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Cabbies driven to stall Uber, Lyft Ride services steered by smart phone apps say it’s sour grapes By TIMOTHY MAGAW tmagaw@crain.com
Two popular ride-hailing smart phone apps — Uber and Lyft — launched in the Cleveland market
last week, but a handful of local cab operators hope the city puts the brakes on the controversial services. Local cabbies say they’ve warned city officials for more than a year about Uber and Lyft’s likely en-
trance into the market and the issues that, at least in their opinion, could rear their head. Because of the way the tech companies are structured, they appear to fall largely outside the city’s regulatory
authority over taxi-cab services. Instead, Cleveland — at least at the moment — considers them limousine services, which are regulated by the state. That creates an unfair advantage, according to Patrick Keenan, general manager of Americab Transportation Inc. in Cleveland. Last
EDITORIAL: Critics of Uber and Lyft need to pump the brakes. Page 10 year, Keenan said his company spent almost $14,000 in licensing fees on his roughly 90 cabs in the city. See CABBIES Page 19
HE ISN’T DIFFICULT TO FIND Only now, Hanlin’s popular golf shows will be available across the country By KEVIN KLEPS kkleps@crain.com
F
or golf fans in Northeast Ohio, Jimmy Hanlin is as ubiquitous as Cleveland Browns draft chatter, Chief Wahoo debates or pleas for LeBron James to return home. Soon, Hanlin really will be everywhere — or at least in 31 states and more than 50 million homes. Fox Sports Ohio, which purchased SportsTime Ohio from the Cleveland Indians in December 2012, is rebranding Hanlin’s popular “Tee It Up” show as “18 Holes With Jimmy Hanlin.” That program, along with “Swing Clinic,” the 30-minute show on which Hanlin gives golf tips, will be televised this spring and summer on 10 Fox Sports regional networks.
15
See HANLIN Page 20
JANET CENTURY
Jimmy Hanlin hosts three shows on SportsTime Ohio, along with a weekly golf program on WKNR-AM, 850.
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74470 83781
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SPECIAL SECTION
SMALL BUSINESS Bainbridge Township company grows by changing focus to food manufacturing ■ Pages 15-18 PLUS: MENTOR’S INTERNATIONAL REACH ■ TAX TIPS ■ & MORE
Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 15
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MEETINGS AND CONVENTIONS
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Crain’s Cleveland Business has formed a minority advisory board to provide objective, constructive input on minority-based issues — a historic weakness in Crain’s coverage and a recent flashpoint due to the lack of minority representation in a high-profile January feature in the newspaper. The impetus for the council came after Darrell L. McNair, president and CEO of MVP Plastics Inc. of Newton Falls, a certified-minority
custom injection molder serving the automotive, medical and industrial markets, contacted Crain’s publisher/editorial director John Campanelli in the wake of a Jan. 13 column by Campanelli headlined, “Prediction: We’ll do better at diversity.� The column noted that in a feature the previous week asking 32 notable community leaders to make predictions about the economy, health care, education and more for 2014, none were AfricanAmerican or Asian-American, and only one was Hispanic. McNair said he immediately
reached out to Campanelli “expressing my concern and offering to assist the publication with closing this gap.� One part of Crain’s effort McNair to close that gap is with the launch of the 11-member advisory board, comprising men and women representing the African-American, Indian, Hispanic and Asian communities. See BOARD Page 9
Vorys law firm will move downtown headquarters to 200 Public Square By STAN BULLARD sbullard@crain.com
After almost 30 years at One Cleveland Center in downtown Cleveland, the Vorys, Sater, Seymour and Pease LLP law firm plans to move to two floors of 200 Public Square by Nov. 1. Anthony O’Malley, managing partner of the Vorys Cleveland office, said the firm landed at the 45-story building — the one many Clevelanders still think of as BP Tower — because it wants to reconfigure its office layout to accommodate modern law firm operations and its busy mediation and arbitration practice. “It’s not a lawyer sitting in his or her office anymore,� O’Malley said. “We want to add collaborative work space, reconfigure to suit our practices as they are today and accommodate the special needs of the mediation and arbitration practice for flexible meeting rooms.� The firm also gained room to grow in the future, which is important because no additional downtown office buildings are under construction. Although Vorys obtained future expansion rights for the balance of the 15th floor from building owner Harbor Group of Norfolk, Va., it initially will occupy the 14th floor and half of the 15th floor. The firm has leased 42,000 square feet, about as much space as it occupies at One Cleveland Center, 1375 East Ninth St. Adding the Cleveland office of the nationally recognized law firm, which has seven offices in the United States, including in Cincinnati, where it was founded in 1909, was important to the building’s owner. Jim Vallos, a Harbor Group managing director, said Vorys is the “ideal type of tenant for the building. They were looking for first-class office space. They have a national presence and want to attract the best employees. We have excellent views for them at a building where we are continuing to improve the package.� Brian Hurtuk, founding principal of the Cleveland Colliers International office, said the building won the lease because its floor plate matched the law firm’s needs. The lease means 200 Public Square now is home to about a half-dozen major law firms. Harbor Group shifted a tenant subleasing part of the 14th floor to another floor to open up space for Vorys. The shift allows the law firm to use an existing stairwell between the floors that had been covered up through the years as other tenants downsized and moved within the building, Hurtuk said. Including Vorys, the building with 1.2 million square feet of office and retail space is 86% leased, Hurtuk said. O’Malley said Allegro Realty Advisors LLC of Cleveland, which represented the firm as a tenant rep, showed it properties throughout downtown before it settled on 200 Public Square. The firm expects to move its 40 attorneys and 20 non-attorney staffers to its new
STAN BULLARD
The Vorys, Sater, Seymour and Pease LLP law firm soon will occupy two floors at 200 Public Square. office by November. The Vocon architecture firm is designing the new office to take advantage of the windows and give the firm a look with a blend of traditional and contemporary features so, O’Malley said, “it won’t be stuffy or stodgy.â€? The Vorys space will emphasize flexibility, in part because of the variable nature of its busy mediation and arbitration practice led by James McMonagle, a former Cuyahoga County Court of Common Pleas judge. The design will include panels that will allow the firm to create a larger conference room and several smaller ones which allow clients and opposing counsel to meet privately if they need to do so. At the same time, McMonagle may have multiple cases in arbitration at one time and shuttle between them. “Some days we’ll have one conference room and others three,â€? O’Malley said. “One day we may have six and another day nine. We did not move exclusively for that, but will take advantage of the move to add this flexibility.â€? Harbor Group is continuing to refine designs for updates to the building’s eight-floor atrium that it announced last year, Vallos said. Efforts to add some new tenants to empty space on the first floor have slowed construction of the atrium updates, he said, but he declined to identify the prospects. â–
Volume 35, Number 15 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2014 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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INSIGHT
OSHA proposal causing a bit of a dustup Administration says silica regulations are outdated, but some businesses disagree By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
The U.S. Occupational Safety and Health Administration is looking to update its 43-year-old regulations on how much of a particular type of dangerous dust employees can be exposed to in a traditional workday. But opponents, including some in Ohio, are raising concerns about the cost any changes would add for companies to carry out the proposal and whether there’s even a need for stricter standards at all. OSHA says respirable crystalline silica — created when products like metal-casting molds are grinded or roadways are cut — can lead to lung diseases such as silicosis, lung cancer and chronic obstructive pulmonary disease. In a fact sheet about the proposal, OSHA says the current regulations are outdated, difficult to understand and inconsistent across industries. The proposal, which first was introduced in August 2013, would lower the allowable levels of crystalline silica across the board, standardize the calculation and require medical monitoring for employees exposed to high levels. The amount employees are subjected to can be mitigated by measures such as increasing ventilation or using water while cutting materials. OSHA estimates the new regulations would prevent 688 deaths and 1,585 silica-related illnesses every year. But not everyone agrees with OSHA’s assertion — or that the current levels are even problematic.
Clearing the air Russ Murray, executive director of the Columbus-based Ohio Cast Metals Association, said his industry has spent “tens of millions of dollars cleaning up foundries” since the 1960s. REBECCA R. MARKOVITZ
See DUSTUP Page 22
Developing an ideal exit plan Volpe transitions ownership of Cleveland Architecture to three longtime colleagues By STAN BULLARD sbullard@crain.com
CONTRIBUTED PHOTO
City Architecture renovated the Park Lane Villa apartments in Cleveland. To view a photo gallery of some of the firm’s best work, go to www.crainscleveland.com/cityarchitecture.
CORRECTION ■ An April 7 CIO of the Year finalist profile of Rob Sable misstated the amount of money Sable saved Alliance Solutions Group in a year. He saved the company more than $100,000 in the year.
Paul Volpe is 62, in good health and looking forward to continuing to work for years as a planner and architect. However, he has just completed a transition in the ownership of his City Architecture firm that most members of his profession leave to fate. He has transferred shares of the 20person Midtown Cleveland architecture firm to three long-term associates who now run the show. “They’re the age I was when I started this firm 25 years ago,” Volpe said. “It’s their time to be doing this. When the time comes for me to leave — and it’s not anytime soon — this firm will
continue.” The new owners are longtime associates that Volpe wants to see continue City Architecture and its work. “I didn’t look for Volpe a buyer of the business,” he said. “I want these people to own this business, and I want to remain a part of it.” The oldest of the new principals is August Fluker, 50, who joined City Architecture 19 years ago after working for other firms in town. John Wagner, 40, joined the firm a dozen years ago fresh from a master’s program in ar-
chitecture at the University of Michigan. The youngest is Alex Pesta, 36, who joined City Architecture after working there as a co-op student while getting his architecture degree at the University of Cincinnati. “I (interned) at four firms. After the summer here, I knew this was the one I wanted to join,” Pesta said. “That was due to the energy at this firm and its blend of residential and commercial work.” Although all four men said they all pitch in when something requires all hands on deck, they have different skills. “It’s one big studio,” Pesta said. Fluker handles construction documents, assigning staff and meeting deadlines. Wagner is the most focused on building issues as an architectural designer. Pesta works on planning and residential design. See PLAN Page 21
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McIntyre is new editor of Crain’s By JAY MILLER jmiller@crain.com
Elizabeth McIntyre is the new editor of Crain’s Cleveland Business. She replaces Mark Dodosh, who joined Crain’s as managing editor in June 1985 and was named editor in October 1988. “Anyone who has worked alongside Elizabeth knows she is a fountain of ideas, a brilliant editor and a leader who inspires a staff like McIntyre no one I know,” said John Campanelli, Crain’s publisher and editorial director. McIntyre, who starts today, April 14, had been vice president of communications and public relations at the National Association of College Stores in Oberlin. She said she is looking forward to returning to a newsroom. “I finally realized that I still have ink running through my veins,” she said in a telephone interview. “When this opportunity presented itself, it was such a fabulous opportunity to work with a staff at Crain’s,
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who are extraordinary journalists, and to partner with John Campanelli, who I greatly admire as a journalist and a person.” Campanelli and McIntyre worked together at The Plain Dealer for more than a decade. Campanelli said he and McIntyre will be reshaping Crain’s into a 24hour-a-day operation and “a brand that will provide information and news over all media.” For McIntyre, it’s a return to a profession that represents “the way I directed myself from second grade on.” “It was a once-in-a-lifetime opportunity to get back into journalism,” she said. “The very thought of being back in a news operation and newsroom again is where I belong; it’s where my heart is.” Campanelli praised Dodosh and the key role he played in making Crain’s what he said was the leader in business and economic news in Northeast Ohio. “Soon after Crain’s started and until today, the reason Crain’s has been a success is due in large part to Mark’s leadership, journalism talent and skills,” Campanelli said. “We owe him a lot.” McIntyre, a graduate of Bowling
Green State University, spent 20 years at The Plain Dealer, starting as a copy editor in 1990. Over the next two decades, she took on added responsibilities in the newsroom. She served as graphics and design editor and assistant managing editor before being named deputy managing editor in 2007. In that role, she directed the news operations of the Metro, Business, Sports and Features departments. She left The Plain Dealer in November 2010 and joined the Cleveland Foundation as public relations officer, overseeing the foundation’s website, advertising and donor communications programs before joining the college stores association in 2013. McIntyre started her career in journalism as a copy editor at The Morning Journal in Lorain. A Youngstown native, McIntyre is married to Plain Dealer columnist Mike McIntyre, who also hosts “The Sound of Ideas” on 90.3 WCPN. The McIntyres met at The Morning Journal and married in 1991 after both had moved to The Plain Dealer. They live in Rocky River with their son, Aidan, age 16, and daughter, Maura, age 13. ■
Selman expands via acquisitions
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it union and bank clients and growing its insurance premium under administration by nearly one-third. Effective April 1, Selman & Co. closed acquisitions of the business and assets of Association & Society Insurance Corp., or ASI, out of Rockville, Md., and of the life and accident insurance administration business of MAI Services Corp. in Cuyahoga Falls. Terms of the deals were not disclosed. Selman & Co. issues policies, bills and collects premiums, and performs customer service between insurance companies such as Aetna or Hartford and members of associations, customers of financial institutions and employees through employers. The ASI deal nearly doubled Selman & Co.’s staff to 150 from 85. Both acquisitions increased its insurance premium under administration by nearly 30% to $155 million from $120 million. Through its deal for ASI, also a third-party administrator of insurance plans, Selman & Co. adds a Washington, D.C.-area office and also can leverage the reputation and “well-established presence” ASI has in serving retired veterans and the eligible dependents of veterans who are disabled or who died in the line of duty, said David Selman, president and CEO. “They’re the largest player in the niche,” he said. “(We) hope to learn from them and make our business stronger. We’ve never operated two offices before, so this is exciting.” All of ASI’s 65 employees have been hired, according to Selman, whose father bought a business and renamed it Selman & Co. in 1980. Selman said he casually approached the leaders of ASI about a potential deal roughly a year ago. “I felt that they occupied a space similar to Selman in that they were large enough to operate very professionally and small enough to have the flexibility, the ability, to be nimble and compete with much larger
competitors,” he said. “The cost of technology and compliance are increasing in the insurance business,” he added. “So it’s more and Selman more difficult for smaller businesses to make those investments. We think that Selman has been particularly well positioned by being large enough to act like a big company and small enough that we’re not very bureaucratic.” As for ASI, which basically sells one product designed for retired military, joining Selman & Co. affords it more diversification, said Edward Singer, executive vice president for ASI. “There is a tremendous opportunity in being a niche, (but) there’s also a lot of downside to it,” he said. “If anything happens, you don’t have anything besides what you’re doing, so I think joining a company that is much more diversified is a very good thing.” Via its other deal for a piece of the business of MAI Services, Selman & Co. becomes the administrator for roughly 60 credit union and 100 bank clients with which it does not already work, improving its position in that market it serves, Selman said. He estimated Selman & Co. works with 800 credit unions nationwide and said it also works with large banks, including KeyBank. MAI continues to do business as a broker of property and casualty and life and health insurance programs for credit unions and community banks and their members and customers. Selman & Co. now will perform the back-room insurance administration MAI’s people have done historically, Selman said. The ASI and MAI transactions bring to 10 the number of acquisitions Selman & Co. has closed in its 34-year history, Selman said. They were its first since 2011. ■
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Team NEO: Biomed sector’s hot, but job growth lags By JAY MILLER jmiller@crain.com
The biomedical industry has been the fastest-growing sector of the Northeast Ohio economy in the 21st century, with the value of goods and services produced by businesses in the sector growing by 59%, and experts and observers believe it has more room to grow. The only thing holding back enthusiasm, however, is that so far the growth has come without any growth in biomedical jobs, according to the most recent report on the regional economy released Sunday, April 13,
by Team Northeast Ohio, the regional business attraction nonprofit. If the region can grow employment in the biomedical sector, most likely by improving production processes for medical devices in ways that reduce the cost of manufacturing, at least one researcher believes that could create a new wave of high-paying manufacturing jobs for Northeast Ohio by keeping production work local. “The United States hasn’t reaped the benefits it should because so much of the production (of medical devices) has moved offshore,� said Ross DeVol, chief research officer at
the Milken Institute in Santa Monica, Calif., where he focuses on job creation, health and access to capital access. “A real competitive advantage of Northeast Ohio is, given the expertise in refining production processes and improving efficiencies, if you can find a way to bring costs down (on making medical devices),you’re talking about creating high-quality, middle-class jobs,� DeVol said. “Northeast Ohio has a real opportunity there.� Team NEO’s quarterly economic review reports on basics such as job creation and unemployment, but
this particular review highlights the biomedical industry and says that 700 biomedical companies in Northeast Ohio now employ 33,000 people — about the same number that were employed in the industry in 2000, when the region had only 300 biomedical companies. Jacob Duritsky, Team NEO’s managing director of research, said that lack of job growth is a result of the increasing productivity in all areas of manufacturing, including the medical device sub-sector, which is a key part of the region’s biomedical industry. That can change, though.
Bo Carlsson, an economic professor at Case Western Reserve University, agrees with Team NEO’s assessment of industry growth without jobs in recent years. But he, too, believes that job growth will come. He sees young medical device companies, which may not yet have regulatory approval for the sale of their new devices, getting that approval and hiring as they start production. “We may see a different picture going forward because there are so many new applications coming forward,� he said. See JOBS Page 19
Gas Natural makes adjustments In filing, company says there were differences with PUCO ‘in interpretation and understanding’ By MICHELLE PARK LAZETTE mpark@crain.com
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In the months since the Public Utilities Commission of Ohio ordered an investigative audit of two subsidiaries of Gas Natural Inc. and all affiliates, the Mentor-based company has made changes to its procedures and internal controls, retained a firm to consult it on regulatory matters, made four hires to improve its reporting and underwent PUCO training. So said the company in its annual report with the Securities and Exchange Commission, and Gregory Osborne, who became Gas Natural’s president and chief operating officer in November, in an interview with
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Crain’s last week. The most significant change Gas Natural made, according to Osborne, was the halting of gas purchases by its utilities through its affiliated marketing company. “Inflated� fees paid to an affiliate company for natural gas purchases were one concern raised in the Nov. 13 opinion and order of the PUCO involving two Gas Natural affiliates: Northeast Ohio Natural Gas Corp. and Orwell Natural Gas Co., both local distribution companies that serve portions of Ohio. The PUCO regulates investorowned utilities in the state. Its order several months ago followed what it termed an “unprecedented� recommendation by commission staff to conduct an investigation of Northeast, Orwell and all affiliates, and cited concerns about the companies’ internal controls, the propriety of their executive compensation system and alleged self-dealing by management, which includes members of the well-known Osborne family of Mentor. Instead of purchasing through its affiliate, Osborne said “our utilities are now purchasing gas directly� from producers and gas marketing companies. That bypasses “possible related party mark-ups and fees on this gas,� according to the company’s filing in late March. Gas Natural also has adopted procedures that ensure that local production gas purchased by its utilities must come from “unrelated, third-party pipelines at competitive prices and without commission.� Other steps prompted by the regulator’s order include Gas Natural’s hiring of a new corporate controller, a new controller at the company’s Ohio utilities and two new general
accountants — enhancements to its talent “to provide timely, accurate, and transparent reporting to the PUCO,� Osborne wrote in an email. And, in another move to ensure a transparent relationship between its utilities and the PUCO, Gas Natural retained Cox Consulting Group LLC to provide it training on standard regulatory filings and advice for regulatory matters. “Some of the requirements in the PUCO order represented differences in interpretation and understanding between our utilities and PUCO,� Osborne wrote. “We have since made changes to our procedures and internal controls to be in compliance with the PUCO order. “Gas Natural Inc. recognizes that growth does not consist solely of adding customers and putting pipe in the ground,� he added. “We need to be cognizant of our growing responsibilities to our regulatory agencies, financial partners, investors, and, most importantly, our customers. To achieve that balance, we are enhancing our internal accounting systems, strengthening our control environment, and increasing transparency with new leadership and a new culture that is transforming our delivery and reporting systems.�
Competence examined In related news, on April 2, the Public Utilities Commission of Ohio issued a request for proposal to find an auditor to conduct the investigation of Northeast, Orwell and related companies. The third-party auditor is to examine the corporate separation between the companies and affiliates, their systems for compensating their employees, the reporting of transactions between them, their management structure and their internal controls.
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Board: McNair hopes to help publication become more ‘inclusive’ continued from PAGE 4
The advisory board’s goal, McNair said, “will be to enlighten Crain’s on the contribution that minority and women-owned businesses deliver to Northeast Ohio.” He said the board “will look to engage with Crain’s on exposing the opportunities and challenges that confront these businesses, thus positioning Crain’s as a catalyst for fostering an environment that is receptive to inclusive activities in Northeast Ohio.” McNair is the immediate past chair of The Presidents’ Council, the largest African-American economic development organization in Cleveland. Under his leadership, the organization helped secure equitable inclusion for minority businesses for projects including the Horseshoe Casino Cleveland, the Cleveland Convention Center and various expansions at University Hospitals. In addition to McNair, the board’s members are as follows: ■ Montrie Rucker Adams, president and “chief visibility officer” of Visibility Marketing Inc., a public relations firm. ■ Luis Cartagena, business adviser/strategic planning for the MBDA Business Center-Cleveland, which assists minority-owned businesses in gaining access to development opportunities, capital and financial management. ■ Samir D. Gautam, a JPMorgan banker who is a trustee and chair of the Development Committee at The
Rucker Adams
Cartagena
Presidents’ Council Foundation. ■ Michael J. Houser, an education specialist with the Boys and Girls Club of Greater Cleveland and a former campaign staffer for U.S. Sen. Sherrod Brown. ■ Pradip Kamat, who founded Indus International Inc. in 1992 to help clients with business development in India. He formerly held executive positions with Swagelok Co., Keithley Instruments Inc. and Allen-Bradley. ■ Adrian Maldonado, owner of Adrian Maldonado & Associates, an MBE firm specializing in various fields of construction and construction management. ■ Kimberly Martinez-Giering, a veteran of the transportation industry who is president and owner of KLN Logistics Corp. (dba AIT Worldwide) in Middleburg Heights. She formed the company in 2005. ■ Michael Obi, chairman and CEO of Spectrum Global Solutions, which helps companies improve performance and grow their revenue through operational excellence. ■ James Vaughan Jr., president and CEO of JDD Inc., a full-service jani-
Kamat
Houser
Gautam
torial company serving medical buildings, manufacturing facilities, schools, retailers, financial institutions, restaurants, churches, government agencies and more. ■ Margaret Wong, founder of Margaret W. Wong & Associates Co. LPA, a firm nationally and internationally known for its expertise in immigration and nationality law.
The cringe factor Campanelli said a look through the pages of Crain’s reveals that “the proportion of faces you see doesn’t match the region or the business community” in its racial makeup. For instance, the lack of racial diversity in the Jan. 6 predictions section “was noted immediately, and (many readers) cringed.” The advisory board is a step toward addressing that issue by help-
Maldonado
ing Crain’s identify trends, people and businesses in Northeast Ohio’s minority community that deserve coverage, McNair said. Campanelli said the board will help Crain’s reporters and editors do a better job of networking in the minority community. McNair, a subscriber to Crain’s and two other Crain Communications Inc. publications, said flatly that Crain’s Cleveland Business “is not a regularly read publication in the minority community due to the lack of articles that appeal to that audience.” The publication, he said, “has taken a more traditional, corporate view” of economic life in Northeast Ohio, and the board aims to advance the idea that “there’s more to it than that.” About 2,500 additional copies of this April 14 issue of Crain’s will be distributed, at no charge, to minor-
The sale of Independence Square Shopping Center, a neighborhood shopping center in the middle of Independence, marks the end of another chapter in Northeast Ohio real estate. When Solon-based Carnegie Cos. paid $4.9 million on April 1 for the 64,000-square-foot center, the seller was Pepper Pike-based Marotta Corp, according to Cuyahoga County land records. Before Vincent Marotta and his business partner, the late Sam Glazer, became known as the developers of the Mr. Coffee automatic drip coffee maker, they built homes and shopping centers, among them Independence Square in 1961. Charles Marotta, the son of Vincent Marotta and a principal of the firm now known as Marotta Corp., said, “It’s really the last commercial building the family owned. This has been a great building for us, but it was time to turn the page. Other than that, we still have land for sale on Miles Road in Bedford Heights.” Charles Marotta said his father used the same crews to build Independence Square that he used to build other centers sold earlier through the years, such as Village Square Shopping Center in Beachwood, Richmond Square Mall in Richmond Heights and Great Lakes Mall in Mentor. The 36 acres that Marotta has for sale in Bedford Heights was the land
ON THE WEB Story from: www.crainscleveland.com
beneath Mr. Coffee’s onetime factory. The elder Marotta is 90 and in good health, Charles Marotta said. The property also has expansion potential because of its location, said Terry Coyne, executive managing director of Newmark Grubb Knight Frank, who handled the sale with Newmark Grubb colleague David Hollister, a managing director. Coyne and Charles Marotta both said they had multiple bidders for the property. Coyne noted there is potential upside because the 80% occupied shopping center at 6511 Brecksville Road is next to a 16-acre parcel with a closed middle school on it that the city of Independence owns and hopes to see developed. Independence Mayor Gregory Kurtz said in an email that Carnegie has told the city that it is still developing its plans for the just-acquired property. The city has discussed the middle school property with Carnegie, Kurtz said. For its part, Carnegie is evaluating its next steps at the property. Paul Pesses, Carnegie president, said in an email, “We are reviewing a number of options related to this acquisition, but haven’t solidified anything in particular at this time.” ■
Obi
Vaughan Jr.
Wong
ity-owned businesses and churches in minority communities throughout Northeast Ohio. Campanelli said a more comprehensive approach to covering the region will improve the “quality, scope and depth” of Crain’s weekly print issue and its website. “Any business person of any background should be able to look to Crain’s as their publication for business,” he said, adding that Crain’s should be “a trusted source of information, and a mirror, too.” ■
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PUBLISHER/EDITORIAL DIRECTOR:
John Campanelli (jcampanelli@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Need a lift?
U
ber and Lyft, ride-sharing services we’ve heard about from the cool kids for months, finally pulled into Cleveland last week. If their arrival here is like their entrances in other cities, they will have some folks trailing right behind, tailgating at an unsafe distance: city governments and an establishment unwilling to embrace a new sharing economy. Hours after Uber and Lyft announced their arrivals here, news broke that the city of Columbus had sued Uber, which launched in the state capital in February. The lawsuit claims the service is essentially an unlicensed jitney operation that’s putting public safety as risk because the city hasn’t inspected Uber cars or licensed Uber drivers. (Uber and Lyft do not own cars. Drivers use their own vehicles and work the hours they want, with the companies’ mobile apps merely matching people who need rides with drivers’ empty seats.) The ride-sharing ventures are facing legal challenges in a number of cities as established taxi companies see their territory invaded by (often) cheaper, cleaner and cooler alternatives, and as lawmakers see their taxes and license fees threatened. Like the parent of a 16-year-old, it’s as if the establishment is pressing on an imaginary brake while riding shotgun, trying to stop a newbie from driving — and growing up — too fast. Problem is, the companies cannot be stopped. We are experiencing a sharing economy revolution. Airbnb, a service that lets people rent their empty rooms, booked 6 million guests in 2013. TaskRabbit lets folks outsource household chores. StoreAtMyHouse allows people to rent their basement or unused parking spot. DogVacay lets anyone become a dog sitter. There are scores of examples, with more debuting all the time. This wave is empowering individuals, creating jobs, boosting competition and lowering prices — the fruits of open markets. In many ways, this new economy is like sprouting grass. We see real potential for a sprawling lawn — lush and thick. So instead of stomping on or cutting the seedlings in a quest to tax and control, cities need to fight the urge to intervene. They must allow companies like Uber and Lyft to grow. In fact, we’d like to see local lawmakers embrace the likes of Uber and Lyft and work with them. One of the many beautiful things about these new startups is that, unlike the jitney operations of old, they rely on online reviews and feedback to get customers. Drivers already are screened and insured, and their vehicles inspected. These days, the companies cannot afford to do otherwise. We’re not saying these ventures should remain stealthy forever. Once they are established, they must contribute to infrastructure and public services with taxes or, perhaps, a new licensing system that doesn’t cripple competition. Finding a taxi in Cleveland, often a tricky endeavor, got easier last week. As the sharing economy grows and creates jobs, let’s have the vision and patience to not get left at the curb.
FROM THE PUBLISHER
Startups can be strong right here $1.1 billion. ly-over country, my JOHN Startups hatched and patootie. CAMPANELLI based in our bucolic region ofThe fools on the ten have to pack the wagon coasts, with their and go west or east to get the $5,000-a-month mortgages, cash they need to grow and three-hour traffic jams and thrive. It’s a terrible cycle that 11% state income taxes, are pushes tomorrow’s employers beginning to wise up. — and a staggering amount of Last week I had the honor of potential jobs — away from moderating a panel of venture the places that need them the capitalists at JumpStart’s Anmost. nual Northeast Ohio EntrepreBut that was the story. Things are neur Expo. On stage were Jay Katarincic, changing. The great minds and deep managing director of Draper Triangle pockets on the panel are based in Ohio Ventures; John McIlwraith, managing diand Pennsylvania, and their funds are rector of Allos Ventures; Ray Leach, CEO dedicated to Midwestern startups. They of JumpStart; and Mark Kvamme, corealize that there are sensational opporfounder of Drive Capital. Together, they tunities and ideas here. (The expo atrepresent more than $1 billion in capital. tracted more than 110 hungry local en(I had $11 in my wallet … and a validattrepreneurs and more than 900 people in ed parking pass.) total.) The cost of real estate, talent, busiThe topic was “Attracting Capital Beness services — all cheaper in the Midtween the Coasts.” west. With the cloud ending the need for The sad reality is despite our great vast tech infrastructure, startups can ideas, hardy work ethic and Midwestern now be based anywhere. Why not here? “mensch-iness,” venture capital continBut while we wait for the investors’ ues to be funneled toward the coasts. Silcash to make the smart move and arrive, icon Valley companies got more than we need to change our thinking, too. $11 billion in VC funding in 2013. ComFirst, the panel suggested — and we hear panies located in the entire Midwest?
F
this all the time — stop being our own worst enemies. No more excuses and diminishing our area. Also crucial: We in the Midwest need to revisit our mindset of “failure.” We view it as shame, ignominy, an “F” on the report card. In Cali, it’s different. Kvamme, who moved to Columbus from Silicon Valley, spoke eloquently about how entrepreneurs out west wear their failed ventures and dead businesses as badges of honor. “You tried something,” he said. “You went for it. … The first company I started was an unmitigated disaster, but if you don’t take any risks, you don’t get any reward. “People in Silicon Valley in particular really focus more on growth, but with more growth comes more risk,” he added. “You learn a lot more on the way down than the way up. All the success I had after my company crashed was because of the things I learned with my first failure.” Kvamme’s second company went public. So unless your business is skydiving, failure is indeed an option. It also might be a rite of passage. ■
TALK ON THE WEB Re: Cleveland cleanup needed for GOP in 2016 ■ Before we get a big convention, are we ready? The city is a dump, and it needs a good cleaning! Take a ride from the airport on the train to Tower City and then look at the trash and dumpy buildings! Why doesn’t RTA use the Muni Lot as a hub? Park there for $5 and take different buses to different venues, like a party bus to the Flats, or a wrapped bus for PlayhouseSquare. Plant lots of flowers along the bus routes. Check if the hotels are clean and the staff knowledgeable about Cleveland. We have great minds in Cleveland, and they are sitting idle! Everybody has to work together and not let greed in the way! — David Jesse
Reader responses to stories and blogs that appeared on: www.crainscleveland.com
Re: Underwhelming gambling returns ■ Gaming is a trash industry and everybody but casino advocates knew it. Business groups like the Greater Cleveland Partnership that supported the statewide enabling ballot issue should have known better. Independent studies by universities showed that gaming has little long-term positive economic impact. — 174745 ■ States should realize that the house always wins. If they wanted bigger revenues they should have written clauses See WEB Page 11
POLL POSITIONS What do you think Cleveland's chances are for hosting the 2016 Republican National Convention? Strong
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MetroHealth CEO Akram Boutros says the hospital system needs to “work diligently to reduce and even eliminate the operational support from taxpayers.�
Web: Horseshoe needs more winners continued from PAGE 10
into the contracts that the casinos make bigger payouts and give better odds to gamblers. Then it would be a win-win for everyone — the casinos, the state and the gamblers. — EscapedLorain ■The Horseshoe and Caesar’s cannot expect the public to continue to come back with no hope of winning, let alone breaking even. $10 free slot play and free buffets (with two-hour wait times) just doesn’t cut it. Sorry. — 171783
Re: MetroHealth’s county support ■The taxpayers’ support of MetroHealth is not in question. We appreciate and value every dollar we receive. As a matter of fact, I firmly believe that as good stewards we need to work diligently to reduce and even eliminate the operational support from taxpayers. However,
the moniker “taxpayer subsidized� does not tell the whole story. Crain’s health care reporter Timothy Magaw is correct to report that MetroHealth’s finances are on stable ground. However, did you know that if MetroHealth had the same percentage of patients with commercial insurance as the other major academic medical centers in the region do, the annual operating income would reach $100 million? Or that if MetroHealth weren’t here, the cost of healthcare in the region would increase? These are just some of the reasons that many feel that the term “taxpayer subsidized� does not do justice to what MetroHealth does for or what it means to the region. — Akram Boutros (Boutros is president and CEO at The MetroHealth System.) ■Over the last couple of decades, counties all over the United States have sold off county owned medical
facilities. Operating these institutions became totally outside the ability of counties to support them. I support the role of MetroHealth since it is the Level One Trauma Center for Northeast Ohio and is the health institute of “last resort� for the uninsured. However, the new health care law might impact that greatly. The real question is where the money will come from for a $400 million to $500 million facilities project. We need to get a task force to look at MetroHealth’s role in the future of health care and how is it paid for. — Neil Dick
Re: Tressel’s chances for Akron presidency ■What does “show cause� even mean? It’s kind of nonsensical, when you think about it. University of Akron: we have cause to hire him NCAA: OK, go ahead. — rayy
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GOING PLACES JOB CHANGES ARCHITECTURE CITY ARCHITECTURE: August Fluker, Alex Pesta and John Wagner to owners. Paul Volpe to senior principal.
CONSTRUCTION KOKOSING GROUP: Lee Schloss to president, Kokosing Materials Inc. METIS CONSTRUCTION SERVICES LLC: Julie Brandle to president; Katie Wright to vice president, human resources.
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AGNON SCHOOL: Kimberly Favor to middle school director.
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investment adviser representative. SPERO-SMITH INVESTMENT ADVISERS INC.: Jeffrey N. Malbasa to president, COO; Robert C. Smith to chairman, CEO.
MS CONSULTANTS INC.: David Mickey to architect.
WELLS FARGO ADVISORS: John Blaha to wealth insurance specialist, Northeast Ohio.
FINANCE
HEALTH CARE
LORAIN NATIONAL BANK: David Nose and Angie Kazi to vice president, commercial banking group.
HOME CARE ASSISTANCE OF CLEVELAND: Stephanie Hatala to client care manager.
FINANCIAL SERVICE
HOSPITALITY
APPLE GROWTH PARTNERS: Harold Gaar to CEO.
RITZ-CARLTON CLEVELAND: Elizabeth Lipstreu to business travel sales manager.
BOBER MARKEY FEDOROVICH: John E. Jenkins to senior manager, tax services; Jonathan C. Stocker to manager, business development. CORNERSTONE ASSET MANAGEMENT SERVICES INC.: Stephanie Anastasakis to partner and director of marketing; Joe Mallo to vice president, business development and national sales manager; Mitchell DeVan to
ADCOM GROUP: Morgan Mitchell to account executive; Stewart Ryan to producer; Scott Carpenter and Sarah Sanborn to senior account executives; Sara Naggar to senior manager, social influence. BROKAW: Renee Alexander to director, digital and social media strategy. C.TRAC INC.: Lauren Jacenty to account coordinator. STEVENS STRATEGIC COMMUNICATIONS: Chris Cugini to content specialist.
MEDIA WKYC-TV3: Micki Byrnes to vice president, station manager.
INSURANCE ALEX N. SILL CO.: Michael S. Hickle to manager, adjusting department. METLIFE PREMIER CLIENT GROUP: Michael Connole to managing director.
NONPROFIT ASM INTERNATIONAL: Christina Sandoval to exhibition planner.
AWARDS KENT STATE UNIVERSITY: Constance D. Harper (Call & Post) received the 2014 Diversity in Media Distinguished Leadership Award.
LEGAL MEYERS ROMAN: Rachel Lerner, Mark J. Sack and Andrew R. Thomas to of counsel. TUCKER ELLIS LLP: Sheila Ninneman to associate.
MARKETING
ST. PAUL AFRICAN METHODIST EPISCOPAL CHURCH OF AKRON: Iris E. Harvey (Kent State University) received the 2014 Harold K. Stubbs Humanitarian Award in Education; Virginia Albanese (Kent State University) received the 2014 Harold K. Stubbs Humanitarian Award in Business.
Ina
WESTON HURD LLP: Rema A. Ina to associate.
Send information for Going Places to dhillyer@crain.com.
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Anchor Industries is growing By DAN SHINGLER dshingler@crain.com
CONTRIBUTED PHOTO
BurkleHagen Photography will be located on the fourth floor of the old Milk Factory Building in Cleveland’s MidTown neighborhood.
New photography studio could be attractive site for local food businesses By KATHY AMES CARR clbfreelander@crain.com
Two food photographers with a combined 32 years of experience are launching a 6,000-square-foot boutique studio dedicated solely to commercial food photography for local and national food-related businesses. David Hagen and Andrew Burkle have formed BurkleHagen Photography, located at 3500 Payne Ave., on the fourth floor of the old Milk Factory Building in Cleveland’s MidTown neighborhood. The duo — who will be working with local food stylists — are retrofitting the space to accommodate a commercial kitchen, walk-in-pantry, six shooting stages, a shower, client seating, conference room, offices and a custom-built prop area. “Unlike self-contained studios in Chicago and New York, which have limited space and often have to rent props, we’re able to store a whole range of items, like dishes and glassware,” Burkle said. The commercial kitchen features two double farm sinks; two fiveburner stoves; two double-wall ovens; two commercial-grade refrigerators and freezers; a microwave; and black granite countertops.
Two, 4-foot-by-10-foot former bowling alley floorboards function as the kitchen’s islands. A wooden floor supported by a spongy base makes it easier for stylists and photographers to be on their feet during long days of shooting. Reclaimed material, from tables to doors, comes from Old School Architectural Salvage in Cleveland’s Flats neighborhood. Three sets of 8foot-by-12-foot windows face west toward downtown, providing natural night and a full vista of the city’s skyline. “We love this neighborhood because it’s surrounded by such great restaurants and food businesses, and we have this incredible view,” Hagen said. The studio currently is in conversations with some local food industry giants and local chefs, Hagen said. A May 3 open house is planned. Both Hagen and Burkle independently have worked for some of the nation’s largest brands and notable chefs, including J.M. Smucker Co., Nestle, Vitamix, the National Pork Board and Kellogg’s. Hagen is a former photographer for Clevelandbased Kalman & Pabst Photo Group. Burkle most recently owned his own studio in Chicago. ■
Anchor Industries is expanding in Solon, where it has received approval to construct a 50,000-squarefoot manufacturing and warehouse building, according to city zoning officials. Anchor produces aftermarket engine and transmission mounts, as well as support bearings, strut mounts and other products for both older and late-model cars. It supports a full line of automobiles, including most brands made in the United States, Asia and Europe. An Anchor official said the company was not yet prepared to discuss the details of the project or its ultimate end use. Solon economic development director Peggy Weil Dorfman announced in her April newsletter to residents that the city had approved the project. The plan was approved at the end of last year, she said. Documents with the city’s zoning department indicate the building will be used for manufacturing, warehousing and distribution. Though Ms. Dorfman said she did not have details on Anchor’s specific plans for the building, she noted that the company already is a significant contributor to the city’s economy and that she is glad to see it grow there. “That’s a sizable facility,” Dorfman said of the proposed new construction. “It’s very good to see a Solon business doing well and growing.” Zoning officials say the project will be built by Geis Cos. Geis in 2012 constructed a similar, 50,000square-foot building for Anchor on
the same site, 30775 Solon Industrial Parkway, they said. Anchor did not receive any special tax incentives or other subsidies for its expansion, Dorfman said. As for the construction of the new building, a date has not been set, but city officials think it will begin fairly soon. “Usually if someone has a site plan approval the project follows in short order,” Dorfman said. The project is just the latest development in a busy period for the city and Dorfman. Nestle is expand-
ing in Solon with a 144,00-squarefoot building, and cosmetics maker Cosmax USA has purchased and will take over a 338,000-square-foot manufacturing building formerly owned and operated by L’Oreal USA. Economic development activity “comes and it goes, but actually this year has been a little on the busy side” Dorfman said. “The Nestle product technology center is well under way and Cosmax should be moving in sometime later this year.” ■
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Edwins Leadership and Restaurant Institute grads go to head of class
T
here’s a certain amount of pomp and circumstance that is due the first graduating class of Edwins Leadership and Restaurant Institute.
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The 29 graduates of the sixmonth classroom and training program can be credited for bolstering monthly sales to an average of $130,000 beyond the original forecast of $100,000 at the nonprofit’s Shaker Square French eatery. The students are landing jobs in the kitchens and at the front of the house at venerable local eateries, such as Greenhouse Tavern, Red The Steakhouse, Moxie, Willeyville, Hodge’s, Melt Bar & Grilled and so on. Two students recently returned from Chicago, where they completed apprenticeships at award-winning restaurants GT Fish & Oyster, and Grace. But the real success is the turnaround these former prisoners have made in their lives, said founder Brandon Chrostowski. “I’m extremely proud of these individuals. We started with this wrecking ball mentality to get this project off the ground, and in the middle of it all are these huge transformations these people have made,� Chrostowski said. “It’s working. It shows there is hope after prison or jail, and it’s radiating now on a larger scale.� The inaugural graduating class of Edwins — a hospitality center training ground for individuals seeking successful re-entry into the professional world — have spent 30-plus hours a week since Nov. 1 learning through coursework and hands-on experience all aspects of running a restaurant, from prep work and pastry to hosting and management. But, as with any startup, there’s a learning curve and period of adjustment. Edwins’ initial class size was closer to 60 students, though a diminished count was expected. Still, Chrostowski is recalibrating several aspects of the program, including screening program candidates more carefully, to improve student retention. “We projected 50% to 60% attrition, but we want to reduce that to closer to 30%,� he said. “We’ll be grinding them during the interview to make sure they’re committed to this program. We want to get down to the core of who they are and make sure they want it.� He also plans to enroll eight students on a rotating monthly basis, instead of beginning with one larger class all at once, to connect more intimately with students in the classroom. If sales at the restaurant — which has quickly gained a foothold as a key player in Cleveland’s culinary scene for its top-notch service and cuisine — are any indication, the
CONTRIBUTED PHOTOS
James Gaines (top) and Dylan Wilkins are part of the inaugural graduating class of Edwins Leadership and Restaurant Institute. nonprofit is delivering on its social mission. The operation’s eatery is trending toward $1.5 million in sales by the end of its first year, surpassing Chrostowski’s initial projection of about $1 million. “I always under-project and over-deliver, but we’ve just been killing it,� he said, noting that despite healthy sales, the restaurant’s labor costs are higher than at forprofit peers. “Labor usually represents 25% of our costs, but here, it accounts for the mid-30s because we have seven or eight times the average amount of staff� with about 50 employees, including the students and seven managers. “I’ve been going seven days, 110 hours a week,� he said. “I was just able to give some of my managers some days off.� Edwins’ restaurant sales subsidize the nonprofit’s mission. The nonprofit prior to its launch raised $300,000 through a combination of various entities, including Cleveland Foundation, RPM International and Fairmount Minerals as well as individual donations. Chrostowski said he plans to continue fundraising for more specific initiatives, such as hiring additional instructors and helping subsidize students’ apprenticeships abroad. “This has just been an incredible experience for everyone involved,� he said.
Local news ■Fat Head’s Brewery is making sure the remaining empty space in its 22,000-square-foot production facility in Middleburg Heights doesn’t go to waste. The North Olmsted-based brewer is purchasing seven, 170-barrel fermentation tanks, which will bring to 23 its total tank count. The additional equipment will beef up
annual craft beer output by increasing from 13,000 to about 20,000 the number of barrels of beer it produces. Plans call for another 28, 170-barrel tanks over the next four years, which would nearly triple current production capacity to about 34,000 barrels. The brewery has a strong presence in Northeast Ohio, though supplies in limited amounts its craft beer to markets in Indiana, western Pennsylvania and Florida. “Our distributor is saying we’re not supplying enough beer in the pipeline, and we need to get more beer out to people,â€? brewer and coowner Matt Cole said. “We’re growing really fast.â€? Fat Head’s also is planning later this year to open a brewpub in Portland, Ore., and has plans to penetrate markets along the West Coast. â– St. Vincent Charity Medical Center is providing a $10,000 sponsorship for the Downtown Farmers Market’s 2014-15 season to bolster its visibility. The farmers market will be rolling out a new branding and marketing campaign that will focus on its producers and farmers, including Melissa Khoury of Saucisson, a boutique butchery, and Hunter Harlor of milk maker forty.one. “This partnership will allow us to connect more people to farm-fresh food and continue doing our part to grow a regional food economy and a healthier Cleveland,â€? said Ashley Shaw, market manager. The market operates from 11 a.m. to 2 p.m. every Friday at the 5th Street Arcades. Its summer season begins June 13 at Public Square. â– Chris Hodgson nabbed Food and Wine’s award for the People’s Best New Chef of the Great Lakes region. Hodgson is a pioneer of the local food truck movement and a chef/consulting partner with Driftwood Restaurants. â–
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INSIDE
SMALL BUSINESS
17 ESOPS SHOULD BE PART OF SUCCESSION DISCUSSIONS
Hunger to grow feeds new focus
■ How do you define a startup? “I define a startup as someone who’s got an idea and they’re trying to run with it …I felt like a startup for probably a good three to four years. Then, when we started another product it made me feel like a startup all over again. Where we are with the manufacturing, I don’t feel like a startup anymore,” said Dianna Dunlevy-Seufer.
Entrepreneur’s appetite for challenges takes her from catering to food manufacturing By SHARON SCHNALL clbfreelancer@crain.com
D
ianna Dunlevy-Seufer never wanted status quo. Otherwise, she might still be a home-based caterer serving a Northeast Ohio market. Instead she chose, in 2004, to expand the then 4-year-old catering business named d’marie Inc. to include wholesale food manufacturing. “I love the energy of the startup. It’s the unknown,” she said. “I can’t sit still. It’s ‘so, OK, we got this all figured out. What’s my next challenge?’” Dunlevy-Seufer closed the d’marie catering business in 2011. However, the d’marie name — a play on the founder’s first and middle names — continues with food manufacturing as the primary focus. Today, the Bainbridge Township business produces frappe vino mix, triangle chips, dip mixes, bacon seasonings, pancake and waffle mix and event-themed food bags — in all, 18 products ranging from $5 to $25. A national customer base is served through 500 direct-to-consumer food shows and special events each year, in addition to wholesale channels and online sales; export opportunities are being considered. Frappe vino, a frozen wine and cocktail slush mix, the company’s top seller, is sold locally at The Winery at Spring Hill of Geneva, Olympia Candy of Strongsville and Mustard Seed Market & Café of Solon.
15
In 2000, the catering business’s gross sales were about $100,000, Dunlevy-Seufer said. While declining to discuss specific 2013 gross sales, she indicated that the food manufacturing business sold 220,000 units up from 7,000 units during 2004’s first full year of manufacturing. Last year’s gross sales, she said, reflect a 495% increase in growth from 2004.
■ What have been your growing pains? “For us, first and foremost, is surrounding yourself with the right people whether they be employees or contracting with vendors. I need the right team in place. If you don’t have the right people in place then it causes so many issues. The biggest growing pain is getting the right people at the right time in the right place.”
A beginning foodie Clearly, Dunlevy-Seufer was a food trade neophyte when she launched the catering business in 2000. That business start followed years of selling WebMD portal subscriptions to physician practices, pitches that combined catered meals and sales presentations. Over time, she jokes, her medical audience was “more interested in lunch” than her message. Following a WebMD merger with another vendor and her eventual layoff, Dunlevy-Seufer explored business ownership, one that would support personal life changes including a recent divorce and a desire to be with her then 7-year-old daughter. She enjoyed cooking and recalled the meals that pharmaceutical company representatives — her future clientele — had used to market physician practices. Using funds from her severance package, she spent $2,500 to start the See HUNGER Page 16
■ What are the building blocks for business growth? “… Listening to your customers. That is key and why we stay involved in the field and hear what’s going on, so we can continue to build upon what we’ve started. We try to be very good listeners — to our customers, employees and representatives — and be open. And, the beauty of being a small company is we can act on it.”
SUBM ITTED PHOTO
■ What is the next big challenge? “… Success is progression and always growing. I want to keep growing. I want to keep challenging myself. I’m looking at different opportunities. There’s so much we can do I just need to decide which (opportunity) we go after.”
SHARON SCHNALL
This year, Crain’s Cleveland Business is focusing on small businesses and their second-stage journeys. The stories focus on smaller entities that have moved beyond — or are trying to move beyond — the startup phase. If you have a suggestion for a business or topic related to second-stage growth, contact Amy Ann Stoessel at astoessel@crain.com.
Dianna Dunlevy-Seufer, owner of d’marie Inc.
Mentor aims to open up a whole new world City hires international trade administrator to help its companies sell more products globally By CHUCK SODER csoder@crain.com
B
lasphemy! Kim Holizna has spoken to a few companies in Mentor that have turned away people who have contacted them out of the blue, wanting to buy their products. The reason? Those hot sales leads came from other countries. “People have come up and flat out told me, ‘I gave those away.’ What? They gave business away,” she said.
Her job is to make sure that never happens again within the city limits of Mentor. The city hired Holizna as its first international trade administrator back in December. Since then she’s been on a mission to meet with “each and every business” in Mentor that might have an exportable product. And there could be a lot of them: There are more than 200 manufacturers in the city. Some are small companies that have never sold a product outside the United States. But even midsize manufacturers often need help getting certification for products sold in the European Union, forming joint ventures in China or navigating the tax system in Brazil. Holizna has experience with such matters. She has spent almost 20 years helping other companies do business in other countries. Most recently, she served as director of the International Trade Assistance Center’s Northeast Ohio office at Kent State Universi-
ty, covering six counties in the region. Though she has worked with companies in Mentor before, now she can give them all her time and attention. Those two resources are critical: Getting the owner of a small company to the point where he or she is comfortable doing business overseas can involve a lot of hand holding, according to Holizna, who also spent several years at Day-Glo Color Corp., a Cleveland company that sells fluorescent pigments all over the world. “You’ve got to slowly get into these companies one by one,” she said. She’s also working with somewhat larger companies that have done some exporting. One of them is Buyers Products Co., which focuses mainly on making parts and accessories for trucks and trailers. That company, based at 9049 Tyler Blvd., has seen its international sales “grow consistently, year after year,” according to Dan Doerr, director of new product development.
Today, Holizna is helping Buyers Products approach foreign markets in a more sophisticated way. For instance, the company already works with distributors in several countries, but Doerr said he doesn’t “know if, in every case, we found the best distributor.” The company ended up in those relationSee MENTOR Page 17
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Hunger: Coach plays key role continued from PAGE 15
catering business; one full-time employee was hired. Meals were prepared from a shared, rented space at a nearby commercial kitchen housed in a Bainbridge Township church; other operations were handled elsewhere. “Your warehouse is your dining room. Your office is your car. It’s chaotic to juggle it all, but when you’re small, you do it,” Dunlevy-Seufer said. Early on, she created seasoned triangles to accompany the catered sandwiches, salads and wraps. “It’s not quite a chip and it’s not quite a cracker,” she said, describing the triangle’s consistency as akin to layers of pie crust or phyllo dough. Soon, physicians’ spouses and secretaries were contacting her with triangle orders for showers and graduations. Relocation and consolidation became necessary not once, but twice.
One door closes, another opens In 2005, d’marie moved to a leased 4,000-square-foot space in Bedford; the $100,000 relocation cost was self-funded. By 2008, the catering business was not thriving, Dunlevy-Seufer said, because of the recession, pharmaceutical company budget cuts and regulatory and in-house restrictions on physicians receiving catered meals from pharmaceutical companies.
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Meanwhile, d’marie’s food manufacturing endeavors continued to grow: more offerings had been added to the product portfolio and the company’s reach had extended across the country. Ultimately, by 2011, the focus was transitioned entirely to food manufacturing and the catering business was closed. “She was going through a big shift. She realized the catering business was going away,” said Deb Mazzaferro, a specialty food industry coach and consultant based in Sarasota, Fla. “She was going away from being the caterer to being this wholesale direct business. She was re-creating the business … Diana transitioned into something relevant. She was insightful.” Mazzaferro has provided coaching and consulting services to d’marie since 2007. Prior to establishing her consulting practice, in 2001, Mazzaferro had more than 20 years of direct sales and marketing experience in the food industry. Dunlevy-Seufer credits coaching as critical toward stewarding business growth — literally so. When, for this latest move, from Bedford to Bainbridge Township, she targeted a 7,500-square-footspace, coaching led to considering a 10,000 or greater square foot space to avoid prematurely outgrowing that next space. In 2011, d’marie landed in the current 14,000-square-foot leased location; 10% of the space is allocated to Chagrin Valley Kitchen, a cooperative kitchen she established. The move, cost about $200,000, and was, again, selffunded.
Moving sooner than later From experience, DunlevySeufer advises other growing food businesses to acknowledge when relocation is necessary. She had been “too close to the business” to see that remaining in the original location was inefficient. A proper facility allows for storage, parcel pickup and selling the product not only in quantity but easily from a loading dock. “Everybody is afraid to pay rent, but once you do it, you see how much easier everything becomes,” she said. “… You can buy supplies bigger and more cheaply. You don’t run out of supplies during an order. You don’t realize you’re wasting your time.” The latest space accommodates larger, more complex equipment, but also reflects a learning curve, with new suppliers and vendors and training regarding the quirks of specialty equipment. Nationally, 15 food dealers sell the product at shows and to regional accounts. Locally, 12 employees, including Dunlevy-Seufer, work year-round at company headquarters and are joined by another eight prior to the holiday season. Mark Seufer, who is married to the company’s founder, joined the business full time in 2007, and manages sales and operations as well as equipment maintenance and employee training. For her part, Dunlevy-Seufer focuses on vision, social media initiatives, creating new products and branding and sales. And by temperament she will seek out more “growth and getting to the next level.” “I need to look for the next challenge,” she said. “I need something to stir the pot a little bit.”
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ESOPs can be part of succession strategy
I
n the six-year period ending in 2012, taxpayers were reluctant to structure transactions to defer taxes because tax rates were very low (especially on capital gains). Why defer taxes if rates are only going to increase? As of last year, the highest tax rate on most capital gains rose to 23.8% (which includes the additional tax on investment income). This rate is more than 50% higher than rates were in 2012. Many observers think it is very unlikely that these rates will be going up anytime soon. This may, therefore, be a good time to once again consider techniques for deferring taxes, especially on significant transactions such as the sale of a company. Driven in part by the current tax rate structure, many business owners are considering employee stock ownership plans (ESOPs) as part of their succession plan. The basic mechanics of an ESOP are relatively straightforward. The company forms an ESOP, which is essentially a qualified retirement
CARLGRASSI
TAX TIPS plan. It is similar in many ways to a 401(k) or profit sharing plan, except that its primary asset is stock of the sponsoring company. The ESOP contracts to purchase stock of the company from one or more selling shareholders at a price determined by a qualified appraisal. In order to effectuate the purchase, the company often will borrow the necessary funds from a qualified lender (i.e., a bank or other lending institution). This is called a “leveraged” ESOP. The company immediately lends this money to the ESOP, and the ESOP uses the money to pay the purchase price to the shareholders for the acquired shares.
There are many benefits to using an ESOP to acquire shares in a closely-held company. First, the ESOP essentially creates a market for a minority interest in the company. While many ESOPs are formed to purchase at least a 30% interest in the sponsoring company to take advantage of the tax deferral described below, there is no minimum percentage that the ESOP can purchase. Selling a minority interest in the company to an ESOP can allow the current shareholders to maintain control of the business and remain employed by the company. There can also be significant tax benefits to the shareholders. If the company is a C corporation, as long as the ESOP owns 30% or more of the company shares after the acquisition, the selling shareholders can generally defer the income tax on the gain from the sale of the stock. Provided the proceeds received by the selling shareholders are rolled over into “qualified replacement property,” no tax is due on the sale of the shares to the ESOP.
Selling shareholders can transfer the qualified replacement property by gift or upon death without triggering the deferred gain. This allows a business owner to diversify his or her investment in the closely-held business without triggering any gain, and completely eliminating the gain if the qualified replacement property is held until the shareholder’s death. There are also benefits to the company. From a tax standpoint, the company will get a tax deduction for the interest paid to the lender and for an amount equal to the principal payments, generally not in excess of 25% of the eligible compensation of ESOP participants. Another reason to consider an ESOP is to create a stock-based retirement plan for employees to replace or supplement existing plans. Many business owners like the idea of employees thinking of themselves as owners of the company, but do not like the idea of giving employees voting rights, holding shareholder meetings, and entering into shareholder agreements with the employees to buy
back the stock upon termination of employment. An ESOP can eliminate many of these concerns because, like other types of qualified plans, ESOPs provide the employees with a beneficial ownership interest in the equity of the company but generally without the voting and other rights of a shareholder. An ESOP will not work in every situation. Having a sufficient number of employees with relatively low turnover is important. Most companies implement an ESOP with borrowed money, meaning the company needs to have sufficient capacity for additional debt. Also, the costs of setting up and maintaining an ESOP are not insignificant, and an experienced team of legal and financial professionals is critical to the successful adoption and operation of an ESOP. Despite these concerns, an ESOP should be a part of the discussion for any business owner considering succession planning. ■ Grassi is president of McDonald Hopkins LLC.
Mentor: Attracting foreign investment to city also a focus
Holizna
ships through happenstance: Those distributors were the ones who reached out to Buyers Products. Now the Mentor company aims to find the best distributors who truly understand the complexities of doing business in a particular country, Doerr said. Holizna also connected Buy-
Looking for a solution to
ers Products with a consultant who is scheduled to meet with the company later this month to talk about the process of getting products certified in the European Union. She also organizes events about topics related to international trade. For instance, last
five BIGGEST PROBLEMS
week a Brazilian lawyer who often works with Baker Hostetler in Cleveland talked to about a dozen Mentor-area executives interested in doing business in that country. The event also was a great chance “to rub elbows with other companies in the area
who have gone abroad,” Doerr said. Holizna, who receives help from her colleagues in the city’s economic development department, also is tasked with helping attract more foreign investment to Mentor. The city wanted to hire some-
one with a focus on international trade because manufacturers form “the heart” of the Mentor economy, according to city manager Ken Filipiak. They make a lot of high-tech, highvalue machines and medical devices that “are ideal for export,” he said. ■
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18 CRAIN’S CLEVELAND BUSINESS
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A helpful push to get your head in the game Specialized field of psychology helping athletes overcome performance anxieties By SHARON SCHNALL clbfreelancer@crain.com
L
ittle did psychologist Dr. Jack J. Lesyk know that when he was contacted by the mother of a figure skater who was experiencing anxiety during competition, it would open up a specialized field of practice to him. The year was 1981, and the thenteenaged skater was Mark Lang. “If you’re training to your optimal level and achieving your practice goals, if there’s a drop-off (at competitions), you know there’s anxiety,� said Lang, a former Ice Capades performer and now a Keller Williams real estate agent working out of the Crocker Park-Greater Cleveland West office. Lang ended up being Lesyk’s first sport psychology client — and the start of the psychologist’s 30-plus years in a field that has been growing in both interest and understanding.
Today, the Association for Applied Sport Psychology, a 1,900member international association founded in 1986, lists 10 Ohioans, four from Northeast Ohio, as certified consultants. Lesyk, who is a past president of the association, has witnessed his sport psychology-based client population increase from 40% of his total in 1994 to 75% in 2000. So much so, he finalized a decision last year to stop accepting clinical referrals reflecting general concerns and instead concentrate on sport and performance clients. His Beachwood practice, the Ohio Center for Sport Psychology, recently expanded beyond the athletic community to serve other clientele — including musicians and executives — who are dealing with performance issues unique to their professional environments. An estimated 90% of the athletes who see him “want to learn how to relax in high-pressure situations,�
he said. Lang, who also works as a figure skating professional, including coaching and choreography, said sport psychology helped him go from being anxiety-ridden to highly competitive. “(Sport psychology) turned (it) completely around,� he said. “It was taking those (anxious) moments and not being worried but being excited. ... I loved to skate but I couldn’t Lesyk figure out why I had the anxiety. It was just like conquering the problem.�
Pathway to practicing Practitioners, like Lesyk, arrive to this specialized arena via different pathways. Lesyk, who previously worked as a clinical psychologist, first at state psychiatric hospitals in Northeast Ohio and then as a private practitioner, first was exposed to sport psychology training during a 1983 conference offered by the U.S. Olympic Committee. “I did not use the term sport psy-
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ing different athletic teams and sports. “You have to go to the people if you want to attract them,� FenderScarr said.
chologist for a number of years,� he said. “I wanted to be cautious. I wanted to have substantial credentials before I used that name.� Lesyk is the author of “Developing Sport Psychology within Your Clinical Practice: A Practical Guide for Mental Health Professionals.� He recalls in the early 1980s, “maybe 10� sport psychology books written by professionals for professionals — hardly household vernacular. “It was hard to get established,� said Lisa Fender-Scarr, an owner of Summit Therapy Group of Akron. “There weren’t academic programs to become a sport psychologist. Now there are some programs but they are limited ... you have to develop it yourself. You have to go out and seek your training whereas in a regular psychology program, those internships are already planted in the community.� Fender-Scarr’s 1998 University of Akron doctorate is in counselor education and supervision; now a clinical counselor, 25% of her practice represents athletic concerns. She designed her way into the specialty, around 1986, after taking an undergraduate physical education course called “The Psychology of Coaching.� That Kent State University course, she said, helped address her own emotions regarding sustaining a sport injury and terminating a gymnastics career; the course also took her education and career in an unintended direction. “It was so new; you could create yourself to be an expert in the field,� she said. Client referrals now come from university faculty, coaches at gyms and an online Psychology Today listing. Her sport psychology practice segment has a primary focus on gymnasts, but also serves runners, wrestlers, football, baseball and soccer players, swimmers and most recently, a riflery client. “To sustain your business you have to go out and seek the athletic environments. ... It’s about pursu-
Understanding the athletic culture An athletic background is not an absolute prerequisite to being a successful sport psychologist but it certainly helps. “It’s someone who has a good understanding of the (sport) culture — the distinct pressures athletes experience,â€? said Darla Sedlacek, a psychologist since 2001, specializing in sport and performance psychology and owner of Transform Sport and Fitness Services of Lakewood. In addition to serving a client population that is two-thirds athletic concerns, Sedlacek also is a certified personal trainer. A fitness studio is on the premises of her practice’s headquarters. A lifelong athlete and avid runner, she participates in ultradistance marathon events — her next event will be a 100-mile summer trail run. Other pastimes include martial arts training, strength training and yoga. One “toolâ€? she teaches is “selftalk.â€? Athletes need to become aware of the “thoughts and chatterâ€? occurring in their heads. “The task is to observe it, recognize it and let it go; the emphasis is not to turn it into the positive but make it a neutral,â€? she said. Lesyk — who developed a passion for sports through running and marathon participation — teaches clients such techniques as how to relax under pressure; mental visualization; progressive relaxation biofeedback; and how to self-monitor. Mindfulness, he said, leads to controlling attitude and effort, making better choices and ultimately experiencing pride regarding an outcome. “A lot of what we practice in sports psychology goes beyond sports and helps them to optimally function in other areas of their lives as a whole,â€? Sedlacek said. â–
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Jobs: Slow and steady could work well for the industry continued from PAGE 8
“From the producer side, it means a great business opportunity; that’s where Northeast Ohio comes in,” Carlsson continued.
Sustainable businesses
REBECCA R. MARKOVITZ
A view of the Uber app on an iPhone as someone waits for a driver to complete a pickup.
Cabbies: Ride services are focusing on tech continued from PAGE 1
He doesn’t have an issue with the city’s regulatory oversight, but he said it also should apply to Uber and Lyft. “It’s an expense we can’t afford to take if our competition doesn’t have to,” Keenan said. “We’ve always embraced competition, but it’s always been a level playing field until lately.” Company officials for Uber and Lyft chalk up concerns like Keenan’s to nothing more than sour grapes. James Ondrey, a Cleveland native and Uber Ohio’s general manager, said the taxi industry is “failing consumers” and his service will “alleviate all of the pain points we hear people talking about,” such as cabs’ cleanliness, timeliness and overall convenience. That said, ride-hailing apps like Lyft and Uber haven’t come without criticism. Some have questioned their safety and accused them of price gouging during times of high traffic and inclement weather. Last Wednesday — the day Uber went live in Cleveland — the city of Columbus sued the company, claiming the service is an unlicensed operation that’s putting people at risk because the city hasn’t inspected Uber cars or licensed Uber drivers. Uber, which operates in more than 85 cities worldwide, launched in Columbus late last year. Cleveland City Councilman Martin Keane, chairman of the council’s aviation and transportation committee, said the city has been studying the issue for some time. But now that the services have gone live, he expects the city to take a closer look. “It’s just something we have to
take a hard look at. We have been, but now we’ll take a closer look … If it’s apparent there is some noncompliance, absolutely the city has to take action,” Keane said. “It’s very important for the city, to the visitors and those who use these services to be treated with respect.”
Mustache love Lyft and Uber characterize themselves as tech companies rather than transportation companies, as they don’t own the cars or employ the drivers. The drivers are independent contractors looking for extra income. With both apps, riders don’t have to physically flag down a cab or fumble with cash given that their credit card information is already on file. Instead, with a few taps of a button, a ride is reserved and a car should arrive in a matter of minutes. In Uber’s case, it’s typically a luxury black sedan or SUV steered by full-time livery drivers with commercial drivers’ licenses looking for extra cash when their schedules are free. The company also boasts its lower-cost, more casual uberX service, whose drivers use their own vehicle — think Honda Accord or Toyota Prius — to cart folks around town. Lyft’s service more so resembles the uberX option, but its drivers’ cars don fuzzy pink mustaches on their grilles. In Angelica Gagliardi’s case, that mustache dresses a sea foam green Hyundai Tucson. Gagliardi is one the founding drivers of Lyft’s Cleveland operation. By day, the Parma resident is a fourth-grade teacher in Cleveland city schools. Lyft’s other local drivers include Case Western Reserve
University medical and dental students, a U.S. postal worker and a chef all looking for extra cash. Cleveland is Lyft’s 31st market. “I know a couple of people who use Lyft or driven with it in different cities, and they had nothing bad to say about it,” Gagliardi said. “I saw ads that it was coming to Cleveland, and I knew I’d love to have second job but didn’t always have time because I’m a teacher.”
Safeguards in place? Both companies say drivers connected through their apps undergo extensive background and driving history checks. Still, those safeguards haven’t exactly satisfied all of Lyft’s and Uber’s critics.
MORE ONLINE Last Thursday, reporter Timothy Magaw took an Uber ride from Crain’s downtown Cleveland offices on West St. Clair to Cleveland Pickle on Euclid Avenue to grab lunch. After a few taps to his iPhone’s screen and a brief, 10-minute wait, the sleek Lincoln Town Car arrived in style. His driver, Tariq Fares, opened the door and was courteous as can be. Of course, Magaw chose the more luxurious Uber offering for his quick ride to grab a sandwich. The cost of the roughly one-mile trip? $12, but Uber picked up the tab because of an introductory offer. For more on Crain’s maiden Uber voyage, check out CrainsCleveland.com for a video explaining the app.
Asked about his thoughts on the companies, Brian McBride, whose company operates Yellow Cab, Zone Cab and Westlake Cab in the Cleveland area, pointed to a wrongful death lawsuit filed in California by the family of a 6-year-old girl killed by an Uber driver on New Year’s Eve in San Francisco. McBride also suggested the drivers often don’t carry the proper insurance. “This is all going to shake out, but the problem is getting people excited ahead of time to lay the framework to protect the public,” said McBride, chairman of Cleveland’s United Garage and Service Corp. McBride admits any potential pushback by the city could result in an immediate backlash via social media from the apps’ fervent fan base. “Every time this happens, a virtual mob appears and pummels the politicians,” McBride said.
Get a move on it Lyft and Uber no doubt drummed up a significant amount of buzz on social media when they launched. Uber’s Ondrey said Northeast Ohioans have been clamoring for the service on social networks and downloaded the app well before the service was available in the area. “With the continued desire of folks to return to the urban core in Cleveland and all the fun things that they can do around the city and surrounding neighborhood, Uber will make it easier to do those,” he said. “It’s going to change the way Clevelanders move around their city.” ■
The biomedical industry has two other sub-sectors: research and development and the pharmaceutical business. But the medical device sub-sector is biggest. “As a share of the total, medical device manufacturing, in terms of output, has grown the most out of those three elements of the biomedical industry,” Duritsky said. “That makes sense because a lot of the R&D work and lab work is spun out of the hospitals and med device manufacturing is benefiting a lot from that research.” Among the major firms in the biomedical sector are Elyria’s Invacare Corp. and Philips Healthcare in Highland Heights, both of which make medical devices, and Steris Corp. of Mentor, which makes infection prevention systems. The Team NEO review estimates the biomedical sector of the gross regional product, or GRP, has grown from $3.5 billion in 2000 to $5.6 billion in 2014. GRP is a measure of the market value of all final goods and services produced in an area in a particular year. Moody’s economy.com provides Team NEO with the data for its quarterly reviews of the economy in 18 counties in Northeast Ohio. Importantly, the industry largely has avoided the ups and downs of other sectors of the regional economy. “This is a sustainable industry here that has grown the right way,” Duritsky said. “It hasn’t been boombust. It’s been really smart, thoughtful, incremental decisions that have grown it.”
2.1% growth forecast for 2014 More generally, the quarterly report pegs total employment in the region at 1.89 million at the end of the third quarter of 2013, the latest data available. That marked the 13th consecutive quarter of growth, though jobs increased by only 9,900 positions between the third quarter of 2012 and 2013. Given that modest growth, unemployment held steady, at 7.1%, only slightly lower than the national rate of 7.3%. Moody’s expects the regional economy to grow by 2.1%, to almost $200 billion, in 2014. That gets the GRP to within about $2 billion of its pre-recession high of 2005. Moody’s reports the regional economy grew only 0.4% in 2013, lagging the broader U.S. economy, but Duritsky considers that an early estimate that will be revised upward as data estimates become more solid. The report also notes employment growth in the service, manufacturing and construction sectors. ■
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The total reach of the 10 Fox Sports affiliates — which include the New York-based YES Network, Fox Sports San Diego, Fox Sports Arizona and Sun Sports (Fox’s regional network in Florida) — spans 135 designated market areas. “18 Holes” and “Swing Clinic” will air in 13 of the nation’s 25 largest designated market areas. “When Fox bought STO, I was really nervous,” said Hanlin, who also owns three golf courses in Ohio, cohosts a Saturday morning show on WKNR-AM, 850, and is the men’s and women’s golf coach at Notre Dame College in South Euclid. Hanlin’s worry turned to excitement when Mike Roche, director of programming for Fox Sports Ohio and SportsTime Ohio, sent a sample of Hanlin’s “Tee It Up” show to Tim Ivy, director of programming at Sun Sports. “Tim Ivy would ask me to pick up one of his high school football games,” Roche said of the programming that is often shared by Fox’s regional networks. “So we would do that and I would say, ‘Hey, we have this golf show.’ ” Ivy’s reaction, according to Roche: “Wow, this is really good.”
New name, more road trips “Tee It Up,” once an all-Ohio program on which Hanlin and his long-
time production partners, Willoughby-based BMA Media Group, would play a course and show some of the nearby area’s best attractions, was expanded in 2013. Roche said the show was “tested” on four Fox Sports regional networks last year — Sun Sports, Sports South, Arizona and San Diego. The response was so positive that Fox elected to more than double the program’s reach in 2014 — and give it a jazzed-up new name. Hanlin said he has been working with the “same six or seven guys” — his team, as he calls them — since “Tee It Up” debuted on SportsTime Ohio in 2006. The group, which works on a freelance basis for Fox Sports Ohio, includes friend Dean Cummings, the show’s producer and editor. Hanlin — in case he wasn’t busy enough — coordinates the travel plans, which are much more extensive than past trips around the Buckeye State. The owner of Little Mountain Country Club in Concord and StoneWater Golf Club in Highland Heights said his goal is to eventually shoot an “18 Holes” episode at a golf course in proximity to each Fox Sports regional network on which his show appears. That probably won’t happen this year, Hanlin said, but he and his crew will be all over the country for the program’s 13-episode run in 2014.
The shoots, which used to take one or two days, have turned into three-, four- and five-day trips. To accommodate the show’s broader focus, “Tee It Up” changed its format in 2013. In past years, the show would focus on Hanlin and co-host Carling Nolan — a 2010 winner of the Golf Channel’s “Big Break” who joined “Tee It Up” in 2011 — playing a golf course’s signature hole and feature footage of the rest of the course. “Now, we actually show all 18 holes of the golf course,” Hanlin said. “A lot of the places we’re going to are large resorts with a lot more to shoot than a Little Mountain or a public golf course in Ohio. These places have spas and tennis courts and huge hotels.” “When we go to these places,” Hanlin said, “we’re really trying to show the whole experience.”
Indians get into the swing “18 Holes” will debut on SportsTime Ohio on Wednesday, May 7, following the station’s broadcast of the Indians’ 7:05 p.m. game against the Minnesota Twins. The first episode of 2014 will feature Indians All-Star second baseman Jason Kipnis and recently demoted relief pitcher Vinnie Pestano, who last month drove from the Tribe’s spring training home in Goodyear, Ariz., to meet Hanlin at SunRidge
Canyon Golf Club in Fountain Hills. “They drove like an hour and 15 minutes to come down and do a show — I kind of told them it was 45 minutes,” Hanlin said of Kipnis and Pestano. The good-natured Indians players matched Hanlin’s signature flashy wardrobe piece for piece. Pestano wore a sweater vest over a short-sleeved golf shirt, complete with a bow tie and plaid pants. Kipnis was more understated — with a white collared shirt and light plaid pants. “They were hilarious,” Hanlin said. “They tried to outdress me.” Hanlin’s attire sometimes overshadows what Roche describes as a down-to-earth personality who won’t hesitate to give a golf tip to anyone — anywhere. “One thing I don’t think people understand about Jimmy is how good of a teacher he is,” said Roche, the Fox Sports Ohio and SportsTime Ohio programming director. “It’s one thing that he’s on air and does things like that, but he hasn’t forgotten where he came from.” Said Hanlin, laughing: “I give more free golf lessons than any human being in the entire world.” Roche turned that Hanlin trait into yet another program. During the early days of SportsTime Ohio, Roche, in an effort to promote “Tee It Up,” would take Hanlin to a local golf course and ask him to give a brief pointer on camera. “He had 26 seconds to do a quick golf tip, and that was the promo
campaign that year for STO,” Roche said. Last year, “Swing Clinic” aired for the first time, and this year its seven episodes also will be shown in more than 50 million homes.
Helping hands Hanlin’s third SportsTime Ohio program, “The Golf Zone With Jimmy Hanlin,” a Sunday night viewer call-in show, will expand from one to two hours on April 20. His ESPN Cleveland radio show is also two hours, making it difficult to find a day during the spring and summer in which he isn’t on the air. “And at some point, I have to show up at my golf courses,” he said. With his schedule even more hectic, Hanlin said he will focus on the day-to-day management of Little Mountain, and let the general managers at StoneWater and Cumberland Trail Golf Club (located in Pataskala, 20 miles east of Columbus) manage those facilities. When he’s not filming a show, taking calls on ESPN Cleveland or managing one of his courses, Hanlin is spending time with his 9- and 6-year-old sons. Their names — Hogan and Palmer — are fitting for a father who devotes so much of his time to promoting the game and the courses on which it’s played. “The freelancers (his production team) are great. They do a lot of the work,” Hanlin said. “And the same for the guys at my golf courses — or I’d be in trouble.” ■
COMMERCIAL CONTRACTORS RANKED BY 2013 REVENUE
Company Address Rank Phone/Website
Local revenue 2013 (millions)
New local contracts 2013 (millions)
# of local projects started 2013
New corporate contracts 2013 (millions)
# of corporate projects started 2013
FTE employees as of 4/1/2014 Local Corporate
Year founded Top local executive
1
Gilbane Building Co. 950 Main Ave., Suite 1410, Cleveland 44113 (216) 535-3000/www.gilbaneco.com
$304.2
$123.2
7
$3,318.7
319
51 2,527
1873
Scott Orr vice president
2
Cleveland Construction Inc. 8620 Tyler Blvd., Mentor 44060 (440) 255-8000/www.clevelandconstruction.com
$270.2
$39.9
6
$219.2
42
90 890
1980
Jon D. Small president
3
Turner Construction Co. 1422 Euclid Ave., Suite 1400, Cleveland 44115 (216) 522-1180/www.turnerconstruction.com/cleveland
$229.0
$389.0
78
$9,500.0
1,350
90 5,298
1902
Jason Jones general manager
4
Donley's Inc. 5430 Warner Road, Cleveland 44125 (216) 524-6800/www.donleyinc.com
$204.2
$140.0
33
$188.0
57
70 150
1892
Malcolm M. Donley president, CEO
5
The Ruhlin Co. 6931 Ridge Road, Sharon Center 44274 (330) 239-2800/www.ruhlin.com
$199.5
$114.0
20
$168.5
36
180 370
1915
James L. Ruhlin president, CEO
6
The Austin Co. 6095 Parkland Blvd., Cleveland 44124 (440) 544-2600/www.theaustin.com
$137.5
$97.4
6
$201.3
11
72 160
1878
Michael G. Pierce president
7
Geis Construction 10020 Aurora Hudson Road, Streetsboro 44241 (330) 528-3500/www.geis.us
$127.6
$179.6
82
$229.5
106
77 80
1967
Gregory Geis CEO
8
Fortney & Weygandt Inc. 31269 Bradley Road, North Olmsted 44070 (440) 716-4000/www.fortneyweygandt.com
$82.5
$18.0
48
$72.9
156
79 120
1978
Robert L. Fortney president
9
Shook Construction Co. 10245 Brecksville Road, Brecksville 44141 (440) 838-5400/www.shookconstruction.com
$76.0
$48.5
5
$184.4
43
46 205
1926
Chris Halapy executive vice president
10
Panzica Construction Co. 739 Beta Drive, Mayfield Village 44143 (440) 442-4300/www.panzica.com
$57.6
$105.1
28
$105.1
28
75 75
1956
Anthony M. Panzica owner, president, CEO
11
Infinity Construction Co. 18440 Cranwood Pkwy., Warrensville Heights 44128 (216) 663-3777/www.infinityconstruction.com
$57.6
$37.6
39
$37.6
39
48 48
1997
Charles A. Izzo president
12
Continental Building Systems 23240 Chagrin Blvd., Suite 400, Beachwood 44122 (216) 454-2500/www.continental-buildingsystems.com
$39.0
$24.3
8
$196.1
58
12 114
1984
Rick Adante project executive
13
C.T. Taylor 5802 Akron-Cleveland Road, Hudson 44236 (330) 656-9353/www.cttaylor.com
$31.0
$41.0
36
$41.0
36
25 25
1971
John Hitchcock president
14
John G. Johnson Construction Co. 8360 E. Washington St., Chagrin Falls 44023 (440) 543-9856/www.johngjohnson.com
$22.0
$22.0
23
$22.0
23
22 22
1943
Marty Weber, president, owner; Mike Weber, vice president, owner
15
Drake Construction Co. 1545 E. 18th St., Cleveland 44114 (216) 664-6500/www.drakeconstructionco.com
$20.3
$25.5
59
$25.5
59
47 47
1954
Steve Ciuni president
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
RESEARCHED BY Deborah W. Hillyer
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Adjustments: Plan: Firm expects 2014 revenues to exceed last year’s $4.3M Board forms committee to investigate continued from PAGE 5
It takes time
continued from PAGE 8
Proposals are due by May 7, the suggested start of the audit is June 2014, the investigation and report preparation are scheduled for June through December, and the audit report is due Jan. 5, 2015. Per the RFP, the PUCO will select and direct the work of the auditor. The companies will bear the costs of the audit, bids for which “shall not exceed $200,000,” including cost of travel. The commission expects the audit report to contain the auditor’s opinion as to the competence, capability and autonomy of the management of the companies, including their board of directors, to operate the public utilities in accordance with acceptable business practices, commission rules, orders and Ohio statutory requirements, according to the RFP. “…The companies and affiliates shall provide any and all documents or information requested,” the commission stated. “The auditor shall immediately notify staff if there are any delays in obtaining requested information.” If any delay is determined to be unwarranted or unjustified, the companies and/or affiliates may be subject to legal action, it stated.
“All I can say ... is that we are working diligently to resolve the issues at hand and put them behind us.” – Gregory Osborne president and COO, Gas Natural Inc.
Moving forward Also revealed in Gas Natural’s annual filing is that the board of directors on March 26 formed a special committee comprised of three independent directors to investigate allegations contained in a letter received from one of its shareholders. The letter demands that the board take legal action to remedy alleged breaches of fiduciary duties by the board and certain of Gas Natural’s executive officers in connection with the order and opinion issued by the PUCO on Nov. 13, the company stated. The special committee is to investigate, evaluate and determine the position Gas Natural will take with respect to the letter. Osborne said company executives are precluded from answering questions — among them, who sent the letter and what legal action is demanded — given the ongoing investigation. “All I can say … is that we are working diligently to resolve the issues at hand and put them behind us,” Osborne wrote. In the meantime, Gas Natural is executing its growth strategy, which includes a targeted growth of its customer base of 4% to 5% a year. With less than 30% natural gas penetration, Maine and North Carolina are considered Gas Natural’s two emerging markets, Osborne said. He also noted that the company has been investing in its Spelman Pipeline in Ohio to strengthen its foothold in the Utica shale region, and continues to seek acquisitions, including smaller utilities it could help to expand. ■
Volpe likes to emphasize the continuity of the firm, and that its focus on rebuilding the city is the same today as in the past. However, things are very different from 1990 when he launched the firm with a name similar to his now-prior job, that of “city architect” in the George Voinovich administration. He used his savings and retirement nest egg from the Public Employees Retirement System to launch the business. The first office was in a Victorian home-turned-offices on Prospect Avenue, where Volpe and his associates painted the walls themselves. The firm did not yet have its first assignment when it opened. Last year, it booked $4.3 million in gross revenues, a number it expects to exceed this year. This City Architecture is on the third floor of a contemporary office building it designed a decade ago at 3636 Euclid Ave., just a few blocks from its first and second offices. It just finished construction drawings for a proposed $36 million expansion of Lubrizol Corp. in Eastlake that will add, if it gets final corporate approval, 90,000 square feet to the chemical and oil-related products company’s headquarters. City Architecture has won more than 200 local and national architecture and other professional awards. It also is overseeing a streetscape project on Main Street in Painesville and has done a design for the transient marina that the city of Cleveland soon will start building at downtown’s North Coast Harbor. The short-term marina is part of a lakefront master plan City Architecture did for the city of Cleveland during the administration of former Mayor Jane Campbell. The firm also is working on a planned Marriott Corp. hotel at North Park Plaza in Akron next to the 10-year-old North Plaza Lofts. “This is not like a shopping center where you build it overnight. We do a plan and see it come together piece by piece over time, Volpe said. “It takes 10 years. Sometimes 15.”
JANET CENTURY
Paul Volpe, second left, completed a transition in the ownership of his City Architecture firm to, from left, August Fluker, Alex Pesta and John Wagner. he said, and it has in its portfolio projects that helped turn around areas as varied as the Coventry commercial district in Cleveland Heights. “We also did a plan that took Detroit Avenue and West 65th Street,” Pesta said. “After it was repositioned as an arts district it became the Gordon Square area.” Incredible as it sounds today, City Architecture started designing townhouses when the feeling was that they would not go in Cleveland and inner-ring suburbs. “We designed 10,000 housing units. Seventy percent of them were built,” Volpe said. However, success breeds its own problem: Volpe often says the residential work outshines its work designing office buildings and even factories.
Public, private side
‘It’s all of us’
City Architecture has a 50-50 balance of public and private work it maintained since the outset. “We didn’t go after public work in 2008 when the commercial market dried up,” Volpe said. “We’ve always gone through the process of applying, interviewing and presenting plans to be hired. It’s very different from the private side where someone says, ‘I like your work. You are hired.’ We have both.” Pesta said, “We stayed flexible. We see urban design as the thread that ties the city together. The people and how they live are what is important to us.” A mainstay of the firm is designing streetscapes,
Although it would be easy to paint Volpe’s ownership transition plans as a case of the baby boomers starting to make way for the next generation of architects and planners, experts see that starting to occur for a different reason than the principal or principals’ ages. Hank Reder, an architect-turned-lawyer in Chesterland who focuses on construction litigation and is a past president of the Cleveland and Ohio chapters of the American Institute of Architects professional group, said the downturn left some senior architects out of work or their nest egg dwindling because they used it to keep their firms afloat. Now, he said, there is more of a tendency to
seek transitions and consulting arrangements because the architecture business was so unsteady for so long. He considers it a change in the way practitioners approach their business, although most will continue producing designs as long as age allows them to do so. During the downturn, senior practitioners frequently set up shop on their own because finances were too tight to plan transitions, he said. “This is really the way to do it,” Reder said. “One key is to transfer the goodwill of the founder to the successors. Another key is to give successors time to develop face time with key clients.” Lillian Kuri, director of architecture, urban design and sustainable development at the Cleveland Foundation, said City Architecture’s focus and investment in remaking the city of Cleveland distinguishes the firm. “It’s an important institution and not just a firm involved in the region,” Kuri said. “What I love about the thought of this is that it’s really important for Cleveland business as a strategy to retain young people and jobs. It’s cool (Volpe) is providing a runway for them to be successful.” Volpe said making it through the downturn did shape his desire to plan for the future of the firm. “People may say it’s a Paul Volpe design. The reality is that it’s all of us,” Volpe said. “They’ll have the responsibility. I want to work with clients and do designs.” Asked who calls the shots in case of a business dispute, all four men answered simultaneously: “All of us.” Then Wagner added, “One vote for everyone.” ■
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Dustup continued from PAGE 5 He thinks most meet the current levels, but they have to work hard at it. He’s concerned the proposed regulations could devastate foundries financially, as the plan puts an emphasis on engineered solutions — such as ventilation systems — over the use of personal safety equipment. In areas where respirable crystalline silica creation is most prevalent in foundries, like a cleaning room where workers are grinding a mold, companies turn to products like respirators, he said. “It’s not pristine,” Murray said of the foundry industry, “and it never will be.” Crystalline silica can be found in processes used in a variety of industries, from construction to metal casting to concrete, brick and glass production, all of which would be subject to the proposal. According to a Bureau of Labor Statistics report from May 2013, Ohio had 161,190 construction employees and 485,370 production workers, although not all would be affected. Some that could be are the 1,790 foundry mold and coremak-
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ers, the 1,120 dental laboratory technicians and the 2,930 brickmasons and blockmasons listed. The proposal would lower the permissible exposure limits, measured in micrograms of silica per cubic meter of air (μg/m3), for crystalline silica in construction, maritime and general industries. Currently, the limit for quartz, which OSHA calls the most common type of crystalline silica, is set at the equivalent of 250 μg/m3 for the construction and shipyard industries and 100 μg/m3 for general industry in an eight-hour work day. Two other types of silica, cristobalite and tridymite, have limits that are half of that. The proposed rule drastically would cut the allowable limit to 50 μg/m3 for all of the above groups and materials, averaged across an eight-hour day. That’s the lowest level that OSHA believes is technologically feasible. Companies would be required to begin monitoring the levels once they reached 25 μg/m3. Vincent Norwillo, a partner with Gonzalez, Saggio & Harlan LLP in Cleveland, said OSHA and employers and contractors want to protect workers, but he’s heard concerns about the proposed levels. “Employers are saying, ‘You
APRIL 14 - 20, 2014
haven’t shown us there’s any magic to the 50,’” he said. He said he thinks it will be difficult for employers to reach those levels, that the costs have been “grossly underestimated” and that the science behind the level hasn’t been made clear.
Focus on enforcement Joseph Brennan, an associate attorney with Fisher & Phillips LLP’s Cleveland office, said that overall, people are asking why the proposal is coming up now. Since 1968, the rate of lung diseases related to silica has dropped by 90%, he said. He questioned whether a stronger standard would help with the remaining cases or if stronger enforcement of the current standard is what’s needed. The enforcement question is critical. Ken Kudela, director for the Ohio-Kentucky Administrative District Council of Bricklayers and Allied Craftworkers in Hudson, believes a stricter standard is necessary. He knows it will add extra costs or burdens to contractors, but said something needs to be done to stem the deaths from diseases like silicosis. But even Kudela notes that enforcement of the levels is the key. Fred Hubbard Sr., secretary treasurer for
the council, said OSHA has a lot of standards, but they seem to only go after the biggest contractors. If a measure is going to impose a lot of costs onto work sites, it needs to be enforced across the board, he said. And some employers think that cost could be significant. Bradley Belden, director of support services at the Belden Brick Co. in Canton, estimates that the proposed regulations would cost the 425-employee company hundreds of thousands of dollars to meet the new regulations. The company already takes care to reduce the levels of crystalline silica employees are exposed to, using dust collection methods to keep its plants in Sugarcreek clean and by having employees use dust masks in the areas where the methods can’t be used. “We just don’t think it’s going to be a cost-effective solution to a problem we don’t even think exists,” Belden said.
When the dust settles Both the Ohio Cast Metals Association and Belden Brick submitted formal comments to the federal government sharing their concerns on the proposal. They’re not alone. As of April 9, there were close to 2,000 comments
received on the docket. Public commenting closed in February, and OSHA wrapped up public hearings on the proposal on April 4 after about two and a half weeks of scheduled hearings. OSHA is still accepting final comments from those who signed up to testify at the hearings. Typically, OSHA will then analyze the written comments and testimony, update its proposal and get any necessary government approvals. A timeline for this proposal was not available on OSHA’s website, but information on its rulemaking process suggests a final decision would be at least two years out. While OSHA estimates that the cost could be significant overall at $637 million annually, the majority of which would be incurred by construction-related companies, it expects that average employers would spend just about $1,242 each year to meet the regulations. Murray of the Ohio Cast Metal Association doesn’t agree with those estimates. While he declined to name the company, he shared that a large, local foundry had spent about $1 million to meet the current guidelines. “This thousand dollar number is infuriating because it’s so absurd,” he said. ■
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THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
APRIL 7 - 13
Investor relations vet Mabee is definitely back in the game
The big story: University Circle Inc. said it’s working with prominent Cleveland-area developers Mitchell Schneider and Sam Petros to build a $130 million residential high-rise on a site occupied partially by the Children’s Museum of Cleveland. The project is dubbed “One University Circle.” Preliminary plans call for a building of 25 to 28 stories with about 280 units ranging in size from 720 square feet to a 4,200 square foot penthouse. Work is expected to begin in summer 2015 on the project. University Circle Inc. is working with the museum to identify another site for the institution.
■ Last July, Keith Mabee retired from Dix & Eaton. “It was just time to write the next chapter,” he said. Mabee started penning that chapter last week: He’s now group president for corporate communications and investor relations for Falls Communications in Cleveland. Mabee had worked for Dix & Eaton since 1997. Prior to that, he did communications and/or investor relations for a trio of companies over a 15-year span. It’s particularly interesting to deliver such Mabee services today, he said. “At the board level, stocks are valued more and more on how a company’s governed and how they execute not only business but their relationships with all stakeholders,” he said. “Shareholder activism is picking up again. I think it’s going to be a heady two or three years now. “It’s an exciting time for somebody like me to hopefully become a trusted adviser to boards and senior management teams that are going to have to face into this environment,” Mabee added. Mabee was president of Dix & Eaton for more than a decade, then vice chairman and finally a consultant through July 2013. It was Rob Falls, president and CEO of Falls Communications, who approached him about returning to full-time work. “Our clients really are wanting more and
Around the block:
Downtown Cleveland’s 14-floor Hampton Inn changed hands on April 7 for $19.8 million, according to Cuyahoga County land records. The buyer is an investor group called “Black Sapphire C Cleveland 2014 Inc.” that was incorporated Jan. 9 in Wilmington, Del. The seller was 1460 Ninth Street Associates Limited Partnership, an affiliate of Raleigh, N.C.based Concord Hospitality Enterprises Inc., a hotel development, ownership and management firm that was based in Cleveland until 2003. The 194-room hotel is on the northwest corner of Superior Avenue and East Ninth Street.
Sharing expertise: The Cleveland Clinic’s Bariatric and Metabolic Institute will lend its expertise to Doctors Hospital at Renaissance, a 530-bed physician-owned health system in Edinburg, Texas. The affiliation is the first for the Clinic’s bariatric program. The Clinic’s renowned heart and vascular program has affiliated with 22 programs across the country, with the most recent being Susquehanna Health, a four-hospital system in north central Pennsylvania. In these arrangements, the Clinic works as a consultant of sorts and collaborates with partnering institutions on complex medical cases and shares its research, care protocols and other tools.
Quite a jump: It turns out the Maltz family was more generous than originally believed. Milton Maltz and his wife, Tamar, announced April 9 that they and their family’s foundation contributed $30 million in total toward Case Western Reserve University’s $64 million performing arts center project. The Maltz Foundation originally agreed to commit only $12 million toward the project of transforming the historic Temple-Tifereth Israel off University Circle into a state-of-the art performing arts space.
Next in line: Progressive Corp. said chief financial officer Brian Domeck intends to retire after the company’s annual meeting May 2015 and will be succeeded by John Sauerland, who currently is president of the auto insurer’s Personal Lines Group. Domeck will continue to serve as CFO through early 2015, when the Mayfield Village-based company’s 2014 financial statements will be completed and certified. On your radar screen: The 39th Cleveland International Film Festival presented by Dollar Bank will be held March 18 -29, 2015, at Tower City Cinemas and select neighborhood screening locations. The film festival has grown by 178% since 2003, and it welcomed 97,804 film enthusiasts this year. More than 350 films originating from more than 60 countries are showcased during the annual spring arts tradition. This is the festival’s 38th year.
Talk about it: Case Western Reserve University announced it will assume management of Town Hall of Cleveland, which bills itself as the nation’s longest consecutive-running speaker series. The programming will move from PlayhouseSquare to Case Western Reserve’s new Tinkham Veale University Center, which opens in August.
more corporate work,” Falls said. “They would like more in-depth strategy and somebody who has been on the corporate side and understands what it’s like. So Keith … is a tremendous, tremendous gain for us.” Also last week, Falls Communications signed a lease that adds 5,000 square feet to its existing 21,000, Falls said. — Michelle Park Lazette
Kids use kits to help advance 3D printing ■ Applied Systems & Technology Transfer LLC in Youngstown, which calls itself AST2, wants schools to be able to have access to affordable, easy-to-fix 3D printers. Enter the INVENT3D printer, a kit that students can assemble on their own. According to the company’s news release about the new product, the assembled printers are designed to work with AST2’s STEM education program. Jack Scott, president of AST2, said the first kits are slated for use in summer camps in Texas and Pennsylvania. But it’s not just the students getting their hands on such a kit who are learning from the experience. The kits themselves are being made by students in an after-school program at Choffin Career & Technical Center in the Youngstown city school district. Scott said four students are using 3D printers, CNC machines and laser-cutting machines to make the parts in the kits and are getting paid $13.50 an hour for their work. Joe Meranto, director of career technical and adult education at Choffin, said the collaboration has been a “good marriage”
WHAT’S NEW
BEST OF THE BLOGS
COMPANY: Surgical Theater LLC, Cleveland PRODCUT: Surgical Navigation Advanced Platform
Excerpts from recent blog entries on CrainsCleveland.com.
Surgical Theater LLC says the Surgical Navigation Advanced Platform, or SNAP, “integrates with operating room technology to provide advanced 3D capabilities and augmented reality, allowing surgeons to enhance their surgery performance.” SNAP provides neurosurgeons “unique virtual-reality guidance to determine the safest and most efficient pathway to remove cerebral tumors and treat vascular anomalies,” according to Surgical Theater. The product, currently being considered for Food and Drug Administration clearance, was on display for the first time last week at the American Association of Neurological Surgeons’ annual meeting in San Francisco. SNAP enables surgeons to “execute their surgery plan while in the operating room utilizing a patient’s CT/MRI scans, allowing enhanced accuracy and efficiency,” according to the company. It also provides features that allow surgeons to see behind arteries and other critical structures. Clearance by the FDA is expected midyear, Surgical Theater says. Dr. Joshua Bederson, chairman of the neurosurgery department at Mount Sinai Hospital in New York City, who was involved in SNAP’s design, said its augmented reality features “allow for accuracy to be maintained throughout the procedure and for simulation of all phases of complex surgeries. For information, visit www.surgicaltheater.net.
Do tell ■ Big-data companies know a lot about customers, but they’d like to know even more. That’s the thrust of a Wall Street Journal story that included information from a Cleveland Clinic spinoff, Explorys. The Journal said big-data firms nationwide “already collect loads of information about their customers and suppliers — but that has only whet their appetites for even more. Some retailers want to see what customers buy from other stores, for instance, while health providers want a real-time rundown on their patients’ vital stats to get an early warning about potential health problems.” The section on Explorys, which creates software for health care companies to store, access and make sense of their data, was headlined, “Taking Patients’ Pulse.”
Explorys “holds a huge trove of clinical, financial and operational information — but would like access to data about patients at home, such as their current blood-sugar and oxygen levels, weight, heart rates and respiratory health,” according to the story.
Set apart ■ Cleveland and Akron are among the U.S. cities where “the rich are most segregated from everyone else,” according to an analysis on TheAtlanticCities.com. Richard Florida wrote the piece based on his Martin Prosperity Institute colleague Charlotta Mellander’s use of an “index of dissimilarity” developed by sociologists Douglas Massey and Nancy Denton. The index, he wrote, “compares the distribution
and that the program gives the students making the kits real-world experience in the manufacturing industry. — Rachel Abbey McCafferty
Dollar Bank invests in educated homebuyers ■ In its 15th year, a Dollar Bank workshop that aims to inform mothers who seek mortgages drew its largest crowd in Cleveland this March, Dollar Bank executives reported last week. Some 300 people signed up for the Mortgages for Mothers program at the Wolstein Center at Cleveland State University on March 29, said Dorothy E. Curtis, assistant vice president for community development for Dollar Bank. The event is offered annually in both Cleveland and Pittsburgh, where the mutual bank is headquartered. At this year’s workshop, Curtis said 176 participants enrolled in Dollar Bank’s Credit Enhancement Program, a free service that analyzes first-time homebuyers’ credit and sets up a strategy for improving their credit. “We are trying to make sure that we secure the communities in which we serve with well-educated homebuyers,” Curtis said. “The program is not just to get an individual in a home. We want to make sure that they stay in the home.” The workshop also is not just for mothers, Curtis noted. A part of Dollar Bank’s Community Reinvestment Act programming, the seminar is open to men and women. It’s targeted to single mothers because “we find that … they are the ones who buy homes the least,” Curtis said. — Michelle Park Lazette
of a selected group of people with all others in that location. The more evenly distributed the wealthy are across tracts compared to the rest of the population, the lower the level of segregation (the Dissimilarity Index ranges from 0 to 1, where 0 reflects no segregation and 1 reflects complete segregation).” Tables in the analysis show the 10 large metro areas — those with 1 million or more people — where the wealthy (defined as households with annual income of $200,000 or more) are the most and least segregated from other economic groups. Cleveland-Elyria-Mentor ranked No. 5 on the list of most geographically segregated metros, with a Dissimilarity Index of 0.56. No. 1 on that list is Memphis, at 0.582. Looking at all the United States’ 350-plus metros, Cleveland is No. 13 overall in income isolation, and Akron is No. 18.
Real progress ■ The number of premature births and children’s hospital visits for asthma “dropped significantly in parts of the United States, Canada, and Europe barely a year after they enacted smoking bans,” The New York Times reported in a story that quoted a MetroHealth doctor. An analysis reported in The Lancet “combined the results of 11 studies encompassing more than 2.5 million births and nearly 250,000 asthma attacks,” The Times said. “Experts called it the best evidence to date that legislation creating smoke-free public places and workplaces improves children’s health, even in the womb.” The results are “very impressive,” said Dr. Brian Mercer, chairman of obstetrics and gynecology at MetroHealth Medical Center, who noted that half a million American babies are born prematurely each year. “If you could prevent 10 percent, you’d prevent nearly 50,000 premature babies in the U.S. alone each year,” said Mercer, who was not involved in the study.
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