Crain's Cleveland Business by Crain's Cleveland Business

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Vol. 35, No. 14

$2.00/APRIL 7 - 13, 2014

SAFETY IS AT FRONT OF LINE

Tressel’s candidacy is cloudy subject Experts say it’s unclear how NCAA penalty would affect potential presidency at Akron

Indians will ‘roll out’ metal detectors this season; local company benefits

By TIMOTHY MAGAW tmagaw@crain.com

By KEVIN KLEPS kkleps@crain.com

Tigers had the detectors in place for their home opener on Monday, March 31 — a year ahead of the MLB mandate. The Indians didn’t use their new metal detectors for their sold-out home opener on Friday, April 4, but Folk said the club will unveil them soon. He didn’t want to disclose the number of metal detectors the Indians purchased from CEIA because they will use a “roll-out” process to determine if they have a sufficient number in place.

Jim Tressel’s fall from grace as Ohio State University’s seemingly invincible football coach was punctuated by half-serious comments from then-university president E. Gordon Gee that Tressel’s status was so cemented at the school that Gee considered it more likely the coach would fire him — not the other way Tressel around. The notion that a football coach could wield so much power over a university angered many, but now Tressel may get his shot at running the whole show, as he’s among a group of 19 individuals who formally have applied to succeed Luis Proenza as president at the University of Akron. Some even call him the frontrunner. However, some legal experts suggest Tressel — now an executive vice president at UA — still could be saddled by sanctions levied by the NCAA, even if he isn’t calling plays from the sidelines.

See SAFETY Page 28

See TRESSEL Page 28

ans who enter the gates at Progressive Field later this season won’t be required to remove their shoes or belts, but they will be asked to walk through a metal detector. Major League Baseball’s new security initiative, which mandates that hand-held or walk-through detection be in place by 2015, has resulted in teams such as the Cleveland Indians testing the procedures this season. And for Twinsburg-based CEIA USA Ltd., the mandate has meant more business for a 17-year-old company that already had made a name for itself by manufacturing metal detectors for airports as well as federal, state and local governments. When baseball announced its security initiative in January, it said it was being assisted by CEIA and GSIS, a Washington, D.C.-based security consultant. Jim Folk, the Tribe’s vice president of ballpark operations, said the Indians were aware of CEIA’s strong reputation and mentioned the company to MLB.

SCOTT POLLACK

Baseball then negotiated pricing for all of its clubs, Folk said. Luca Cacioli, director of operations for CEIA USA, said the company was “glad and honored” to be working with MLB. “What it means from a financial standpoint, I can’t disclose,” Cacioli said with a laugh.

No ‘magic number’ for MLB Marilyn Thaxton, the North American marketing manager for CEIA, said the company’s contract

with baseball isn’t “exclusive,” but “most” clubs have bought metal detectors from the Twinsburg business. CEIA won’t reveal the teams with which it’s working, but clubs such as the Indians, Detroit Tigers and Minnesota Twins already have confirmed partnerships with CEIA. The Tigers bought 55 walkthrough metal detectors and 15 hand-held screening wands from CEIA, Mike Healy, the team’s vice president of ballpark operations, told Crain’s Detroit Business. The

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APRIL 7 - 13, 2014

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CRAIN’S CLEVELAND BUSINESS

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APRIL 7 - 13, 2014

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On March 28, the organization celebrated making its 1,000th loan across its footprint, which also includes Toledo. All the while, the microlender, which also provides technical assistance to its borrowers, counts a single default in Cleveland, Diamond noted. While an apples-to-apples comparison between Cleveland’s earliest loan volumes and those of ECDI’s first office in Columbus isn’t possible because loan limits were lower when the Columbus office opened in 2004, Diamond said the startup scene in Cleveland is more vibrant and is driving volume. Now, the Cleveland office is projected to book slightly more loans by dollar volume than Columbus in the current July-to-June period, he noted. “There really was this pent-up demand in Cleveland when ECDI got here,” Diamond said. “There re-

MICHELLE PARK

Sharon and Bob Rybak are the co-owners of My Pizzetta, a pizza drive-through they opened in North Royalton last December. They are shown with their son, Paul, the business’ general manager. ally was no place for these individuals to get loans and … our group in Cleveland did a great job with networking with banks” to find candidates, he said. “The founders of ECDI will tell you they never anticipated these numbers either in Cleveland,” he said.

Dough makes dough rise From Sharon Rybak’s perspective, the numbers reveal “there’s very little other support out there for small businesses.” Her family and she opened a pizza drivethrough in North Royalton last December, and used a $75,000 loan from ECDI to buy much of the equipment they needed, including an oven that cooks pies fast enough to make their concept work. But before ECDI, they’d sought bank financing for My Pizzetta and came up empty-handed, Rybak said, citing their unproven concept as one reason. “Other banks wouldn’t even touch us,” agreed Bob Rybak, her husband and co-owner of My Pizzetta. Business owners in Akron, too, soon may be able to seek financing from ECDI, as the organization is eyeing expansion there. The nonprofit is in conversations with financial supporters now, Diamond said. ECDI also has plans to roll out next month in Cleveland and Columbus its first line-of-credit offering, he added. When ECDI enters new markets, it asks stakeholders to provide operating support and seeks lending capital from banks. In Cleveland, The Cleveland Foundation and Cuyahoga County have supported operations, and Huntington National Bank committed to lending ECDI $2 million for a loan fund. The city of Cleveland — through a grant

Volume 35, Number 14 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 © 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

BY THE NUMBERS ■ 2: Number of years in which ECDI estimates its loan fund would be depleted without more commitments* ■ 36: Percentage of ECDI loans made to minority-owned businesses in Cleveland ■ 58: Percentage of ECDI loans made to female-owned businesses in Cleveland ■ 1,000: Dollar amount of smallest ECDI loan in the Cleveland area, for marketing by a woman who bakes pies out of her house ■ 300,000: Dollar amount of largest ECDI loan in the Cleveland area, for real estate improvements ■ *Based on its current rate of financing loans, according to a February study ■ Source: Eric C. Diamond, vice president, Economic and Community Development Institute — Michelle Park Lazette — and Cuyahoga County — through a revolving loan fund — also provided capital for loans, as does the U.S. Small Business Administration, Diamond said. The motivation behind Huntington’s commitment is helping businesses grow, perhaps to a point where they can obtain traditional bank financing, said Daniel Walsh, president for the Columbus-based bank’s Greater Cleveland region. “Because we do so much SBA business in our shop, we have a very clear understanding of what deals can get done and what can’t in the banking environment,” Walsh said. “Obviously, it’s a regulated industry. It’s attractive to us to say, there’s another solution and it’s ECDI. “The fact that these (ECDI) goals have been exceeded and the pipeline remains strong shows there’s a lot that remains to be done,” Walsh added. ■

Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 482079911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

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CRAIN’S CLEVELAND BUSINESS

American Financial has made ‘final’ offer Company says it isn’t interested in upping shares in Richfield’s National Interstate By MICHELLE PARK LAZETTE mpark@crain.com

Don’t expect the majority shareholder of National Interstate Corp. to come knocking anytime soon with another offer to buy out the Richfield-based company’s shares. So says the company itself — American Financial Group Inc. — and one equity analyst who covers both American Financial and National Interstate. “They’ve communicated (that they) have no interest in increasing their shares,” Vincent DeAugustino, a vice president and equity analyst with Keefe, Bruyette & Woods in Baltimore, said of American Financial. “I think $30 was in fact their best and final offer, and they held true to that. If conditions change, their position may change as well.” It’s been three weeks since American Financial Group’s unit, Great American Insurance Co., terminated its tender offer to acquire all of the shares of National Interstate it didn’t own already. The decision to withdraw the offer followed a federal court’s announcement that it would grant a motion for a preliminary injunction enjoining the consummation of the offer. Although he sued in early March in U.S. District Court for the Northern District of Ohio on grounds that Great American’s tender offer was coercive and its process flawed, and he’s happy with the court’s decision, Alan R. Spachman isn’t pleased it came to this. “It’s not a good situation for anybody,” said Spachman, who founded National Interstate in 1989 and is a director on its board. “It’s kind of embarrassing. It distracted the company. It cost a lot of money.” Spachman, who along with his family owns roughly 12% of National Interstate’s shares, hopes the company “can put this behind us and get back to business.” “I hope they decide to go one of two directions, either one is fine with me,” he began, speaking of American Financial. “I hope they decide to take their 52% and help this business prosper, and we can all continue the wonderful financial relationships we’ve had for the past 25 years. “Option two, if they want to own the whole company, I hope they go about making another tender offer, but I hope they use a process that withstands public scrutiny,” he added. However, American Financial’s public filing with the U.S. Securities and Exchange Commission a day after the tender offer’s termination stated that it had “no current plan or proposal to acquire any additional shares” of National Interstate. See OFFER Page 29

CORRECTION ■ A March 31, page 5 story about suburban development misidentified the mayor of Euclid. He is Bill Cervenik.

INSIGHT

FUELING A BOOM Columbus law firm’s report shows staggering amount has been invested in state as product of shale drilling By DAN SHINGLER dshingler@crain.com

staggering $18.7 billion. That’s the most recent accounting of the amount of money being invested in Ohio as a result of shale drilling.

The tally is based upon a recent report by the Columbus law firm Bricker & Eckler, which has been following infrastructure and other shalerelated investments since early in 2013.“We’ve spent a lot of time on this,” said Bricker & Eckler associate Matt Warnock, who works on shale-related legal issues in the Utica shale re-

gion. “This list has gone through three iterations already,” Warnock noted. The first time that he worked on the list, about a year ago, there was about $12 billion in investments either made or committed to be made in Ohio. Since then, the number has continued to grow rapidly. It’s not in dribs or drabs, either. There are no fewer than 12 projects that each represents an investment of $500 million or more on the current list of the Buckeye State’s shale oil and gas investments. See BOOM Page 27

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APRIL 7 - 13, 2014

Munchies: Candymaker aims to make marijuana treats Baker Candies gets license to make ‘edible cannabis’ products By JAY MILLER jmiller@crain.com

A Cleveland chocolate maker is setting his sights higher. Chris Galgoczy, the owner of Baker Candies Inc., a small, struggling Cleveland candymaker best known for the whipped eggs that are an Easter favorite, is aligning with a financially strong partner and hoping to market what are called chocolate marijuana edibles across the Midwest. He’s making the move as attitudes change and states allow for the highly regulated sale of the hallucinogen for medicinal or even recreational uses. “There’s a huge opportunity,” he said last Monday at his small brickfaced production shop and showroom in Collinwood. “It’s a billiondollar industry in California. It can be a huge economic development engine.” Though marijuana conjures up images of laid-back users, it’s just a business to Galgoczy. “I’m not your typical stoner businessman,” Galgoczy said. “I’m a Republican.” But getting into the medicinal marijuana business is fraught with hurdles, Galgoczy is learning. Every step along the way violates federal law, from cultivating marijuana plants to processing the plant’s essence into a salable product and distributing it. That means the entire plant-to-candy-to-distribution process must take place within a single state. Galgoczy has aligned himself with Bhang Chocolate Co. of Oakland, Calif., That company claims to be the leader in edible cannabis products nationwide. Scott Van Rixel, Bhang’s CEO, said Galgoczy has licensing rights to the Bhang brand and its trademarked packaging in Illinois, Michigan, Ohio and Pennsylvania. Last month, Mentor Capital Inc., a publicly traded San Diego firm that invests in cannabis businesses, invested $39 million in Bhang, taking a 65% stake in the candy company. That move will provide funding for his growth plans — funding that is not readily available to most aspiring cannabis entrepreneurs, Galgoczy said. “It costs $200,000 (for startup) in Illinois, $200,000 in Pennsylvania, which sucks because it kills a lot of entrepreneurs, because you can’t get financing for this industry,” he said. “We’re fortunate that our brand (Bhang) is so strong in the industry that Mentor bought into it.”

Waiting for things to loosen up As state laws loosen and allow the production and sale of medical marijuana, Galgoczy said a company he is creating to manage the licensing from Bhang will open a candymaking operation state by state.

PHOTOS BY JANET CENTURY

These Baker Candies chocolates don’t contain marijuana. In the future, however, Chris Galgoczy aims to make marijuana treats in other states. His operations then will affiliate with one of the companies that win a license to cultivate marijuana and sell plant material and edibles to licensed dispensaries. Van Rixel said the licensees are on their own to make their in-state connections, but his company’s legal staff will help partners like Galgoczy weave their way through the legal thicket.

“He can use our brand name, our packaging and our marketing,” he said. “And we provide a recipe for the chocolate and what the standards should be for the cannabis content.” The laws in the fours states where Galgoczy holds Bhang licenses do not yet allow for that kind of supply chain. Bills to legalize medical marijuana use in Ohio have been introduced and died in recent years, and a drive for a ballot issue also has come up short. Both Gov. John Kasich and House Speaker Bill Batchelder, RMedina, oppose any legalization. Pennsylvania also is holding firm against legalization. But Michigan and Illinois have taken steps forward, though not far enough to allow Galgoczy to a set a timetable for moving ahead with his new business. Michigan had passed laws that would have allowed cannabis businesses to be established. But a 2013 Michigan Supreme Court ruling

determined that while the medicinal use of marijuana was legal, cultivation and dispensaries are not. So, until the state Legislature steps in to clarify the situation, a person will not be prosecuted for possessing a quantity of marijuana if a physician has authorized cannabis therapy for the patient. But, according to Edward J. Orlett, the Ohio representative of the national Drug Policy Alliance, growing, selling and buying cannabis products are still illegal. The law, he said is designed “purely for the patient’s benefit. If you somehow get it and use it, you’re OK.” Illinois is beginning a fouryear pilot program and is expected to have in place later this year regulations that will allow it to license 22 cultivation centers and the 60 dispensaries that will sell marijuana products.

A new generation When the laws are clarified, Galgoczy expects his new business to work with one or more of the cultivation licensees to produce and distribute Bhang brand chocolates in each of the states. NORML, the Washington, D.C.based nonprofit that advocates for the responsible use of marijuana, says that 20 states allow state-licensed medical cannabis dispensaries, most on the East Coast and in the West. Baker Candies was started in 1921 by Galgoczy’s great-grandfather, Louis Bakracheff, who changed the name on the candy to Baker. In addition to a sales room attached to the production plant on Holmes Avenue, the company has a shop on SOM Center Road in Willoughby Hills. A centerpiece of the back shop is what’s called an enrobing machine. It’s the same machine, Galgoczy said, that was featured in a famous episode of the 1950s television show “I Love Lucy.” ■

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CRAIN’S CLEVELAND BUSINESS

Health care conference takes chance on Cleveland as host CMSA president says group was won over by convention center By JAY MILLER jmiller@crain.com

The first major health care conference at the Cleveland Convention Center is coming to town in June — a visit that the leader of the group holding the conference wouldn’t have expected to make until she came to check out the city. The Case Management Society of America (CMSA) will bring 2,000 of its members — mostly nurses and social workers — for its four-day annual conference June 17-20. The confab is branded with the phrase, “Embracing the Changing Rhythms of Healthcare.” It’s the first time the 24-year-old organization has gone outside a socalled “tier one” convention city, said association president Nancy Skinner, who was in Cleveland last week to iron out details of the conference. “I want to say this in a kind way,” Skinner said during a visit to Crain’s office two blocks from the convention center. “It was a little bit of a risk for us to go outside one of the true convention center cities; in 24 years of having conferences we’ve been to Dallas, San Francisco, Chicago, Florida (and) Boston. “But Cleveland made us feel so comfortable — the people from (the convention center) and Positively Cleveland — that we were willing to take that step,” she said. Skinner admitted that the city’s tarnished national image, and notuncommon worries about safety in an urban downtown, were concerns that ultimately were allayed by all the local people she met at Positively Cleveland and the hospitals. She toured the new convention center in November and visited the Cleveland Clinic and University Hospitals last week. Skinner even was welcomed by Cleveland Mayor Frank Jackson at City Hall, who presented her with a welcoming proclamation and offered to kick off the conference with a few remarks at the opening session. “This is the first time the mayor of any city has welcomed us,” Skinner said. “I think that demonstrates the partnership CMSA and Cleveland are forming to make this a good experience for our attendees and the city of Cleveland.” CMSA expects to consume 4,000 hotel room-nights at four hotels. The Westin Cleveland Downtown, set to open May 1, will be the headquarters hotel. Attendees also will lodge at the Cleveland Marriott Downtown, the Hyatt Regency Cleveland and the Renaissance Cleveland. The convention will be kicked off on its first night with a reception at the Rock and Roll Hall of Fame and Museum. Dave Johnson, director of public relations and marketing for the convention center and the adjoining Global Center for Health Innovation, called the wooing and landing of CMSA’s convention “a case study in how a community works together to overcome the fears and obstacles.” Johnson said the Global Center for Health Innovation, formerly the medical mart, also was an attraction. Skinner mentioned in particular the under-construction State of the Art Patient Home, a showcase for the

A banner ad for the Case Management Society of America’s conference, which will be held at the Cleveland Convention Center in June. latest technology and equipment available for home health care. “More and more people want to care for their loved ones at home,” and the exhibit will give her members help in advising patients and families about the value and limits of home care, Skinner said.

Lengthy courtship Case management is a growing part of health care, in which case

managers act as intermediaries between patients and their doctors, and even their insurance providers. Skinner said most of her group’s members come from nursing and social work backgrounds. A job description in a recent posting for a nurse case manager at University Hospitals stated that the position requires coordinating patient care with other health care providers, completing patient documentation and practice utilization

management. The latter refers to evaluating the appropriateness and value of health care services for the patient, the hospital and for the patient’s healthcare plan. Mike Burns, senior vice president of convention sales and services at Positively Cleveland, the city’s convention and visitors’ bureau, said his organization has been working with CMSA since early 2011, after one of the society’s meetings consultants stopped at Positively Cleveland’s booth at a convention industry gathering. That contact led to Positively Cleveland being offered the opportunity to put in a bid for the 2014 convention. A CMSA site selection team first came to Cleveland in May 2012. The

“They loved what they saw. They liked the walkability of the city.” – Mike Burns senior vice president of convention sales and services, Positively Cleveland convention center was still under construction, but Burns said the team was shown drawings and layout maps. Brianne Baird, CMSA’s director of communications, said the group chose Cleveland over Chicago and Philadelphia. “They loved what they saw,” Burns said. “They liked the walkability of the city.” ■

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Auto, oil and gas industries strengthening local steel By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

The steel industry as a whole may be stuck in neutral, but steelmakers serving the automotive and oil and gas industries appear to be revved up in high gear. One such example is ArcelorMittal’s Cleveland plant. Although ArcelorMittal declined comment, Mark Granakis, president of United Steelworkers Local 979, which represents production workers at the Cleveland plant, said the global steel giant’s mill here is running strong. He estimated the mill is at capacity and employing about 1,900 salaried and hourly workers. “We’re expecting to be full for the entire year,” Granakis said. That isn’t the case at most mills across the United States and Ohio, according to information from steel industry analysts and the Federal Reserve Board. The improvement in non-residential construction steelmakers hoped for last year has yet to materialize. That situation combined with a sluggish Chinese economy could mean 2014 will be another disappointing year for the steel industry overall. The Federal Reserve’s Beige Book

in January noted that some steel producers in the region covered by the Federal Reserve Bank of Cleveland — which encompasses all of Ohio, western Pennsylvania, eastern Kentucky and a small part of West Virginia — reported lowering their capacity usage due to excess capacity globally. In the Beige Book report for March, steelmakers in the Cleveland region reported “significant open capacity” and steel shipments that had risen only slightly since the start of the year. “Producers predicted that their industry will not exhibit strong growth until there is considerable strengthening in the construction sector and a greater sense of confidence in the economy at large,” according to the March report.

An upbeat Republic The increasingly sluggish steel recovery comes amid a host of investments and changes for Northeast Ohio’s steelmakers, from the planned spinoff of the steel business at Timken Co. to the expansion of production at mills run by Canton-based Republic Steel. Republic Steel is another local steelmaker that seems to be buck-

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ing the national trend. Ted Thielens, executive vice president for Republic Steel, said the company is forecasting sales above $1 billion for 2014. It had sales of about $800 million in 2013, a drop from $950 million sales in 2012. But now it’s running two furnaces in Canton to keep up with demand instead of idling one as was originally planned, and it started to ramp up production in Lorain in February with a new electric arc furnace. Republic Steel makes special bar quality products, primarily for the automotive industry, Thielens said. The Lorain furnace adds new capacity to support products for the drilling industry. “We’re optimistic about ’14,” he said. Timken in Canton, like Luxembourg-based ArcelorMittal, which also had been investing in equipment in Ohio, declined to comment for this story.However, in its 2013 full-year results, Timken noted that in addition to its equipment investments, the company added two new alloy steels specifically for the oil and gas industry in 2013, and had high hopes for 2014. Timken said in a news release about its fullyear results that it expects steel

sales in 2014 to rise 12% to 17%, mainly driven by improvements in the oil and gas and industrial markets. Steel sales for Timken were $1.4 billion in 2013, down 20% from 2012. When it comes to ArcelorMittal, the strength in the automotive market could be helping to keep production high in Cleveland. The company upgraded equipment at its Cleveland plant in 2013 so the mill could produce advanced, highstrength steel, an option for an automotive industry that’s pushing for ever-lighter materials. Granakis of Local 979 thinks the efficiency of the ArcelorMittal Cleveland plant — it’s often touted by the company as one of the most productive in the world — contributes to its success. The pricing for its products is competitive, he said.

China remains a drag Mills serving specific, growing industries, such as oil and gas or automotive, have an advantage, said Andrew Lane, equity research analyst for Morningstar Inc. But overall, capacity usage at steel mills in the United States is still muddling along near 77%, he said. Ten years ago, capacity usage would have been closer to 85% or higher. Analysts such as Lane aren’t expecting anything but a slow climb back to strength over the next few years. “I think it’s taken a little longer than management teams expected,” Lane said. Philip Gibbs, a metals equity analyst for KeyBanc Capital Markets, said he doesn’t expect steelmakers at large to reach more desirable utilization rates until there’s a strong recovery in construction. He expects output finally to pick up in 2014, but “it’s just a matter of how much.” Gibbs said the research team he works with at KeyBanc is expecting

3% to 5% consumption growth in the U.S. steel industry in 2014, but that the projection seems a bit aggressive given the slow first quarter. John Lee, an equity research analyst at Fifth Third Bank, said he expects some improvement in the Cleveland area compared to 2013, but he doesn’t anticipate a surge in demand or earnings. Lee is keeping an eye on the giant Chinese market, which he said has been slowing recently and could lead to issues in global demand and production if it continues. Gibbs and Lane said they think consolidations, closures or divestitures could take place if the market continues to stagnate. Gibbs said companies will continue to try to consolidate their mills and dump non-core plants as long as slow growth continues. Lane said he wouldn’t expect widespread production curtailments, but would watch for smaller producers to consider shutting down if the economic picture is the same next year. Granakis said he thinks the steel industry at large would be better served if U.S. producers were on an even playing field with those overseas. Leo Gerard, international president of the USW, expressed similar concerns. One issue the industry is watching now is whether the federal government eventually will enact duties on tubular goods coming out of South Korea. Gerard said Ohio’s mills are sophisticated and there is high demand for the goods from the oil industry, but the government is letting South Korea drop an “economic bomb” on the industry. Countries are said to be dumping goods when they sell them below fair value. Gerard noted that to win in trade cases, it’s necessary to prove that jobs already have been lost because of a foreign country’s policies. “American trade policy is counterproductive,” Gerard said. ■

Youth organization is ready to work for Northeast Ohio By TIMOTHY MAGAW tmagaw@crain.com

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If you need some summer help, more than 12,000 motivated teenagers between the ages of 14 and 18 are willing to lend a hand. Youth Opportunities Unlimited, a local nonprofit, is on the hunt for employers to take part in its summer jobs program. The program matches young people who have registered on its website with local employers looking for a particular skill set. Youth Opportunities Unlimited also pays the wages. The organization hopes to fill as many as many as 3,500 jobs in the community this summer, up from the 3,200 it employed last year. The number of jobs offered depends on the number of employers who sign up for the program and the amount of money provided through foundation, city, county, state and federal sources. Participating employers include libraries, museums, hospitals and retailers. “These kids are very eager,” said Carol Rivchun, president of Youth Opportunities Unlimited. “I hate to say this, but there are some jobs college students aren’t particularly interested in. But there’s a young person getting a paycheck who can get very excited about them.”

The program’s leaders insist it’s not a way to pick up cheap labor, but rather an opportunity to mentor teens in the community. “It’s been a rewarding experience on both sides,” said Ann Williams, a career coach at University Hospitals, which has been involved with the program for about a decade. “We don’t view it as free work. We view it as opportunity to give high school students an opportunity to see what a real work environment looks like.” This year, UH plans to bring 16 young people to work in various departments, and it occasionally hires on students after the summer program over. For instance, one of last year’s participants — Chanel Foster, now a senior at Lincoln West High School — is still working part-time as a dietary aide at the health system. Last summer, teens enrolled in the program earned a combined $3.25 million in wages. The bulk of the young people — about 86% — said they were satisfied with their experience while 92% of employers said the same. Employers interested in participating must register on the organization’s website, www.youthopportunities.org, by April 15. Student registration ended last Friday, April 4. ■

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CRAINâ€™S CLEVELAND BUSINESS

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TechPint: Canâ€™t-miss party for startups Entrepreneurs raise glass to massively popular event series By CHUCK SODER csoder@crain.com

Paul McAvinchey expected 80 or 90 people to show up at the first TechPint event last June. Instead, he got 180, many of them well-known local entrepreneurs and investors. Many more people who didnâ€™t buy tickets in advance were turned away at the door. Today, TechPint is the most popular tech networking event in Northeast Ohio, according to several entrepreneurs who spoke with Crainâ€™s. The event â€” which McAvinchey describes as â€œa party with the right peopleâ€? â€” consistently sells out well in advance, no matter how many tickets are made available. And the next TechPint should be no exception. The Ireland-born entrepreneur expects 400 people to register for the event, which will be held at the Agora building in Cleveland on April 16. At first, he said 350 people might show up, but that could be conservative: Only three people who signed up for last monthâ€™s TechPint event in Akron didnâ€™t show up, he said, noting that about 150 people attended. â€œItâ€™s just abnormal,â€? he said. A few entrepreneurs said TechPint has become a key piece of a broader effort to create a sense of community among local entrepreneurs. Among them was Adam Baratz. founder and CEO of Betchyu. The Cleveland startup is developing a self-improvement app with a twist: It lets people to place bets on whether a given person will meet his or her goals. It was at a TechPint event that Baratz met one of his mentors, John Knific. Heâ€™s CEO of DecisionDesk in Lakewood, which makes software universities and companies use to manage applications from prospective students and employees. Now the two men meet up every month. Brian Bowles had a similar story. At one TechPint, he met two developers who connected him with an intern at Kent State University. That intern is helping his Cleveland-based startup, Blackwolf Tactical, develop the user interface for its software, which is meant to help police departments run futuristic training exercises. Blackwolf Tactical also was one of the startups that participated in a business competition that took place at a TechPint event held in Lakewood in January. An investor in the audience who liked the concept is scheduled to meet with Bowles later this month. The open communication between entrepreneurs and investors is what makes TechPint so valuable, according to Bowles. â€œThe amount of advice thatâ€™s just openly given at TechPint, more than any other tech networking event, is huge. Through the roof,â€? he said.

Starting in the bar McAvinchey had no idea how big TechPint would become.

He and his wife, Rebecca, moved to Cleveland from Chicago two years ago, so they could be closer to her family. McAvinchey, who previously started a few Internet-focused companies, took a job as product innovation manager at MedCity Media, a young Cleveland company that writes about innovation in health care. But McAvinchey noted that it gets lonely working in front of a computer in a town where you donâ€™t know many people. He attended events held by other local organizations that help entrepreneurs, such as JumpStart Inc. and Shaker LaunchHouse, but he tended to run into a lot of the same people. To shake things up, he decided to start what he described as a mini tech conference, in a bar. He approached JumpStart, which had invested in MedCity Media, to see if the nonprofit could help him pay for the conference. Turns out, JumpStart already was looking to sponsor some grassroots-style events run by entrepreneurs. The nonprofit has helped McAvinchey and his team of seven volunteers cover the cost of food and drinks at all three of the TechPint events that have been held in the Cleveland area since that first one that attracted so many people to Ohio Cityâ€™s Market Garden Brewery last June. The Knight Foundation in Akron is sponsoring TechPint events in that city. Other sponsors have helped pay for individual events. Once the money was in place for that first TechPint, McAvinchey started making phone calls to â€œhardened entrepreneurs and investorsâ€? â€” the type of people who would make the event worthwhile. Those calls are a big reason why so many people showed up to that first event, he said. â€œI literally rang up three-quarters of the people who came and personally invited them,â€? he said.

Ecosystem-friendly More local entrepreneurs need to learn from McAvincheyâ€™s example if they want Northeast Ohio to have a strong community of startups that help each other and learn from each other, according to Morris Wheeler, a local entrepreneur and investor who works in Beachwood. Entrepreneurs must lead efforts to create such a community; they shouldnâ€™t wait for local governments and nonprofits to do it for them, Wheeler said, citing tenants laid out in the book â€œStartup Communities,â€? by Brad Feld. Though JumpStart has created a lot of tech networking events on its own, the nonprofit also has helped fund and promote a few events created by entrepreneurs, said Samantha Fryberger, spokeswoman for the organization. Among those events is the Burning River Coffee Community, a gathering for female entrepreneurs founded by Laura Bennett, CEO of Embrace Pet Insurance in Beachwood. Fryberger paraphrased a quote from Bennett, which will appear in JumpStartâ€™s coming annual report. â€œUltimately, for an ecosystem to be sustainable, the people it benefits need to lead some of the charges,â€? Fryberger said. â–

COURTESY OF JUMPSTART

Above: TechPint founder Paul McAvinchey stands on a table to get the attention of a talkative crowd at the first TechPint last June. Right: Katie Connelly of Shaker LaunchHouse holds a beer for a friend. Far right: McAvinchey talks to Phil Brennan, CEO of Echogen Power Systems, an Akron company with a technology for turning heat into power.

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PUBLISHER/EDITORIAL DIRECTOR:

John Campanelli (jcampanelli@crain.com) EDITOR:

Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

Hangin’ in

ere’s betting that Columbus is a bit envious of Cleveland this week, as our town remains in contention as the possible host city of the 2016 Republican National Convention. Cleveland can’t become too puffed up at this point. That’s because five other cities also survived last week’s cut by the Republican National Committee’s site selection committee in the number of locations that still are under consideration for the GOP’s big gathering. The worthy opponents include Cincinnati, Dallas, Denver, Kansas City and the undisputed heavyweight champion of convention cities, Las Vegas. But, at least Cleveland remains in the hunt. Columbus and Phoenix can’t say the same. Cleveland’s continued appearance on the list of contenders is an indicator of how far the city has come in building its meetings and conventions business since the national political parties last went through the convention selection process four years ago. It’s indisputable that Cleveland would have had zero chance of seriously competing for either the Republican or Democratic conventions held in 2012, or for any of their presidential conventions in the previous three decades for that matter. The old Cleveland Convention Center was a drab, columnfilled meeting hall that failed to pass either the form or function test with many meeting planners. It had become a liability in attracting events long before wrecking balls knocked it to the ground in 2011 to make way for the sparkling new convention center that opened last summer. It also is inarguable that the hotel development that has blossomed downtown since shovel was taken to earth for the new convention center wouldn’t have happened if Tim Hagan and the now-imprisoned Jimmy Dimora hadn’t stepped out in their former roles as county commissioners and in July 2007 voted to hike Cuyahoga County’s sales tax by a quarter point with the goal of directing those proceeds to a new meeting hall. The Westin hotel that is taking the place of the run-down Crowne Plaza hotel on St. Clair Avenue and the coming makeover of the old Cleveland Metropolitan School District headquarters as a luxury Drury Plaza Hotel are but two of the hotel projects that promise to transform the lodging market in Cleveland and help make the city an attractive regional meeting destination. The Republican National Committee now will be sending what it describes as a “small team” from its staff to visit the six remaining cities on its list for what it calls “a more in-depth and technical look at financing, convention venues, media workspace, and hotels.” We obviously hope Cleveland passes its muster, as the presence of a national presidential convention could produce tens of millions of dollars in economic benefit to the city. However, even if our town doesn’t emerge as the GOP’s choice for its big powwow in 2016, Cleveland can know it possess the chops to compete for meeting business with any other city in the Midwest, if not beyond. And that’s something that would have been unthinkable to say at the start of this decade.

FROM THE PUBLISHER

Benefits that way outweigh the cost tax revenue — from these he opponents of the JOHN buildings has been overstated. sin tax extension have some solid points. CAMPANELLI I think the benefits, economic and otherwise, are so much Yes, there are better more. ways than regressive taxes to I bet that $5 billion of ecofund stadiums. Yes, big-time nomic benefit is realized every sports owners probably season by the scores of sales should pay the costs of the faprofessionals and executives cilities they enjoy. And, yes, entertaining clients and closmoney going toward new ing deals at events. Games and scoreboards and other “reconcerts are a tried-and-true pairs” is more urgently needed way to show gratitude to partelsewhere. ners, grease the wheels of business and But I’m also a realist. goose deals. The arena, stadium and ballpark are But I don’t want this to be about what not owned by the teams. They are owned happens in the loges, box seats and club by us, the taxpayers. The leases with the level. An egalitarian benefit is realized Cavs, Indians and Browns say the public too, and it goes way beyond — and is responsible for major repairs. Like it or above — simple dollars. not, we are contractually on the hook. If Less than a year before he died, we the money doesn’t come from taxes on took my wife’s grandfather, a native of smokes and hootch, it’ll come from New York City, to then-Jacobs Field to somewhere else. That’s reality. see his Yankees play the Tribe. He was But more than just being practical, I using a walker and could barely make it support the extension of the sin tax for from the curb to his seat. Once he shufanother reason. Opponents say the ecofled down the steps and caught his nomic benefit — $5 billion in activity, breath, his eyes were 12 years old again, thousands of jobs, $400 million in local twinkling under the lights.

My then-7-year-old son and I were lucky enough to be in the very last row, in the corner, of Quicken Loans Arena when the Cavs won the Eastern Conference finals in 2007. He rode back to the car on my shoulders, high-fiving people on the streets for blocks. That evening alone is worth 1.5 cents a beer for the rest of my days. And it’s not like you have to flip the turnstiles to enjoy the benefit. Walk into any local nursing home or hospital on a Sunday and try to find a television not tuned into the Browns. Ask the patients and residents if that’s not worth a penny on a glass of wine. Ask anyone about the time their mom took them to a concert or their dad taught them how to keep score of a ballgame. In an age of so many divides — technological, partisan, racial, economic, generational — our sports teams are our only common language. It may be the final thing, aside from our region itself, that unites us. In many ways, Issue 7 is like our teams themselves. Flawed, perhaps, but essential. ■

TALK ON THE WEB Re: Crain’s blows it with sin tax endorsement ■ Your analysis in the March 31 editorial, “Yes on Issue 7,” is way off base. This whole sports complex issue was sold to the taxpayers years ago as a way to keep these sports teams. The premise was to pass a sin tax to build new stadiums to keep the teams. That was done and completed. Nobody said these sin taxes were going to be permanent and we would have to continue this tax to support the billionaire owners for life and their non-profit teams. It is now up to the city of Cleveland to find an alternative way to fund these boondoggles. Basically, a bunch of incompetent politicians gave the deal of a lifetime to the owners and we are stuck to pay for it forever. Not in my book. The city should have been thinking ahead years ago and saving money from the rent and

Reader responses to stories and blogs that appeared on: www.crainscleveland.com

sin tax to pay for the maintenance and upkeep. To assume a sin tax would pay for these basic necessities is totally incompetent at best. It should be run like any other business, and if the business cannot afford to operate, it needs to be shut down. It would be nice if we as homeowners and business owners could just put levies and taxes on the ballot every time we mismanaged our endeavors and allow the public to pay for our mistakes. Unfortunately, this is reality. It’s time for the city and sports team owners to ante up. Browns owner Jimmy Haslam just got $100 million from FirstEnergy for the stadium naming and another $15 million for scoreboards. See WEB Page 11

POLL POSITIONS What are your expectations for the Cleveland Indians this season? A return to the playoffs. This team is strong.

64.0% A near-miss. The pitching is a little thin.

26.7% A regression to .500 or worse.

9.3% Vote in the poll each week at: CrainsCleveland.com

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Web: Sin tax opponents have their say continued from PAGE 10

Now his hand is out AGAIN? — CobraDude

Is your business movin’ on up?

■ Editorial board, have you done an examination of the social and economic implications of maintaining our funding on cigarette taxes? Have you done analysis on other best practices for stadium funding nationwide for alternative methods of maintaining our obligations? — William Tarter Jr.

■ Using public money, primarily generated from the poorest members of our community, to support a poorly defined list of “repairs” (i.e., a wish list of money-making upgrades) for billionaires is not good policy. Maybe this is the “least painful” thing to the editorial board of Crain’s. But to the poor of Cleveland who could see this money going to support infrastructure, social services and education, it is most certainly painful. There are other ways. Broaden the tax to a multicounty base, clarify the word “repair” in the leases, consider facility fees. I am disappointed in this editorial opinion. It smells like a lack of critical judgment at best, a complicit plug for Cleveland plutocracy at worst. — Peter Young ■ Taxing addictive substances because it’s “the least painful” way to raise money to maintain the workplace of millionaires making money for billionaires is shameful. This regressive tax impacts low income people much harder. There are numerous alternatives that indeed can be looked at that your editorial board has not mentioned, the obvious being a facility fee. The FDA has called nicotine one of the most addictive drugs out there, and placing an excise tax upon a minority that couldn’t possibly defeat Issue 7 on their own is

NEW! GETTY IMAGES

What does Jay-Z have to do with the sin tax? Reader Angie Schmitt explains. heinous. Issue 7 must be defeated. — Russ Sypen

learn what other sports cities are receiving in remuneration. Voters, there is no rush, as the sin tax will not expire for one year. Vote no on Issue 7. Doing so will allow time for fact finding and give us leverage. Who in our government will step forward and offer the transparency that has been requested? — Kathryn Walker

■ There are other options to explore! The politicians who represent the citizens of Cleveland need to use their brains and imagination to solve this financial debacle and STOP coming back to the citizens to support a NEW tax to replace the current tax that does not expire until 2015. Perhaps the city of Cleveland needs to renegotiate the terms of the leases with these sports entities and ask for a more reasonable and higher rent for the facilities the teams are renting. Each team’s owner has more resources (money) than most taxpayers in Cuyahoga County. Let them pay for their own playgrounds! VOTE NO ON ISSUE 7! — Susan U

■ City streets are a mess. Bridges, water and sewer lines need help. We could use more police and firemen. The schools could use more help. Help for the homeless, unemployed, underpaid employed is needed and they want our money for scoreboards and new carpeting in luxury suites. The city’s priorities are messed up. In a household, you pay for the necessities before you spend money on extras. The city should do the same. — Jane Hilf

■ Why not have the teams pay their own way, just as other private businesses must and do? They don’t pay taxes. They want smokers and drinkers to pay their way. Smokers are not allowed to smoke in their facilities. Drinkers can drink to their hearts content and then drive home from the game. Why didn’t your editorial provide the grand total of taxes collected? If only a pittance is being collected, as is implied in your closing sentence, why are the teams spending so much money to ensure that Issue 7 passes one year in advance of its expiration? Installing new scoreboards at the cities expense is not maintenance. Given that the city owns the scoreboards, the city should collect all advertising dollars associated with the scoreboards. It is insane to continue to give to an organization that is already mega-wealthy when our community is already over-taxed, many unable to find a job, and more who can’t afford to attend the very games for which they are taxed. Our city leaders must hone their negotiating skills and do research to

■ The real outrage here is the fact that taxes on alcohol and cigarettes will not be used to aid in the reduction of addiction (hence the reference to “sin”) but rather to stuff the pockets of all three teams who could easily afford to pay for the repairs themselves. The vote was rammed through the last time, and hear we go again. But this time, not so fast!!! We the voters of Cuyahoga County are going to fight the proponents on this one, and we don’t care if the teams up and go somewhere else because, quite frankly, there are simply more important things than sports and the unearned money that comes with it. Those in public office who are too stupid and lazy to find other ways to grow a major American city need to resign and leave their selfseeking political ambitions on the scrapheap of history. Don’t ever let it be said that this was time when the tide ran out on Cuyahoga County but rather was the time when the voters rose up to welcome the rising tide of change and rebuked this pathetic paradigm our previous elected leaders embraced. Let the battle be joined. — Joe Bialek

WEEK

■ Why was a facility fee not discussed in your editorial? The vast majority of people living in the city of Cleveland never attend games at any of our venues. They can’t afford it. Yet they pay the lion’s share of the sin tax. They are funding activities they are prohibited from enjoying. Most can’t even watch on television because that requires paid cable. To suggest that out-of-county visitors pay their share by purchasing a beer or two when they come downtown is quite a stretch. I think you guys have bought the company line, a mistake I believe the voters will see through. — Alan Glazen

1301 E. Ninth St. Cleveland, OH

THIS

■ Crain’s recited both sides’ talking points and sided with the big boys. That’s the best we can expect apparently from our media. … There was a disappointing lack of critical analysis and repeating of marketing points. State law won’t allow it? Come on! The backers of these taxes snap their fingers and state law is changed. You guys know that. Increasingly desperate public money giveaways will “save” Cleveland? Really? These touristy gimmicks have saddled taxpayers with billions while the population of Cleveland has declined at a breathtaking pace. The important thing though is Jay-Z concerts, definitely not roads, public health, helping alleviate poverty you know, quality of life issues for actual residents. Boy, this editorial displayed disappointing old-boy group-think. — Angie Schmitt

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

APRIL 7 - 13, 2014

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED

Steven A Woyat, DDS Inc. 2255 Columbia Road, Westlake ID: 34-1731629 Date filed: March 5, 2014 Type: Employer’s withholding Amount: $15,437

D & O Leasing Inc. 883 Addison Road, Cleveland ID: 34-1297801 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $174,415

BTA Collision LLC 27500 Lorain Road, North Olmsted ID: 27-1626005 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $15,055

Surocshaker Inc. 2101 Richmond Road, 817, Beachwood ID: 55-0881729 Date filed: March 7, 2014 Type: Employer’s withholding, corporate income Amount: $115,871

Mr Alberts Mens World 618 Prospect Ave., Cleveland ID: 34-1238031 Date filed: March 12, 2014 Type: Employer’s withholding Amount: $13,652

Zin Technologies Inc. 6745 Engle Road, Middleburg Heights ID: 34-1603383 Date filed: March 7, 2014 Type: Employer’s withholding, unemployment Amount: $107,248 Tarekzein Corp. 12019 Lake Ave., Lakewood ID: 45-1583666 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $47,279

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131 Fashion Inc. 6793 York Road, Apt. 223, Cleveland ID: 41-2176654 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $15,821

Paul F. Smith Jr. DDS Inc. 20119 Farnsleigh Road, Shaker Heights ID: 34-1337892 Date filed: March 5, 2014 Type: Failure to file complete return Amount: $37,359 Pro Construction Co. 24400 Highland Road, Suite 45, Richmond Heights ID: 34-1643463 Date filed: March 12, 2014 Type: Employer’s withholding Amount: $35,704 st

1 Choice Roofing Co. 3210 Scranton Road, Cleveland ID: 34-1882761 Date filed: March 7, 2014 Type: Employer’s withholding, unemployment Amount: $27,522 Ameriplumbers Inc. 6287 Pearl Road, Suite 3, Parma Heights ID: 34-1935423 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $24,513 United Stones International Inc. 5905 Harper Road, Suite C, Solon ID: 26-4660923 Date filed: March 7, 2014 Type: Employer’s withholding, corporate income Amount: $19,255 Guarantee Product Specialties Inc. 9401 Carr Ave., Cleveland ID: 45-0673710 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $17,150

M&M Landscaping LLC 1371 Lander Road, Mayfield Heights ID: 20-3415248 Date filed: March 7, 2014 Type: Annual return of withheld federal income tax Amount: $12,541 Mansfield Premier Car Wash & Lube Inc. Premier Auto Center & Car Wash 1719 Kendal Drive, Broadview Heights ID: 27-1839121 Date filed: March 12, 2014 Type: Employer’s withholding Amount: $10,759 R J Mascia Corp. P. O. Box 42296, Brook Park ID: 34-1798352 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $10,564 Visionquest Eyecare Inc. 2344 Canal Road, Cleveland ID: 30-0190443 Date filed: March 7, 2014 Type: Employer’s withholding Amount: $6,081

Avon Pizza LLC Coleones Pizza & Subs 1260 Smith Court, Rocky River ID: 26-3021097 Date filed: Sept. 20, 2012 Date released: March 5, 2014 Type: Employer’s withholding Amount: $21,900 Barone Landscaping Inc. P.O. Box 38232, Olmsted Falls ID: 34-1967329 Date filed: May 17, 2011 Date released: March 12, 2014 Type: Employer’s withholding Amount: $12,659 Ehle Morrison Group Ltd. 820 W. Superior Ave., Suite 230, Cleveland ID: 34-1799106 Date filed: July 27, 2009 Date released: March 7, 2014 Type: Employer’s withholding, unemployment Amount: $8,309 Franks Coach & Carriage 1120 Brookpark Road, Cleveland ID: 34-1448256 Date filed: July 28, 2008 Date released: March 5, 2014 Type: Employer’s withholding Amount: $15,504 Galindo Inc. Supermercado Rico 3456 W. 117 St., Cleveland ID: 34-1623495 Date filed: May 21, 2013 Date released: March 7, 2014 Type: Unemployment Amount: $5,838 Johnnys Burgess Grand Corp. 1406 W. 6th St., Cleveland ID: 34-1737006 Date filed: March 2, 2011 Date released: March 7, 2014 Type: Employer’s withholding Amount: $66,950 Johnnys Burgess Grand Corp. 1406 W. 6th St., Cleveland ID: 34-1737006 Date filed: March 2, 2011 Date released: March 7, 2014 Type: Employer’s withholding Amount: $5,346

Champion Fire Equipment Inc. 5316 Lorain Ave., Cleveland ID: 34-1370504 Date filed: March 5, 2014 Type: Employer’s withholding Amount: $5,516

Michael A Covas DDS Inc. 6563 Wilson Mills Road, Suite 102, Mayfield Village ID: 34-1962025 Date filed: March 17, 2008 Date released: March 7, 2014 Type: Employer’s withholding Amount: $6,683

Vee-Pak Inc. 1472 Grace Ave., Lakewood ID: 34-1683146 Date filed: March 7, 2014 Type: Employer’s withholding, corporate income Amount: $5,348

Plain Dealer Publishing Corp. 1801 Superior Ave. E., Cleveland ID: 34-0228575 Date filed: Jan. 22, 2014 Date released: March 7, 2014 Type: Employer’s withholding Amount: $17,294

Maryann Candies Inc. 8928 Brecksville Road, Brecksville ID: 34-1756730 Date filed: March 7, 2014 Type: Corporate income Amount: $5,265

LIENS RELEASED Action Calibration Services Inc. 17820 Englewood Drive, Suite 13, Middleburg Heights ID: 34-1879978 Date filed: Feb. 1, 2011 Date released: March 5, 2014 Type: Employer’s withholding Amount: $23,995

Rybak & Associates Inc. 21821 Libby Road, Suite 102, Bedford ID: 03-0514289 Date filed: June 28, 2012 Date released: March 7, 2014 Type: Unemployment Amount: $5,164 Sadler Hearing Aids Inc. Hearing Aids of Ohio NE 7251 Engle Road, Suite 110, Middleburg Heights ID: 14-1905278 Date filed: Dec. 31, 2013 Date released: March 7, 2014 Type: Employer’s withholding Amount: $5,337

Have you signed up for Crain’s new Manufacturing Report? Suscribe to all of our daily e-newsletters at www.crainscleveland.com

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Local colleges add healthy dose of grad programs Universities are attempting to capitalize on uncertainty of turbulent industry by offering MBAs geared toward leadership By TIMOTHY MAGAW tmagaw@crain.com

Northeast Ohio’s colleges and universities are injecting a dose of graduate programs related to health care into their repertoire in hopes of capitalizing on the uncertainty brought on by the Affordable Care Act and the region’s reliance on the health care industry as an economic anchor. The programs, for the most part, are geared toward those currently entrenched in the turbulent field and looking to enhance their career prospects. Case Western Reserve University this fall will launch a new health management program, Kent State University is relocating its executive health care MBA program to the Cleveland area and University of Akron is in the early stages of working with hospitals to develop some sort of degree offering. They join Baldwin Wallace University’s established health care MBA program, which is among the nation’s oldest; it began in 1997.

“There’s a great deal of anxiety among a lot of the providers these days. The forward-looking ones are going to recognize they need to have people who are experts at managing their systems against this changing landscape.” – Mark Votruba leader of Case Western Reserve University’s new health management MBA program

known health care finance expert.

Cozying up to Cleveland Kent State this spring will relocate its two-year executive health care MBA program to the university’s College of Podiatric Medicine in Independence, which Kent State acquired in 2012. The executive MBA launched in 2009, and student interest has fluctuated since,

according to Laurie Walker, director of the university’s executive MBA programs. She said the move should help the program recruit better from Cleveland’s east and west sides. Baldwin Wallace, the elder statesman in the health care management arena locally, has seen enrollment in its health care MBA program triple to about 60 students over the last 11 years since its director, Thomas Campanella, took over. The program offers classes on both sides of town — Beachwood and Berea — and requires its students hold jobs in the health care industry. “During times of challenge, I personally believe — and I think peo-

IF YOU’RE INTERESTED ■ Baldwin Wallace’s health care management MBA: For more information, go to: tinyurl.com/lse8asf ■ Case Western Reserve’s health care programs: Go to: tinyurl.com/mhhyef6 ■ Kent State’s executive health care MBA program: Go to: tinyurl.com/ll8rqto ple are showing this in the program — you need to invest in yourself,” Campanella said. “Consequently, because health care is evolving, you need to be in a position to take advantage of it. There’s going to be

winners and losers, both from an organizational standpoint and a career perspective.” The University of Akron is in early discussions with regional hospitals about developing a specialized business program with a health care focus, according to Bill Hauser, director of graduate business programs. Hauser said it was too early to discuss specifics, though the university for 15 years has offered a health care concentration within its traditional MBA program. “We received a lot from interest from area hospitals, and not just the three in Akron, about some possible programs,” Hauser said. “We’re very serious.” ■

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The health care industry is undergoing a dramatic shift — one that could upend the current business model rooted in payment for the amount, not quality, of services rendered. The idea behind these graduate offerings is to train leaders who tactfully can lead that transition. That said, the budgetary pressures facing health care providers, particularly hospitals, could be a concern for institutions launching such offerings. Higher education officials say many providers already have tempered their tuition reimbursements, which could limit interest in such programs. However, many education leaders suggest the rapidly evolving health care landscape is still working in their favor. “There’s a great deal of anxiety among a lot of the providers these days,” said Mark Votruba, a Case Western Reserve economics associate professor leading the development of the new master’s degree. “The forward-looking ones are going to recognize they need to have people who are experts at managing their systems against this changing landscape.” Case Western Reserve already has begun reaching out to local hospitals to market its two-year program. The university isn’t necessarily starting from scratch in the health care realm, as its Weatherhead School of Management already has in-house expertise, including J.B. Silvers, a well-

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APRIL 7 - 13, 2014

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Goodyear is giving independent dealers path to new-look brand Commercial owners will have chance to operate under tire makerâ€™s CTSN banner By JENNIFER KARPUS Tire Business

Goodyear Tire & Rubber Co. is extending the reach of its recently rechristened Commercial Tire & Service Network (CTSN) â€” formerly Wingfoot Tire â€” to its independent dealers in the United States by offering them the opportunity to operate under the CTSN banner. Akron-based Goodyear disclosed the plan during its 2014 Goodyear Dealer Conference in Nashville, Tenn. The tire makerâ€™s literature shows the potential for up to 1,300 service points throughout the United States, with the potential to extend into Canada. â€œThe consumer side of our business blazed the same trail several years ago with the Goodyear Tire & Service Network,â€? said Phillip Kane, vice president, commercial tires. He was referring to the conversion that started in 2010 of the Goodyear Gemini auto service program to Goodyear Tire & Service. Warren Croyle, brand marketing operators manager at Goodyear, said the consumer program has been doing well, so Goodyear management decided to add a program for commercial dealers, too.

Previously, Goodyearâ€™s company-owned commercial locations operated under the Wingfoot name. The company announced last October it was rebranding that program under the Tire & Service Network banner. In announcing the switch, Goodyear said it wanted to lead with its brand name. This was a sentiment Kane expressed in October when the name change was revealed. â€œWe are rebranding Wingfoot locations to utilize the strength and equity of the Goodyear brand,â€? he said at that time. â€œOur extensive research shows that fleet customers know and trust the Goodyear name,â€? he said. â€œWe believe we can utilize the power of the Goodyear brand to drive additional traffic to our Commercial Tire & Service Centers.â€? Kane noted that Wingfootâ€™s product lineup, service menu and organizational structure will not change. Goodyear said when joining the network, independent dealers are provided with â€œcomprehensive advertising and marketing support that reaches the right targeted audiences at the right times.â€? The mate-

rial should help gain more reach for dealers by attracting fleet customers across the country that are loyal to Commercial Tire & Service Network dealers. Promotional materials include a commitment poster; window cling to identify the business as an independently owned and operated Commercial Tire & Service Network dealer; and an ID kit instruction sheet to assist dealers on how to display the information effectively. Goodyear said the dealers can carry products that will attract fleets when they are looking for new tires, including the Goodyear, Dunlop and Kelly brands that the company promotes as featuring â€œinnovative technologies to help your customers reduce downtime and save on fuel costs.â€? Goodyear said benefits of the network include getting exclusive access to programs to help fleets choose products to reduce operating costs, supporting the professional image with the network ID, and increase and maintain new fleet customers. Additional benefits include priority preference on Goodyear Fleet HQ calls and being offered the premium listings on the online Goodyear dealer locator. â– Karpus is a reporter at Tire Business, a sister publication of Crainâ€™s Cleveland Business.

CRAINâ€™S BLOGS Get the latest from our editors and reporters, including: â– Editorâ€™s Choice: Managing editor Scott Suttell rounds up news and views about business, and stories of interest in Northeast Ohio. Weekdays â– Sports Biz: Assistant editor Kevin Kleps writes about the Browns, Cavaliers, Indians and much more. Weekdays

â– Health Care: Reporter Timothy Magaw breaks down the latest news about the regionâ€™s hospitals. Tuesdays â– Whatâ€™s Cooking: Twice per month, freelance reporter Kathy Ames Carr has morsels on the local restaurant scene. GO TO: CrainsCleveland.com/section/blogs

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Rezoning referendum looms for Geauga Lake land Aurora mayor supports a referendum on May 6 ballot that would rezone 550 acres, move site toward redevelopment By STAN BULLARD sbullard@crain.com

Another roller coaster ride of sorts looms in Aurora over the vast acreage that was formerly Geauga Lake Park. The May 6 primary ballot in the Portage County community includes Issue 11, which would rezone almost 550 acres — primarily former Geauga Lake land — to mixed-use from the current industrial zoning. The city of Aurora developed the mixed-use zoning plan for the site late last year. Aurora City Council put it on the ballot with a unanimous vote Jan. 13. Although the wish to resurrect the historic amusement park remains alive, the measure may help move the site toward redevelopment. The site has languished through the country’s economic downturn that set in soon after its 2007 closing. Aurora Mayor Ann Womer Benjamin said she supported the mixed-use plan previously as a council member and continues to back it. The plan was developed by her predecessor without prodding from Sandusky-based Cedar Fair Entertainment Co., which owns it, or a real estate developer in the hunt for the site. “Just look at it and you know” that something needs to be done in the way of rezoning because of the poor condition of the closed park and because it has languished sev-

en years, the mayor said. “There’s been no interest in it from industrial users,” Womer Benjamin said. “As it sits, the development of the area could be haphazard and piecemeal. It could result in manufacturing facilities across the street from a residential area.” Aurora City Council has authorized the city to spend $7,500 to educate voters about the plan’s virtues. The city on Wednesday, March 26, held the first of three “town hall” meetings to inform the public about the referendum. Changing the zoning to mixed-use would strengthen the city’s hand over the development of the area, the mayor said. Updating the zoning also may help open the door to development, the mayor said, as real estate developers have shied from the property because Aurora’s city charter requires all rezoning measures to win approval at the polls. Cedar Fair’s general counsel, Duffield Milkie, has supported the rezoning at meetings in the past, according to online minutes of Aurora City Council meetings. Bryan Edwards, a spokesman for Cedar Fair, issued a statement through email that read as follows: “Cedar Fair is in favor of the rezoning and believes that it is a vital step in the process for the redevelopment of the property. We believe that updating the classification to multi-use zoning will serve as a catalyst for developers to come forward with concepts to maximize the

Pianalto says education is crucial for manufacturing By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

For manufacturers to succeed, they need a strong “educational supply chain,” said Federal Reserve Bank of Cleveland president and CEO Sandra Pianalto during a speech Thursday, April 2, to the AMP 2.0 regional meeting at the University of Akron. Pianalto touched on the issues of the reshoring and off-shoring of labor, saying there are a variety of factors, including taxes and trade regulations, that go into a manufacturer’s selection of a location for a plant. But the most important factors, she said, are whether a company can be both innovative and productive. That means manufacturers need access to a highquality labor force. As manufacturers continue to grow more advanced in the technology they use to make their products, potential employees need to be more skilled in areas such as mathematics and computers. “A strong back is no longer enough,” Pianalto said. “Most production workers today need skilled minds.” Pianalto was the luncheon keynote for the AMP 2.0 meeting, a regional meeting of the federal government’s Advanced Manufactur-

ON THE WEB Story from: www.crainscleveland.com ing Partnership that was sponsored by the University of Akron and the United Steelworkers. Pianalto began by addressing the massive job losses manufacturing has seen in recent recessions, noting that the most recent recovery has been much slower than expected. More than six years after the recession began, the United States is just now on the cusp of pre-recession employment levels, which is “unprecedented” in recent history, she said. Manufacturing employment has not fully recovered from the past five recessions, she said. Despite those losses, Pianalto thinks manufacturing that is innovative and productive has a future in the United States. Work force and training needs in manufacturing were a high-profile topic at the meeting, which Pianalto noted is a sign that the tides are turning in terms of awareness. A decade ago, education likely would not have been on the agenda of a manufacturing conference, she said. “I think today that’s a sign things have changed,” Pianalto said. ■

full potential of the unique set of assets provided by the Geauga Lake property.”

Challenges abound Bill Sanderson, director of project development at Payne & Payne Custom Home Builders in Chardon, said changing the zoning would assist redevelopment of the site. But it would not be a panacea. “It would remove an element of risk,” Sanderson said. “However, with mixed-use, time (to plan, secure approvals and build) is the biggest risk. It really is a pretty big gamble. Your return is not consistent or predictable in this market.” Bank financing for land acquisition and development remains difficult to obtain, Sanderson said, which reduces the number of prospective suitors. Cedar Fair has the property listed for a price of about $15 million with Cliff West, an associate and specialist in land development services at Marcus & Millichap LLC’s Cleveland office. A portion of the former Cedar Fair land is in Bainbridge Township, and that land has had greater interest because it is zoned residen-

GET THE INSIDE SCOOP Crain’s reporter Stan Bullard’s Real Estate Report, a weekly e-newsletter, publishes Mondays. To sign up, go to: CrainsCleveland.com/register tially and commercially, West said. However, the Bainbridge land can’t be sold easily because it provides access to sites in Aurora. “We never asked the city to do it. The city came up with this,” West said. “But we applaud them for it.” West said a national real estate developer that he refused to identify has started to negotiate a letter of intent to buy the Aurora land since the local rezoning issue went on the ballot. He said another eight prospective buyers are waiting for the snow-melt on the site to dry to walk the land. Cedar Fair wants to sell to as small a group of buyers as possible, he said, so it does not wind up with odd pieces of land after reaching a deal. Minutes of Aurora City Council meetings on legislation to propose rezoning the land show light opposition to the matter from a few individuals who want fewer shops in the city. A negative factor is likely to

be resentment over Cedar Fair closing the prized landmark, which got its first carousel in 1889.

Viable ‘for the right person’ Sentiment over the park’s demise, and the yen to rejuvenate the property, remains strong. Carole Sanderson, a roller coaster and amusement park enthusiast, said she hopes the plan and eventual buyer can accommodate resurrecting the historic lake-edge portion of the park and its famous Big Dipper roller coaster, which remains on the grounds. That area, she said, might function as a small, familyoriented entertainment center. However, as a principal of Herschman Architects Inc. in Warrensville Heights, which prepared a plan to reconfigure the park in hopes of reopening it in 2007, Sanderson also knows the difficulties such an effort entails. Much of the site lacks water and sewer service, she said, and removing remnants of other rides transported from the park will be costly. “It’s a totally viable idea for the right person,” she said. “Is it economically viable with our winter and the costs? That’s another story.” ■

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Cobalt crashes don’t ‘stand out,’ NHTSA chief tells Congress But acting head of safety administration says accidents involving Chevy model and Saturn Ions are a ‘bit above average’ By NICK BUNKLEY Automotive News

The National Highway Traffic Safety Administration twice decided not to investigate crashes involving Chevrolet Cobalts and Saturn Ions because its staff calculated that the rate of injuries was not significantly higher than for other cars, the agency’s acting chief told members of Congress last week. During a hearing of the House Energy and Commerce Committee’s oversight panel, David Friedman said the regulatory agency decides when to open investigations in part by comparing the number of crashes in which occupants were hurt with how many of the affected vehicles are on the road, and how old they are. “When the team did that comparison, the Cobalt did not stand out,” Friedman said. “It was a little bit above average, but other vehicles were higher.” The Cobalt is produced at General Motors’ Lordstown plant. Friedman said NHTSA was missing three key pieces of information — which he said General Motors provided when it initiated the recall

in February — that prevented the agency from identifying a defect in the cars’ ignition switches sooner: ■ The fact that GM changed the design of the ignition switch in 2006. ■ Conversations that GM had with suppliers about algorithms related to airbag deployment. ■ A direct link between the cars’ ignition switches and the ability of their airbags to deploy. Friedman said the lack of that information contributed to decisions in 2007 and 2010 not to go forward with internal agency proposals to investigate airbag issues in the Cobalt and Ion. About half the proposals to open investigations are approved, and the other half result in no further action, Friedman said. “If we had any of those pieces of information I truly believe it would have changed how we handled this,” he said. Friedman said the circumstances of the crashes GM has now linked to the defect are “complicated.” Many of them involved unbelted drivers and passengers, several of the drivers were legally drunk, and the crashes mostly happened after cars drove off the road into terrain where

GETTY IMAGES

National Highway Traffic Safety Administration acting chief David Friedman — right, shown with U.S. Transportation Secretary Anthony Foxx on Feb. 3 — said the circumstances involving crashes linked to General Motors vehicles are “complicated.” Friedman said it can be difficult to determine whether the airbags should have deployed. “I wish these crashes were as simple as they appear to be,” Friedman said. “I wish the connection was as direct as we now know it is.” Friedman said NHTSA staffers, based on the agency’s past experience and information available from GM at the time, operated with the understanding that an ignition switch turning off wouldn’t prevent airbag deployment. Many of the House committee

members appeared less than satisfied with the explanation of why NHTSA didn’t probe injury and crash reports further. “It appears we have a flaw in NHTSA’s decision-making process,” said Rep. John Dingell, DMich., noting that NHTSA is “shortstaffed and underfunded.” Rep. Michael Burgess, R-Texas, said crash investigations commissioned by NHTSA in 2005 and 2009 showing that the airbags failed to deploy should have raised more concern at the agency.

He cited a 2012 investigation of some Hyundai models, which led to the recall of 190,000 vehicles last year, stemming from just one complaint. Friedman responded that it’s easier for NHTSA to take action in cases where a defect is more obvious than it was in the GM cars. “All it takes is one,” he said, “if that’s clear.” ■ Bunkley is a reporter with Automotive News, a sister publication of Crain’s Cleveland Business.

CRAIN’S SPORTS SERIES: THE BUSINESS OF BASEBALL Crain’s will host a breakfast April 16 at The Collection Auto Club at Progressive Field. The event will give a behind-the-scenes look at the business of Cleveland Indians baseball. The featured speakers will be Indians president Mark Shapiro, Tribe senior vice president of public affairs Bob DiBiasio and Brian Barren, the

club’s executive vice president of sales and marketing. Limited space is available for the event, which will run from 7 to 9:30 a.m. For information or for tickets, contact Kim Hill at 216-771-5182 or kehill@crain.com. Tickets must be purchased in advance. For event details, go to: CrainsCleveland.com/Indians

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CRAIN’S CLEVELAND BUSINESS

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KPMG: G. Maxell Toole to tax partner and Northeast Ohio tax leader; Tom Mayor to advisory principal. WELLS FARGO ADVISORS: Chardon — Susan E. Paolo to branch manager; Westlake — Thomas Haggerty to vice president, investment officer; Mark Obloy to associate vice president, investments; Michael Sejka to first vice president, investment officer and senior private investment management portfolio manager.

INSURANCE BOLI GROUP: Gavin E. Blaha to marketing manager; Judith Kellner to chief operating officer. WESTFIELD GROUP: Deborah Birk to marketing communications leader.

LEGAL HURTUK & DAROFF CO. LLP: Kathryn Kramer Gaydos to associate. KAMAN & CUSIMANO LLC: M. Katherine Bushey and Kevin M. Fields to partners. MCDONALD HOPKINS: Maria L. Cedroni and Joseph M. Muska to associates. SQUIRE SANDERS: Ryan Callender to principal. WELTMAN, WEINBERG & REIS CO. LPA: Vincent G. Farris to of counsel.

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BRIGHT SPOTS Bright Spots is a periodic feature in Crainâ€™s highlighting positive business developments in the region. To submit information, email Scott Suttell at ssuttell@crain.com. â– Energy Focus Inc. of Solon, a maker of energy-efficient LED lighting, said its military business was awarded $2.1 million in orders in March, following $2 million in orders announced in February. Accumulated orders of $4.1 million so far this year â€œnow represent more than the sales of the military business in all of 2013,â€? the company said in a news release. The bulk of the new orders are for Energy Focusâ€™ LED retrofit tubes. Energy Focus LED tubes â€œare starting to reach the various naval platforms including, most recently, a U.S. Navy aircraft carrier,â€? according to the news release. â€œOur accelerated sales order growth, which is well diversified across various Navy ships and platforms, demonstrates that the whole Navy ecosystem is beginning to recognize the benefits our LED products provide, resulting in significantly lower maintenance and energy costs,â€? said Eric Hilliard, president of Energy Focus, in a statement. â€œWe are also thrilled to retrofit the Navyâ€™s carrier fleet,â€? he said. â€œWith 80,000 or more linear fluorescent lamps per carrier, the carriers represent the largest users of shipboard lighting in the U.S. Navy.â€? â– Three former Cleveland senior executives at Rosetta, a digital marketing agency, have formed InReg

Partners, which they describe as â€œa boutique integrated marketing strategy, leadership and execution services agency. Dave Fazekas, Joe McCrone and Scott Cesen officially launched the Cleveland firm on March 25. In a news release, they said they launched InReg to help middlemarket companies â€œexecute in the interactive marketing and online commerce world â€Ś to maintain market share and to drive growth.â€? Fazekas said in the release, â€œWhile working with small- and medium-size companies the last two years, it became apparent that many companies were missing seasoned marketing leadership on their management team. We saw an opportunity to provide this leadership as an extension to their team, but in a scalable and affordable manner.â€? InReg plans to focus on serving clients in Northeast Ohio. The firmâ€™s website is at www.inregpartners.com. â– The Davey Tree Expert Co. of Kent announced the graduation of nearly 60 Davey employees from the Davey Institute of Tree Sciences. The company described the graduates as the â€œlargest class in yearsâ€? from the training program it calls D.I.T.S., which has been part of Davey Tree for more than a century. The month-long training program â€œincludes classroom and field exercises in climbing and safety procedures, tree and plant care, disease and pest diagnosis, management practices and team building,â€? the company said in a news release.

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Rascal House will celebrate the 34-year anniversary of its first restaurant with a special event April 16 at the businessâ€™ flagship location at 1836 Euclid Ave. Shown above is Niko Frangos, whose parents started the business. This yearâ€™s class included sessions on how to spot invasive species such as the Asian Longhorned Beetle and the Emerald Ash Borer. Students also learned about how to preserve trees during construction and heard management presentations from their respective service lines as the program drew to a close. R.J. Laverne, manager of education and training at Davey Tree, said in a statement that the program underscores the companyâ€™s commitment to training. â€œNot many companies have departments dedicated to education or college degree programs partnered with a university,â€? Laverne said. â€œOur goal is to help Davey employees work smarter, be efficient and profitable and provide greater service to clients, all while working safely.â€? â– Cleveland-born filmmaker TJ Amatoâ€™s Desert Wind Films of Marina Del Rey, Calif., said it secured digital distribution for a documen-

tary called â€œSugar Wars: The Rise and Fall of the Cleveland Mafia.â€? The film as of April 1 was available for digital viewing through iTunes. Amato said in a news release that the film chronicles the life of Angelo Lonardo, who was one of the highest-ranking mob underbosses to become a federal witness. â€œThis story has been close to me for a good portion of my lifeâ€? Amato said. â€œHaving grown up in Cleveland where this story took place, I had heard about it many times, and to be able to create such a hard-hitting film from my home town with was just icing on the cake.â€? You can learn more about the film at sugarwarsthemovie.com. â– Mike and Fouly Frangos, who opened their first Rascal House restaurant 34 years on the campus of Cleveland State University, are commemorating the occasion with a special event later this month. Theyâ€™re hosting a â€œgrand

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re-opening partyâ€? from 4 p.m. to 8 p.m. on Wednesday, April 16, at their flagship restaurant 1836 Euclid Ave. Those who visit Rascal House on April 16 will have a chance to win free pizza for a year, and everyone can order from a special 34-cent menu. All proceeds from that menu will benefit the Greater Cleveland Food Bank. â€œWe are grateful for all the good friends and valued customers we have served over the past 34 years,â€? Mike Frangos said in a news release. â€œThis is our way of saying thank-you to the community.â€? In addition to the store on the Cleveland State campus, Rascal House has locations on Warrensville Center Road in Cleveland, in University Circle in the city, and in Bedford and Euclid. â– Parker Hannifin Corp. has made a $125,000 gift to the annual campaign of The Ohio Foundation of Independent Colleges. In a news release, the foundation said Parker has designated $100,000 of the gift â€œspecifically to be distributed equally among all 34 OFIC member institutions across the state to be used at the discretion of college administration in the areas of greatest need such as financial aid, technology upgrades, library and laboratory needs, or for support of educational programs.â€? The remaining $25,000 of the gift will provide scholarships for engineering or science majors from Auglaize, Clermont, Cuyahoga, Defiance, Franklin, Fulton, Lake, Lorain, Lucas, Mahoning, Medina, Montgomery, Portage, Preble, Summit or Union counties. Parker currently provides scholarships to 18 students enrolled in OFIC member colleges and universities. The news release noted that Parkerâ€™s cumulative giving to OFIC totals about $1.7 million. â–

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

For the ninth year,

FINALISTS Amy Brady…..Page 25 Gary Conkol.....Page 25 Matthew Dickerson.....Page 23 Chris Fuss.....Page 22 Kathy Golovan.....Page 20 Russell Grindon.....Page 20 Rachel Johnson.....Page 24 Michael McManamon.....Page 23 Toby J. Miletta.....Page 20 Jeff Mowry.....Page 21 Dale Phillips.....Page 24 Deborah Piccus.....Page 22 Rob Sable.....Page 21 Ron Steiger.....Page 25

the Northeast Ohio Software Association is honoring the region’s information technology professionals with its CIO of the Year Awards. The CIO of the Year program, held in partnership with Crain’s Cleveland Business, is part of NEOSA’s annual Tech Week, which runs this year from April 11 to 18. Nominations for CIO are open to the top corporate executive at any company, organization or wholly owned subsidiary based in Northeast Ohio who provides technology-related strategy and leadership. This year’s finalists were selected by an independent panel of judges made up of Jane Alexander, CIO, Cleveland Museum of Art; Mark Hogan, CIO, United Way of Greater Cleveland; Fred Franks, CIO, FIT Technologies; and Jim Sage, CIO, University of Akron. Winners and finalists will be honored during an April 15 event at LaCentre Conference & Banquet Facility in Westlake. Additionally, Dr. Martin C. Harris of the Cleveland Clinic will receive the 2014 Terabyte Award, a new award this year recognizing exceptional overall career achievement. NEOSA held its first Tech Week in 2011, and the program has experienced increased attendance ever since. “We’re really excited we’ve seen such great growth … it’s good to see there’s some real excitement building,” said Brad Nellis, director of NEOSA, the COSE Technology Network. In its first year, 515 people attended Tech Week events, with the number growing to 879 in 2012 and 1,556 attendees in 2013. Nellis said he expects participation to surpass 2,000 this year. New for 2014 is the incorporation of Cleveland Startup Weekend, from April 11 to April 13, into Tech Week. Startup Weekend is an event that allows would-be entrepreneurs to pitch ideas, as well as learn and execute some of the fundamentals of starting a business. Nellis said TechPint — a local popular technology networking series — also plans to hold one of its events during Tech Week. For more information on Tech Week, a full list of events and registration information, go to: www.neosatechweek.com. Also of note: Stay up to date with CIO of the Year awards coverage as it happens. Get live coverage of the event via Twitter by following @CrainsCleveland and technology reporter @ChuckSoder. Join the conversation using #CrainsCIO. Post-event coverage, along with video interviews with the finalists, will be available after the April 15 event at www.CrainsCleveland.com/CIO.

Terabyte Award C. Martin Harris Cleveland Clinic

Harris

r. Thomas Graham described the Cleveland Clinic’s chief information officer as “a genius,” but that wasn’t the biggest compliment he paid to Dr. C. Martin Harris. Graham reserved his highest praise for the graciousness Harris shows to his patients and his colleagues. Harris treats people “with the utmost respect,” even when fielding complaints from employees who are upset about some aspect of the Clinic’s vast information technology system. Complaints that Harris often addresses himself, even though he could forward them to someone else on his staff. “It never was, ‘Talk to somebody else,’ or ‘This is not my job,’” said Graham, who is both chief innovation officer and vice president of orthopedic surgery at the Clinic. Recruited in 1996 by former Clinic CEO Floyd Loop, Harris has led what could be described as one of the biggest projects in the history of the hospital system. More than a decade ago, the hospital system started rolling out the Epic-brand electronic medical record system that today is used in every building that bears a Cleveland Clinic logo. The process was fraught with risk: Harris noted that more than half of all hospital electronic medical record implementations fail to meet their goals, a figure that’s roughly in line with statistics from other sources. The Clinic, however, approached the rollout in a way that might not make sense at first glance. The hospital system didn’t start by implementing the software at its main campus. Instead, it started with its outpatient clinics. Why? Much more so than hospitals, outpatient clinics see the same patients over and over again. So when they enter a patient’s data into the electronic medical record system, they end up looking up that data soon thereafter. “When they came back that second time, the computer was immediately valuable to them,” Harris said. Those early wins helped the Clinic build momentum for a journey that continues today. The Clinic’s electronic medical record system is in a constant state of evolution, Harris said. For instance, late last year, the Clinic upgraded its online MyChart system, which Clinic patients use to look up information about the care they receive at the Clinic. Now those patients can see the electronic notes that their doctors jot down about their progress, in addition to all sorts of other information. Harris says his philosophy revolves around the patient, not the technology. That way of thinking has helped him avoid sleek new technologies that might not help the hospital improve care and cut costs. “There’s always a shiny new object that is coming out that looks great,” he said. Harris keeps in close contact with patients: He spends about 15% of his time practicing internal medicine at the Clinic. Harris — who received all of his degrees, including his MBA, from the University of Pennsylvania — became a doctor because he loves “that personal interaction.” But being CIO of the Clinic allows Harris to have a broader impact on patient care, in Northeast Ohio and beyond. For instance, he sits on the Health Information Technology Standards Committee. That group has

See HARRIS Page 24

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Toby J. Miletta Eliza Jennings Lakewood decade ago, Eliza Jennings’ information technology network Miletta consisted of two staffers, five servers and 100 personal computers. Now it has 18 servers, 300 computers and a staff of four. “Since joining the organization in 1999, Toby essentially took Eliza Jennings from being nontechnical to a place where all employees have access to and use technology to improve the quality of care we provide,” said the nomination from Eliza Jennings’ president and CEO Deborah Lewis Hiller. “He has been incredibly creative in helping management understand what technology can bring to the organization.” Eliza Jennings describes itself as a nonprofit that operates a network of services for the aged, including the Eliza Jennings Skilled Nursing and Rehabilitative Community in Cleveland; Eliza Jennings Retirement Campus at The Renaissance in Olmsted Township; Eliza Jennings Assisted Living Community in Westlake; and Eliza Jennings Adult Day Center at Acacia Place in Cleveland. It also provides in-home therapy, skilled home health care and clinic services. The nomination praised Miletta for making Eliza

Jennings’ IT operation a revenue generator by providing phone and Internet services to residents of its communities. The department also has increased its productivity, reducing substantially the time it takes to complete assigned tasks. “Toby’s small department produces an enormous quantity of work that is exceptionally high quality,” the nomination said. Now Miletta is guiding Eliza Jennings into the ever-changing world of electronic health records. He and his team are working on custom programming that will enable the network to exchange health information electronically with hospitals, labs, physician offices and the state of Ohio’s electronic health information system. He’s also developing software that Eliza Jennings will use in licensing a program, SAIDO Learning, that can be used by aging services providers nationwide to improve the quality of life for people with Alzheimer’s and other forms of dementia. “Thanks to Toby’s efforts, Eliza Jennings is poised to roll out the new software that will provide a record-keeping system, track resident progress and generate reports in our network of communities and adult day program in spring 2014,” the nomination said. “Development of SAIDO Learning software will enable us to more efficiently operate and bill for our new line of business, expand our services beyond our physical walls and conduct breakthrough applied research to benefit those with Alzheimer’s and dementia.” — Jay Miller

APRIL 7 - 13, 2014

Kathy Golovan Medical Mutual of Ohio Cleveland athy Golovan became the health insurance provider’s CIO in Golovan 2012 as the headwinds of the Affordable Care Act began to grip the business with the ferocity of a hurricane. Within two years, the unit would have to complete what the insurer describes as a “portfolio of projects” that ranged from participating on health care exchanges, meeting a long list of compliance requirements and better managing medical costs to enhancing operations in a more costsensitive environment. In short, the information services department had to adapt as the 2,400-employee company with 2013 gross revenue of $3 billion went to a business-to-consumer model from a business-tobusiness model. Moreover, Golovan became head of information services from a role as chief of internal audit. Rick Chiricosta, Medical Mutual’s chairman, president and CEO, said “I got a lot of looks that said, ‘What does she know about IT?’ However, today we all use our own computers and software and know what IT is capable of doing. At this level, it’s helping direct the unit. She’s proven before that she adapts. She knows business.

Russell Grindon MSC Industrial Supply Co. Inc.

Barnes, a title he maintained in the acquisition. Bello said Grindon has a lot of experience in different technologies and the company plans to use his knowledge to help ussell Grindon has it grow organically and helped to integrate through other acquisitions. the technology sysWhile the former headGrindon tems from Barnes Distribution quarters of Barnes DistribuNorth America with those at tion North America on East 9th Street MSC Industrial Supply Co., said Brian in Cleveland is closing, Grindon will be Bello, senior director of IT applications one of the employees staying with the development for MSC. company. The new Cleveland area loThe distributor of metalworking, cation for those employees has yet to maintenance, repair and operations be identified. supplies acquired Barnes Distribution Bello said Grindon has a “consultaNorth America in 2013.Grindon was a tive” leadership style. David Collier, director of information technology at

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She has great common sense. Speak to her troops now and you’ll find they believe in her.” The challenge was such her staff logged significant overtime to make it all happen. Many of the requirements were behind the scenes, covering areas from coding for essential health benefits to managing new taxes and fees under the Affordable Care Act. Golovan also knew Medical Mutual’s challenges and culture from long experience at the company. A lawyer and former manager in tax consulting for the EY accounting firm, she joined Medical Mutual as legal counsel for information technology in 1998 and later served as vice president of internal audit, which gave her a wide view of operations. She rose through the ranks to a seat at the table of top management through a combination of clarity of purpose, analytical skills and communications mastery, according to the nomination. She also is engaged civically. She is a graduate of Leadership Cleveland and Bridge Builders. When Medical Mutual updated its computers in 2013, she was directly responsible for it donating 300 computers and 40 servers to the Cleveland Metropolitan School District. Her performance also resulted in her being named executive vice president of care management, Chiricosta said, because the former precertification unit has significant data responsibilities that fit with the CIO’s job. — Stan Bullard

the vice president of supply chain integration at MSC, noted Grindon’s customer-focused solutions to problems. “He always approaches a challenge with a real can-do attitude,” Collier said. At Barnes, Grindon selected and implemented a variety of programs and products, the nomination said. That includes getting mobile tablets for the sales team and implementing software for mobile presentation and marketing automation. He had been a member of the senior leadership team and the strategic planning team. “Over the years that I’ve had the privilege of working with Russ, he’s been a critical partner and peer in

helping me to drive sales and marketing effectiveness. We frequently review our progress on strategies and he goes to work finding technology solutions that keep us on the cutting edge, boost productivity and increase the sales pipeline,” the nomination said. Going forward, Grindon will continue to work to integrate the Barnes and MSC enterprise resource planning systems and to enhance the company’s ecommerce and customer “selfservice” system. Outside of work, Grindon sits on the board of the Cleveland Pops Orchestra and the Cleveland Alzheimer’s Association. — Rachel Abbey McCafferty

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Jeff Mowry Cuyahoga County Cleveland efore he arrived in 2011, Jeff Mowry’s job, chief information officer for Cuyahoga County government, didn’t exist. It couldn’t exist. Instead, Cuyahoga County had a handful of information systems and IT directors, each under the direction of a different elected county official. That changed when voters created a new county government structure and elected Ed FitzGerald to be the first county executive. FitzGerald lured central Ohio native Mowry back north from the CIO job in Broward County, Florida. On his arrival, Mowry found a mashed-together department with multiple networks, a budget deficit, no central help desk and mix-and-match hardware and software, the result of decades of decentralization. And because of the new government structure, he faced new IT demands from newly created departments. A key part of that restructuring was consolidating disparate systems in the former offices of auditor, recorder and treasurer that were gathered under a single fiscal office. And because of the scandal that precipitated the reform of county government, IT was

CRAIN’S CLEVELAND BUSINESS 21

Robert Sable Alliance Solutions Group Independence

Mowry

key in opening up county government for public examination. That meant streaming county council meetings and archiving those meetings online, posting all financial and procurement information and creating online vendor services. “Mr. Mowry met the challenges by centralizing the IT organization’s infrastructure teams and charged the new organization in developing a common network, directory, help desk and overall IT infrastructure standards,” said the nomination from county director of fiscal operations Eric Richter. “A centralized print management program was established to reduce a 2-to-1 printer-toemployee ratio down to 7-to-1.” The nomination reported that efficiencies created under Mowry’s leadership saved the county $3 million in his first two years and another $2.4 million in 2013. As a part of a FitzGerald policy of sharing

obert Sable has been a “complete Sable game changer” for Alliance Solutions Group, said CEO Aaron Grossman. Sable joined the group of Independence-based staffing and recruitment firms as its chief information officer about 18 months ago, Grossman said, and immediately began overhauling the company’s technology base. He introduced a new technology platform, created a mobilefriendly job board and purchased some high-end video conferencing technology that allows recruiters to interview candidates from afar. At the start of January, Sable added the title of chief operating officer for Alliance Solutions Group to his resume. “Rob doesn’t lead through a top down methodology, but looks to gain buy in and consensus around new initiatives and agendas for the organization,” the nomination said. “This ap-

services, 29 county communities now use services first developed for county operations, including website design and geographic information system needs. “Without Jeff’s expertise, many of the changes implemented countywide could not have happened with any success rate,” wrote county human resources director Elise Hara in support of Mowry’s nomination. “Certainly, HR would have never succeeded in standardizing processes and procedures without Jeff’s team. Together we have insured that all employees are on electronic timekeeping systems, have access to email and payroll is uniform throughout.” — Jay Miller

proach to leadership was embraced by our staff, and Rob was able to drive several successful outcomes within a short period of time as a result of the trust he built within the organization. With Rob’s leadership and insight, Alliance redefined its mission statement with a focus towards operational excellence.” The implementation of a new technology system was identified in the nomination as a critical win for the company. The nomination called the previous system, which had been installed shortly before Sable’s arrival, a “disaster from day one.” “Rob quickly assessed the situation and worked to solve … it as one of his first initiatives with Alliance,” the nomination said. “His calming presence during an incredibly difficult time was an inspiration to the entire staff at Alliance. He gained the trust of the company, and he was able to implement a solution to this problem by executing a successful, on-time project over an eight-month time period. I don’t know if the company would have been able to survive and ultimately overcome this challenge if Rob wasn’t the person leading the charge.” Sable also has worked to make the company more efficient by automating many of the processes employees use, in-sourced the IT department and saved more than $100 million in a year by bringing software development and information systems management in house, the nomination said. Going forward in 2014, Sable will be working on the company’s digital marketing program, automating its hiring process and rolling out a cloud-based service for employees to use for collaboration and support. Further in the future, Sable will work on initiatives including a remote work force system — which would allow the company to more easily grow — and an online business-to-business portal where employers and potential employees could interact. — Rachel Abbey McCafferty

Congratulations C. Martin Harris, MD, MBA Crain’s 2014 Terabyte Award Winner At Cleveland Clinic, we applaud our own Dr. C. Martin Harris, Chief Information Ofﬁcer and Chairman of the Information Technology Division, for this distinguished recognition. Through his expertise and leadership on numerous national policy commissions, Dr. Harris has helped spearhead innovative applications of information technology in healthcare. We salute Dr. Harris for his outstanding contributions to Cleveland Clinic and his commitment to world class care.

Same-day appointments 216.444.CARE clevelandclinic.org

C. Martin Harris, MD, MBA

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4/4/2014

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Deborah Piccus Duramax Marine LLC Hiram nthusiasm, according to the nomination, is what sepaPiccus rates Deborah Piccus from her peers. Piccus has been at Duramax Marine, a Hirambased manufacturer of products that improve vessel performance, for nine years. In that span, she has upgraded the entire company’s infrastructure, the nomination said. Piccus led Duramax’s conversion to Windows 7, which included the move to upgraded and virtual servers, improved storage systems, and upgraded computers and routers. She also guided the company’s switch to a new phone system. Because of the new technology, Duramax needed to replace its customer relationship management system with one that would better meet its needs, the nomination said. “The completed system is streamlined, very efficient and allowed for data warehousing of essential quoting, costing, customer and contact information,” the nomination said. The more efficient system provides Duramax’s sales team with data on where to locate

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CIO OF THE YEAR quotes, along with statistics on the success rates of quotes and the reasons for failures. The improved work flow that has resulted from the changes has improved customer service, the nomination said. And Piccus’ work is just beginning. She is helping the company become ISO9001 certified — a designation by the International Organization for Standardization that specifies requirements for quality management systems. Piccus also is leading the implementation of a new communication system between the customer service and production teams. Piccus teaches information systems and business classes at the University of Phoenix campus in Beachwood, where, according to the nomination, “she loves imparting knowledge and experience to others who will benefit from her.” Piccus said she is a member of “Note-Oriety Showchoir,” a singing group based in Solon that performs in two formal shows per year and does a handful of performances at nursing homes, rehabilitation facilities and community events. She also is part of an all-female band, the AMANDAS, which performs at restaurants and bars. She and her husband Bob, chief of mission support in the integration division at NASA Glenn Research Center, have two children, Adam and Rachel. — Kevin Kleps

APRIL 7 - 13, 2014

Christopher Fuss PartsSource Aurora hristopher Fuss has an innate ability to take an existing problem and find what his Fuss nomination described as an “elegant way” of simplifying it using technology. While Fuss has only been at PartsSource for the last two years, he already has made an indelible mark on the rapidly growing medical parts supplier based in Aurora. Fuss’s first order of business at PartsSource was taking a look at all of the company’s existing technology tools through the eyes of the end user. He spent time learning about all of the company’s departments to see what they do, how they do it and what sort of shortfalls there were in terms of the processes and tools they used. After his deep dive into the organization, he assembled a so-called technology product roadmap, which became the de-facto guide for his team over the next 18 months, according to the nomination. PartsSource needed to automate as much of the parts ordering process as possible — a complicated task given the complexity and fragmentation of the medical equipment industry.

Fuss and his team, however, were able to automate much of the process and over-delivered on their 2013 automation goals. At the beginning of the year, every order was touched by a PartsSource associate. By the year’s end, more than 20% of all orders were touchless, according to the nomination, through the company’s ecommerce platform. “These accomplishments not only added operational efficiency throughout PartsSource, but increased customer satisfaction by fulfilling parts orders faster and more accurately,” the nomination said. In an email, PartsSource president & CEO Phil Settimi described Fuss as “engaging, stimulating, encouraging, aspirational.” “Chris energizes the team around him and departments around them,” Settimi said. “All this creates positive momentum in our company.” Fuss has also used his technological wizardry for the good of the community. Last year, he and his team donated their time to install new computers for employees at a local homeless shelter. He’s also an adviser to the Dalton Foundation, assisting with technology needs. Prior to joining PartsSource, he served as the CTO for OEConnection, a Richfield-based company that provides online systems to car dealers and collision repair shops to help them find replacement parts. — Timothy Magaw

MEET THE JUDGES Jane Alexander CIO; Cleveland Museum of Art Alexander is responsible for implementing technology that supports the Cleveland Museum of Art’s mission, as well as long-term planning for information management systems, media services and technology services. Under her direction, the CMA completed Gallery One and the ArtLens mobile application. Alexander She has worked on several high-profile projects in Cleveland, notably as the virtual chief technology officer to the Great Lakes Science Center, as well as the technology design consultant to Frank Gehry’s Peter B. Lewis Campus at Case Western Reserve University. Alexander earned a bachelor’s degree in architecture and a BS/MS in applied mathematics from Columbia University.

Mark Hogan CIO; United Way of Greater Cleveland Prior to filling the top information technology position at United Way of Greater Cleveland in 2013, Hogan worked as chief information officer at Cleveland Hopkins International Airport. Before his decade-long tenure with the airport, Hogan worked at the District of Columbia Public Hogan Schools as an independent auditor and special assistant to the chief operating officer. His earlier experience includes technology and policy positions with the Cleveland Metropolitan School District and Cleveland City Council. Hogan is a graduate of Wittenberg University in Springfield. He has a master’s degree in public administration from Cleveland State University.

Congratulations Mike McManamon for being a ﬁnalist for

CIO of the Year!

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CIO OF THE YEAR

APRIL 7 - 13, 2014

Michael McManamon Cleveland Sight Center; Cleveland teven Friedman, executive director of McManamon the Cleveland Sight Center, credits Michael McManamon with keeping the organization functioning during its space overhaul two years ago. The $10 million makeover of the Sight Center’s building on East 101st Street forced the agency into a temporary home for months, yet Friedman said, “We didn’t miss a beat.” “That was an enormous task,” said Friedman of the Sight Center’s chief information officer. “I can’t tell you how many hours Mike put in.” McManamon — who has been at the Sight Center for about three years — earned his master’s degree from Carnegie Mellon University along with dual degrees from Kent State University. He has more than 25 years of experience leading technology for organizations from startups to Fortune 500 companies. “Big picture, strategic accomplishments are where Michael excels, but he still retains the ability and humility to provide assistance wherever needed,” the nomination said. “He is comfortable making presentations to boards of di-

rectors and business leadership and can express complex technology matters in terms the uninitiated can grasp.” Friedman said he has known McManamon for about six years, having worked with him prior to the Sight Center. “We work very well together,” said Friedman, who describes the CIO as devoted to both the agency and his profession. “He’s really a joy to work with as a team member.” McManamon has been involved with making sure technology is accessible to the Sight Center’s low-vision and blind users, and he has worked with creating and maintaining the technological infrastructure needed for the agency’s call center program. He additionally played an essential role in redesigning the center’s systems to be compliant, a process for which “we had to start from scratch,” Friedman said. “Shifting our focus from ‘this is what services we provide’ to one where we ask ‘what does this client need’ has transformed the culture of the agency,” the nomination said. “We have leveraged technology to streamline the processes and workflows around the provision of services and developed new processes and systems to keep up with the billing demands of our funders.”

— Amy Ann Stoessel

MEET THE JUDGES Fred Franks CIO, FIT Technologies At FIT Technologies, Franks brings both strategic and tactical experience to the organization and to the clients. His primary focus is on business development and client solution design. Prior to joining FIT Technologies, Franks worked in information technology at SherwinFranks Williams for five years. He earned his master’s degree in business administration from Case Western Reserve University’s Weatherhead School of Management, and his bachelor’s degree in business administration, MIS, from the University of Akron.

Jim Sage VP for information technology, chief information officer; University of Akron Sage joined UA in 2005 from American Teleradiology Management Group, a medical services company in Chagrin Falls. He also previously worked as: executive vice president and chief information officer at Agilysis, an elecSage tronics and computer systems distributor based in Cleveland; vice president of information systems at OfficeMax in Cleveland; and vice president of management information systems at Camelot Music Inc. in Canton. He earned a bachelor’s degree in industrial management and management information systems from UA. He also graduated from the CIO Academy at Emory University.

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Matthew Dickerson SIRVA Worldwide Independence ome chief information officers have it easy — they only have to Dickerson deal with one company, one country and one set of problems. Not so with Matthew Dickerson. As CIO of SIRVA Worldwide Inc., Dickerson doesn’t have to just worry about whether the computers are working and communicating effectively with 2,500 employees at one company. He has to deal with scores or hundreds of companies, all over the world — and each of them is dealing with multiple employees in varying circumstances, sometimes in multiple countries as well. That’s because SIRVA is in the corporate mobility business. It’s an international provider of relocation and moving solutions and helps companies, governments and even individuals with more than 230,000 relocations a year. Having computer systems that integrate with its clients and their needs — rather than just a computer system that helps SIRVA itself — has been key to the company’s success. That’s thanks largely to Dickerson’s efforts, the nomination said. “By transforming a historically inwardlyfacing role into a key, external customer service

CRAIN’S CLEVELAND BUSINESS 23 function, Dickerson shifted the mindset of the IT function,” said the nomination from SIRVA’s vice president of marketing Jeff Knapton. Many of SIRVA’s direct contacts and users are the HR professionals who deal with personnel for SIRVA’s corporate clients. Dickerson has initiated and implemented systems that allow them to better track and manage their own employees, through moves, job changes and other mobility challenges. At the same time, he’s also helped SIRVA come up with IT solutions that allow it to better serve its clients. “Dickerson has also implemented processes and mechanisms to capture feedback from all customers regardless of their size, and then translate that feedback into actions that ensure continuous improvement and/or the addition of new capabilities,” the nomination said. Between the internal and external improvements, SIRVA credits Dickerson with helping it land several big clients, and with being instrumental in retaining others. Oh — and he did it while cutting his IT budget. “Not only have Dickerson’s efforts contributed significantly to top line revenue through yearover-year growth since 2009, Dickerson has also reduced his budget by 10 percent each year during the same time period, accomplishing more yet spending less,” the nomination said. — Dan Shingler

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24 CRAIN’S CLEVELAND BUSINESS

Dale Phillips MCPc; Cleveland

by another 5 percentage points, according to the nomination. The company’s new softale Phillips is a CIO’s ware systems and processCIO. Literally. The es “enable such an aggrescompany employs at sive forecast,” the least four or five people who nomination said. have been chief information Phillips is good at setting Phillips officers or held similar titles a vision and guiding his team at other companies, according to so they can achieve it, according to MCPc spokesman Aaron Marcovy. AfFrank Yako, vice president of software ter all, MCPc is an information technolarchitecture at MCPc. ogy consulting company. So it has a And it isn’t easy to lead a team lot of employees who know a thing or tasked with helping people adapt to a two about technology. new technology, said Yako, who Phillips knows a lot about technolohelped Phillips figure out how to tackle gy, too, but what’s more impressive is the project. Team members faced rethat he’s able to get so many experts sistance from employees who didn’t to work as a team, Marcovy said. immediately understand the benefits Phillips’ team spent much of 2013 of the changes, but Phillips made sure implementing software that’s already they stayed focused, Yako said. having a major impact on the compa“I don’t think we’d be where we are ny. More than a year ago, the companow if it wasn’t for Dale rallying the ny started rolling out the ConnectWise troops and trying to lead the charge suite of business management softup the hill,” he added. ware products. The software has givA father of two, Phillips is a swimen MCPc’s management greater visiming enthusiast “and spends many bility into the company’s operations — weekends poolside officiating swim more than they’ve ever had, accordmeets across Northeast Ohio,” the ing to the nomination. nomination said. That visibility has helped boost the He’s a member of the ConnectWise company’s bottom line, according to user group and helps out with the anthe nomination. MCPc’s revenue innual ConnectWise user conference. creased by 9% in 2013, and its gross He also serves on the advisory board profit margin increased by 3 percentfor Quosal, a software product that age points. This year, the company MCPc recently started using for sales projects that gross margin will grow — Chuck Soder quotes.

CIO OF THE YEAR

APRIL 7 - 13, 2014

Rachel Johnson The NRP Group Garfield Heights

system has “really cut down on our response time,” Heller said. As NRP’s chief information officer, Johnson oversees a team of a dozen people that achel Johnson didn’t has seen to it that the comjoin The NRP Group pany’s people stay connectto drive its informaed between NRP’s seven ofJohnson tion technology efforts. In fices and its more than 100 fact, J. David Heller, the properties in 14 states using tools founding principal who in 2010 hired such as video conferencing. Johnson into NRP, which develops and Her team’s work is felt by residents manages apartment complexes, calls of the company’s properties, too, Johnson’s career path a “highly unusuHeller said. al trajectory.” But, that’s what makes “Ms. Johnson not only supports the her so effective, from his perspective. core company IT needs, but is inJohnson first joined NRP’s asset volved in high-tech solutions that are management group, which oversees revolutionizing the world of multifamily and works to maximize the value of living, such as engineering networks roughly 140 properties. to provide high-speed data, cable TV “It gave her a real understanding of and digital phone solutions,” the nomithe business, and when she went into nation said, before noting other the CIO role (two years ago), she was amenities such as streaming music. able to see what individual challenges Johnson also decreased the cost were at the properties and translate of IT expenses by $400,000 by renethat into solutions,” Heller said. gotiating a licensing agreement and “Rachel has a real unique ability to moving the company’s email to the be in the moment with every person cloud, among other changes, the she’s communicating with, and that nomination said. gives her the ability to understand Johnson sits on the board of zoning their business needs and challenges,” appeals for Chagrin Falls, volunteers he added. One example: Johnson created a for the Women’s Leadership Council streamlined business process that for the United Way of Greater CleveNRP’s property maintenance techniland and has supported the NRP incians use to track and log the tasks ternship program each year she’s they are handling, such as carpet rebeen employed. placement and toilet repairs. That — Michelle Park Lazette

PAST WINNERS 2013 Public company: Esther Potash, Olympic Steel Large private company: George Mehok, Safeguard Properties Midsize private company: Mark Danczak, Cohen & Co. Small private company: Don Shadrake, The Reserves Network Large nonprofit: Teri Rini-Barber, Southwest General Health Center Small nonprofit: Jane Alexander, Cleveland Museum of Art Special Recognition: Miguel Zubizarreta, Hyland Software

2012 Large company: Dan Muller, The Timken Co. Midsize company: John O’Neill Sr., Molded Fiber Glass Small company: Fred Franks, FIT Technologies Nonprofit/government: Mark Hogan, Cleveland Airport Systems

2011 Large company: Bill Blausey, Eaton Corp. Midsize company: Doug Wenger, Omnova Solutions Small company: George Mehok, Revol Nonprofit/government: Greg Kall, Summa Health Systems

2009

Harris continued from PAGE 19

helped shape federal programs that have pushed health care providers all over the country to use electronic medical records and figure out how to share them with other providers — even competitors. Harris also has served as chair of the Healthcare Information Management Systems Society. That influential organization agreed to lease the entire top floor of the newly constructed Global Center for Health Innovation, which used to be called the medical mart. Harris was tasked with helping convince the organization to establish a presence at the center. When HIMSS signed the lease, local officials hailed it as a major victory. But the organization might not have come to Cleveland if Harris hadn’t been involved, according to Graham, his colleague at the Clinic. “I credit Martin Harris,” he said. — Chuck Soder

Government: Brian Kelley, Portage County Nonprofit organization: Jim Sage, University of Akron Small company: Jeremy Moorman, Aluminum Line Products Co. Large company: Thomas Lucas, Sherwin-Williams Co.

2008 Large company: Jon Elsasser, Timken Co. Midmarket company: George Mehok, Revol Wireless Small company: Sandra Rapp, OEConnection Nonprofit: Sasi Pillay, NASA Glenn

2007 Large: George Dufour, CBiz; Charlie Rau, Forest City Enterprises Midmarket: Leslie Pochaukas, Electronic Merchant Systems Small company: Bala Thangavelu, Tenth Floor Nonprofit organization: Jim Sage, University of Akron

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CIO OF THE YEAR

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Ron Steiger National Interstate Insurance Co. Richfield ot only has Ron Steiger run the inforSteiger mation technology operations for National Interstate at a cost that’s “much lower than the industry average,” he’s also led his team to build proprietary software for pricing the insurer’s business, reducing its dependence on costly third-party providers. Developing code internally — which has occurred over the last several years — also renders the Richfield-based company able to get products to the market faster, said president and CEO Dave Michelson. “Product managers and department heads know that if they need an additional piece of functionality quickly, they simply need to walk down a few flights of stairs to speak directly to the programmer or architect that built the system,” the nomination said. IT department expenses for National Interstate, a specialty property and casualty insurance holding company, are currently at 1.5% of the company’s direct written premium — “one of the best ratios in the business,” the nomination said. “Ron achieves this without sacrificing quality,”

the nomination said of Steiger, whose tenure with National Interstate spans 16 years. “99.85% of our jobs finish successfully, and our applications remain available with 99.95% uptime.” Translation: National Interstate’s systems are up and available during work hours for its users 99.95% of the time, Michelson explained. “When I describe Ron to people … he’s simply a visionary,” Michelson said. “He thinks about staffing, he thinks about hardware, he thinks about software, he’s thinking ahead of most people that I see in these jobs. He’s thinking three to five years down the road all the time.” In addition to keeping costs low, which better positions National Interstate in the marketplace because it gives the company greater margin for error on its loss ratio, Steiger led the successful creation of a series of tools and repositories that the company now uses to extract useful information. This helps the company analyze trends, favorable and unfavorable, and respond to issues, Michelson said. “This saved hundreds of man hours tracking down information, and prevented costly mistakes from incorrect information,” the nomination said. Steiger is an active member of senior executive groups such as EDGE, exchanges ideas and best practices regularly with colleagues in the industry and contributes to online resources such as Stack Overflow. — Michelle Park Lazette

Gary K. Conkol Kaman’s Art Shoppes Inc.; Chagrin Falls

more than 20 years to build an information technology infrastructure that supports Kaman’s operations at 45 amusement parks and zoos in the United States and ary Conkol brings IT Canada, as well as two corexpertise to what porate buildings, according might appear to be a to the nomination from comlow-tech business. Conkol pany executive vice presiBeen to an amusement park dent and co-owner Rich Kaman. or zoo lately? You’ve probably seen one Programs Conkol designed “have of Kaman’s more than 300 retail art and enabled a large group of managers photo concession stores, which sell (unaccustomed to articulating sales made-on-site portraits and caricatures, figures) to … (use) a sales reporting photos, face painting and other goods engine which has increased their abiliand services to remember the day. ty to manage, motivate and drive In this “artist-driven, nontech-savvy sales.” environment,” Conkol has worked for

Congratulations! We applaud our clients

Amy Brady, KeyCorp Jeff Mowry, Cuyahoga County and

Ron Steiger, National Interstate on being named Crain’s CIO of the Year finalists

Thompson Hine

LLP

www.ThompsonHine.com

CRAIN’S CLEVELAND BUSINESS 25

Amy Brady KeyCorp; Cleveland n two years at KeyCorp, Amy Brady has quickly displayed the value of 27 years of experience in the banking industry. Brady Brady As the leader of Key’s technology and operations organization, Brady is responsible for the banking giant’s technology, security, data and procurement functions. “She has transformed her organization” in that short time, the nomination said. Among her many contributions has been modernizing the platform and design of Key.com. KeyCorp’s online bill payment capabilities were upgraded, its mobile phone application was updated, and tablet and mobile banking applications were launched. Key’s mobile traffic has doubled since early 2012, and it has seen a “significant increase” in customers who are using mobile banking, the nomination said. Brady also has helped Key improve its returns on large investments in data, analytics and reporting, which were “delivering sub-optimal results” prior to her arrival, the nomination said. Two more crucial improvements in Brady’s tenure have been increased employee engagement and greater diversity.

Kaman noted that a company intranet Conkol developed enables inpark managers to handle inventory management, manpower and budget reporting from remote sites. This has led to “time savings, better concentration on sales growth, improved park acceptance and greater stability,” the nomination stated. What Kaman’s Art Shoppes calls its Next Generation Intranet in 2013 was “credited with facilitating the most profitable year in the company’s 40year history,” according to the nomination. “Furthermore, through Gary’s creative vision, new applications of web technology are being expanded into other areas, such as the fabrica-

Key has had “significant movement” in direct reports to Brady who are female and/or minorities, and the number of women in leadership positions has increased. There also has been a 25% improvement in employee engagement scores, and feedback gathered through focus groups indicates “much higher rates of employee satisfaction, engagement and productivity,” the nomination said. At Key, Brady has created a communication strategy that includes more frequent and timely written communications, as well as town halls, roundtable discussions and site visits. “Amy’s leadership and easy and effective communication style have permitted her to guide her team to make transformative change at Key,” said Deborah Z. Read, managing partner at Thompson Hine LLP, a fellow member of executive women’s networks. “Those same qualities have placed her at the top of the civic and professional organizations with which she affiliates.” Brady is a member of the board of directors for the National Center for Women & Information Technology, the Achievement Centers for Children, PlayhouseSquare and In Counsel With Women. She is also a member of the 2013-2014 class of Leadership Cleveland and is an executive sponsor of the Key Bank People with Disabilities Network Group. Brady, who was named to American Banker’s 2013 list of “most powerful women to watch,” came to Key after 25 years at Bank of America. — Kevin Kleps

tion division and Kaman’s online stores.” Conkol is a planner who maintains a “rolling five-year IT plan” for the company. Goals for this year include “merging labor and manpower functions into the web-based intranet, replacing spreadsheet-based tools of the past;” instituting a new videoconference system; and launching tests of the 2016 infrastructure redesign. “He’s all data-driven,” Kaman said in an interview. Another valuable charac-

teristic for the company: “He has a great understanding of what non-technical people need in a business sense,” he said. At work and outside it, “Basically, Gary doesn’t sit still,” Kaman said in the nomination. Conkol in 2011 founded the Northeast Ohio professional chapter of Engineers Without Borders. He also volunteers with the Burton Chamber of Commerce, Habitat for Humanity and his local. — Scott Suttell

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CRAINâ€™S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

APRIL 7 - 13, 2014

MONEY MANAGERS

RANKED BY ASSETS UNDER MANAGEMENT LOCALLY(1) Total assets under local management with discretion (millions)

Company Address Rank Phone/Website

Dec. 31, 2013

Dec. 31, 2012

% change

Minimum Total number individual of local account accounts (thousands)

Portfolio analysts on staff

Compensation for services

Chief investment officer

Top local executive Title

Victory Capital Management Inc.(2) 4900 Tiedeman Road, 4th Floor, Brooklyn 44144-2302 (216) 898-2400/www.vcm.com

$7,664.4

$12,937.2

-40.8%

$10,000.0

Percentage of assets under management

Boyd Watterson Asset Management LLC 1801 E. Ninth St., Suite 1400, Cleveland 44114 (216) 771-3450/www.boydwatterson.com

$4,428.1

$3,916.0

13.1%

1,584

$250.0

Fee only, percentage of assets under management

Ancora Advisors LLC 2000 Auburn Drive, Suite 300, Cleveland 44122 (216) 825-4000/www.ancora.net

$1,944.0

$1,534.8

26.7%

375

$500.0

Percentage of assets under managment

Wasmer, Schroeder & Co. 1111 Superior Ave., Suite 965, Cleveland 44114 (216) 622-0000/www.wasmerschroeder.com

$1,764.0

$1,672.6

5.5%

526

$1,000.0

Percentage of assets under management

Oak Associates Ltd. 3875 Embassy Pkwy., Akron 44333 (330) 668-1234/www.oakfunds.com

$1,010.6

$855.7

18.1%

$3,000.0

Percentage of assets under management

Spero-Smith Investment Advisers Inc. 3601 Green Road, Suite 102, Beachwood 44122 (216) 464-6266/www.sperosmith.com

$795.5

$620.0

28.3%

301

$250.0

Percentage of assets under management; fee only

Carnegie Investment Counsel 25550 Chagrin Boulevard, Suite 101, Beachwood 44122 (216) 367-4114/www.carnegie.me

$792.0

$540.0

46.7%

1,923

$500.0

Winslow Asset Management Inc. 3333 Richmond Road, Suite 180, Beachwood 44122 (216) 360-4700/www.winslowasset.com

$648.8

$561.0

15.7%

128

$1,000.0

Percentage of assets under management

North Point Portfolio Managers Corp. 5910 Landerbrook Drive, Ste. 160, Mayfield Heights 44124 (440) 720-1100/http://nppmcorp.com

$625.5

$491.4

27.3%

223

$500.0

Percentage of assets under management

Diane M. Stack

First Fiduciary Investment Counsel Inc. 6100 Oak Tree Blvd., Suite 185, Cleveland 44131 (216) 643-9100/www.firstfiduciary.com

$469.3

$366.7

28.0%

370

$250.0

Percentage of assets under management

Mary F. Anderson

Mary F. Anderson president

Beese Fulmer Private Wealth Management 220 Market Ave. South, Suite 1150, Canton 44702 (330) 454-6555/www.beesefulmer.com

$406.3

$311.8

30.3%

341

$500.0

Percentage of assets under management, fee only

Dennis S. Fulmer

Dennis S. Fulmer president, principal

The Mutual Fund Store-Ohio LLC 36040 Detroit Road, Suite E, Avon 44011 (440) 934-6565/www.mutualfundstore.com

$357.4

$281.5

27.0%

3,162

$50.0

RAV Financial Services LLC 2000 Auburn Drive, Suite 400, Beachwood 44122 (216) 831-4900/www.ravfinancial.com

$353.7

$323.5

9.3%

392

$500.0

Fee only

David M. Taucher

Gratry & Co. 20600 Chagrin Blvd., Suite 320, Shaker Heights 44122 (216) 283-8423/www.gratry.com

$345.6

$256.8

34.6%

$0.0

Fee only

Van Cleef Asset Management Inc. 3201 Enterprise Parkway, Suite 140, Beachwood 44122 (216) 464-0253/www.vancleefinc.com

$307.2

$243.3

26.2%

Percentage of assets under management

Geoffrey C. Hauck Lino Sergo

Private Harbour Investment Management & Counsel 29525 Chagrin Blvd., Suite 110, Pepper Pike 44122 (216) 292-5700/http://privateharbour.com

$277.1

$260.2

6.5%

200

$500.0

Percentage of assets under management

James A. Blue

Jentner Wealth Management 3677 Embassy Parkway, Akron 44333 (330) 668-1000/www.jentner.com

$228.0

$200.8

13.5%

143

$500.0

Percentage of assets under management

Martin A. Weisberg

Bruce A. Jentner president

Midwest Investment Management LLC 1301 E. Ninth St., Suite 1110, Cleveland 44114 (216) 830-1110/www.mimllc.com

$222.9

$140.7

58.5%

487

$500.0

Norman F. Klopp

Norman F. Klopp managing partner

Reed Financial Services Inc. 3690 Orange Place, Suite 240, Beachwood 44122 (216) 464-2090/www.reed-financial.com

$181.3

$149.8

21.1%

259

$250.0

Percentage of assets under management

James M. Reed

James M. Reed president

Winfield Associates Inc. 700 W. St. Clair Ave., Suite 404, Cleveland 44113 (216) 241-2575/www.winfieldinc.com

$140.7

$118.5

18.7%

201

$500.0

Fee only, percentage of assets under management

William W. Baker

Cornerstone Wealth Management 835 Sharon Drive, Suite 280, Westlake 44145 (440) 899-4000/www.cornerstonewealthmgmt.com

$138.9

$110.4

25.8%

247

$0.0

Percentage of assets under management

Nick Dionisos

David A. Gomersall president

Broadleaf Partners LLC 9 Aurora St., Suite 5, Hudson 44236 (330) 650-0921/www.broadleafpartners.com

$131.1

$94.3

39.0%

230

$100.0

Percentage of assets under management

Doug MacKay

Doug MacKay, CEO, CIO Bill Hoover president

Shaker Investments 3690 Orange Place, Suite 400, Cleveland 44122 (216) 292-2950/www.shakerinvest.com

$122.6

$94.3

30.1%

$250.0

Percentage of assets under management

Edward P. Hemmelgarn

Sigma Investment Counselors 30195 Chagrin Blvd., Suite 210 N, Pepper Pike 44124 (888) 718-1132/www.sigmainvestments.com

$37.7

$32.2

17.1%

$1,000.0

Percentage of assets under management

Denise Margolis Farkas

Fee only

Percentage of AUM

Fee only, percentage of assets

David C. Brown CEO

Brian L. Gevry

John P. Micklitsch

Brian L. Gevry, CEO, CIO; Timothy M. Hyland, Michael E. Bee, managing directors Frederick D. DiSanto CEO

John S. Majoros III N. Richmond Jr. Michael J. Schroeder Thomas principals, portfolio managers James D. Oelschlager

James D. Oelschlager, president, CIO; Mark Oelschlager, Robert Stimpson, portfolio managers

Mimi Lord Robert C. Smith Jeffrey N. Malbasa

Robert C. Smith, chmn., CEO Jeffrey N. Malbasa, president, COO

Richard L. Alt

Gary P. Wagner Richard L. Alt principals

Gerald W. Goldberg, chmn., Gerald W. Goldberg chief investment officer; Kara H. Lewis, president

Chris Bouffard

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. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Companies on the Money Managers list are registered investment advisers with the Securities and Exchange Commission and have full discretionary control over where all of their clients' money is invested. This criteria is in keeping with the standard used by our sister publication, Pensions & Investments. (2) In July 2013, Victory was sold by KeyCorp and became an independent money manager. As part of that transaction, Key retained approximately $4 billion in local assets.

Ronald J. Lang president, secretary

Brian Fowles senior vice president, investments Robert A. Valente CEO Jerome R. Gratry, president, managing director; Gregory A. Tropf, Mark A. Anderson, managing directors Geoffrey C. Hauck Martin J. Burke Jr. Geofrey J. Greenleaf CEO

Denise Margolis Farkas, chief investment officer; Anthony Basalla, portfolio manager

RESEARCHED BY Deborah W. Hillyer

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CRAIN’S CLEVELAND BUSINESS

Boom: $18.7 billion investment figure might be conservative continued from PAGE 5

They range from pipelines — some, spanning numerous states, but whose main purpose is to move gas and natural gas liquids from the Utica or the western portions of the shallower Marcellus shale play — to large natural gas processing centers near small Ohio towns such as Kennsington, Scio and Leesville. The $18.7 billion number might be a conservative one, even though it does include high-end cost estimates for some projects. For example, a power plant in Lucas County is slated to cost between $800 million and $850 million, and the higher $850 million figure was counted toward the total. But by the same token, many projects weren’t counted at all. The total list includes 105 projects, but 43 of those had unknown investment amounts and were not accounted for — including new college programs and schools, oil and gas equipment storage facilities and new hotels with unknown price tags.

Just the beginning Nearly all of the items on the list appear to be directly related to shale gas and oil development, though. Perhaps the least directly related major project is FirstEnergy Corp.’s initiative to invest $2.8 billion in its transmission system to serve the growing economy in eastern Ohio’s shale region. At the same time, though, major projects that were a stone’s throw away were not counted, even if they are being built to serve Ohio’s shale gas industry, if they were out of state. Case in point — the $4 billion to $5 billion cracker planned for Parkersburg, announced late last month by the Brazilian oil and gas services company Odebrecht, was not counted in the new report’s numbers. The ongoing growth of the investments in Ohio might surprise some, but those who have been closely watching the development of Ohio’s Utica shale are probably not shocked. Developers, especially those investing in pipelines, processing centers and other infrastructure, have been saying all along that their investments here would only increase with time. For example, Frank Tsuru, president and CEO of M3 Midstream in Houston, told Northeast Ohioans at the Crain’s Shale Summit as far

TOP SITE AERIAL PHOTOGRAPHY

Harrison and Noble counties have had $1.5 billion in shale drilling investments. back as a year ago that his company’s investment then of $1 billion in Ohio was just a start. “We’re planning on spending, in phase one, $1 billion in eastern Ohio, and this is only going to grow,” Tsuru said at the event. “It’s going to (ultimately) look like a house that you’ve added on to 10 times . . . I think we’re going to be here for a long time,” he added. He reiterated that when speaking with Crain’s Shale magazine in December, when he said the results from the Utica’s wells were only bolstering his faith in the play. “We are right now in two of the best plays in North America (the Utica and Marcellus) and we’re very happy to be where we are,” he said. Dr. Iryna Lendel, an economist and assistant director of the Center for Economic Development at Cleveland State University, has been following the Utica’s develop-

ment. She said the numbers prove some of the naysayers wrong. “Most of these investments are coming from outside of Ohio and would not come if Utica would not have been developed,” Lendel said in email correspondence this week. She also said the investments, particularly in drilling, can have a multiplier effect. “Every dollar spent directly in drilling activities results in another 62 cents being spent for intermediate goods and services in its supply chain,” Lendel said. “Another 40 cents are going to be spent through consumer spending — from salaries of employees at drilling industry and its suppliers.”

likely that many of the projects, though they represent massive investments, produce relatively few jobs. Many of the large pipelines, power plants and processing centers, for example, will take hundreds or even thousands of people to build, but once they are up they often employ only a few dozen people. For example, Carroll County Energy’s proposed $800 million power plant, though it would require 500 workers to build, will ultimately only employ 25 to 30 workers. And, outside of some construction work, most of the projects will provide few if any jobs for workers with a high school education, or even those with blue-collar skills.

“It’s generally not traditional blue-collar manufacturing type jobs,” Warnock noted. “A lot of these are engineering, professional, white collar jobs.” But the breadth and scope of the investment, even if only measured in dollars, is stunning. Warnock said that’s what’s jumped out at him as he and his team have researched the topic. Like Tsuru, he expects the numbers to continue to grow. “That’s what jumped out at me — how comprehensive the infrastructure projects are,” Warnock said. “And a lot of these projects keep growing in size and the volume (of gas and other materials in need of processing) that they can handle.” ■

Where are the jobs? If there’s a point of frustration for those hoping that shale gas will fully revive all of Ohio’s economy, it’s

Cleveland Water Alliance names Stubbs executive director Bryan Stubbs has been named executive director of the Cleveland Water Alliance, which describes itself as “a cross-sector network whose purpose is to share knowledge and spur innovative solutions to freshwater issues.” The organization said in a news release that Stubbs’ appointment was the culmination of a national search effort chaired by Rebecca Bagley of NorTech and board chair Jeanette Grasselli Brown. Stubbs brings to the job “a wide range of experience that spans entrepreneurship, academia and economic development,” and he has “vast experience in sustainability, nonprofit management and private/public partnerships,” Cleveland Water Alliance said. Stubbs most recently was a con-

ON THE WEB Story from www.crainscleveland.com sultant for the Regional Economic Competitiveness Strategy, which is comprised of business, academic, philanthropic and civic leaders from Northeast Ohio. In the past decade, he has worked on “variety of mission-driven initiatives,” including with the Illinois Department of Commerce and Economic Opportunity in partnership with the University of Illinois-Chicago and for Symbiotic Ventures in Berkley, Calif., the alliance said. Under his leadership as managing director of the Oberlin Project, the city of Oberlin became the third project in the world to receive ‘participant’ status as part of the Clinton Cli-

mate Initiative and Bloomberg’s C40 Climate Positive Development Program, according to the release. Initial partners in the Cleveland Water Alliance are Case Western Reserve University; the ClevelandCuyahoga County Port Authority; the Cleveland Foundation; Cleveland Metroparks; the Cleveland Museum of Natural History; Cleveland State University; Fairmount Minerals; the Great Lakes Science Center; Hiram College; Kent State University; MAR Systems; NorTech and the Northeast Ohio Regional Sewer District. Initial financial support was provided by the partners and the Generation Foundation, the George Gund Foundation, the Lennon Foundation and the Burning River Foundation.

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Safety: New MLB initiative will create ‘balancing act’ for Tribe continued from PAGE 1

“We’re still developing that plan,” Folk said. “We want to see what it takes in order to make sure that we keep those lines moving smoothly, quickly and efficiently. We’re going to experiment and roll this out and see how it works.” Nick Skelin, a key account manager for CEIA, said “there is no minimum or maximum number” of metal detectors for major league teams. “They are all making judgments based on the fan base,” Skelin said. “Team X might say, ‘Opening Day, we’ll get a full house.’ But for the other games they have no anticipation of more than 20,000 per game. There is no real magic number.”

‘Balancing act’ The crucial factor for every team is finding a way to provide the safest environment possible without causing big delays in entering the ballpark. “We are obviously very much concerned with fan experience here,” Folk said. But, he added, “Our absolute highest concern is fan safety — first, last and always. There’s a balancing act that goes into that. “We want to make this as seamless, comfortable and convenient for the fans while providing a safe environment,” Folk said. Skelin, CEIA’s key account manager, said walk-through metal de-

CONTRIBUTED PHOTO

An example of a walk-through metal detector manufactured by CEIA USA Ltd. in Twinsburg. tectors are “much more efficient” than the hand-held devices. His boss, Cacioli, agrees. “We sell both walk-through and hand-held, so I’m not going to talk

bad about either product,” said Cacioli, CEIA’s director of operations. “But the reality of the matter is given all of our experience, walkthroughs are much faster than wanding someone. They are also safer because they don’t rely on the screener’s ability to find something. You walk through, and you get a yes or no visual.” Tad Carper, the Cleveland Cavaliers’ vice president of communications, said the NBA team bought walk-through metal detectors from CEIA shortly after Dan Gilbert became the club’s majority owner in 2005. The NFL mandated hand-held metal detectors for all its teams during the 2012 season. Rob McBurnett, the Cleveland Browns’ coordinator of communications, said the team began using the hand-held devices at FirstEnergy Stadium in November 2012. Skelin said any change in security measures requires an adjustment period, but CEIA’s extensive work with agencies that stage big events shows it isn’t just the metal detectors that create longer lines to enter a stadium or ballpark. “It’s not just one item that causes the delay,” Skelin said. “The addition of the bag screening process creates the biggest delay in the testing we’ve done. In testing, there is a significant difference when you remove the bag screening. Teams wouldn’t consider that obviously,

NATHAN SKID/CRAIN’S DETROIT BUSINESS

The Detroit Tigers purchased 55 walk-through and 15 hand-held metal detectors from CEIA USA. The Indians’ American League Central rivals used the detectors for the first time on Monday, March 31. but it’s a time constraint.”

Next up at the ballpark Skelin said he thinks fans will begin to see the walk-through detectors at Progressive Field “within the first couple of homestands.” Folk wouldn’t commit to a time frame, but said the Indians will “make sure the fans are involved in this.” “We’ll be gauging the entry time and get their reaction to it,” he said. CEIA’s priority is security, and Cacioli said the company’s relationships with government agencies have enhanced its profile among professional sports teams. Among

the company’s notable deals was a five-year contract it signed in 2010 with the Federal Protective Service in which it was named the provider of metal detectors for 1,600 government buildings. “Major League Baseball came to us because they asked around,” Cacioli said. “They asked federal agencies. Our name came up. “We have a strong brand name and recognition in the federal world,” Cacioli said. “Our products go through a rigorous testing process. When that is done, we feel our products are the best.” Said the Indians’ Folk of CEIA: “We’re fortunate to have them in our backyard.” ■

Tressel: Former Ohio State football coach is unusual candidate continued from PAGE 1

At issue is whether the showcause order issued by the NCAA in late 2011 and that runs through Dec. 19, 2016, applies to roles outside of coaching. The show-cause order isn’t exactly clear, as it notes the NCAA restricts “athletically related” duties of the former coach. Athletics, of course, and every other department at a university report to the president. Tressel’s current role at the university — as the person in charge of student success efforts — falls completely outside of athletics. “I imagine the NCAA would interpret the penalty to be the broader view of ‘any employment,’ but the NCAA manual doesn’t seem to explicitly address this point,” Michael McCann, a Sports Illustrated legal analyst and director of the Sports and Entertainment Law Institute at the University of New Hampshire, told Crain’s. The original show-cause order also notes that any employing institution must file with the NCAA a report within 60 days of the hire outlining how it will monitor Tressel to prevent the recurrence of violations mentioned in the report. Also, the employing body must file reports every six months through the end of the show-cause period detailing its efforts of monitoring the former coach. It does not indicate whether that monitoring mandate applies only to coaching jobs. Should the employing institution wish to contest the NCAA’s sanctions, it would need to appear before the committee to “showcause” why they shouldn’t be implemented. Tressel isn’t commenting publicly on his application, which along with the applications of 18

other candidates was made public late last month. The university also had no comment about what sort of issues might arise should Tressel be offered the job, other than to say he has been an effective leader since his appointment in 2011. The NCAA also did not comment, other than sending along the original Ohio State infractions report.

An unusual candidate Tressel, by all accounts, is an unusual candidate for the UA presidency. Unlike the bulk of the other applicants, his resume is anchored in athletics rather than academics. He doesn’t carry a Ph.D or Ed.D, which 76.8% of college or university presidents did in 2011, according to the most recent data from American Council on Education. Tressel’s highest level of education attainment is a master’s degree in education he earned from the University of Akron in 1977, though he does carry two honorary doctorates. Josephine Potuto, a University of Nebraska law professor and former chair of the NCAA Division I Committee on Infractions from 2006 to 2008, said the idea of a sanctioned coach becoming a university president is “unprecedented.” She characterized Tressel’s violations as “very significant.” “I don’t think the infractions committee would have ever thought of anybody who committed NCAA violations becoming president of a university,” Potuto told Crain’s. The NCAA accused Tressel of withholding information to protect Ohio State players who had received improper benefits from a tattoo parlor owner. John Infante, a former university

NEWSCOM

“I don’t think the infractions committee would have ever thought of anybody who committed NCAA violations becoming president of a university.” – Josephine Potuto University of Nebraska law professor, on Jim Tressel (above) compliance officer and author of the Bylaw Blog, which follows NCAA regulations, said he expects the University of Akron to assume that the NCAA restrictions apply to the presidency should trustees offer him the job. “I don’t think it would be worth challenging,” Infante said. “I’d play the conservative route and assume this applies, maybe go to a hearing just to make sure, but I’d be prepared for the NCAA to tell them to follow through.” McCann of the University of New Hampshire said, as a practical mat-

ter, it’s ultimately up to the NCAA as to whether sanctions would be imposed on the University of Akron should the school hire Tressel as its president. He said the University of Akron would have a hard time challenging the NCAA in court over its interpretation of the show-cause order, as the courts are “very deferential to decision-making of private associations like the NCAA” as it relates to their voluntary members, such as the University of Akron. Former Mid-American Conference commissioner Rick Chryst doesn’t see Tressel’s show-cause order as an issue for the former coach or the University of Akron. Chryst, who now leads the Cleveland office of Dietz Trott Sports and Entertainment Management, said he thinks it only would impact Tressel were he to take a coaching gig. In addition to the monitoring requirements, the show-cause stipulates Tressel would be suspended from all coaching duties for the first five games of the year for the first year he is employed as well as any postseason contests. “I think it’s on the periphery as it relates to this position (of president),” said Chryst, who knows Tressel personally. “Jim’s been forthright about this and moved passed it.”

Onward, upward For the most part, Tressel appears to have recovered from the NCAA scandal. University of Akron leaders rave about his performance as an administrator. Since he was hired a little more than two years ago, Tressel’s responsibilities have grown to include some of the most important functions of the university, includ-

ing recruitment, admissions, student advising and marketing. The school’s football coach — Terry Bowden — even recently endorsed Tressel’s candidacy for president while speaking at a Pro Football Hall of Fame luncheon, according to a report last week in The Alliance Review. Still, Tressel’s candidacy hasn’t come without its skeptics. One is Steve Weeks, a UA biology professor and president of the university’s faculty union. “My thinking — and I think you would get this from most faculty — is that the university is a $400 million-plus a year corporation, or whatever you want to call it. It’s huge. You need background in running something like that to really do a good job,” Weeks said. “Mr. Tressel is from what I gather — and I’m not a big sports guy — a decent coach. That’s not like running a huge institution.” In his application, Tressel noted that the university needs more than a leader who can “hit the ground running,” but rather one who is on the ground with the university’s current team. He also talks of continuing the controversial effort to eliminate underperforming academic programs, stabilizing the university’s budget and likely creating a strategic plan. His application notes that he also contributed more than $70,000 in speaking fees to the university over the last two years. “I am confident that I am the right leader to bridge the transition from Dr. Proenza’s accomplished fifteen year tenure to UA’s new era of excellence,” Tressel wrote in his Feb. 25 letter to the university’s board of trustees. “Put simply, I believe I am the right leader for this time.” ■

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Offer: Companyâ€™s stock falls below $30 continued from PAGE 5

Not that American Financial isnâ€™t putting its hundreds of millions of dollars of excess capital to use elsewhere: Just last week, the company completed its acquisition of Summit Holding Southeast Inc. and announced it had an agreement with Selective Insurance Co. of America to buy a book of business, effective March 27.

â€˜Prickly situationâ€™ American Financial owns roughly 52% of the common stock of National Interstate, a provider of specialty property and casualty insurance. The companiesâ€™ relationship began roughly 24 years ago when American Financial invested during National Interstateâ€™s formative period. Several of National Interstateâ€™s 10 directors are affiliated with American Financial. One of them, Jeff Consolino, is confident board members will continue to serve together as they always have, despite whatâ€™s transpired. Consolino is executive vice president and chief financial officer for

American Financial and a director on its board and that of National Interstate. A member of National Interstateâ€™s board since 2006, he became chairman in February 2013. â€œAFG has been involved with National Interstate since its beginning, which is nearly 25 years,â€? Consolino said. â€œOver that period of time, there have been differences of opinion on the board. Despite the fact, National Interstate has been a success.â€? Where equity analyst DeAugustino anticipates there may be a â€œprickly situationâ€? is between American Financial and Spachman, whom he referred to as the â€œbiggest hurdle to them getting a deal done.â€? â€œIf there is going to be any decision by AFG to move forward in the future with a second attempt to acquire the remaining National Interstate shares, we would probably look to any changes on the board composition with regard to Mr. Spachman,â€? DeAugustino said. Removing Spachman from the board would be difficult, given Spachmanâ€™s large ownership position in the company, DeAugustino

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noted. â€œIt would be something that other shareholders would basically have to agree with,â€? he said. â€œGiven that the deal fell through and the stock is now trading below $30, that is something that is potentially easier to accomplish.â€? National Interstateâ€™s stock closed last Thursday, April 3, at $27.34.

Difference in opinion Responding to speculation about his continued board directorship, Spachman, whoâ€™s up for re-election this May, said, â€œI think Iâ€™ve been good for National Interstate. Iâ€™m the founder of the company, longterm CEO. It would be for reasons not associated with my experience, my ownership of the stock â€Ś that anybody would not want me to continue to serve on this board.â€? And as for his being a hurdle to American Financialâ€™s buying the company? â€œI donâ€™t think thatâ€™s right,â€? Spachman said. â€œI think theyâ€™re the most obvious buyer for the balance of the company. Itâ€™s the best strategic fit. It makes tremendous sense. I just want a fair process as they go

about doing so. â€œI think they (were) trying to buy the company on the cheap and they were doing it in a threatening and coercive way,â€? Spachman said soon after the offer was terminated. â€œIf I didnâ€™t raise my hand, they might have gotten away with it.â€? Others, however, assert the offerâ€™s termination is a missed opportunity for shareholders. â€œThe fact that the tender offer was not completed is a missed opportunity for AFG and for National Interstateâ€™s shareholders who were deprived of the opportunity to decide for themselves whether they wanted $30 in cash,â€? American Financialâ€™s Consolino said. Dave Michelson, president and CEO of National Interstate, shares that disappointment. He said he voted for National Interstateâ€™s board to take a position of neutrality on the tender offer so shareholders could decide for themselves. If heâ€™d had the choice, Michelson said he would have tendered his shares. Spachman, however, argued that shareholders could have traded their shares for roughly $30 in the week before the courtâ€™s decision. â€œIf a shareholder wanted to sell their stock for more than $30 a share, they had a number of days to do that,â€? he said.

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As for why National Interstateâ€™s board didnâ€™t convene a special committee to consider the tender offer, National Interstate executives declined comment, citing ongoing litigation.

Moving on In the same filing in which it said it currently does not plan to acquire additional shares of National Interstate, American Financial noted it â€œhighly valuesâ€? National Interstateâ€™s business, management team and employees. The company, Consolino said, is confident in the plan that National Interstateâ€™s executives have for restoring profitability to a higher level than it experienced in 2013. That plan has involved seeking rate increases and choosing not to renew more than $60 million of business that the company found produced a disproportionate amount of losses, Michelson said. The company is hiring, too: Its number of employees stood last week at 598, up from 586 at year-end 2013 and from 546 at year-end 2012. â€œThe whole theme for me is, â€˜Yeah, this tender offer is withdrawn â€” itâ€™s done, weâ€™ve moved on,â€™â€? Michelson said. â€œWe didnâ€™t lose focus on the business. Itâ€™s business as usual.â€? â–

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THEINSIDER

THEWEEK

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

MARCH 31 - APRIL 6

Mentor looks to life after shuttering of a Steris plant

The big story: Cleveland is still in the running

■ Although Steris Corp. is closing a 100,000square-foot plant and eliminating 100 positions in Mentor, city manager Ken Filipiak says the city will recover quickly. For one, even though the medical equipment maker isn’t planning to close the plant until October 2015, the city already has a lead on a company that might be interested in taking over the space at 6515 Hopkins Road, which is visible from state Route 2. Plus, Steris has been hiring in Mentor. Filipiak has even seen guys wearing “help wanted” sandwich board signs, walking the sidewalks in Mentor on behalf of Steris. He estimates that the company employs roughly 1,000 people in the city, excluding workers at U.S. Endoscopy, a Mentor-based medical equipment company that Steris acquired in 2012. Steris would say only that it employs about 1,500 in Ohio, mostly in Lake County. Steris has moved a few operations to the city from other areas over the past few years. Steris has said it aims to find positions elsewhere in the company for plant employees, when possible. They make the System 1E, a machine used to clean endoscopes and other medical devices. Demand for the machine dropped after hospitals throughout the United States finished replacing its popular predecessor, the System 1, which was Steris’ first product. Federal regulators forced them to get rid of the System 1, saying that Steris had changed the product too much since it was approved

for the 2016 Republican National Convention, but Columbus is out. The Republican National Committee’s site selection committee voted to narrow the list of sites in contention for the 2016 convention to six cities from eight. Moving on to the next round of consideration are Cleveland, Cincinnati, Dallas, Denver, Kansas City and Las Vegas. Columbus and Phoenix are out “We’re pleased to be moving forward with our community partners,” said Cleveland Mayor Frank Jackson. “They (Republicans) are going to like what they see.” A final decision is expected by early fall.

Any urge to merge?: Akron Mayor Don Plusquellic called on his city’s rivaling health systems — Akron General and Summa Health System — to merge. In his State of the City address on April 2, Plusquellic said that Akron’s health care industry Plusquellic is turning into a battlefield of sorts as larger health systems from outside the area buy stakes in Akron’s hospitals. Plusquellic said he does not want to “sit idly by and wait for Akron to be Gettysburg.” Summa last September sold a 30% stake of its enterprise to HealthSpan, an auxiliary organization of Catholic Health Partners, the state’s largest health system. Akron General, meanwhile, is looking to be acquired by a larger health system.

Integrating Integrated:

Steris Corp. of Mentor plans to spend $165 million to acquire an Alabama company that repairs surgical instruments and provides related consulting service. The acquisition of Integrated Medical Systems International is part of Steris’ plan to expand its specialty services line of business, which repairs medical devices, in addition to providing other services. Steris said sales at Integrated Medical Systems are expected to be in the $150 million range in 2014.

MILESTONE

marketing itself as “Hyland Software.” The Westlake-based company has rebranded itself, putting the name of its flagship product front and center. The company’s primary logo now says “OnBase by Hyland.” The company previously had separate logos for both OnBase and Hyland Software. The new brand puts greater emphasis on the company’s content management software product while still giving a nod to “the people behind the product,” according to a blog post by Hyland CEO Bill Priemer.

COMPANY: Thomas Associates Inc., Cleveland OCCASION: Its 100th anniversary

Animal attraction: Bus rides, rock stars, movie tickets — and now elephants. The Cleveland Foundation’s latest gift to the community in celebration of its 100th birthday is a free day of admission at the Cleveland Metroparks Zoo and RainForest from 10 a.m. to 5 p.m. on Saturday, April 26. It will be the first free weekend day at the zoo in almost 20 years. Previous celebratory gifts include a free day of ridership on the Greater Cleveland RTA, free admission at the Great Lakes Science Center and Rock and Roll Hall of Fame and Museum, free tickets to the Cleveland International Film Festival and tickets to the coming Tri-C JazzFest.

■ Late last month, Taco Bell launched a TV ad campaign touting its new breakfast offerings featuring none other than Ronald McDonald. No, not the red-nosed face of the McDonald’s franchise, but rather the former director of leadership development and special projects at the University of Akron. McDonald, who retired from the university in 2012, was among many people with the same name featured in the ads. “They worked with six Ronald McDonalds each day, and I was ‘Ronald Akron,’” McDonald said on a post on the University of Akron website. “It was a phenomenal experience being on set. I can’t look at a commercial the same way, now that I’ve seen how they’re made. I know the camera angles and where the sound guy is standing.” The university said on its website that McDonald’s 15 minutes of fame started with a call from a casting agency a few weeks ago. Every time the commercial airs, McDonald said he earns residuals. No word on whether free waffle tacos are part of the deal. — Timothy Magaw

Experience abounds at Thomas Associates, which is entering its second century as one of the premier trade association management firms in the nation. Thomas serves more than 20 national and international manufacturing trade associations representing metal buildings, air compressors, garage doors and operators, power tools and fire equipment among other industries. The company says its account executives average more than 20 years of trade association management experience; several of the client associations have been with Thomas for more than 25 years. What’s now known as Thomas Associates began business as D.S. Hunter & Associates in 1913 and advanced the concept of a professional services firm supporting the work of multiple trade associations. Thomas took on its current form in 1981, when John Addington and Charles Stockinger bought the company. Addington remains president and CEO; Stockinger is chairman emeritus. The firm’s staff provides technical services that include “product certification, model code liaison and representation, coordination with technical organizations and testing laboratories, and development of industry standards,” the company stated. Thomas also arranges for federal, state, local and regulatory authorities to meet with association members or address industry gatherings. Thomas operates from a renovated school building at 1300 Sumner Ave. For details, visit www.thomasamc.com.

A movie helps manufacturers move past the downturn ■ Automation Tool & Die Inc. wants to get students interested in manufacturing, but its leadership knows it will be tough to shake off the industry’s negative reputation. So the Brunswick company is throwing itself into a wide variety of outreach events, from plant open houses to an apprenticeship program to a free night or morning at the movies. Automation Tool & Die is hosting two free showings of “American Made Movie” for local students and parents at the Regal Cinemas in Medina. Randy Bennett, co-owner, said the company has reserved two, 400-seat theaters for the events on April 16 and 19. The movie has benn shown in Ohio before, but Automation Tool & Die thought it would be a good way to continue to connect students, parents and the industry. Bennett said he thought the movie summarized how manufacturing was hurt during the recession and addressed ways to help the sector. The company doesn’t expect students to immediately buy in, so it plans to offer them some incentives to see the movie. The first 200 students at each showing will receive a free ticket to a movie of their choice, and all attendees will receive a coupon for $5 off or a free snack order of wings at the Buffalo Wild Wings in Medina, administrative assistant Michelle Wedlake said. Tickets are free, but registration is required. Learn more at automationtd.com/american mademovie/. — Rachel Abbey McCafferty

BEST OF THE BLOGS Have a heart

John Addington

Foods Inc. engaged a financial adviser to evaluate “strategic alternatives to enhance shareholder value,” the Cleveland company has entered into a definitive agreement to be acquired by Apex Restaurant Management Inc. Apex is to acquire for $5 a share in cash Morgan’s Foods, which was formed in 1925 and operates 68 KFC, Taco Bell and Pizza Hut Express franchises in Ohio and five other states. The transaction represents a premium of 100% to Morgan’s Foods’ closing share price on the last day of trading prior to the March 31 announcement.

‘Ronald Akron’ joins Taco Bell’s jab at rival McDonald’s

Excerpts from recent blog entries on CrainsCleveland.com.

Touching base: Hyland Software no longer is

Swallowed: Roughly six months after Morgan’s

for sale in the 1980s. That ordeal opened the door for competitors to move in on a market that had been dominated by Steris. Though sad, closing the plant “probably strengthens the company overall,” which is good for Mentor, Filipiak said. — Chuck Soder

■ A New York University study aided by Independence-based Life Line Screening Inc. offers more evidence that marriage is good for you. The Associated Press reported that the study of more than 3.5 million Americans found that married people had a 5% lower risk of any cardiovascular disease compared to single people. Widowed people had a 3% greater risk of it and divorced people, a 5% greater risk, compared with those who are married. Dr. Jeffrey Berger, a preventive cardiologist at NYU Langone Medical Center, told the AP, “It might be that if someone is married, they have a spouse who encourages them to take better care of themselves.” The story noted that researchers “used health questionnaires that people filled out when they sought various types of tests in community settings around the country” from Life Line Screening.

The hole story ■ This might fall into the “tell us something we don’t know” department, but The AtlanticCities.com declared that the 201314 winter is “the worst pothole season in recent memory.” Cities across a wide swath of the country “are finding themselves in a prolonged pothole purgatory,” the website noted. “It’s a whole lot worse because of that extra cold,” said Cleveland’s director of public works, Mike Cox, of road conditions here. “We’ve been battling this problem all winter, and we’re still in winter mode.” The story noted that during an average Cleveland spring, “six crews deploy about

six tons of asphalt each day to repair potholes. This year, it’s regularly been 10 crews going through 100 tons of asphalt per day.” Cox has brought in extra help in the form of PatchMasters, a professional company with specialized equipment to fix potholes. “His city-employed crews, who do the patching by hand, work alongside two PatchMasters teams and their machinery,” according to TheAtlanticCities.com. “The worst holes in the roadway get highest priority, and crews keep working through the list day after day fixing as many problems as possible.” He concluded: “We work in between the snowstorms and just do what we can. It never stops.”

Hang on ■ More than four years into the economic recovery, “the real level of investment spending by businesses, households, and nonprofits on structures, equipment, and software is still below its pre-recession peak,” according to economic commentary by two researchers at the Federal Reserve Bank of Cleveland. The current low level of investment “is mainly the result of an exceptionally large and persistent drop” in investment in residential buildings, such as homes and apartment buildings, and nonresidential buildings, such as factories, office buildings, stores, and hospitals, wrote Margaret Jacobson and Filippo Occhino. “After peaking in early 2006, investment in residential and nonresidential structures dropped by an unprecedented 45 percent, and it began to recover late, two years after the official beginning of the recovery,” they wrote. “Currently, it is still 29 percent below its pre-recession peak.” They noted that the level of investment in structures was too high in the first half of the 2000s and created an “overhang” of structures that has held down investment in the recovery. Their findings suggest investment in structures may pick up as the remaining overhang gets absorbed, though it’s not likely to return to pre-recession levels anytime soon.

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