and the AmericanHockey League available dates, minus already-booked events suchas the circus, Disney on Ice and, for2010-11, the first and secondrounds of the NCAA men’s basketballtournament.
Cavs and Monsters officials,meanwhile, must balance eachteam’s needs in developing poten-tial schedules. For instance, givingthe Cavs all the arena’s availableFriday and Saturday nights mightbe good for the Cavs, but the Monsterswould suffer.
Indeed, 24 of the Monsters’ first38 home games were played on Friday or Saturday. The Monstersare sixth in the 29-team AHL in attendance at 6,298 a game, butthat number jumps to 7,466 for Friday and Saturday games.
“When you’re looking at makingthese schedules, that’s a considera-tion,” said Hallie Yavitch, senior director of events for the Cavaliers.“The Monsters are part of a league,too; we have to make sure they havegood nights.”
Then, there are other considera-tions for the respective leagues. TheNBA must satisfy ABC, ESPN andTNT, all looking for prime teams(the Cavs certainly fit the bill) fortheir Wednesday and Friday nightand Sunday afternoon telecasts.NBA senior vice president of basketball and game operationsMatt Winick said teams submitteddates to the league by March 12 thisyear; the league typically releases its
schedule in early August. That practice allows for last-minute
alterations based on the summer’sfree-agent and trade activity, aboutwhich Clevelanders have heardplenty. As for a minor-league hockeyleague such as the AHL, Mr. Esck-ilsen said, it must weigh heavilytravel limitations. In the case of theMonsters, the team travels by busto opponents such as Hamilton(Ontario), Rochester (N.Y.), Torontoand Grand Rapids (Mich.).
Playoffs?! No sweat hereDespite all the potential for con-
flict, don’t expect to see a Denver-like flap here this playoff season.
Thanks to the Cavs’ success,Quicken Loans Arena officials havegained a scheduling advantage.NBA teams were sent playoff datesin August, Mr. Winick said, and because the Cavs almost were guaranteed at midseason of beingone of the Eastern Conference’s topfour seeds, they potentially couldbook The Q for Games 3 and 4 ofthe Eastern Conference’s first-roundseries.
Armed with that knowledge, theCavs then were freed to book The Qduring what many hope to be a longplayoff run. So, Smucker’s On Icewill play on April 30, rock bandPearl Jam on May 9 and soul starsMaxwell and Jill Scott on May 21.
“The playoffs can throw a monkey wrench into things,” Ms.Yavitch said. “If we didn’t havehomecourt advantage, we wouldn’tknow until April 15 when we’d beplaying. Fortunately, they’re doingso well, it’s allowed us to have someleeway.”
By contrast, the Western Confer-ence’s seven playoff teams behindthe Los Angeles Lakers as of lastWednesday were separated by 4.5games, meaning they didn’t havethe luxury the Cavs did of knowingwhen they’d be hosting games. (Mr.
Winick said of the Nuggets-WWEflap: “It wasn’t a miscommunica-tion. It was a mistake.”)
The same process goes for theNHL’s Columbus Blue Jackets andNationwide Arena.
The Blue Jackets are a .500 teamand in the bottom half of theleague’s Western Conference, andthus never really have threatened toearn a top playoff seed. Arena officials, then, scheduled events fordates when the lower-seeded teamslikely would be on the road. So, Nationwide Arena will play host toTim McGraw on April 23, a women’sconference on April 30-May 1, come-dian Tyler Perry on May 4 and PearlJam on May 6. This may be moot,though, as Columbus currentlystands out of the playoff picture.
Also working in the venues’ favoris a concert business where schedulesare set — at least tentatively — further in advance than ever before,said Eric Granger, general managerof Nationwide Arena. Nationwide,like Cleveland State University’sWolstein Center, is run by SMG, anarena management company thatcontrols more than 1.5 million seatsin 76 arenas.
That connection also helps CSU,which, with only one permanenttenant, books as much concert traffic as it can.
General manager Ron Willner —an 18-year Wolstein Center vet —also benefits from the HorizonLeague men’s and women’s basket-ball schedule being set two to threeyears in advance, he said. In turn,he works with the CSU athletic department to set the teams’ non-conference home games. (The CSUmen played seven such games inthe just-finished season, while thewomen played four.)
“It was a lot more hectic whenthe (professional indoor soccer teams)Crunch and Force were here” from1992-2005, Mr. Willner said. ■
continued from PAGE 3
Arena: Postseason uncertainty poses challenge
Medical histories more accessiblethrough Ravenna outfit’s software By SHANNON [email protected]
When a medical emergency happens, people often can’t pro-vide adequate information to first responders to help them providethe right care quickly.
A new Ravenna company, MyLifePlan Inc., hopes to remedy thatsituation with a software programcalled MyChoice, which enables individuals to gather their health information in one place and makeit available to first responders andhealth care professionals whenneeded, said Ruth Skocic, CEO ofMy LifePlan.
Under MyChoice, an individualpays $29.95 a year to input as muchor as little medical information as he or she wants on his or her MyChoice account, Ms. Skocic said.Customers are given items such as magnets, window decals, driver’s license stickers and a wallet identi-fication card to alert medical personnel that they can find the patient’s medical information andwishes through MyChoice.
Medical personnel either canscan the patient’s thumb print witha portable thumb print reader that
can be plugged into many computersalready installed in emergencysquads, or they can call My LifePlanfor the patient’s information, whichis updated every three months, Ms.Skocic said.
Fire departments that alreadyhave signed on with My LifePlanare Aurora, Ravenna and Windhamin Portage County, Stow in SummitCounty and Windsor in AshtabulaCounty. They have included thumbprint readers in their ambulances,and My LifePlan is in negotiationswith other local fire departments toadopt the technology, Ms. Skocic said.
Akron General Health System hasintroduced thumb print readers inits emergency departments at AkronGeneral Medical Center and inStow and is considering them at allits locations.
“Knowing what the patient’sDNR (do not resuscitate) wishes areand what their allergies are up fronthas the ability to provide safer andmore quality care,” said Dr. JackMitstifer, president of inpatient services at Akron General.
Lou Ann Metz, Stow’s divisionfire chief, said her departmentsigned on with My LifePlan to better care for local residents and
anybody passing through. Emer-gency squads located at all threefire stations in Stow are nowequipped with the thumb printreaders, she said.
MyChoice is ideal for senior citizens because they often aren’table to provide emergency responders with their medical information or don’t know what pillsthey are taking, Ms. Metz said.
“The weakest link in patient carefor the EMS most times is gettingthe information,” Ms. Metz said.“We are hoping to get a majority ofour population to sign up for it.”
My LifePlan has signed a dealwith Panasonic Computer Solu-tions Co. to become a vendor of itsToughbook products, which aredurable notebook computers.However, organizations that wantto adopt the MyChoice technologycan use any computer or thumbprint reader on the market, so theydo not need to buy equipment fromMy LifePlan, Ms. Skocic said.
The cost to implement the My-Choice technology can vary, she said.Because Stow already had computersin its ambulances, Ms. Metz said itcost the fire department about $2,000to add the thumb print readers. ■
for construction of the corridor, whichhas been the subject of on-again, off-again financing commitments.That wait and the long timeline forconstruction frustrates some of theroadway’s strongest backers, whowould like to see the project put on afaster track for completion.
“We don’t think the project cancome soon enough,” said Chris Ronayne, president of UniversityCircle Inc., one of the project’sbiggest boosters. “University Circleis growing out of land.”
Mr. Ronayne said he already is envisioning what he calls a “Medical Mile” along the corridor’seastern end that would give Univer-sity Circle health care and medicalinstitutions room to grow. It couldinclude office space for the Cleve-land Clinic and University Hospitals,both of which already have back-office workers in buildings in theeastern suburbs.
Mr. Ronayne noted the Clinic hadto push its boundaries south towardthe corridor site to build its GlobalCardiovascular Innovation Center,and that Cleveland developer MRNLtd. is transforming the former Tudor Arms Hotel into a $22 millionDoubletree Hotel at East 105th
Street and Carnegie Avenue, wherethe corridor would meet UniversityCircle.
Catalyst neededThe Opportunity Corridor is
planned as a divided and landscapedboulevard with limited intersectionsthat would link to Interstate 490 atEast 55th Street, follow rail tracks to East 105th and then become East 105th until it reaches UniversityCircle.
The road is a priority for ClevelandMayor Frank Jackson because itwould open for redevelopment 200acres of largely abandoned land —much of it already zoned for com-mercial and industrial uses — in asection of the city’s impoverished
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Corridor:Jackson saysroad priorityfor region
southeast side that is called the “Forgotten Triangle.”
To push the project, the city,ODOT and the Greater ClevelandPartnership created the OpportunityCorridor steering committee chairedby Ms. Brown to oversee the projectand hold public meetings in the neighborhoods touching the corridor.
Paul Volpe, president and foundingprincipal of City Architecture, already is working with the steeringcommittee on design concepts fordevelopments along the road as wellas site plans for key areas.
“This neighborhood is very depressed,” said Robert Brown,Cleveland’s planning director. “Unless we do something different,like this roadway, the chances of adramatic turnaround (in that area)are not great.”
Project planners estimate that2,200 of 5,500 parcels of land in thetarget area are already vacant orabandoned.
After an urban feelThe idea is that while ODOT
designs and builds the roadway, thecity and community developmentgroups would assemble adjacentland into developable tracts.
“I imagine as we begin our marketassessment we will begin to talk todevelopers, not with the purpose ofselling them anything but gainingtheir insight to help shape our plan,”Ms. Brown said.
Mr. Brown, the planning director,imagines an urban feel to the corridor,with buildings separated from a tree-lined roadway by only a sidewalk,what he is calling “linear, urban office parks.” Some of the boulevardcould be home to office or research-
and-development buildings, whileother space could be used for lightmanufacturing. Parking lots wouldbe hidden from view, behind thebuildings.
At the west end of the corridor,Slavic Village Development, a community development nonprofit,is looking at the potential for residential and other development.Marie Kittredge, executive directorof Slavic Village Development, said there are some businesses to the west of East 55th Street, “butthere’s a lot of land that is underuti-lized.”
“That’s where we would look fordevelopment, also along East 55th,”
Ms. Kittredge said.Others were reluctant to be more
specific about development oppor-tunities for fear of stirring up landspeculation.
No quick fixOne reason the project likely will
continue to move slowly is thatthere is little interest among investors for development land in aslow economy.
Joseph Martanovic, a senior vice president with Colliers Osten-dorf-Morris who specializes in industrial property, said therewould be little interest in the landfor several years.
“It’s not attractive industrial landnow,” Mr. Martanovic said. “It’s going to take minimally 10 years (for
interest to blossom) and assemblingthe land will take time. Way downthe road there is going to be devel-opment there, but the road has tobe done (first).”
Minimizing dislocation is anotherreason for a slow pace.
Avoiding as much residential disruption as possible will be a keyfactor in the choice of a roadwayalignment.
Cleveland City CouncilwomanMamie Mitchell, whose Ward 5 covers a large portion of the corridor,said she hasn’t been swamped withobjections to the concept, butknows backs will stiffen when a finalroute is chosen.
“The best route will be the onethat displaces the fewest people,”she said. ■
1144 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
GOING PLACESJOB CHANGES
EDUCATIONLAKE ERIE COLEGE: AlisonMearns Benders to vice presidentfor academic affairs and chief academicofficer.
FINANCIAL SERVICEANCORA ADVISORS LLC: RobertBrady to institutional marketing. RETIREMENT SOLUTIONS: RachelSnyderburn to senior administrativeassistant.
HEALTH CAREAKRON CHILDREN’S HOSPITAL:Michael Trainer to chief financial officer and treasurer.
AKRON GENERAL: Dr. Ross Marchetta to director of robotic gynecological surgery. OHIO CLINIC FOR AESTHETICAND PLASTIC SURGERY: Dr.James Scarcella to medical staff.
INSURANCETHE HOFFMAN GROUP: BryanShamp and Jake Pease to accountexecutives. MCMANAMON INSURANCE: Walter L. Voyzey to account executive. MEDICAL MUTUAL OF OHIO:Ezell Underdown to director, legal affairs; Karen Williams to director of financial analysis and costand budget.
LEGALHAHN LOESER & PARKS LLP:Douglas S. Morgan and W. EricBaisden to partners. TUCKER ELLIS & WEST LLP: Clifford S. Mendelsohn to counsel.
MANUFACTURINGDVUV LLC: David P. Wanner tosales representative. FABER-CASTELL USA: CathyBlankenship to director of sales,children’s brands.KEN-TOOL: Rockford Tyson to vicepresident of sales and marketing.LIBRA INDUSTRIES: James Saboto chief operating officer. TRANSTAR INDUSTRIES INC.:Nancy Parker to vice president ofcorporate human resources.
NONPROFITCLEVELAND FOUNDATION: AniBagdasarian to presidential liaisonfor special initiatives; Judy Salm todonor relations officer; Jim Nicholsto senior communications editor. ELIZA JENNINGS SENIOR CARENETWORK: Greg Lonsway to executive director, The Renaissance. NORTECH: Karen Allport to vicepresident, strategic outreach; ByronClayton to vice president. THE VILLAGE AT MARYMOUNT:Max A. Becker to executive chefand director of culinary services.
REAL ESTATEERIE TITLE AGENCY INC.: DaveIammarino to account executive;Ted Bush to senior vice president,general counsel.
UnderdownMarchettaBenders
BagdasarianSaboWilliams
JonesNicholsSalm
DEVELOPERS DIVERSIFIED REALTYCORP.: John S. Kokinchak to seniorexecutive vice president, property management; R. Christopher Salatato assistant general counsel, corporate. JONES LANG LASALLE AMERICASINC.: Brian Conroy and Scott Pick to senior vice presidents; JonVanderplough to vice president.TRANSACTION REALTY: Joan Brillaand Vicki Lehigh to sales associates.
SERVICESS&G HEALTHCARE SERVICESLLC: Kristine Woodcock to billingspecialist.
UTILITYFIRSTENERGY CORP.: Charles E.Jones to senior vice president andpresident, FirstEnergy Utilities.
BOARDSCUYAHOGA VALLEY CHAMBER OFCOMMERCE: Eileen Hawking to executive director; Charlene Paparizos(CMP Communications LLC) to presi-dent; Traci Davis to past president;Leesa Jacubenta to vice president;Susan Amoroso to treasurer; NancyPrucha to secretary. NORTHEAST OHIO NEIGHBORHOODHEALTH SERVICES INC.: Matthew T.Fitzsimmons (Nicola, Gudbranson &Cooper LLC) to chairman; WillieStarkey to first vice president. OHIO AND ERIE CANALWAY ASSOCIATION: Jon Elsasser tochairman; Tom Yablonsky to vicechairman; Pat Campbell to secretary;Tim Novotny to treasurer.
AWARDSNATIONAL ASSOCIATION OFWOMEN BUSINESS OWNERS,CLEVELAND CHAPTER: Mary Biacsi,Zoller/Biacsi Co.; Barbara Cagley,SCK Design Inc.; Jennie Chiccola, Jennie Chiccola Realty; Rachel Daniel-Talton, Synergy Marketing Strategy andResearch Inc.; Karen Fike, Let’s Enter-tain Inc.; Ingrid Halpert, Weiss MoversInc.; Laura Jacobs, Embellish Acces-sories LLC; Kristina O’Brien, MajesticTitle Services LLC; Holly Rhoads, TheRuby Group LLC; Victoria Tifft, ClinicalResearch Management Inc.
RETIREMENTFIRSTENERGY CORP.: Richard R.Grigg, after 40 years of service.
space in Eastlake is today a company with 250 employees and300,000 square feet of space. Andit’s not just model-making anymore. Today, Astro produces finalparts, components and assembliesfor a slew of products, from mili-tary torpedoes to CT scanners.
For nearly all of the journey,
Mike Watts Jr. has been either athis father’s side or at his beck andcall. Though he did not join thecompany until 1983, the youngerMr. Watts spent much of his youthin and around machine tools.
“He would come in here at nightwith his friends and use the machines,” the father recalled.
So when his son went to college,Mr. Watts also put him to work.Mike Watts Jr. set up a small machineshop in the house that he and hisfriends shared at school, and hetaught his friends to run the equip-ment. Together, they all did piece-work for Mike’s dad and Astro.
Northeast Ohio is home toscores of successful familyowned businesses, both thosewell known and some well-kept secrets.
Over the following pages, wetake a snapshot, from father-son duos to four, five and sevengenerations of hardware, candlesand furniture.
Astro Manufacturing and Design Inc.eastlakesecond generationBy DAN [email protected]
Lots of fathers and sonsbuild models together —but not many turn theminto multimillion-dollar
businesses the way Mike Watts Sr.and his son Mike Watts Jr. did withEastlake-based Astro Manufacturingand Design Inc.
Mike Watts Sr. started the company in 1977, after running aCleveland-based model shop thatmade mock-ups of parts and components before they weremanufactured in larger volumes.The operation eventually was shutdown, leaving Mr. Watts and hisstaff of 12 out of work, but withmarketable skills.
“We took our severance pay,pitched it together and bought theequipment — we bought 80% ofthe shop,” Mr. Watts said. “Therewasn’t much of a job market.”
But if you ask the senior Mr.Watts if he was scared at the time,he gives the quizzical look of aman who only now, more than 30years later, is considering thequestion for the first time.
“Scared? I guess I wasn’t,” hesaid. “I just thought we could do it.”
And so they did.Luckily for Mr. Watts, the model
shop wasn’t the only part of hisformer operation to be shut down.Soon, the same internal clients forwhom Mr. Watts previously builtmodels were scattered and workingat numerous other Northeast Ohiocompanies.
In their new jobs, they wantedsomeone to build models for themthe way Mr. Watts had done — andlo and behold Mr. Watts’ new company, Astro, was one of thefew shops able to do it and the firstone to which they turned.
Astro took off. What once was 12people in 5,000 square feet of
Mike Watts Jr.(left), joined Astro Manufac-turing and Design Inc. in1983 after hisfather, MikeSr., started thecompany in1977.JANET CENTURY
MARC GOLUB
Kurt Epprecht (left, vice president of procurement and risk management) and his brother John (executive vice president) in part run Great Lakes Cheese Co., which their father, Hans, founded.
Since its inception at the NorthernOhio Food Terminal in 1958 to itsprominence today as a nationalcheese supplier with seven U.S.
plants, Hiram-based Great Lakes Cheese hasseen much of its success rooted in its willingness to seize opportunities.
The company’s history is rife with examplesof risk-taking and the identification of newconcepts and markets. Founder Hans Epprecht, for example, was one of the first toencourage grocers to buy prepacked shreddedand sliced cheese at a time when cheeseloaves were carved up in back rooms. He
also offered profit-sharing to his employeeslong before such plans were popular.
In the early ’80s, the company galvanizedits expansion into New York by respondingquickly when a private label cheese supplierannounced its exit from that market. GreatLakes Cheese also snatched the chance to establish a presence deep in the heart of thedairyland by purchasing the equipment andtaking on the employees of a food supplier inPlymouth, Wis.
In recent days, Great Lakes Cheese’s concentration on store-brand cheese lines —traditionally priced lower than nationalbrands — has delivered some of its highestreturns as many manufacturers experienceddeclines.
“The desire to find new opportunities andseize them is part of our history and culture,”said Mr. Epprecht’s daughter, Heidi Eller.“And it continues to be an important aspectof the company today.”
A director at Great Lakes Cheese, Ms. Elleris one of a trio of second-generation
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National EnterpriseSystems
RUGGERO FATICA
Chris Pollak (from left) and brothers Scott and Jeff each work at National Enter-prise Systems, the company their father, Ernie, started in 1987.
On the weekends, Ernie Pollak and his sons may goon a picnic or play a roundof golf. He plays with the
grandkids. They relax at family parties.
During the work week, though,the family is all business.
The three sons and their father areall executives at National EnterpriseSystems in Solon, a collection agencythat Ernie, 65, started in 1987 afterrising through the ranks at anotherfirm. When he started the businesswith the boys’ stepmother that June,she did bookkeeping while hemanaged the company.
After just six months, it was afull-fledged family affair.
Scott Pollak, 43, is the oldest son.He joined National Enterprise inDecember 1987 as a collectionagent, when there were just a handful of other workers at thecompany that now employs 420.
But just being Ernie’s progenydidn’t guarantee him the job henow holds, vice president of sales.Indeed, it was six or seven years before he was promoted to a salesposition.
For Jeff Pollak, 39, the wait waseven longer. He was twice passedover for a management position heapplied for within the company.
“He was pretty mad,” Ernie said,recalling a time he and Jeff werepainting a wall together when Jeff
asked what it was going to take toget the promotion. Ernie said hetold his son, “You have to keepworking hard, do the things I tellyou to do, when I tell you to dothem, and follow your work ethicand it won’t be long.”
Nine months later, Jeff got a promotion. He is now vice presi-dent of collections.
“It was good he pushed it,” Erniesaid. “Aggressiveness is a thing youlook for.”
Jeff said he never considered looking for other work, where hedidn’t have to impress his father. Allthree of the boys — Chris Pollak, 29,is general manager of collections —said as president, Ernie was less patient with them than with otheremployees, but that they wanted tostay with the business, which they described as more than just a job.
“I felt like the opportunity washere,” Jeff said. “Sooner or later, Iwas going to impress him.”
Ernie said he doesn’t believe in
family businesses where a next generation rises in the rank justbecause of their last name. Kids cantake advantage of that situation, hesaid, and it can harm the company.And Ernie still has big plans for thecompany, which he would like to seemore than double in size to fit thecapacity of the campus’s two buildings.
“You’re not going to get anywherecoddling them,” he said. “They’veearned everything they’ve had, believe me.”
Ernie said he’s proud of his sons,who often work 14-hour days. Hepraised their work ethic, saying heleaves a lot of the decision-makingto them and is confident in theirskills.
It will still be some years beforeretirement, he said, but when thetime comes, he knows the boyshave what it takes to succeed.
“I couldn’t ask for three betteremployees, no matter where I wouldlook,” he said. ◆
Heinen’s Fine Foodswarrensville heightsthird generation
Grocery shopping can be achore, a get-in and get-outerrand on a hurried customer’s unpleasant
to-do list. But at Heinen’s, shoppers loiter
in the showroom for food. It’s notjust because of the fresh, colorfulfruits and vegetables, naturalmeats, tasting kiosks and the variety of unique local products onthe shelves, but also because of therelationships the grocer’s associatesfoster with customers.
Heinen’s has grown organically,mostly from word-of-mouth advertising and brand loyalty, fromthe Shaker Heights store thatfounder Joe Heinen opened in 1929to 17 Northeast Ohio stores withabout 2,500 employees and $400million in annual sales. And eventhough the economy has impactedthe higher-end grocery operation,revenue still has been marginally rising over the last couple years.
The third-generation businesscurrently is run by twin brothersTom and Jeff Heinen, whom employees describe as humble andmodest — more like friends thanbosses.
“We’re happy being the ice cubesin the drink,” Jeff Heinen said.
The brothers still run the opera-tion as their grandfather envisionedby emphasizing family and food.
“We visit most of the placeswhere we buy from,” Tom Heinensaid. “People want to know wheretheir food comes from, and howthe animals are treated. Even inthe ’70s, my grandfather hand-selected quarters of beef in Akron.”
Heinen’s also has expanded itsofferings to meet the needs of itsconsumers, who have becomemore educated about nutrition.
For example, the company offers chef-prepared foods, andabout three years ago, Heinen’s
partnered with the Cleveland Clinic to develop the Healthy Appetite line of prepared foodswith the Go! food product label.
The business’ private labelbrands — Heinen’s and TwoBrothers — also have been successful. Some of the labels havebeen around for decades, butHeinen’s two years ago expandedits natural and organic lines.
The business also donates morethan $2 million annually to localfood banks and about $200,000 toarea schools.
To accommodate the “familiescomes first” motto, Heinen’s isopen from 8 a.m. to 8:30 p.m. andis closed on six national holidaysand Easter, while some of their retail counterparts stay open later,or even 24 hours a day.
Many of Heinen’s employeeshave become more like extendedmembers of the Heinen’s family.
“There are a lot of families herewho have more family membersworking with Heinen’s than wedo,” Jeff Heinen said.
Mary Smeltzer, for example, hasbeen an employee for 32 years,and her husband, Robert “Bob”Smeltzer, whom she met at the Aurora store 18 years ago, has beenwith the business for 33 years.
Their high school son, Trevor, isa grocery stocker.
“I really can’t think of a timewhen an associate has been disgruntled,” said Ms. Smeltzer,right before she greeted a customerby her first name.
Tom and Jeff Heinen both have high school or college-age children, but stopped short of confirming a fourth-generationtakeover. That’s because the children, like their dads, plan to orare pursuing college degrees.
“We are managing the businesstoward a fourth-generation operation,” Jeff Heinen said.
“We still want to grow,” TomHeinen added. ◆
solonsecond generation
RUGGERO FATICA
Heinen’s Fine Foods, which opened its first store in 1929, now is run by twinbrothers Tom (left) and Jeff Heinen.
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Joe Sullivan says Kichler Lighting’sdecorative lighting fixtures andother products are some of themost popular he sells.
Mr. Sullivan, showroom managerat the Mentor lighting showroom ofMars Electric, an electrical supplierwith eight Northeast Ohio locations,has a simple way of knowing; it’sbased on how often he reordersKichler’s catalogs.
“Their catalog gets beat up prettyfast,” Mr. Sullivan said.
Its products may go fast, butKichler’s rise in the decorativelighting business wasn’t quite aseasy or quick. It started with SamMinoff buying the company fromL.D. Kichler in 1954 — promisingMr. Kichler he’d never change thename — and selling products byday while making them at night.
From those humble beginnings,when Mr. Minoff had one employeeand his wife, Clare, kept the books,to today, with over 6,000 products,Kichler has prided itself on “beingeasy to do business with,” said RoyMinoff, Sam’s son and the company’scurrent chief administrative officerand general counsel.
“They’re exceptional,” Mr. Sullivansaid. “The products are quality, andtheir customer service is very good.We make one call, and they solveany issue we might have.”
Sam Minoff grew the companylittle by little through the 1960s until he finally convinced a bank toprovide a long-term loan, for 10years and $125,000. Under Mr. Minoff’s direction, the companywent from 3,000 square feet on Ontario Street in Cleveland, to onerented floor on East 21st Street, toEast 38th Street and finally to its cur-rent location, a 640,000-square-footbuilding on East Pleasant Valley Road in Independence, offInterstate 77.
Sam’s oldest son, Barry, joinedKichler in 1972, and today serves as chairman of the board; Barry’s son,Dave, is the company’s e-com-merce manager. Roy Minoff joinedKichler after working as a hospitalaide supervisor, and his son, Drew,a student at John Carroll, has donesummer research, among otherthings, at Kichler. In addition, MikeSouthard, who married Barry andRoy’s sister, Amy, in 1987, is thecompany’s national sales managerfor landscape lighting.
Each Minoff, and Mr. Southard,said the family members’ uniqueresponsibilities have limited any intense squabbling that some otherfamily-owned businesses may encounter.
“I think it’s different here because
we all have our own areas,” saidMr. Southard, who also said thelandscape lighting division has beena growth sector for the company.“There isn’t a ton of interaction;each of us is focused on our ownthing and we try to do that well.”
But there is one point of con-tention, it seems: Who gets most ofthe credit for the company stillhumming along.
Sam Minoff, in a conversationfrom Florida, said while he’s stillplenty active in the company, his family deserves the credit. Meanwhile, Roy Minoff said Sam’spassion for the products and knackfor finding talented people spurredthe company’s growth; Sam, Roysaid, walks into a room and callsout product numbers of light fixtures, despite the aforemen-tioned thousands of products.
“Since I was a little kid, I’ve
wanted to work here,” said DaveMinoff, who worked in sales in Orlando for a few years after graduating from Vanderbilt University before joining the company. “There’s a sense of prideinvolved with all the blood, sweatand tears my grandpa, dad and uncles put into this.”
The drastic dropoff in homestarts — according to Census figures, housing starts nationwidefell to 445,000 in 2009 from 1.05million two years prior and 1.6 million in 2004 — have hurt, as newhomes require new lighting fixturesand other accents. But carrying little debt puts Kichler in an oppor-tunistic position, Roy Minoff said.
“You have to have good supplychains and be ready for everything.It’s about choosing good suppliersand rewarding them; we’re big believers in pleasing others.” ◆
MARC GOLUB
Sam Minoff (center) bought Kichler Lighting in 1954, and now he’s joined by sonRoy (left, chief administrative officer and general counsel), son-in-law MikeSouthard (national sales manager for landscape lighting), son Barry (chairmanof the board) and grandson Dave (e-commerce manager).
“You have to have goodsupply chains and beready for everything. It’sabout choosing goodsuppliers and rewardingthem; we’re big believersin pleasing others.”– Roy Minoff, chief administrativeofficer and general counsel, Kichler Lighting
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During an economic meltdown, you need thebasics for survival —food, water, shelter and
chocolate. At least that’s what Cleveland-
based Malley’s Chocolates has discovered since it was founded byMike Malley in 1935 during theGreat Depression. It continues tothrive today during the Great Recession.
“I was fortunate enough to workside by side with the guy who startedthis business when I was a kid,”said Dan Malley, grandson of thefounder and the operation’schocolate czar. “Growing up, thedinner conversations were alwayscentered around business, and(my siblings and I) were likesponges, soaking it in.”
Mr. Malley said he remembers ata young age stuffing Easter grassinto cellophane bags in the basementof the North Olmsted retail storefor 2 cents each.
“I thought I made a fortune,” hesaid.
Suffice to say, Malley’s also hasmade a fortune since that time.
The third-generation family operation that began as a singlestore in Lakewood has grown to 18Northeast Ohio locations, five ofwhich sell homemade ice cream.The newest store opened last August in Highland Heights.
Malley’s employs about 300 full-time and mostly part-time employees, with Dan, Adele(“Sis”), Bill (“Bee”) and Packy, allof the Malley family, running theoperation.
While the company does notdisclose annual sales, Dan Malleysaid the company’s revenue wasup about 6% in 2009 from 2008,and he hopes to maintain that trajectory this year.
Community contributions alsohave been a key ingredient to theMalley’s operation. The companyjust finished raising $10,000 forHaiti relief efforts. Each year, thecompany donates about 25 to 30food baskets to benefit families inneed and also buys gift cards for
the hungry. Brook Park Mayor Mark Elliott
said the city is fortunate to havethe chocolate factory — which herefers to as a “tourist destination”— based there.
“We have traffic jams on Brook-park Road during the peak holidayseasons, and that’s a great problemto have,” Mayor Elliott said.“They’ve been an outstandingbusiness, and they get a lot of peopleto come into our community.”
Adele Malley, chief operating officer and Dan’s sister, said sheenjoys working at the family busi-ness because she and her siblings— like many families spearheadingtheir businesses — wear many hatsto ensure they are proficient atrunning the business from differentangles. On this particular day,Adele Malley wore a hair net, asshe was out in the factory learninghow to run the machines thatmake the chocolate candy.
“I love working here,” she said.“It’s fun and relaxed, but it’s stillbusiness. It’s nice to know we’refollowing in our grandparents’footsteps.”
While some of the third-generationMalley family members have children, Dan Malley said it’s premature to tell whether thechocolate business will spill into afourth generation.
For now, “we’re going to grow,but continue to focus on what wedo well,” he said.
For Northeast Ohio chocolatelovers, that plan sounds prettysweet. ◆
Epprechts overseeing the familybusiness. John Epprecht, the oldestof Hans’ three children, was thefirst to join the company full time,working his way from the productionline to executive vice president.Kurt Epprecht, the youngest, is vicepresident of procurement and riskmanagement.
The elder Epprecht emigratedfrom Switzerland in 1948 when acheesemaker from Brewster, in
Odds are you’ve come incontact with some of thework of Akron-basedBotzum Bros. Hardware
whether you know it or not. The 118-year-old company’s
legacy ranges from the cement inthe city’s landmark Y Bridge todoors and hardware in Akron Public School buildings and incommercial buildings across theregion.
“It’s great to be a part of some-thing like that,” said Al Hilkert,Botzum’s fourth-generation owner.“I never felt pressure to go into thebusiness, but when you come intoit, you certainly want it to do well.You feel a special responsibility forit.”
Pictures in Mr. Hilkert’s office atBotzum’s North Arlington Streetheadquarters show a parade ofBotzum Bros. delivery wagons inthe early 1900s representing thebranches of the family business.
Al’s father Bill Hilkert remembersthose years when the Botzumname was on everything from sandand gravel sales to a feed businessand four movie theaters in Akronand Canton. Though many ofthose businesses fell victim to theGreat Depression, the buildingmaterials operation carried theBotzum name for several decadesto come.
Bill Hilkert began running the
company in the 1960s, graduallybuying out his seven siblings’ interest and narrowing the Botzumfocus. In the late 1980s, the company sold the last of its concreteoperations to concentrate mainlyon commercial doors and frames,which remain its core business almost a quarter-century later.
“Careful financial managementwas probably the biggest lesson Ilearned,” Bill Hilkert said from hiswinter home in Florida. “It’s veryimportant in the constructionbusiness not to be a wild speculator.”
Al, the great-grandson of founder Lewis Botzum, worked onand off at the company as a youngman — he remembers testing theconcrete used in Akron’s Y Bridge —and he bought the company fromhis father in early 2001.
“His No. 1 goal wasn’t growth,”Al Hilkert said of the lessons helearned from his father. “He wassomebody who would workthrough and figure out problems(for customers), and that’s whatwe do. I hope people look at us andsay, ‘That’s a company we cantrust.’ That goes a long way in theconstruction business.”
Bob Baker, hardware foremanfor the maintenance departmentof Akron Public Schools, has beendealing with Botzum for decadesand in three different jobs — withForest City Dillon, Allen KeithConstruction and in his currentposition. Mr. Baker recalls BotzumBros. was hands-on in meeting
contractors’ needs.“They worked with us on drawings
and specs ... and they would buildthe frames to those specs,” he said.
And when he joined the schoolsystem, he turned to the companyfor its experience and proximity.
“Being in maintenance in theschools, you get a lot of stuff you needto get repaired right away,” Mr.Baker said. “Botzum is local and theycarry the products we need to use.”
Still, even as Al Hilkert pointswith pride to yellowed Botzumstock certificates from 1914 andframed photographs illustrating thecompany’s history, he said youcan’t lean on longevity itself.
“You can end up talking aboutthe past ... but you’re not going tostay in business unless you thinkabout the future,” he said. “Businessis constantly changing, and youneed to change with the industry.”
Wireless locks and copy-proofkeys are examples of the technolog-ical advances Botzum has had tokeep up with, as is the interest insustainability and the U.S. GreenBuilding Council’s Leadership inEnergy and Environmental Designcertification process.
It’s no longer enough, in manycases, to just know your hardware:Botzum recently earned its “Chainof Custody Certificate,” which per-mits it to sell LEED-certified doorsbased on knowledge of their sourcematerials and recycled content.
“You’ve got to be willing toevolve,” Al Hilkert said. “We’re goingto be different in five years becausethe industry will be different.”
That may be so, but givenBotzum Bros.’s long history, its involvement in projects across theregion seems likely to continue. ◆
but it wasn’t until he saw the minis-eries “Roots” in the late 1970s thathis legacy took hold of his life.
“I developed a keen interest inthe history of the family, which created an interest in the business,”he said.
Mr. Root in 2008 became thesixth family member to serve ascompany president, following inthe steps of his great-great grandfa-ther, who had owned a jewelrymanufacturing shop on Medina’stown square before becoming infat-uated with bees and bee keeping.
The company started makingbeeswax candles for churches inthe 1930s, and it expanded to makeconsumer candles a few decadeslater. All the while, demand for beekeeping equipment declined,driving A.I. Root Co. to shut downits saw mill in 1994.
It was a hard decision, but Mr.Root said the company is more interested in developing new products than re-creating old ones.
Mr. Root said the company sellsabout $25 million in products annually. Brad Root’s father, John,who retired as president in 2008 butremains chairman, said he enjoysknowing that the money the family’scompany brings in has helpedcountless people make a living.
John’s brother Stuart Root todayis corporate secretary and safetymanager, but he’s held positions inproduct development and qualitycontrol since joining A.I. Root Co.48 years ago. Even then, he figuredhe’d still be working for the compa-ny today.
“I really enjoyed everything I didhere,” he said.
It’s too early to say whether thecompany’s next president will be aRoot. After all, Brad Root’s kids arejust 11, 9 and 7. He won’t pressurethem to join the business, but hesurely wouldn’t mind if they did.
“I’d be tickled pink,” he said. ◆
JASON MILLER
A.I. Root Co. president Brad Root, now in charge at the 141-year-old company,said he updates the family tree to keep tabs on relatives.
Stark County, traveled abroad insearch of laborers.
He learned every facet ofcheesemaking while in Brewster,but his budding vocation was cutshort by the draft. After serving inthe Army for two years and a briefstint as a milk truck driver, he responded to an advertisement inthe newspaper to buy a modestcheese supplier in Cleveland’sNorthern Ohio Food Terminal.
That was 1958. Four years later,he took out a loan and built a 6,000-square-foot cheese manufacturingand packing plant in Newbury.
Mr. Epprecht grew his companyover the years by acquiring existingplants and adding new productsand customers. In 1998, GreatLakes Cheese moved its Newburyplant and headquarters to a newsite on the edge of Geauga Countyin Hiram. In 1999, he decided toretire and the family looked outside for a new leader.
“At the time it was a $500 million company, and we wantedsomeone with the business exper-tise to take it to the next level,”John Epprecht said.
Great Lakes Cheese found that
business savvy in Gary Vanic, an 18-year veteran of Land O’ Lakes Inc.of Arden Hills, Minn. Mr. Vanic hasbeen instrumental in Great LakesCheese’s expansion in private-labelcheese — a market it now leads.
Kurt Epprecht cited the company’sdevoted employees as another catalyst behind its ascent to $2 billion in annual sales. GreatLakes Cheese employs more than500 at its Hiram site and nearly2,000 nationwide.
Administrative assistant LauraValvoda said employees like her value the company’s stability,
especially when so many NortheastOhio companies are letting workersgo. Watching her retirement savingsblossom via the firm’s employeestock ownership plan and its 35-year-old profit-sharing structure isnot so bad, either.
“Great Lakes Cheese is one of thecompanies that truly recognizes it isonly as strong as its employees,”said Raymond James & Associates’Dennis Schwartz, a longtime financial adviser for Great LakesCheese. “The family really caresabout the employees and that goesboth ways.” ◆
Cheesecontinued from PAGE 15
JANINE BENTIVEGNA
Al Hilkert is the fourth-generation owner of the 118-year-old Botzum Bros. Hardware, which now mainly focuses on com-mercial doors and frames.
In the early days of the A.I. RootCo., employees would playsoftball in the middle of thestreet that now runs between
the company’s downtown Medinaoffices and the sprawling brickplant where it makes candles.
They could pull it off back thenbecause horses and buggies stillruled the roads, said president BradRoot.
“Then the automobile came,” hesaid with a laugh.
The A.I. Root Co., which doesbusiness as Root Candles, wasfounded in 1869. That’s four yearsafter the end of the Civil War, andseven years before Alexander Graham Bell invented the tele-phone. Since then, the companyhas evolved from making equip-ment for beekeepers — which inspired the Medina City SchoolDistrict to adopt its “Battling Bees”nickname — to producing candlesfor churches and consumers.
The whole time, descendants offounder Amos Ives Root haveowned a majority stake in the com-pany, which today employs 140 inMedina and about 165 nationwide.
Brad Root knows his roots well.He regularly updates the Root familytree to keep track of both relativesand shareholders, which includesecond and third cousins. Many ofthem aren’t interested in sellingtheir shares because they like feeling connected to their ancestors,he said.
So does Mr. Root. Like his siblings,he spent summers during highschool working for the company,
“He’d get a quarter (per piece),I’d get 20 cents and I’d give myfriends 15 cents,” Mike Watts Jr. said.
Today, Mike Watts Jr. no longergets paid in dimes or for one pieceof work at a time; he’s Astro’s president.
His father spends most of histime at home — no relaxing, buttending to a 120-acre farm nearChardon. But the two talk constantly,and Mr. Watts Sr. still watches thebusiness closely and comes into theoffice a few times each month.
“When you retire, you buy ahome in Florida or a boat, right?”said Mr. Watts Jr., in an obviousjoke meant for those who did notknow his father as well as he did.
Mr. Watts Sr., now 74, has a different image of retirement.
“The day I retired, I bought myself a bulldozer, a track-hoe anda loader,” the elder Mr. Watts said.“Then I dug a three-acre lake.”
A self-described “hands-on manager” who never hesitated todo work himself if no one else waswilling or able, Mr. Watts Sr. saidit’s actually been easier to let go ofhis day job than some might haveguessed. But then, he’d beengrooming his son to take the reinsfor a long time.
“That was always the plan,” thefather said.
It’s worked out well not only forthe Watts, but also for the companyand its employees, said Astro vicepresident Rich Peterson.
“Lucky for us, they’re both greatpeople to work for,” Mr. Petersonsaid. ◆
2200 CRAIN’S CLEVELAND BUSINESS APRIL 5-11, 2010
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The Taylor Cos., the Bedfordchair and desk manufacturer,traces its business and family ownership lineage to
Benjamin Franklin Fitch, the Cleve-land suburb’s first settler in 1813.
Mr. Fitch had a way with wood:He knew how to season timber, usethe grain and handle the knots. Forhis cabin, he made slat-backed andsplint-bottomed chairs.
Since so many neighbors soughtthem, he set up shop in a nearbycabin. A multigenerational familybusiness was born by 1816, onewhose historic exhibit at its head-quarters reeks of Americana nearlyas much as the Smithsonian.
With roots like that, Taylor haslearned how to manage businesscycles, social transitions and the vagaries of fate, which shape and
test a family enterprise. Take the industrial revolution.
Originally, Taylor made chairs forhomes and schools in the agrarian-era U.S. After the industrial revolution, demand for chairs forbusinesses developed and thecompany focused on the businessand institutional market. Taylorwent from rocking chairs commonat late 19th-century business desksto chairs that roll, swivel and, insome models, still rock.
Today, Taylor’s staff totals 65,with just over half the staff here atthe chair factory and the remainderat a Los Angeles plant. Brett N.Meals, the seventh generation ofMr. Fitch’s family to own the company, is Taylor’s sole share-holder, and he carries the title ofexecutive vice president.
In 2006, Taylor moved into anew $6 million factory on a reclaimed brownfield in Bedford— its predecessor plant dated from1892 — and the last few years developed a name for itself as aleader in sustainability in manu-facturing.
One way Taylor manages changeis to focus on current needs withan eye on tomorrow.
“Our focus is getting throughthis time. It’s a very challengingeconomy,” Mr. Meals said. “Brettand Jeff (Baldassari, Taylor presidentand CEO) are focused on gettingthrough. We also focus on sustain-ability because it is more than theproduct we make — it’s how wemake the product.” Another sign oftheir focus comes from copies ofTaylor’s original stock certificatesthat Messrs. Meals and Baldassarihave hanging on the walls of theiradjoining offices: they date from1885, when Ohio began organizingcorporations for legal purposes.
Mr. Meals declined to discusssuccession plans for Taylor. However, it’s clear the focus is onkeeping the company alive by focusing on what Mr. Baldassaricalls “the Taylor family.” He arguesthe key to any family company’slongevity is prizing contributionsby employees at all levels.
Taylor’s sustainability kudos reflects that approach. “We gave itto our operational team. They figured out how to do it,” Mr. Baldassari said of its sustainabilitypractices. “You don’t want Jeff orBrett making your chair,” but Taylor’sskilled union workers on the job.
Likewise, Taylor operations people found a key to sustainabilitywas saving materials and not havingthem get in the way or require cost-gobbling moves in the shop. Taylordiverts materials that used to go tolandfills, annually recycling 2.5 tonsof leather straps as high-end pursesand donating 76,000 pounds ofsawdust to area farms.
MARC GOLUB
Jeffrey Baldassari, president and CEO of the nearly 200-year-old Taylor Cos.,with Brett Meals, the company’s executive vice president and owner.
Taylor, which prides itself onbuying locally, also hopes its sustainability seeds reap increasedsales. A key requirement for building and office certification inLeadership in Energy and Environ-mental Design prized by some corporations, contractors and architects is sourcing products locally, which could be magical fora local chairs and desk outfit thatcompetes globally.
Holly Harlan, president of Cleve-land-based Entrepreneurs for Sus-tainability, said Taylor gets the ideathat sustainability is about legacy,including what this generation addsto those that came before it andsaves for those coming later. The59% reduction in utilities costs Taylor achieved with its new plantwill be a legacy for the future, shesaid. ◆
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 21
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More 401(k) participantsstay course, studies showBy TIMOTHY INKLEBARGERPensions & Investments
Separate studies of participants in401(k) plans served by the Vanguardand Charles Schwab investmentfirms showed that participants heldfirm on their investments in 2009,while more plans provided invest-ment advice for their workers.
The Vanguard study of 3.2 millionparticipants showed that 13% tradedin their retirement accounts in2009, down three percentage pointsfrom a year earlier. Employee contributions dipped slightly to anaverage 2.9% of pay in 2009, downfrom 3.1% in 2008.
However, the percentage of loansoutstanding increased to 18% in2009 from 16% in 2008. Hardshipwithdrawals were also up slightly, to9% from 8%.
Steve P. Utkus, director of theVanguard Center for Retirement Research and co-author of the report,said in an interview the results showthat participants largely are stayingthe course with their 401(k) plans.
The sustained commitment to401(k) plans could be a result of employers’ decisions to instituteautomatic enrollment, automaticsavings increases and other methodsof ensuring increased employee retirement savings. Mr. Utkus saidplan sponsors should educate thosewho have abandoned their plansthat “the market collapse has ended,
that they overreacted and need toget back into the plan.”
In the Schwab study of 1.5 million401(k) plan participants, 70% madeinvestment advice available to participants last year, up from 62%a year earlier.
Sixty-eight percent offered target-date funds in 2009, compared with 65% in 2008; and 35% of employers automatically enrollednew employees into their plans, upfrom 33% in 2008. Of the plans automatically enrolling employees,34% were automatically increasingsavings rates in 2009, up from 30%in 2008.
“Of all the features provided in a401(k) plan, access to advice can beone of the most powerful resourcesfor helping people meet their savings goals,” said Dean Kohmann,vice president of 401(k) plan servicesfor Charles Schwab Retirement Services, in a statement.
“For example, among the retire-ment plans we serve at Schwab, approximately 70% of participantsthat receive and implement 401(k)advice make a change to their deferralrates, and we see those savings ratesnearly double on average as a result,jumping from 5% to 10% of pay,”Mr. Kohmann said. ■
(Timothy Inklebarger is a reporterwith Pensions & Investments, asister publication of Crain’s Cleve-land Business.)
20100405-NEWS--21-NAT-CCI-CL_-- 4/2/2010 11:14 AM Page 1
2222 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 5-11, 2010
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Here’s an idea that’s going to pot■ Cleveland, at least a few people in Port-land, Ore., believe, is “the nation’s leadingcity in green development.”
The blog Portland Food and Drink.com is reporting (http://tiny.cc/vwd9o) that the Portland Development Commission isseeking to turn a vacantdowntown shopping centerand a former departmentstore building into green-houses.
The model the develop-ment commission is using,the blog reports, is theCleveland Galleria, whichintroduced its “GardensUnder Glass” project earlierthis year. That project istaking advantage of the downtown shoppingmall’s greenhouse roof to grow and offer forsale tomatoes, lettuce and other vegetables(see Crain’s Nov. 30, 2009, issue).
The Oregon folks, though, may be takingthe Cleveland concept a step further. Theyhave their eyes on an effort to put on the November ballot an issue that would legalizemarijuana — and that would allow the green-houses to grow marijuana for medical use. — Jay Miller
The price wasn’tright, apparently■ Sometimes, even a potential bargain may betoo costly when it comes to a downtownCleveland skyscraper, especially if it’s empty.
Such seems to be the case with the formerEast Ohio Building, known now by its 1717East Ninth St. address. A March 3 sealed-bidauction for the vacant structure drew no bidshigh enough to meet the owner’s reserve, according to a source familiar with the auctionstaged by the Jones Lang LaSalle real estatecompany and the REDCC auction firm.
None of the parties promoting the auction publicized the reserve; the source also re-fused to comment. Aproperty owner’s reserveis the minimum price itwill entertain for selling abuilding at auction.
The source said JonesLang LaSalle and thebuilding’s owner, an EastCoast investor group affil-iated with Sovereign Prop-
erties Ltd., is exploring other options to sell it.James Postweiler, the Jones Lang LaSalle
managing director overseeing the marketingof the building, did not return two calls and ane-mail to discuss the auction by 10 a.m. lastFriday, April 2.
At least one bidder from Northeast Ohio remains in the hunt for the building, accordingto other sources familiar with the situation. — Stan Bullard
The last daysof National City■ The envelope still has National CityBank’s logo, but inside the envelope, there’sno green to be seen.
National City customers in Northeast Ohio
and other areas received letters late last month— on PNC letterhead — giving them informa-tion about the mid-April conversion of bankbranches in their areas to PNC Bank.
Customers should get new ATM cardsand other account materials in early April,the letter stated, and can begin using thematerials April 9. The banks will close as National City at 4 p.m. that day; when theyreopen April 12, they will be PNC.
National City’s online banking will not beavailable after 3 p.m. this Friday, April 9, theletter stated. It will come online as PNC at 7a.m. on April 12.
The letter also included information aboutconverting to PNC’s web sites and detailsabout changes to individuals’ accounts. —Arielle Kass
Hardly a moot point■ The University of Akron School of Law wona national moot court competition on childwelfare.
The school beat Loyola University Chicago School of Law in the final round ofthe Fifth Annual National Moot Court Competition in Child Welfare and AdoptionLaw in Columbus. In all, 17 schools arguedon the topic of “Assisted Reproduction andSame Sex Relationships” throughout thecompetition.
Students from the University of CincinnatiCollege of Law and Capital University LawSchool in Columbus also competed.
Akron students Maria Klutinoty and EmilyTrettel won the competition. Ms. Trettel alsowas named Best Oralist. — Arielle Kass
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Tharo Systems says its RFID Wizard allowsusers to easily create Electronic ProductCode (EPC) and Department of Defensesmart labels.
The product gives users the option of importing parts or all of their RFID (radio frequency identi-fication) data fromsources includingdatabases, serialfiles, user input,existing bar codeor text fields,and external textfiles.
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The product also gives users the ability towrite and print a report that includes the dataused to program printed smart labels. The report then can be used as part of an ASN(advanced shipping notice) or to keep arecord of labeled items.
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Send information about new products to managing editor Scott Suttell [email protected].
REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS
THEINSIDER
THEWEEK MARCH 29 - APRIL 4
The big story: About 375 employees of HugoBoss’ Cleveland plant — all of them slated to lose their jobs if the suit plant closes as plannedthis month — were given a ray of hope by the National Labor Relations Board. Workers United, the union representing the employees, announced that it and the company are headedback to the bargaining table. The union said theNLRB found Hugo Boss did not bargain with itsemployees in good faith. Hugo Boss respondedto the development by saying it now hopes theunion will accept its own proposal to keep theplant open, which involves significant wage cutsthat workers had previously not accepted.
If it seems too good to be true …: ACuyahoga Falls man was charged with one countof wire fraud in an alleged Ponzi scheme the federalgovernment says defrauded 26 investors of $29.7million. The government alleges that Enrique F.Villalba portrayed himself as an “investment man-ager” who used a method called “Money MarketPlus” to invest in the futures market in a way thatcould produce long-term gains of 8% to 12%. Mr.Villalba allegedly told investors his knowledge ofphysics, when combined with what he called a“momentum filter,” allowed him to predict with“an uncanny degree of certainty” how the futuresmarket would trend at various times.
Bio a bright spot: Employment in Ohio’sbioscience sector is on the rise across the state,according to a report released by BioOhio, a
nonprofit organiza-tion supported by thestate’s Thomas EdisonProgram. Despite astagnant economy,total employment in Ohio’s bioscience sector in 2008 was55,465. That was up
1,520 jobs, or 2.8%, from 2007. Since 2000, thebioscience sector in Ohio added over 8,400 jobs,BioOhio said.
More cuts coming?: The Greater ClevelandRegional Transit Authority said the rejection byits union employees of a fact finder’s recom-mendations could lead to more service cuts.Without a reduction in union labor costs, ascalled for by the independent fact finder fromthe State Employee Relations Board, the transitagency is forecasting a $10 million deficit in 2011,said Joe Calabrese, CEO and general manager ofRTA. RTA currently is reducing service by 12% andlaying off 130 of its 2,300 employees. RTA’snonunion employees already have taken wage cutsand furlough days. RTA sought similar concessionsfrom its 1,870 employees who are members ofAmalgamated Transit Union Local 268.
Market crash: Downtown Cleveland willlose the grocery at Reserve Square Apartmentswhen building owner K&D Group of Willoughbycloses the market in about 60 days. Doug Price,CEO of K&D, said the Reserve Square Markethad been unprofitable for several years.
This and that: Eaton Corp. plans to expand itsoperations in China by investing in a new enginevalve plant in Jining City, Shandong Province. …JumpStart Ventures, a nonprofit that invests inearly stage companies in Northeast Ohio, said it’sinvesting $250,000 in Thermalin Diabetes Inc., ayoung biopharmaceutical company that is devel-oping insulin treatments for patients with diabetes.… Dr. Alan M. Hirsh was named chief medical officer of the University Hospitals Ahuja MedicalCenter, which is scheduled to open in early 2011 atChagrin Highlands in Beachwood.
To keep up with local business news as it happens, visit www.CrainsCleveland.com.
APRIL 5-11, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 23
Excerpts from blog entries on CrainsCleveland.com.
BEST OF THE BLOGS
Rep. Kucinich offers praisefor the philosopher in chief■ Dennis Kucinich has spent a lot of qualitytime lately with President Barack Obama.And as a leader, the president most remindsthe Cleveland congressman of … philoso-pher Martin Buber.
New York magazine ran a quirky look atthe president’s leadership style in the wakeof the hard-fought victory in passing healthcare reform.
Rep. Kucinich, whose late change of heartwas critical to securing liberal support for thelegislation, told the magazine, “Obama had anapproach unlike anything I’ve ever seen anyother president use. Honestly, if I were to try tocharacterize it, I’d say it was a dialogue alongthe lines of Martin Buber’s ‘I and Thou.’”
And that means what, exactly, for those ofus not familiar with Mr. Buber? “He goesvery deep into looking at an issue from theside of the person to whom he’s speaking,”Rep. Kucinich says.
The observation “mayseem like the sort of kookymysticism that Kucinichmade famous on the cam-paign trail,” New York says.“But his point is that peoplecan either talk at you or toyou. Most politicians aremonologists. Obama isn’t.”
Not exactly the LBJ modelof presidential leadership,but in the end, it worked.
Investment bank laudsprogress at Progressive■ FBR Capital Markets has an upbeat viewabout the prospects of Mayfield Village-based insurer Progressive Corp.
In a March 29 piece in Barron’s, FBR said it’s upgrading shares of Progressive to“outperform” from “market perform” and israising its price target on the stock to $23from $18.
“We are excited about the dynamic of theauto-insurance business and we are particu-larly thrilled about the company’s growth andprofit margin opportunities,” FBR said. “Asmany competitors are pushing for rate increases, Progressive is gaining market sharewhile maintaining underwriting margins.”
The agency channel “is posting growthfor the first time in years,” according to FBR,and the direct sales channel “is acceleratingrapidly with double-digit premium growthyear-to-date.” The firm says customer retention is increasing at a 3% clip, and it expects demand to improve as the economyrecovers and new cars sales revive.
He knows how to Busta movethat gets artists’ attention■ The New York Times gave some nice attention to Cleveland furniture makerKevin Busta in a March 24 story.
Mr. Busta has released a striking, limited-edition series of photos printed onold industrial blueprints.The work pictured in theTimes story, “Birds on AWire,” is a 30-by-84-inchphotograph printed on anoriginal blueprint for a loco-motive engine. It sells for$5,200.
“When I was growing up,there was a big factory in
Medina that did a lot of casting that went out ofbusiness,” Mr. Busta, 31, told The Times. “Theydid pieces for power plants, turbine engines.They filled the Dumpster with everything.There was a big windstorm, and I gathered upa bunch of the blueprints to use it for art.”
