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Vol. 35, No. 16
$2.00/APRIL 21 - 27, 2014
Entire contents © 2014 by Crain Communications Inc.
Startups stalled by lack of capital Fledgling businesses could be forced to leave state, find investors elsewhere By CHUCK SODER csoder@crain.com
tices that I did that.’ ” Shapiro said he didn’t get a “whole lot” of reaction from the subtle message, but that doesn’t diminish the impact of what the Indians believe will be a gamechanger. The Tribe preaches fan experience more often than Tom Hamilton makes an enthusiastic home run call, and until this season, they were somewhat hamstrung by a ballpark at which fans had difficulty doing something as simple as sending a text message or tweeting that they were at a Tribe game.
Northeast Ohio is mass producing high-tech companies, but something is wrong with the assembly line. There aren’t enough local investors willing and able to fund the dozens of tech companies pouring out of the region’s three business accelerators and other programs designed to help local startups, according to several sources. Competition for cash is increasing at a time when the pool of capital is shrinking. And locally, the pool was never that big. As a result, some startups could leave the state in an effort to find investors elsewhere. Others could have to survive with less, if they survive at all. The lack of capital is a big problem for companies graduating from the LaunchHouse Accelerator program. So big that the Shaker Heights-based program has decided to change its focus. Many of the 21 startups that have graduated from the boot camp-style business accelerator have had trouble raising money from local investors, according to LaunchHouse partner Todd Goldstein.
See TRIBE Page 20
See STARTUPS Page 22
TRIBE FANS ARE DIALED IN REBECCA R. MARKOVITZ PHOTOS
Indians quietly roll out new Wi-Fi, cellular networks during home opener By KEVIN KLEPS kkleps@crain.com
T
he Cleveland Indians hadn’t publicized the fact that, for the first time, the sold-out crowd at Progressive Field for the home opener on April 4 was able to access the club’s new Wi-Fi and cellular networks. But Mark Shapiro couldn’t help himself. When @skyfire1984, a Tribe fan named Nick, tweeted, “I thought I
couldn’t love the @Indians any more!” during the home opener, he included a screen grab that showed he was on the club’s ballpark-encompassing WiFi network. Shapiro, the Tribe’s president, retweeted the message and picture to his more than 54,000 followers. “I told Neil (Weiss, the Indians’ senior vice president of technology and chief information officer), ‘The fact that there is a small subset of people that are noticing, I’m going to tease that a little bit and see if anybody no-
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Summa Health System loves dummies. No, the Akron-based health system isn’t keen on hiring docs who finished at the bottom of their class. Rather, Summa plans to pump between $1.2 million and $1.5 million into its already-strong medical simulation efforts, all in the spirit of learning without, well, hurting anyone. Just think: You’d probably prefer a budding physician learn how to stick a catheter into your jugular vein using a high-tech mannequin rather than your own neck. “We believe it’s imperative that anyone who goes near you with a needle or knife for some kind of procedure has demonstrated to us that they’re capable of doing this,� said Dr. Joseph Zarconi, Summa’s system vice president Zarconi for medical education and chief academic officer. “Simulation has given us a wonderful opportunity.� Summa learned recently it will receive $750,000 from the state of Ohio for the project as outlined in the state’s capital budget signed earlier this month by the governor. The health system requested $1 million toward the effort, but said it will pay for the rest of the investment with its internal reserves. The health system launched its 3,000-square-foot simulation center at its flagship Akron City Hospital in 2007, but the looming investment is expected to double to about
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Dr. Rami Ahmed, Summa Health System’s simulation medical director, works with one of the hospital’s high-tech mannequins. 14,000 the number of teaching experiences it can offer each year. The plan is to update the lab’s current digs with more lifelike mannequins and better equipment, as well as to launch a new mobile simulation unit. (Picture a giant tractor-trailer outfitted with medical equipment that will allow Summa to take its educational efforts on the road to other hospitals or teaching institutions such as Northeast Ohio Medical University in Rootstown.) Also, the health system plans to outfit with simulation technology about 10,000 square feet of shelled space in the former Roadway headquarters it acquired in 2012. “Our site at the main campus right now is bursting at the seams in terms of demand,� said Dr. Rami
Organization says it’s stepping up its business retention and expansion effort For the people and organizations that focus on creating jobs in Northeast Ohio, it doesn’t get any more glamorous than convincing a company to bring 100 or more positions to this region rather than somewhere else. It’s the economic development equivalent of throwing a long touchdown pass, as happened last year when Nestle decided to bring its pizza business to Solon from suburban Chicago. Equally important, though, but too often underappreciated and so far somewhat overlooked by chambers of commerce and state and local government, is the ground game
— keeping track of local existing businesses and knowing when it’s time to check with owners about their plans to grow and asking, “What can we do to keep you here?� Now, the Greater Cleveland Partnership is pledging to “double down� on that ground game. At its annual meeting on April 2, GCP president and CEO Joe Roman announced that the regional chamber of commerce will be stepping up what’s called its business retention and expansion effort. “We’re going to be refocusing and reprioritizing the whole spectrum of helping companies already here expand in our region,� Roman said in an interview April 10. “While we have a pretty robust retention program, we think it’s worth dou-
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Ahmed, Summa’s simulation medical director.
High fidelity Summa isn’t alone in its quest to beef up its medical simulation efforts. In 2012, the Cleveland Clinic — the region’s largest health system — opened a 10,000-square-foot medical simulation lab, bringing its total square footage dedicated to simulation to about 60,000. The Austen BioInnovation Institute, a wellfunded biomedical commercialization effort in Akron, also in 2012 opened a 30,000-square-foot simulation center as part of its new, $13.3 million headquarters. See SUMMA Page 21
GCP is working on ground game By JAY MILLER jmiller@crain.com
Jonathan Mokri ‡
APRIL 21 - 27, 2014
cept for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2014 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
bling down and really expanding our ability to work with companies here in the region that can expand, because at the end of the day it’s pretty clear that’s nearly 50% of where we’re going to get our job growth.� Roman was reluctant to go into any detail about the plan or discuss staff expansion or financial commitments GCP might be making. He did say, though, that GCP would be rolling out a detailed retention and expansion strategy in early summer. Economic developers recommend retention and expansion programs to communities, pointing out that it’s easier to create additional jobs at an existing company than to attract a company unfamiliar with the territory. Those out-oftown companies need to be wooed, and they often require hefty financial incentives to move. See GCP Page 21
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Pulte is making major push
CRAIN’S CLEVELAND BUSINESS
Stronger regulations won’t deter fracking
INSIGHT
That’s the opinion of investors after state fortifies permit conditions for drillers
Michigan-based builder attempting to fill huge void in decimated market
By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
By STAN BULLARD sbullard@crain.com
To the survivors go the rewards. With locally owned homebuilder ranks decimated by the worst housing downturn since World War II and a dwindling lot supply as the market rebounds, publicly traded national builder Pulte Homes is opening up the throttle. It is opening five new communities from Mentor to Avon, and it’s making a big bet on the market’s empty nester segment. To appreciate the shift in supply for the Bloomfield Hills, Mich.-based builder, remember that like its local competitors, it sufficed through the downturn with buying lots from lenders or builders quitting business. The first residential subdivision it installed in northern Ohio in seven years went in last year, 84 lots on Pearl Road in Strongsville called “Fieldstone Preserve.” Now, big or new markets are the operative terms for its moves. Workers are finishing the first two Pulte models on a 95-home site development in Twinsburg on the former Corbett’s Farm, a former dairy farm that Pulte bought in March from land developer MSRK of Beachwood. MSRK had spent the past six years in litigation with the city of Twinsburg in an unsuccessful quest to hike home density on the site. The parties settled last September, clearing the way for putting in streets on the farmland at Glenview Drive. Tony Barbee, president of Pulte Homes Ohio, said Corbett, which Pulte will develop in three phases, is larger than the typical 35-home subdivision it has worked in lately. Pulte entered the Northeast Ohio market in the 1980s buying lots in the Ethan’s Green subdivision in Twinsburg. Pulte is glad to get back into the city, he said. “We love the location. Anytime you can get land at Main and Main, you do it,” Barbee said. “Twinsburg is a great school district. It’s near highways and close to job corridors in the region.” The homes will range in price from $300,000 to $500,000.
JANET CENTURY
Lakewood-based cinematographer Adam White was shooting the scenes for a television series in Alaska when the producers of “Captain America: Winter Soldier” asked if he could work on the set for a day.
HITTING IT BIG HERE Movies being shot in Cleveland have produced major bucks for NE Ohio
Building in 13 locations
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Meantime, Pulte is taking a position in the Newell Creek project in Mentor that Petros Homes of Broadview Heights has been developing as a master-planned community since 2007.
I
See PULTE Page 8
5
t was a good sign for the local film industry when Adam White, a Lakewood-based cinematographer, had to turn down a day’s work on a major motion picture shooting in Cleveland.
Another positive indicator: Cuyahoga Community College had 26 students sign up for its first film crew training program in January, a three-week certificate program that introduced students to the basics of film-set jobs. Several of those students already have found work — though some of it as unpaid interns — on movie sets around the state, and a second class is scheduled for later this year. “Cleveland has turned the corner” on the road to building a filmmaking community, said Bob Bryan, chairman of the board of the Greater Cleveland Film Commission and executive director of media engineer-
INSIDE: A look at some movies that were shot in Northeast Ohio, and how each of them fared at the box office. Page 19 ing at Tri-C. “The film industry is starting here, and it’s going to get larger and stronger.” In the last month, three films shot in part in Northeast Ohio last year have debuted “Captain America: Winter Soldier,” “Draft Day” and “Miss Meadows,” starring Katie Holmes. The credits for those films list dozens of Northeast Ohioans who worked on one or more of them. See BIG Page 19
The Ohio Department of Natural Resources’ announcement of new, stronger permit conditions for horizontal drilling near faults or areas of past seismic activity will add extra costs for some drillers looking to set up wells, but those watching the shale play in the state don’t expect the change to drive away operators or investors. The new permit conditions, announced April 11, would require companies to use seismic monitors if the proposed drill pad is within three miles of a fault or the site of previous seismic activity of more than 2.0 magnitude. If a “seismic event” — known as an earthquake to most of us — of more than 1.0 magnitude was detected, any activity at the site would have to halt while an investigation is conducted. And if that investigation showed the event likely was related to hydraulic fracturing, commonly known as “fracking,” drilling at that site would cease. But the department wants to make it clear: The new permit conditions don’t prohibit hydraulic fracturing or drilling, even near fault lines. “It’s just an additional level of monitoring,” said Mark Bruce, a spokesman for ODNR. Major drillers so far are keeping quiet about the announcement. Houston-based Hilcorp Energy Co., the operator of a Poland, Ohio, drill site that set off the change after a set of small earthquakes in March, and New Yorkbased Hess Corp. indicated in written statements to Crain’s that they were taking time to see just how the conditions would affect their operations. Chesapeake Energy Corp. of Oklahoma City declined comment. Messages left for a half dozen other drillers with operations or leases in Ohio were not returned as of publication. But there’s still a “lot of enthusiasm” around the play in Ohio, said David Deckelbaum, a senior equity research analyst in KeyBanc Capital Markets’ New York office. And he doesn’t expect the permit condition change to dampen that enthusiasm much, if at all. Most of the horizontal drilling in the state has been taking place on its eastern edge, where fault lines are few. See FRACKING Page 20
UTICA AND BEYOND ■ For more on Ohio’s booming shale industry, go to: crainscleveland.com/shale ■ To sign up for Crain’s Manufacturing Report, go to: crainscleveland.com/register
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After getting beat up by a brutal recession, Brad Sanders is finally ready to trust the economy again. He’s one of many local entrepreneurs who have become more optimistic lately, according to data from multiple sources. And that optimism is driving some local companies to hire new employees and expand. The sunny attitude comes through loud and clear in a survey that the Cleveland chapter of the Entrepreneurs’ Organization (EO) conducted in March. Members must run companies with at least $1 million in revenue, but most of the firms would be considered small businesses. The 4-year-old survey has never produced more positive results. For instance, 82% of the business owners who responded said they expect profits to increase over the next six months. That’s up from 65% in mid2013 and 60% in mid-2012. More profit means more jobs: 71% expect to hire more full-time employees over the next six months, up from 54% in mid-2013 and 67% in mid-2012. And none of the 70 or so business owners who responded said they expect their profits to drop or their staffs to shrink. That’s a first. Other questions also produced positive results, which didn’t surprise Sanders, president of Skye Group. The Warrensville Heights
company specializes in launching new retail centers, so its sales took a hit when the real estate bubble burst. Even after some of that business started to come back, Sanders was suspicious. “You couldn’t tell if it was an anomaly or a trend,” he said. Now he’s pretty sure it’s a trend. Skye Group has been growing steadily, Sanders said. The company has hired six employees over the past month, and soon it plans to open a small physical office in Canada. The company also invested a significant amount of money in a new software system, he said. “Two years ago, I might not’ve had the appetite to do that,” he added. Other entrepreneurs are telling him that they feel just as positive, and Sanders talks to a lot of them. He’s an active member of the Cleveland chapter of the Entrepreneurs’ Organization, and he regularly visits members from other chapters when he travels. “It’s pretty consistent with what I hear when I talk to the rest of the EO members,” he said.
Changing the question The survey also squares with what Kirk Zehnder has been hearing. The president-elect of the local EO chapter said lots of members here and elsewhere in the Midwest — he’s on the council for the organization’s central region — have been talking to him about how to hire good people. And that says something. “That’s not a question you hear when times are tough,” Zehnder said. He’s among the optimists. When he took the survey, the CEO of Earnest Machine couldn’t help but think how good things are at the Rocky River-based company. The company is a wholesale distributor of nuts, bolts and screws, but in December it bought Westgate Machine in Cleveland so that it could make its own custom fasteners. Now the company is looking to buy another computer numerical control (CNC) machine, since demand is so high. Zehnder figures that the companies buying fasteners through Earnest Machine and its distributors must be doing well. “We’re seeing their growth through the customers we’re selling to,” he said, noting that the company has hired six people since the start of 2014.
Looking on the bright side … Other statistics suggest things are going well for small businesses in Northeast Ohio. More of them are asking for advice on recruiting and hiring these days, according to data from the Employers Resource Council in Highland Heights. ERC reports that the number of phone calls it has received on those topics jumped by 15% in the first quarter of 2014 compared with the first quarter of 2013. Plus, optimism among local information technology companies hit a new high in the fourth quarter of 2013, according to a survey by the Northeast Ohio Software Association. Ninety-three percent of the companies that responded, which tend to be small businesses, said they expected business to improve in 2014, up from 87% in the third quarter and 79% in the second quarter. The survey hasn’t recorded that much optimism since NEOSA started conducting it in 2005. National statistics from EO’s Global Entrepreneur Indicator survey resemble the local statistics, suggesting that entrepreneurs throughout the country are becoming more optimistic. But not every survey is so positive. Though small business owners became more optimistic in March, they’re not nearly as chipper as they were before the recession, according to the Small Business Optimism Index produced by the National Federation of Independent Businesses. The index rose two points in March, hitting 93.4, but it can’t seem to break 95. Before the recession began, the index regularly exceeded 100 — a baseline score set when the survey began in 1986. In a news release, the federation’s chief economist, Bill Dunkelberg, said the group is “encouraged that the economy is at least crawling forward.” Sanders, the president of Skye Group, said there is at least one issue weighing heavily on the minds of entrepreneurs: Health insurance. Many small companies that don’t provide health insurance today are worried about the mandate in the Affordable Care Act that will require businesses with at least 50 employees to provide insurance for their employees, or face a fine. And even small business owners who do provide insurance are wondering how other aspects of the law will affect the health care landscape. “When that ball stops finally rolling, where is it going to land, and how does it impact our businesses?” Sanders said.
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CRAIN’S CLEVELAND BUSINESS
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Gordmans is adding stores in Mentor, Bainbridge Discount home goods and apparel chain is expected to further expand local presence By STAN BULLARD sbullard@crain.com
Move over, Kohl’s and T.J. Maxx. Make room, Marshalls and Stein Mart. Northeast Ohio’s crowded deep discount apparel and home goods market is gaining another retailer, Gordmans, which is expanding rapidly from the west. The Omaha, Neb.-based company already has leased space and secured city approvals to set up shop at Mentor Commons in Mentor, and Lyndhurst-based retail broker Goodman Real Estate Services Group recently announced Gordmans has leased space at Marketplace at Four Corners in Bainbridge. Realty experts expect more Gordmans stores to be on the way in the Cleveland and Akron areas. Tony Visconsi, a partner at the retail-focused brokerage Kelly & Visconsi Associates in Woodmere Village, said Gordmans is likely to cross town for a west suburban location to balance the announced east suburban stores. “The next logical step would be North Olmsted, but no 50,000-square-foot spaces are available there,” Visconsi said. Asked if the Kmart store due to close by month’s end at West Bay Plaza in Westlake would be a candidate, Visconsi said it would be a viable site for
Gordmans stores have a “racetrack” layout that is similar to that of Kohl’s. Gordmans, but he believes shopping center owner DDR Corp. “has grander plans” for the property. For its part, DDR spokesman Matt Schuler said in an email that the Beachwood-based real estate investment trust’s policy is to decline comment “on any redevelopment or leasing activity until agreements have been fully executed by all the parties involved.” However, landlords in the region have many empty spaces that Gordmans might like. Opportunities out west are available in Rocky River and Elyria, to name just two. Within a 30-mile radius of downtown
Cleveland, online real estate data provider CoStar reports that 50 spaces that can accommodate a Gordmans are available in 30 shopping centers. Visconsi said Gordmans is likely to want at least five stores to cover the region and rationalize advertising costs over multiple locations. The challenge, Visconsi said, is that no new shopping centers likely to house a new-to-the market retailer are under construction. That means Gordmans would have to make do with an existing empty store space shed by other retailers. “In North Olmsted, they may just have to
wait for another retailer to close,” Visconsi said. “It’s good for the market (that) we’ve got a new retailer coming in.” Adding stores is clearly the goal of Gordmans, which dates to 1936. Gordmans went public in May 2012 and is adding 10 stores this year, according to its most recent earnings report. Its pace of openings also is increasing. In an analysis of prospective retail activity it keeps for tracking publicly-traded REITs, the Solon office of RBC Capital Markets estimates the 73-store chain also may add 20 stores by 2015. Gordmans is best known west of the Mississippi River, but it’s rapidly making gains to the east. Earlier this year, it opened its second distribution center — and its first east of the Mississippi — in Monrovia, Ind. The building has 500,000 square feet. A Gordmans spokeswoman, who declined to be identified by name, said the Mentor and Bainbridge locations will be the chain’s first stores to open in Ohio. The chain’s niche is selling apparel at 60% off department and specialty store prices on a daily basis, the spokeswoman said. Its stores use what is known as a “racetrack” layout most closely associated with Kohl’s but adopted by Penney’s in its newer small format stores, such as in Avon. Gordmans stores offer a big-screen TV in a sports-themed area for sports-crazed spouses as well as a children’s theater with a TV for movies and DVDs, both with bench-style seating, the spokeswoman said. Insiders see Gordmans as more similar to Kohl’s and T.J. Maxx than other off-price retailers. However, Visconsi said he believes Gordmans stores, which he has visited, are more oriented to young adults and young families than similar chains. ■
Discover How MetroHealth Plans To Transform Its Campus. And Our Community. First Annual Stakeholders’ Meeting Friday, May 9, 2014, 8 -10 a.m. Cleveland Convention Center Grand Ballroom C 300 Lakeside Ave., Cleveland, OH 44113
Join us for our report to the citizens of Cuyahoga County and weigh in on our exciting plan to transform MetroHealth’s aging campus. Please RSVP to 216-957-9999 or metrohealth.org/annualmeeting by May 1. Unable to attend? Watch online at metrohealth.org/transformation.
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Pulte: Homebuilder is focusing on selling to empty nesters continued from PAGE 5
Earlier this month, Pulte opened its first two models in the development on Newell Creek Drive in eastern Mentor under a plan to acquired more than 200 home sites over the next five years. Pulte will offer ranch and twostory homes at Newell Creek at prices upwards of the low $200,000s and in 11 different designs. The master-planned community will include a clubhouse with an outdoor pool and basketball courts that Petros will build this year. Sam Petros, CEO of Petros Homes, said he agreed to sell the lots to Pulte because he wanted to accelerate the development of the property where he has already sold about 200 homes. Neither Petros nor Barbee would disclose financial terms of the transaction. Petros acknowledged that he invites competition into his project with the transaction, but considers it worthwhile. “In Cleveland you have to offer a lot of variety to get absorption,� Petros said, referring to the pace that new homes sell. “We build a different home at a different, slower pace than Pulte,� Petros said. “We’ve been selling about 30 homes a year — 28 last year — and at our rate it’s a 10-year project. They are able to move a lot of homes quickly. It’s also not like we are going away. We still have (home sites) there and I will build a million-dollar clubhouse this year. We are also continuing to build
CONTRIBUTED PHOTOS
LEFT: The Westchester model is offered by Pulte Homes in its Newell Creek project in Mentor. RIGHT: The Eden model at Pulte Homes’ Corbett’s Farm community in Twinsburg. townhouses there.� Other locations Pulte is premiering this year include 24 home sites at Signature of Solon — its first time to venture into Solon — 62 lots at Hidden Lakes in Cuyahoga Falls and 21 sites in Highland Park in Avon. All told, Pulte is building in 13 locations throughout the region.
“They don’t need to be in anything less than ‘A’ locations. It’s different from the past, when home building was a volume race.� – Bob Dyer owner, Asset Advantage LLC, on Pulte Homes
Finding their niche Across the area, Pulte caters to the move-up home buyer and the second move-up buyer as a focus costing more than $275,000 as a way to cope with increasing construction and land costs and longer development timelines for new ar-
eas, Barbee said. At Newell Creek and other subdivisions it is offering products geared to the empty nester segment of the market, baby boomers whose children are at college or
have grown up. “We feel it’s an underserved market at this time because so little has been developed the last few years,� Barbee said. “They are people who like to downsize but not downsize their lifestyle.� The plans boast first-floor living with open floor designs, first-floor masters and two bedrooms as well as an optional loft on the second floor. Pulte is focusing on empty nesters as they are able to sell their homes since the resale market picked up, Barbee said, adding that the often-discussed lack of home inventory supports construction. The busy cross-town pace reflects the strength that publicly
traded national builders such as Pulte have after the downturn. They can sell stock to raise money and secure corporate debt for activities. Meantime, Petros said, local builders have to deal with restrictive lending standards after the financial crisis. Bob Dyer, the owner of Hudsonbased Asset Advantage LLC which serves as a real estate consultant for builders and energy companies, said the situation allows Pulte to pick its shots. “They don’t need to be in anything less than ‘A’ locations,â€? Dyer said. “It’s different from the past, when home building was a volume race.â€? â–
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Plaza 45 building is sold for $3.8 million By STAN BULLARD sbullard@crain.com
The recovering Rockside Road office market is drawing additional investor interest. This time, the prominent Plaza 45 office building at 4500 Rockside Road near the Interstate 77 interchange has sold for $3.8 million, according to Cuyahoga County land records. The new owner is Garland Real Properties Inc., which is based in Cleveland. Donald King, managing director of Plaza 45 Ltd., which sold the building, declined to identify the buyer beyond its being a “group of people who like to remain quiet.” He said his Beachwood-based King Group real estate firm will continue to handle leasing and management of the four-story building. The multitenant building is 90% leased. That’s far different from its largely empty status when Plaza 45 purchased it for $2.95 million in
1996 after the building had gone through foreclosure and a sale to a prior owner by the Federal Deposit Insurance Corp., which handled sales of distressed properties that precipitated the savings and loan crisis in the 1990s. “We made a little money on the sale, and it was a good building financially for a very long time,” King said. However, King said the building was difficult to manage because its ownership had become convoluted over the years as several of the investors died and he now was dealing with trusts. The nearly 58,000square-foot building dates from 1975, according to online realty data provider CoStar. Rico Pietro, a principal at the Independence-based Cresco real estate brokerage, called $3.8 million a “middle of the road price” for a building of its age. Given that the prior owners renovated the building in 1996, he said it likely will need investments to
American Kenda growing here and internationally By CHRIS SWEENEY Rubber & Plastics News
American Kenda Rubber Industrial Co. plans to expand and develop research and development centers in Akron and Taiwan, which the company said will assist with testing and product development across all categories. Overseeing this development will be Tom Williams, whom the company recently selected as its vice president of engineering. He will be responsible for the North American market. Williams said he already has hired a new employee at Kenda’s current technical center run by its Akronbased subsidiary, Martin Wheel. More growth is on the horizon for Akron and Taiwan through people, equipment and capabilities, he said. Kenda is not building a new center in Akron right at the moment, Williams said, but either expansion at Martin Wheel or a new facility for Kenda is likely on the horizon. For now, the growth in Akron will be through Martin Wheel. “We’re not going to stay small in Akron, we’re going to put more capability in place,” Williams said. “The only question is whether we want to do it jointly with Martin Wheel or independently. We don’t really at this time have anything cast in stone.” The tiremaker is following a similar roadmap in Taiwan, though Williams said the growth there is occurring much quicker. While he will be splitting time between Taiwan and Akron, initially he estimated he’ll be spending about 70% of his time in Asia for the first three years. Once the initial growth period in Asia is complete, he will return to the United States to focus more on developing the Akron center. “In Taiwan, we’re moving a little faster,” he said. “We’re growing a little more aggressively over here. We’re looking at potentially new facilities,
expanding the facilities we already have, adding people and equipment.” American Kenda is a subsidiary of Kenda Rubber Industrial Co. that focuses on bicycle, industrial product, wheel chair and motorcycle tires. Williams said the firm has branched out into the passenger car radial, light truck radial, and truck and bus radial tire markets in the last few years, which is the primary reason for the company’s added investment in R&D. Since passenger car radials and light truck radials “are a little different of a product mix than bicycles or industrial tires,” Williams said, “it takes an investment in technology to be up in the top for PCR (passenger car radial), LTR (light truck radial) and those types of products. They realize this and want to back their advancements with the needed investment to make sure they become a top company in this market as well.” Williams has spent 30 years in the tire industry, getting his start out of college at the former Firestone Tire & Rubber Co. in 1984. After six years there, he moved on to General Tire & Rubber Co. for three years before joining Hankook Tire USA Inc., where he remained for the last 21 years before coming to Kenda. Kenda recruited Williams through its current vice president of sales, Bob Phoenix, who was with another company at the time and worked together with Williams on a project for Hankook about 10 years ago. “It really is a very unique and interesting opportunity for me,” Williams said. “I’ve been in the industry many years, it’s not often you get to come in at the very beginning of redesigning and reinventing a research and development effort like we’re trying to do. ■ Sweeney is a reporter with Rubber & Plastics News, an Akron-based sister publication of Crain’s Cleveland Business.
STAN BULLARD
The Plaza 45 office building on Rockside Road was purchased for $3.8 million. The previous owners bought it for $2.95 million in 1996. keep it competitive with others in the market. The south suburbs are also 21% vacant at the end of 2013, far lower than vacancy’s peak of 24% at Aug. 30, 2011, according to
CBRE Group Inc. statistics. The Plaza 45 sale is the second in the south suburbs this year. Indianapolis-based Duke Realty Inc. sold five office buildings on or near
Rockside in Independence and Seven Hills to Five Mile Capital Partners LLC, a private equity fund based in Stamford, Conn., in a $62 million deal in January. ■
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PUBLISHER/EDITORIAL DIRECTOR:
John Campanelli (jcampanelli@crain.com) EDITOR:
Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Shakeout
W
e hope it’s not flip to say that the Ohio Department of Natural Resources is standing on solid ground. Earlier this month, ODNR announced a “probable connection” between three small earthquakes in Poland Township in March and nearby hydraulic fracturing. As a result, the state is strengthening permit requirements. Oil and gas companies drilling within three miles of a known fault or an area with a history of seismic activity will have to install sensitive monitors at the site. Any activity over a 1.0 magnitude will halt production, and if drilling is linked to the tremors, as in Poland Township, operations will be suspended. “While we can never be 100 percent sure that drilling activities are connected to a seismic event, caution dictates that we take these new steps to protect human health, safety and the environment,” ODNR director James Zehringer said in a statement. The investment in the Utica and Marcellus shale plays has been huge — billions. The economic and political pressures to keep the gas moving are just as massive. We applaud the state for not blinking and, at the same time, not overreacting. The new permit rules seem sensible and workable. We also hope these new rules will give geologists more data on the relationship between drilling and what the state euphemistically calls “seismic events.” A clearer map of Ohio’s tectonic features and seismic risks also may result from the new permit requirements. Human innovation has sparked the shale boom in Ohio, moving the goal of energy independence from the fiction to nonfiction section. We are convinced that the same innovation can balance safe drilling practices with public safety.
Bright light
T
he arches, the signage and a spectacular chandelier are nearly installed at PlayhouseSquare, capping, quite literally, a decadeslong transformation of our amazing performing-arts neighborhood. Missing from the Dazzle the District celebration May 2 will be one of the folks most responsible for the area’s very existence. Ray Shepardson died last week in Illinois. Fourand-a-half decades ago, as an employee of the Cleveland schools, he was scouting locations for teachers meetings when he saw the interior of the State Theatre, which had already been stripped for demolition. Shepardson was so inspired by the space, he soon left his job, moved a few blocks away (at one point he even lived inside the State Theatre) and made it his mission to save the square’s historic theaters and, as Shepardson said at the time, to get the ball rolling instead of swinging. With support from local media, activists, philanthropists and other local visionaries, Shepardson convinced reluctant local leaders that the district could not only survive and thrive but transform downtown. Today PlayhouseSquare is the nation’s largest performing arts center outside New York, drawing more than a million people a year. Shepardson liked to quote architect and futurist Buckminster Fuller: “Do something big enough to make a difference.” He won’t be there May 2 when the world’s largest outdoor chandelier is turned on above Euclid Avenue. But in many ways, he already flipped the switch.
FROM THE PUBLISHER
Being the underdog is ideal for this battle Times or Politico. It came ven though Vegas JOHN from The Dallas Morning has tried to shore itself up and call it- CAMPANELLI News. Dallas, as you might reself family-friendly, member, is one of the six cities it’s still a metaphor for deca— along with Vegas, Clevedence. There’s still 64 pages of land, Cincinnati, Kansas City escort services in the Yellow and Denver — still in conPages.” – James Dobson, contention to host the 2016 conservative Christian leader vention. I’m not sure what’s more The article was pretty evenshocking, that there’s 64 pages ly played, but just by publishof escort-service ads in the Las ing it, the paper raised the volVegas Yellow Pages or that Las ume on the anti-Sin City whispering Vegas still has Yellow Pages. campaign. As a result, Vegas might be on Dobson revealed that stat recently the ropes. At the very least, the bid now when discussing his objections to Vegas’ has a target on its back. bid for the 2016 GOP convention. He and Liberal super PAC American Bridge reother leaders on the religious right recently launched SinCityGOP.com and cently penned a letter to Republican says it’s planning on secretly filming delchairman Reince Priebus, warning him egates’ extracurriculars during convenof the potential problems a convention tion week. in Sin City might pose. “American Bridge is preparing our “What could go wrong?” they asked in team of researchers and trackers to captheir note. “The answer is obvious.” ture the action no matter what city they The news about the letter and the choose,” the site boasts. “In making their push-back to Vegas came from a single selection, Republicans would do well to article, with the headline “Religious conremember that Las Vegas is already the servatives warn GOP against holding city with the most cameras per capita of convention in Vegas.” It appeared not in anywhere on the planet.” The Washington Post, The New York
E
“
I imagine luring a convention is not much different than other sales jobs, whether it’s closing a deal on widgets or getting someone to say yes to a first date: You outline your strengths … and you trash the competition. I’m certain that other cities are subtly mentioning Vegas’ debauchery, Denver’s legalized pot and Dallas’ location in an already-safe red state. Being an underdog, which Cleveland might be in this race, is the best place to be. Let the other kids beat each other up. When GOP reps come to town next week for a more detailed inspection, Cleveland leaders will show off our new convention center, our new hotels, our easy traffic patterns and a well-thoughtout security plan. The only controversy will likely be deciding between dinner on East Fourth or PlayhouseSquare. They probably won’t need to remind the GOP contingent about the numbers, that there are zero marijuana shops around, just one casino and only 2½ pages of escort ads in the Yellow Pages (at least in the 2008 edition, the last one I could find). They may mention one stat, however, that Ohio still has more electoral votes than Colorado and Nevada … combined. ■
TALK ON THE WEB Re: Ride-hailing services Uber and Lyft ■ We used Westlake Cab for a ride to the airport one morning a few months ago. They never showed up. When we called we were routed to Yellow Cab. When we told them what happened they asked, “Why are you calling us,” and told us to find another ride. Absolutely rude! I have used Uber in New York and Chicago. It’s a great service and it works. The cabs are all top-quality and you give feedback, so these drivers go out of their way to provide quality service. … In addition, you know the fee before you get into the cab. You also have access to the cab driver’s cell phone. I have no sympathy for Yellow Cab or Westlake Cab — shoddy service, terrible customer interaction, subpar cars and drivers. The competition is heating up and Yellow doesn’t like it. Well, too damn bad! — Trey Drier
Reader responses to stories and blogs that appeared on: www.crainscleveland.com
■ Uber is a taxi operator that is actively looking for new drivers. To claim otherwise is a childish words-play that is absurd. Ride-sharing companies are breaking laws and regulations every day, from regulatory fee evasion to use of smart phone while driving. Most readers likely already know that the commercial liability insurance expense and enforcement is just not there for any of the ride-sharing law-breakers. The bottom line is that regulators who blindly support ride-sharing law-breaking model are gravely wrong and misguided. — Michael Tompson See WEB Page 11
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LETTERS
Better late than never, Crain’s
C
rain’s is to be applauded for creating a minority advisory board, because actions do speak louder than
words. The prominence of the April 14 announcement also speaks volumes about the sincerity of your intent. While Crain’s may have been late to the table recognizing the changed reality of today’s business world, you acted swiftly to correct the situation. That’s what organizations do when they value their reputations and the perception of their brand in the marketplace. In our experience, when mistakes are made, you’re more likely to be judged on how you handle the situation going forward rather than the incident itself. Bruce Hennes Managing partner Hennes Paynter Communications
Get everyone on board We have this situation in Cleveland where the cabbies are crying foul as phone app-driven ride-sharing services are taking fares away from the established, regulated
WRITE TO US Send your letters to: Elizabeth McIntyre, editor, Crain’s Cleveland Business, 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Email: editor@crainscleveland.com
(and taxed) providers. Crain’s avers that the city should get with it and allow the free-enterprise system to sort things out. That’s fine, as well. However, government is an unequal player in this and most marketplaces. Cab companies rightly expect that in exchange for what amounts to “protection money,� their business is protected. It’s just that the racketeers are downtown and aren’t holding up the bargain. Hipsters and ride-share entrepreneurs are free-riding, which is exactly why the phenomenon exists. They want to bypass The Man. Such sentiment begins with overreach in regulation and ends with the government spoiling the marketplace. There is a public benefit to regulating taxis, and there is a savings to be realized by bypassing that regulation. So-called “gypsy cabs� are
nothing new. What’s new is the technology. What’s the solution? Cabbies need to be able to respond to calls from Uber and Lyft. Cab companies need to work out policies for themselves, fares with shared services, and gain approval from the city’s fare-regulation authorities, as long as those hold sway. There should be a natural advantage to being a yellow, licensed, sooner-arriving “regular� taxi. Would the hippest of hipsters wait longer in the rain for a pink-mustachioed Prius versus a turmeric-colored Crown Victoria? Doubtful. So now what we need to do is quit giving lip service to free markets and let everyone, including what we might call, in the parlance of drug companies, “ethical� taxis participate in giving Lyfts on Uber’s app. This might require an adjustment in thinking among the city, the cab companies and at the app provider, but the marketplace ought to have all options available if it calls itself free. John G. Dzwonczyk Avon Lake
Web: Think before you call for a lift
■I used Uber in New York City recently and loved loved loved it. That said, it’s more money then a stan-
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â– There is no question the app is cool, but ‌ I Uber’d for the first time in Cleveland last week and found the same thing I have found in other cities; old cars and poorly trained drivers. I am not a cab company, am not affiliated with a cab company nor have any skin in the cab game, but I ask this: The taxi cab companies have been protected by the city in return for the legislation that requires them to take every one who orders a cab regardless of whether the trip is 10 feet, 10 miles or 10 states over. When the cab companies are put out of business by this “tech companyâ€? who is going to pick up the people with no smart phone? Who is going to pick up the people with no credit card? Who is going to take Aunt Gertie three blocks with her groceries? Who is going to employ the cab drivers and dispatchers from the cab companies? Who is going to hire the mechanics from the cab companies? Who is going to buy the clean burning natural gas that the cab companies burn? How many of our neighbors will find themselves unemployed and on our public assistance because of the choices we make? As a group, we lament the end of the middle class and wonder where they have gone. The new Uber drivers will replace the old ones, albeit at lower pay, but the support jobs have just been outsourced to a computer. Think about that the next time you choose to Uber or Lyft instead of Yellow, Americab or Ace. The next middle class job you outsource might very well be your own. — Frank Dzurik
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Some Cavaliers fans are questioning Kyrie Irving’s leadership. dard cab, but it’s worth every penny. Sorry cab companies; this is better in every way. — Jason Loveless
Re: A facilities fee rather than a sin tax? ■Have the people who came up with this idea for a $3.25-per-ticket facilities fee asked if the Cleveland and Cuyahoga County councils would support it? They’re the ones who have to put it on the ballot, unless they want to do it by initiative petition. — Keith Price ■At that price ($3.25 per ticket), the facilities fee would generate an amount equal to the total of sin tax revenues. After this point, the public could bring back a sin tax and allocate all of its revenues to purposes that serve the general public, such as roads, security, schools. — Alan Glazen (he’s one of the founders of the Coalition Against the Sin Tax)
Re: The Cavs’ struggles ■Kyrie Irving has become what is an all-too-often recurring problem in, especially, the NBA: players taking the night off, pouting, not listening to the coaches, not giving 100% all the time and various other negative behavior. This sport is slowly but surely sinking as fans see this and write it off. Major League Baseball also has this problem, including a few Tribe members, but the NFL mostly seems to have avoided it thus far. — Jim Daniloff ■Irving’s not a leader and is too stubborn to change. When you have your coach counting out loud how many seconds you have the ball in your hands and you don’t care, you need to go. And this leader of the team is tweeting basically he’s leaving?? What kind of leadership is that? It’s been three years and we’re still not winning and he’s acting like a diva?? — TV63
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NONPROFIT ALZHEIMER’S ASSOCIATION CLEVELAND AREA CHAPTER: Melissa Zapanta Shelton to vice president, fund development.
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president, government relatins. CLEVELAND NEIGHBORHOOD PROGRESS: Mordecai Cargill to manager, fund development; Zoe Taft Mueller to placemaking fellow; Daniel Brown to economic opportunity fellow. CLEVELAND WATER ALLIANCE: Bryan Stubbs to executive director. GEAUGA GROWTH PARTNERSHIP: David Kraninger to business consultant. NEW AVENUES TO INDEPENDENCE: Amie EspinozaGonzalez to vocational services director, Buckeye Industries. R.H. MYERS APARTMENTS: Jeffrey Degyansky to administrator. SISTERS OF CHARITY FOUNDATION OF CLEVELAND: Leslie Strnisha to vice president; Teleange´ Thomas to program director, health.
REAL ESTATE REMAX RESULTS: Joe Seifert to sales associate. TRANSACTION REALTY: Frank
Dzik to sales associate.
RETAIL SIGNET JEWELERS LTD.: Denise Shaffer to treasurer. STERLING JEWELERS INC.: Vince Marchetta and David Jacobsen to vice presidents, real estate.
TECHNOLOGY E2B TEKNOLOGIES INC.: Mary Jo Mahood to CRM and ERP practice manager.
BOARDS AMERICAN COLLEGE OF BANKRUPTCY: Christopher Meyer (Squire Sanders) to president.
RETIREMENTS PCS: Robert S. Strickland, 21 years of service. THE RUHLIN CO.: Bob Lane, 37 years of service and Fred Beaver, 27 years of service.
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SPECIAL SECTION
THE BUSINESS OF CANCER CARE
BUILDING A NETWORK OF CARE How Northeast Ohio hospitals are using localized treatment centers to expand their cancer coverage By Timothy Magaw
W
ith University Hospitals and the Cleveland Clinic, Northeast Ohio is fortunate to have two nationally ranked cancer programs headquartered less than two miles apart. UH boasts a stunning $260 million cancer hospital that opened in 2011, and the Clinic is quietly plotting a new home for its renowned program. Still, much of the meat behind the two cancer powerhouses sits well beyond their urban hubs on Euclid Avenue, just east of downtown Cleveland. Both enterprises — and to a lesser extent, their small-
er counterparts in Northeast Ohio — have steadily increased their cancer-related offerings in the region and show few signs of slowing their suburban conquest. UH, for starters, invested millions over the last few years in its cancer treatment sites in Westlake, Chardon and Parma. The Clinic also continues to muscle up cancer care at its community hospitals and health centers and even acquired independent cancer practices in Sandusky and Mansfield in 2011 and 2013, respectively. See NETWORK Page 17
ILLUSTRATIONS BY JEAN TUTTLE
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Doctors take personal approach with disease Individualized medicine being used for treatment, prevention By CHRISSY KADLECK clbfreelancer@crain.com
ollywood star Angelina Jolie made headlines last year when she revealed that she underwent a preventive double mastectomy after testing positive for BRCA1, one of two gene mutations researchers have linked to a 60% chance of developing breast cancer. In doing so, Jolie made her per-
H
sonal decision public and brought international attention to the issue of personalized medicine — an emerging practice that harnesses a person’s genetic profile to screen, prevent, diagnose and treat diseases such as cancer. This highly individualized form of precision medicine is not just for the rich and famous. Every day throughout Northeast Ohio health systems and research laboratories, oncologists, geneti-
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cists, genetic counselors and other scientific minds are engaged in an amazing race to develop clinical interventions that will change the way we prevent and treat cancer. Take new research at University Hospitals Seidman Cancer Center spearheaded by Dr. Lyndsay Harris, medical director of the center’s Breast Cancer Program. Her innovative trial recruits patients to further her groundbreaking research that uses deep genome sequencing to reveal changes in breast cancer tumors after just one dose of preoperative therapy. Go to the Cleveland Clinic and you’ll find Dr. Davendra Sohal, staff physician in the Department of Solid Tumor Oncology at the Taussig Cancer Institute, studying the feasibility and clinical impact of targeted genomic sequencing on patients with certain tumors that have a poor prognosis or limited treatment options. He expects to explore with 250 patients personalized oncology in a well-defined, systematic manner. At MetroHealth Medical Center, genetic counselor Elizabeth Hogan is testing a growing number of patients to find hereditary markers of breast, ovarian and colon cancers, and more recently, pancreatic cancer, and to adjust screenings and appropriate treatments accordingly. Hogan says the number of patients undergoing genetic screening and counseling has nearly doubled in the past two years. “Personalized medicine is an evolution in the way we think about treating cancer in general,” says Har-
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ris, who believes genomic sequencing will be done on all cancer patients within five years and even sooner for those with advanced disease. “It’s really the way of the future to be able to treat people on a personal level based on their genome and genetic changes in their tumor and how those happen over time. “Breast cancer kind of leads the field in a lot of other personalized therapies,” she said.
No longer one size fits all Cancer treatment and personalized medicine will even be the theme of the Cleveland Clinic’s upcoming Medical Innovation Summit: “Now, it’s Personal.” Cancer is not just one disease; it has multiple expressions and multiple faces, says Dr. Thomas Graham, chief innovation officer and Justice Family Chair in Medical Innovation at Cleveland Clinic Innovations, the commercialization arm of the Cleveland Clinic. “A one-size-fits-all approach is not acceptable,” says Graham, who also is the vice chair of the Clinic’s Department of Orthopaedic Surgery. To that end, at Akron General’s Reflections Breast Health Center, there is a high-risk clinic where patients can be screened by a genetic counselor. A detailed family history is taken, and the proper genetic tests are ordered, said Dr. Andrew H. Fenton, executive medical director of the McDowell Cancer Institute. “It’s often a lot more than BRCA1 and BRCA2. Our genetic counselors
really help us because they can detect the genes associated with some of the more rare syndromes,” he says. “The classic example is a patient who has a very strong family history of breast cancer and they come in and every woman in their family in the last three generations has had breast cancer and they do the genetic testing and it comes back negative, so obviously there is some gene that we haven’t been able to identify just yet.” The ability to find genetic markers of cancers is exploding, says Dr. Paul Hergenroeder, a hematology and oncology physician at MetroHealth Medical Center. “Three or four years ago you would check for the two most common breast cancer hereditary genes, now we have panels that check for 25,” he said. “The ability to detect marker genes has far outpaced our ability to deal with them clinically. The real challenge for the next five to 15 years will be on the preventive side … answering the clinical question, ‘Can we do anything to reduce that risk?’”
Finding the right treatments Genomic-based tests, which analyze the genetic makeup of tumors, have unlocked exciting possibilities for oncologists and researchers. Designated as a Top 10 innovation for 2014 as part of the Cleveland Clinic’s Medical Innovation Summit, these tests have led to enhancements in the management of breast and colorectal cancers. The FDA approved a test for
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CRAIN’S CLEVELAND BUSINESS 15
Calculating one person’s risk prostate cancer in 2013. The goal of a study by UH’s Harris involving the deep gene sequencing of tumors after initial therapies is to provide patients with the best possible outcomes based on how their tumor responds to a specific treatment. “We’d like to know very early on in the treatment course if it’s going to work or not or if it’s going to have its best result. If we can find out two weeks into the treatment course that Mrs. Jones is going to have a complete response to this treatment and it’s the right treatment for her, then we’ve done her a service,” Harris said. “But for Mrs. Smith it doesn’t look like she is going to have a complete response so we would suggest that she try another treatment that is approved but works in a different way.” For invasive breast cancer, a classic example is the Oncotype DX test, a 21-gene assay that is run on the tumor to come up with a recurrence score — a number between 0 and 100 that quantifies the likelihood that a woman’s breast cancer will spread to another area of her body within 10 years of the initial diagnosis. The recurrence score also can predict how likely a woman is to benefit from chemotherapy. “It is one of the major advances in the last decade,” Hergenroeder says. “A third of the women who would have gotten chemotherapy 10 years ago now don’t get it because they don’t need it. They don’t have to go through four to six months of chemotherapy with all the trials and tribulations.”
iagnosed with Hodgkin’s lymphoma at age 24, Michael Kattan, chairman of the Department of Quantitative Health Sciences in Cleveland Clinic’s Lerner Research Institute, was in graduate school studying financial risk calculators. He found the staging process of the cancer in his lymph nodes to be crude and highly generalized not taking into account personal characteristics as basic as age and overall health and overlooking specific test results. “It was the opposite of personalized medicine,” says Kattan, who underwent 10 months of chemotherapy and did an about-face career change from financial prediction to developing cancer risk calcula-
D
Kattan
tors to provide better predictions to improve medical decision-making. His most recent calculator, CRCPRO, was designed to quickly and accurately predict an individual’s risk of colorectal cancer, as published in the January issue of The Journal of the American Board of Family Medicine. He’s best known for his work in predicting outcomes in breast cancer treatment and progression and recurrence in men with clinically localized prostate cancer. “If you’re a patient and you’re trying to get personalized medicine, what you want to know is what are my benefits and harms of Treatment A versus Treatment B,” says Kattan, who has
received Cleveland Clinic Innovator Awards in 2012 and 2013 for working with electronic health care data and the risk calculator website. “You want tailored predictions for yourself, whether that’s genetics or what have you,” he says. “The goal is that kind of precision medicine where I’m able to predict more accurately what is going to happen to you, not people in general, as a consequence of that treatment choice. How you get there, whether it’s some fancy test or not, is kind of not entirely the point.” To check out the calculators, go to rcalc.ccf.org. (Note: They are intended for physician use.) — Chrissy Kadleck
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Part of the bigger picture The field of oncology is evolving rapidly and while personalized medicine may not replace traditional approaches, it will be a very important component in the overall care of patients with cancer, says the Clinic’s Sohal. “We have derived pretty much maximum mileage possible from chemotherapy drugs; there has been rapid growth in the science of genomics; genomic tests are now widely available at much lower prices; and many targeted therapies are on the horizon,” he says. “Having said that, we need to study this systematically and not jump to conclusions. That is our goal here — we do this as part of a clinical study, and not as one-off, ad-hoc tests.” Dr. John Jakob, a Summa Health System oncologist, says that physicians have to excel at explaining the screening and test results to the patient and how they can use this genetic snapshot to enhance their care. “The key thing is to make sure that patients understand the limitations of the test because one of the things that we struggle with as a society is people thinking that computers are the answer to everything,” Jakob says. “The next generation sequencing has the ability to look at a relatively good chunk of the genome of someone’s tumor but it’s still a work in progress,” he said. “It would probably of greatest use in pointing someone in the direction of a clinical trial and the oncologists have to do a really good job of explaining that nuance to the patient.” ■
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Firms ramping up efforts in cancer space More NE Ohio companies starting to take on development of drugs, diagnostic tools By CHUCK SODER csoder@crain.com
ortheast Ohio’s research institutions used to sell off most of their promising cancer drugs before anyone ever filed the paperwork to create actual businesses around them. That still happens, but not as much as it used to. Nowadays, institutions such as the Cleveland Clinic and Case Western Reserve University are more willing to form startup companies tasked with turning cancer drugs — and other pharmaceuticals — into products, according to Glen Gaughan, CEO-in-residence at BioEnterprise Corp., a Cleveland nonprofit that assists local health care companies. And, that shift could help the region play a larger role in developing new cancer technologies. Northeast Ohio’s research institutions already do their fair share of cancer research. The National Cancer Institute awarded $36 million to local researchers in the fiscal year
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that ended Sept. 30, 2013. That amounts to 1% of the money that the Bethesda, Md.-based institute awarded last year, which makes sense: The eight-county Cleveland-Akron metro area is home to about 1% of the U.S. population. Even so, the region isn’t well known for taking cancer technologies through the commercialization process. Sure, the region has deep expertise related to medical imaging. Those technologies are important for diagnosing and treating cancer. And the area is home to a few companies that have developed devices and processes designed to help doctors diagnose the disease. But the region’s commercialization efforts traditionally have fallen short when it comes to products delivered via pill or IV. In the past, cancer drugs developed in Northeast Ohio typically were licensed out to pharmaceutical companies located in other states.
Finding a vaccine for breast cancer Today, however, there are a few local companies working to push cancer drugs through the early stages of testing and development. Among them is Shield Biotech. The Cleveland Clinic spinoff, which is based at the hospital system’s main campus, has developed a vaccine designed to prevent triple-negative breast cancer, a particularly deadly form of the disease that commonly occurs in people who have a mutation in the BRCA1 gene. The vaccine teaches the immune system to hunt down cancer cells that contain a particular protein. That protein also is found in women who are lactating, however, so the vaccine couldn’t be used on women who still plan to have children. Vincent Tuohy is learning how hard it is to commercialize a cancer drug. His team at the Clinic has been trying to create that vaccine since 2002. The team received $1.3 million in federal grants about four
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years ago, and in 2010 it published research suggesting that the vaccine could prevent mice from developing breast tumors. Raising money to start human trials has been hard for the company, but it has had some success: Shield Biotech has received investments from the Clinic and other sources, and the hospital system’s fundraising team helped collect another $1.3 million in donations for the effort. Some people in the medical field have described the project as risky, according to Tuohy, an immunologist at the Clinic’s Lerner Research Institute. But if the vaccine works on breast cancer, he thinks it could be adapted to prevent ovarian cancer and prostate cancer. “We really haven’t tapped into how incredibly powerful our immune system can be,” he said.
Starting things up Research institutions are more likely to form a startup company when it appears that it could become a platform from which to launch many products. BioMotiv in Shaker Heights is a good example. The University Hospitals spinout aims to buy the rights to dozens of pharmaceutical technologies from research institutions all over the world. And now BioMotiv is spinning out its own companies. One of them is Dual Therapeutics, which is developing a drug designed to block two functions that help tumors grow. Gaughan, of BioEnterprise, said that Dual appears to be one of the more promising cancer-related companies in the region, given how well its technology has performed in animals. But not every technology designed to fight cancer comes in the form of a drug. Take Akrotome Imaging Inc., which is based in the BioEnterprise building on Cedar Avenue. In 2009, Case Western formed the company to commercialize a technology that could help surgeons remove tumors without leaving cancerous tissue behind. But it’s not a drug or even a medical device. It’s a chemical that makes cancerous tissue glow. Here’s how it would work: A surgeon would remove a tumor, which then would be covered with the chemical. If none of the tissue glows, that means the surgeon was able to carve out the entire tumor. If it does start to shine? The surgeon will have to hunt for whatever cancerous tissue he or she left behind. That technology is being developed for breast cancer, but it has broader potential — which is one reason why Case Western decided to form a company around it, according to Wayne Hawthorne, senior licensing manager at the university. “We’re hoping that this can be transitioned into brain cancer, can be transitioned into prostate cancer,” he said.
Detection and diagnostics Cleveland isn’t well-known for developing cancer diagnostic technologies, but there is a lot of oppor-
Other local entities that have developed technologies designed to fight cancer: ViewRay Inc. The company has raised roughly $100 million in venture capital since moving to Oakwood Village from Florida in 2008. The ViewRay system allows doctors to see live MRI images of cancerous tumors as they try to hit them with radiation.
GenomOncology LLC This company’s software is designed to help doctors and researchers hone in on the gene that caused a particular patient’s cancer. The Westlake company recently secured its first few customers, including a few big-name institutions such as Vanderbilt-Ingram Cancer Center in Nashville.
GLC Biotechnology Inc. People don’t like colonoscopies. That’s one reason why this Solon company is developing a system that would test for cancerous DNA in feces. The test is supposed to be cheaper and more pleasant than a colonoscopy. It was developed by Baochuan “Bob” Guo, a chemistry professor at Cleveland State University.
Protimage Diagnostics LLC This company is developing a way to help surgeons figure exactly where a tumor begins and ends, prior to surgery. It has developed probes designed to produce images that can detect tumors down to the single cell level. It was founded by Susann Brady-Kalnay, a professor in the department of molecular biology and microbiology at Case Western Reserve University.
tunity for local companies to succeed in that sector, according to Arnon Chait, CEO of Cleveland Diagnostics. For one, diagnostic technologies often face lower regulatory hurdles than drugs. Plus, early detection often is as good as a cure, Chait said. Cleveland Diagnostics plans to capitalize on that opportunity. Formed last year by the Cleveland Clinic and a local biomedical firm called AnalizaDx, the company is developing tests that can tell whether someone has cancer based on structural changes of certain protein biomarkers in blood or other bodily fluids. The company’s first target is prostate cancer, but it aims to create tests for other forms of the disease, too. Having a broad lineup of products makes it more likely that Cleveland Diagnostics will remain a standalone company, according to Chait, who previously led AnalizaDx and its parent company, Analiza Inc., a pharmaceutical research company in Cleveland. “It’s a platform that should be sustained,” he said. ■
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Network: Coverage expanding continued from PAGE 13
Meanwhile, Cuyahoga County’s safety net hospital, MetroHealth, in the next six to 12 months will offer infusion therapy at its site in Middleburg Heights and its planned community health center straddling Brecksville and Broadview Heights. The reasons for the suburban sprawl are many: Treatment, for the most part, is less costly in community settings, patients prefer treatment closer to their homes and the aging population — and its corresponding influx of cancer diagnoses — requires a more robust network of cancer care services. Cancer also continues to be big business in health care circles, as the cost of cancer care in the United States is slated to reach at least $158 billion in 2020, a 27% increase over 2010’s numbers, according to an analysis from the National Institutes of Health. “It’s a very competitive field in part because it’s such an important part of the health care field,” said Dr. Brian Bolwell, chair of the Clinic’s Taussig Cancer Institute. “If you look at demographic trends, there’s little doubt over the next 10 to 15 years, cancer is going to be the single most important driver of health care costs. It’s going to take over as heart disease as the No. 1 cause of death.”
A well-oiled machine Dr. Nathan Levitan, president of UH Seidman Cancer Center, said cancer care has historically been a “high-margin” type of health care. But as the economics of health care have changed, those profit margins have slimmed and hospitals have tried to provide higher quality care in lower-cost settings. “It is perfectly reasonable to pro-
vide simpler types of cancer care in the community where the care is often less expensive and reserve the more expensive facilities for the most complex care,” he said. “At the end of the day, I believe patients with cancer will travel if they need to receive the best care.” Years ago, cancer care was primarily practiced by independent physicians in the community. Over time, those independent docs have been gobbled up by large academic medical centers — like the Clinic — as they’ve tried to piece together strong regional health systems. In the Clinic’s case, Bolwell said the health system’s since worked to standardize the way cancer care is practiced across the entire enterprise. “It’s our job to try to make the field better and get better treatments,” Bolwell said. “That’s what major cancer centers do. We take that very seriously.” The Clinic also used its cancer institute to extend the health system’s already significant footprint. In 2011, the health system acquired North Coast Cancer Care in Sandusky and last November bought Ohio Cancer Specialists in Mansfield. The Sandusky acquisition gives the health system a strong foothold in the western part of the state, while the Mansfield purchase opens up central Ohio. Also, in 2012, the Clinic inked a deal to serve as a consultant of sorts to Cadence Health’s cancer program outside Chicago. UH has preferred to cozy up to independent hospitals, placing its coveted Seidman Cancer Center branding on facilities and providing access to the health system’s respected cancer services. The health system planted the Seidman flag at Parma Community General before ultimately acquiring the entire hospital. UH also has a Seidman outpost in Mentor affiliated with Lake Health, an independent health system, and another in Elyria affiliated with Mercy, which is owned by Catholic Health Partners, the state’s largest health system. The health system also has a Seidman site at Southwest General, an independent hospital in Middleburg Heights that has a strong clinical affiliation with UH.
CRAIN’S CLEVELAND BUSINESS 17
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Keeping it close to home Health systems’ recent investments in cancer care tend to fall in geographies where the population continues to grow. In 2010, Summa Health System opened a 100,000-square-foot outpatient center on state Route 18 in Medina County, the region’s fastestgrowing county. The center boasts a lengthy list of cancer-related services. Previously, patients who needed radiation treatment had to travel to Akron, Cleveland or Brunswick. For MetroHealth, the reasons for expanding infusion therapy — which of course can also be used to treat conditions other than cancer — at its suburban health centers is no different than why others are extending their reach: It just makes life easier. “We found out years ago that if you see a person and ask them to get tests and get things done, more likely they would follow through if they can do it close to home,” said Dr. E. Harry Walker, MetroHealth’s senior vice president for ambulatory network operations and development and director of the health system’s Center for Community Health. ■
Three local doctors discuss the challenges of treating cancer, their hopes for the future and the environment for cancer care in Cleveland.
www.crainscleveland.com/doctor
WHERE WE STAND More than 900 hospitals are listed online by U.S. News & World Report as treating cancer. A hospital is included by the publication only if at least 251 inpatients in need of a high level of expertise were treated in 2009, 2010 and 2011. Both the Cleveland Clinic and University Hospitals ranked nationally on the 2013-14 compilation, with several others listed as high-performing in adult cancer care. RANKED:
LISTED AS HIGH PERFORMING: Akron General Medical Center
#9 Cleveland Clinic #15 University Hospitals Case Medical Center, Seidman Cancer Center at UH Case Medical
MetroHealth Medical Center Fairview Hospital (Cleveland Clinic) Hillcrest Hospital (Cleveland Clinic)
List includes hospitals within a 50-mile radius of Cleveland ZIP code 44114.
Aultman Hospital (Canton)
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LARGEST OHIO MERGERS AND ACQUISITIONS-2013 RANKED BY DEAL SIZE
Rank
Base equity value at completion (millions)
Buyer Buyer location
Seller Seller location
Date announced Deal description
1
$2,444.4
Kroger Co. Cincinnati
Harris Teeter Supermarkets Inc. Matthews, N.C.
7/09/13
The acquisition expands The Kroger Co's market presence in southeastern and mid-Atlantic markets and in Washington, D.C.
2
$2,070.0
Cardinal Health Inc. Dublin
Assuramed Holding Inc. Twinsburg
2/14/13
The acquisition was financed with $1.3 billion in new senior unsecured notes and the remaining amount in cash. Assuramed Holding Inc. markets and distributes health care products.
3
$1,034.0
Murray Energy Corp. Pepper Pike
Consolidation Coal Co. Pittsburgh
10/28/13
Acquired in the transaction were five coal mines held by the seller: the McElroy Mine, the Shoemaker Mine, the Robinson Run Mine, the Loveridge Mine and the Blacksville No. 2 Mine.
4
$968.5
Milacron LLC Cincinnati
Mold-Masters (2007) Ltd. Georgetown, Ontario
2/12/13
Mold-Masters (2007) Ltd. manufactures and distributes hot runner controllers. The deal is in line with Milacron LLC's growth strategy and gives them an opportunity to expand globally.
5
$500.0
Unisource Worldwide Inc.; Bain Capital Investors LLC Norcross, Ga.; Boston
xpedx inc. Loveland, Ohio
4/22/2013
xpedx inc., a manufacturer and distributor of paper and cardboard, was acquired from International Paper Co. Under the terms of agreement, International Paper will spin off xpedx inc. to its shareholder, and Unisource will be merged with the new company.
6
$286.0
TransDigm Group Inc. Cleveland
Arkwin Industries Inc. Westbury, NY
5/15/2013
Arkwin Industries Inc. provides precision hydraulic and fuel system components for the aircraft industry.
7
$270.0
Nexstar Broadcasting Group Inc.; Mission Broadcasting Inc. Irving, Texas; Westlake
Communications Corp. of America Inc./ Louisiana Lafayette, La.
5/15/2013
The deal enhances Nexstar Broadcasting Group Inc.'s portfolio of services in the broadcasting and television services. The acquisition was funded through cash on hand, existing credit facilities and other market transactions.
8
$258.5
ROI Acquisition Corp. New York City
EveryWare Global Inc. Lancaster, Ohio
1/31/2013
Post acquisition, ROI Acquisition Corp. will be renamed EveryWare Global Inc. EveryWare Global focuses on total tabletop and food preparation solutions.
9
$250.0
TransDigm Group Inc. Cleveland
Airborne Systems Group Ltd. Pennsauken, N.J.
12/02/2013
Airborne Systems Group Ltd, a subsidiary of HDT International Holdings Inc., ultimately owned by Metalmark Capital Holdings LLC, designs and manufactures parachutes.
10
$246.0
Crestview LLC; Victory Capital Management Inc. Private Group New York City; Brooklyn, Ohio
Victory Capital Management Inc. Brooklyn, Ohio
2/21/2013
A private group, led by the management and employees of Victory Capital Management Inc., along with Crestview LLC, acquired Victory Capital Management Inc. from KeyBank NA, a subsidiary of KeyCorp.
11
$223.0
BioScrip Inc. Elmsford, N.Y.
CarePoint Partners Holdings LLC Cincinnati
6/17/2013
The transaction provides BioScrip the ability to provide home infusion services to its clients.
12
$218.0
The Standard Register Co. Dayton
WorkflowOne LLC Dayton
8/01/2013
Founded in November 2005, WorkflowOne LLC provides electronic printing, document management and promotional solutions.
13
$206.5
Mill Road Capital Management LLC Greenwich, Conn.
R.G. Barry Corp. Pickerington, Ohio
9/12/2013
Mill Road Capital Management LLC entered into a non-disclosure and standstill agreement to acquire the remaining 91.4% stake in RG Barry Corp. RG Barry’s primary brands include Dearfoams, Baggallini and Foot Petals.
14
$202.4
CECO Environmental Corp. Cincinnati
Met-Pro Corp. Harleysville, Pa.
4/22/2013
Met-Pro Corp. manufactures and sells product recovery and pollution control equipment.
15
$195.0
Directional Capital LLC Richmond Heights
Flexjet LLC Richardson, Texas
9/05/2013
Directional Capital LLC acquired Flexjet LLC from Bombardier Inc. Concurrent with the acquisition, Flexjet LLC placed its largest new-aircraft order valued at approximately $5.2 billion for up to 245 Bombardier business jets.
16
$176.8
Nordson Corp. Westlake
Kreyenborg GmbH and BKG - Bruckmann & Kreyenborg Granuliertechnik GmbH Munster, Germany
7/14/2013
Kreyenborg GmbH manufactures melt filters and pumps, diverter valves, and related filtration supplies. BKG manufactures underwater pelletizing equipment and machines.
17
$150.0
TransDigm Group Inc. Cleveland
GE Aviation Systems LLC /Electromechanical Actuation Division
7/18/2014
GE Aviation Systems LLC, a subsidiary of General Electric Co. manufactures aerospace electromechanical motion control systems. Upon completion, the business would be conducted via a new entity named Whippany Actuation Systems LLC, which would be located in New Jersey.
18
$145.0
The Andersons Inc.; Lansing Trade Group LLC Maumee; Overland Park, Kan.
Thompsons Ltd. Blenheim, Ontario
6/03/2013
Under the terms of the agreement, Thompsons Ltd, which provides crop production services, would be equally owned by both The Andersons Inc. and Lansing Trade Group LLC.
19
$120.0
Seven Mile Capital Partners LLC; Trent Capital Partners LLC; Bratenahl Microporous Products LP Capital Partners Ltd.; Microporous Pitney Flats, Tenn. Products LP/Private Group New York; Naples; Cleveland
9/26/2013
Microporous Products LP, a manufacturer of rubber and polyethylene battery separators, was acquired from Polypore International Inc.
20
$113.5
Worthington Cylinder Corp. Columbus
Palmer Manufacturing & Tank Inc. Garden City, Kan.
4/09/2013
The acquisition enhances energy product offerings of Worthington Cylinder Corp. and expands its geographical footprint into North American oil and gas markets.
21
$109.4
FNB Corp. Hermitage, Pa.
PVF Capital Corp. Solon
2/19/2014
The transaction is part of the growth strategy of FNB Corp. and enhances its portfolio of banking services and expands its market presence in Cleveland.
22
$100.0
Atkore International Inc. Harvey, Ill.
Heritage Plastics Inc. Carrollton, Ohio
9/16/2013
The transaction enhances Atkore International Inc.'s portfolio of plastic pipes business and expands its service offerings. Heritage Plastics Inc. manufactures PVC conduit, fittings, elbows and plumbing pipe products.
22
$100.0
AB Acquisition LLC
New Albertson's Inc. Minneapolis
1/10/2013
AB Acquisition LLC, a unit of Cerberus Capital Management LP, acquired New Albertsons Inc. from SUPERVALU Inc. New Albertsons Inc. owns Acme Markets Inc., Jewel-Osco Co., Shaw's Supermarkets Inc. and Star Markets Inc.
24
$99.0
Huntington Bancshares Inc. Columbus
Camco Financial Corp. Cambridge, Ohio
10/10/2013
Under the terms of agreement, shareholders of Camco Financial Corp elected to receive $6 in cash or 0.7264 Huntington share for each Camco Financial Corp. share held.
25
$67.9
TravelCenters of America LLC Westlake
Girkin Development LLC Bowling Green, Ky.
12/17/2013
TravelCenters of America LLC acquired 31 convenience stores in Kentucky and Tennessee from Girkin Development LLC.
26
$65.6
AtriCure Inc. West Chester, Ohio
Endoscopic Technologies Inc. San Ramon, Calif.
12/19/2013
The consideration includes 2,125,913 million shares of AtriCure Inc. common stock, additional consideration up to $26 million would be paid based on the achievement of certain revenue-based milestones. Endoscopic Technologies Inc. manufactures and distributes medical devices.
27
$60.0
Scotts Miracle-Gro Co. Marysville, Ohio
Bell Laboratories Inc. Madison, Wisc.
10/14/2013
The acquisition includes the Tomcat brand and a long-term partnership to bring new technologies to the consumer rodent control industry.
28
$54.9
Shiloh Industries Inc. Valey City
Contech Castings LLC Southfield, Mich.
6/12/2013
Contech Castings LLC, a subsidiary of Cerion LLC, ultimately owned by Revstone Industries LLC, was acquired via bankruptcy transaction. Contech Castings manufactures aluminum and magnesium die casting components.
29
$52.0
A. Schulman Inc. Akron
Vita Thermoplastic Compounds Ltd. London
9/03/2013
The acquisition enabled A. Schulman Inc. to strengthen its service offerings in the engineered plastics segment and also expand its presence in the Asia Pacific region.
30
$49.5
A. Schulman Inc. Akron
Network Polymers Inc. Akron
5/28/2013
Network Polymers Inc. produces and supplies plastic compounds and resins. It had generated revenues of $65.3 million in the year 2012 and has approximately 70 employees. The acquisition expands A. Schulman Inc's service offerings in the manufacturing of plastic resins.
Source: FactSet. 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
RESEARCHED BY Deborah W. Hillyer
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Big: Ohio film tax credit has been a critical factor continued from PAGE 5
“We (created the class because we) wanted to make sure that we were able to supplement already existing crew with new trainees,” Bryan said, adding that until recently movie crew members for major motion pictures were more often coming from elsewhere to work the occasional film production. “As we’ve built our crew base up, they’re (people living) here,” he said. At the other end of the spectrum is White, the Lakewood cinematographer. For him, the Hollywood production work he gets here is only 25% of his income, but it allows him to pursue his own filmmaking, like the scenes for a television series he was shooting in Alaska. “I was in Alaska, in a river, when ‘Captain America’ called and asked, ‘Can you get here tomorrow?’” he said. “They wanted to add me on for a day.” White was in Alaska working on “The Restorers,” a television series his company, Hemlock Films, was shooting. The series follows aircraft restorers as they resurrect and restore vintage airplanes. White raised the roughly $400,000 needed to produce a five-part series that he’s working on now to get aired on PBS. Lately, he has been hired on for “Carol,” a drama starring Cate Blanchett that began shooting in Cincinnati in March. White also was an instructor for Tri-C’s film crew training class. White’s credits on IMDb, a database that records every worker, from star to production assistant on every screen, television or cable production, include, in addition to “Captain America,” work as a camera operator on a number of locally shot films including “Miss Meadows” and “Draft Day” and work as a grip on “Alex Cross,” “American Splendor” and “Spider-Man 3.” A grip may work in the camera department building supports and moving equipment on location or be an electrical crew member helping with lighting setups. “It’s really kind of refreshing to bop back and forth between working on your own stuff and working with other people,” White said “In ‘Captain America,’ you’re working with some of the best people in planet earth when it comes to doing this sort of thing. And then when you go and work on your own stuff, the stress level is different.”
Credit where it’s due According to the film commission, in the last four years, between paychecks and purchased services, moviemaking has generated more than $300 million in spending in
Northeast Ohio. But more important to Bryan and others building the local film industry, the film productions created more than 1,100 full-time equivalent jobs. “Workers used to come in from Michigan, Pittsburgh and Kentucky but as we build up a crew base they’ll be (living) here, Bryan said. Much of the praise for that growth is going to the Ohio film tax credit. Created in 2009, the tax credit is a refund against the state income or corporate tax on approved productions equal to 25% of in-state spending and nonresident wages and 35% of Ohio resident wages. Any single production can earn up to $5 million in credits. The Ohio Legislature has capped the amount of credits the state can award in any year. That cap was $10 million a year for fiscal 2010-2011and 20112012, and $20 million a year for fiscal 2012-2013 and 2013-2014. Film tax credits are offered by 45 states and Puerto Rico, according to the National Conference of State Legislatures. However, legislatures in several states, including Michigan, New York and North Carolina, are looking at cutting back on or ending film tax credits because they don’t believe the investment pays off. A 2012 study of the Ohio film industry by Cleveland State University found that every dollar of tax credits returns $1.20 to the state economy. “The tax credit is quite significant,” said Kiely Cronin, a native Clevelander who, like White, won last year’s major motion picture trifecta, working on all three major productions filming in Cleveland. “At this point in time, for feature films, (the tax credit) makes Ohio competitive.”
Welcome to the jet-set Cronin, a 25-year camera crewman, considered Los Angeles his home base for two decades. He first returned to Cleveland professionally when he worked as a camera loader on “Welcome to Collinwood,” in 2001. At first he moved to Pittsburgh, because that was where the work was. But five years ago he felt could get enough work locally to justify a Cleveland home base. He said a little less than half is work is local, so he still travels to wherever there’s work. “I now consider myself a Rust Belt jet-setter,” he said. Bill Garvey, a native New Yorker, came to Cleveland six years ago; his wife is from here. In New York, he worked his way up from production assistant, to location scout, to assistant location manager. He spent four years as as-
sistant location manager for “The Sopranos” television series and three years in the same job on the “Law and Order” series before moving to Cleveland. At first, the work in Cleveland was scarce, “but that changed within a year,” he said. “I spent a year working on ‘Captain America: Winter Soldier,’ and I spent over a year working on ‘The Avengers,’” which was shot in Cleveland in 2011. As location manager, Garvey was responsible for finding all the locations in Cleveland and then he coordinated with city and county governments for permits and arranged for police and fire department assistance during filming. He also was responsible for hiring local people and companies for things like security, clean up, signage, street sweeping and crew catering.
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He credits the president and CEO of the film commission, Ivan Schwarz, for the pickup in film work locally. (Schwarz was unavailable last week to be interviewed for this story.) Schwarz came to Cleveland in 2007 after a 20-year career in Holly-
wood, principally as a location manager. “The central reason for (the increase) is Ivan,” Garvey said. “His knowledge of the industry and his contacts in the industry” played a key role in the industry’s growth in Cleveland. ■
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Fracking: Changes could be costly Tribe: New networks were
among club’s top priorities
continued from PAGE 5
The northern and western portions of the state, where there are more fault lines, have been less economic for drillers, anyway. “This is a minority issue right now, from our perspective,” Deckelbaum said.
continued from PAGE 1
Seeking ‘balance’ Also unconvinced the change will drive away companies is Tom Stewart, executive vice president of the Ohio Oil and Gas Association in Columbus. While Stewart said he’s reserving judgment until he sees how the new conditions play out, he is hearing concerns about the cost to comply with the change. And the low levels that set off the conditions are a concern for Stewart. The drilling industry doesn’t want to be the cause of significant earthquakes, but he said he wants people to keep perspective. When people hear the word earthquake, they tend to think of the devastating ones in San Francisco and Chile. The lowlevel kind of activity included in the permit conditions can’t be felt on the earth’s surface, he said, but these regulations can take leasing and mineral rights off the table. “I just worry about the balance,” Stewart said. Shawn Bennett, an Ohio spokesman for oil and gas public outreach campaign Energy In Depth, said the majority of the Utica shale play will be unaffected by the permit changes. But it won’t be without costs. Companies that plan to drill near those faults or areas of previous seismic activity either will have to hire a contractor for the seismic monitoring or bring those operations in house, he said. And they could lose their investment entire-
STEPHEN HERRON
Chesapeake Energy Corp. and other drillers with operations or leases in Ohio will be impacted by the state’s stronger regulations. ly if the earth shakes enough to reach the state’s 1.0 magnitude threshold. ODNR’s Bruce said the department will let drillers know whether a site for which they want a permit falls under the monitoring requirement. Companies will be responsible for developing their own monitoring plan, which the state then will approve. He said the total timeframe for how long sites would have to be monitored has not yet been determined, but that the drilling and hydraulic fracturing processes would be included. Deckelbaum of KeyBanc Capital Markets said he believes the new permit conditions simply illustrate how new Ohio is to the horizontal drilling industry, and that the change opens the door to conversations about whether there’s a connection between hydraulic fracturing and earthquakes.
Taking responsibility The new permit conditions were sparked by recent seismic events in Mahoning County, which were found to have a “probable connec-
tion” to hydraulic fracturing, ODNR said on April 11. Geologists in the department think that the sand and water pumped into the well during the hydraulic fracturing process increased pressure on a microfault. According to the Ohio Seismic Network, an earthquake of about 2.0 magnitude is on the low end of earthquakes people can feel. The network has had 109 events with a magnitude above 2.0 since the state began recording them in 1999, according to ODNR. Bruce said he believes Ohio is one of the first states to require this type of monitoring on production wells. He said the state enacted such monitoring on injection wells in 2012. The new permit conditions began immediately and will be enacted as permits for relevant drill sites appear. Bruce said the review process of current permit applications already has begun. The department also will review about 400 permits that have been issued, but not yet drilled, to see if they will require additional monitoring on site. “We just feel it’s responsible and cautious,” he said. ■
“We put it among the highest priority of areas that we needed to address,” Shapiro said of the Wi-Fi and cellular networks. “And until we addressed that, we were very limited in what else we could do. Now that we’ve done Shapiro it, it’s almost limitless the things we can do from a technological perspective.”
Dialed in Weiss, the Tribe’s CIO, said, prior to this season, any Progressive Field crowd of more than “10,000 or 12,000” might as well have just left their smart phones in their pockets. “You had a low probability of being able to receive or send a phone call or send a text a message, and almost no chance of doing anything that required a significant amount of bandwidth,” he said. As professional sports teams fight an increasingly more difficult battle with the home experience, Wi-Fi and cellular access are critical. Instead of using a program to score the game, the vast majority of baseball fans prefer to track pitches on their phones while texting, tweeting and posting pictures to Facebook and Instagram. All of that is now possible at Progressive Field — even on dollar dog and fireworks nights with more than 30,000 fans in the stands. The Indians partnered with Verizon, which installed a Distributed Antenna System (DAS) and Wi-Fi network in time for the first home game of 2014. DAS allows cell phone users access to Verizon’s speedy 4G LTE network, and Progressive Field’s Wi-Fi capabilities give fans the option of connecting to the Internet while waiting in line for nachos. “I look at it as we went from essentially nothing to something very good that will get better as the year goes on,” Weiss said. Rather than tout their high-tech additions, the Indians decided to quietly — well, aside from Shapiro’s retweet — put their networks to the test during the game at which they annually draw the most fans. “It’s a large-scale effort with a lot of infrastructure and a lot of work involving a lot of people,” Shapiro said. “And what better climate to test it in than maximum capacity for the ballpark?” Weiss said the Wi-Fi network reached a peak of about 1,200 users during the home opener, and the results were encouraging. As more fans learn about the networks (the Tribe will make a formal announcement this week), Weiss expects that a Friday or Saturday night game with a large crowd could have 2,000 to 3,000 fans using Wi-Fi at any given time. “As the park has different configurations — 8,000 people in the stands, 20,000 people in the stands — we’ll identify certain gaps and what holes we have to fill,” he said. “That will be an ongoing process all season.”
Others are welcome Progressive Field has 460 Wi-Fi
access points. Weiss estimates that 75% to 80% of fans at games use their cell phone signal before attempting to access a Wi-Fi network. That’s where DAS — which Weiss describes as “I see four bars on my phone and I can do what I want to do” — comes into play. Verizon was responsible for the implementation of DAS, which consists of hundreds of antennas strategically placed, and mostly hidden, around the ballpark. The Indians aren’t disclosing how much of the new networks’ costs were absorbed by the nation’s largest cell phone provider. Shapiro would only say “the source of the funding is a partnership with Verizon that made it happen.” Competing cell phone providers such as AT&T, Sprint and T-Mobile can join the DAS network, but they would have to compensate Verizon to do so, said Erica Sevilla, a Verizon senior consultant in public relations. “There would be a payment for use of the network,” Sevilla said. An Indians source said the team is optimistic that other providers will choose to join the network, which would result in each sharing a portion of the DAS project’s cost.
Beacons of technology Weiss estimates that “18 to 20” of Major League Baseball’s 30 teams have Wi-Fi networks this season. By the end of the 2015 season, “it would be unusual for any team to not have recently installed DAS and/or Wi-Fi,” he said. While the Indians and other bigleague clubs view Wi-Fi and cellular networks as a must for tech-dependent fans, MLB has additional motivation for pushing its teams to be fully wired. MLB charges customers $19.99 to use its popular At Bat app — which, among many other features, allows fans to keep track of every pitch and see live look-ins of key moments from each game — for the 2014 season. Baseball also has a free At the Ballpark app that allows fans to “check in” when they attend a game. Weiss said the At the Ballpark app is an important tool for the Indians because they can give fans the opportunity to “unlock” offers on game day. Progressive Field is one 20 majorleague parks equipped with iBeacon technology. The small devices, which at Progressive Field are installed at the gates, communicate with Apple users through Bluetooth technology. “If you have an iPhone or an iOS 7 device, you’ll get a push notification that says something like, ‘Welcome to Progressive Field. Swipe here for an offer,’ ” Weiss said. The Tribe’s CIO said Android users will have access to the At the Ballpark offers and mapping services later this season or at the start of the 2015 campaign. It’s another cool innovation for a park that recently celebrated its 20th birthday. “Every single thing we want to do from a technological standpoint to interact with our fans, to build fan experience, will be dependent on them having the ability to utilize their technology inside our ballpark,” Shapiro said. ■
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GCP: ‘80-20 principle’ comes into play continued from PAGE 4
80-20 split
CONTRIBUTED PHOTO
Summa Health System is pumping between $1.2 million and $1.5 million into its medical simulation efforts.
Summa: Technology has added to level of ‘realism’ continued from PAGE 4
Everyone’s doing it
Case Western Reserve University in 2006 opened its own simulation center, though an upgraded and expanded center is expected to be part of the $80 million medical education building it’s hatching with the Cleveland Clinic, according to a university spokeswoman. MetroHealth, also in 2012, opened a 2,600-square-foot simulation lab at a cost of about $450,000, and hopes have an expanded space once the health system completes a campuswide facelift over the next few years. Akron Children’s Hospital also operates a simulation center. Of course, health care simulation isn’t anything new, as people have been practicing CPR on mannequins for decades. However, Dr. Thomas Noeller, the medical director of MetroHealth’s simulation center, said the technology has greatly improved over the last 15 years to a point where the simulations closely resemble medical scenarios. MetroHealth’s even has a birthing simulator. “We’ve incorporated higher-level technologies to achieve a higher level of fidelity and realism,� Noeller said. “It’s accelerated to where just about every health care provider at some point should have access to this level of simulation. I’m interested in providing the best care we can to our patients.�
The surge in interest in the field prompted Summa and the University of Akron to collaborate on a new associate’s degree and certificate program in health care simulation technology. If the program proves successful, its developers say a bachelor’s degree offering could follow suit. At present, there aren’t any dedicated degree programs to training socalled simulation technology specialists, as they’re typically individuals with health care or IT backgrounds that acquired the needed skills through on-the-job training. These are the workers that will run the simulation centers, set up the equipment and fine-tune the centers’ complex technological backbone. “The use of simulation technology for training is almost universal across health care education,â€? said Martha Conrad, director of interprofessional simulation at the University of Akron and director of interprofessional education at the Austen BioInnovation Institute. Given that most academic medical centers and universities that offer health care programs boast simulation centers, Conrad believes there will be a robust job market for the program’s grads. She also envisions job opportunities with the companies that produce and develop the simulation equipment. â–
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While Roman estimates that half of all job growth comes from business expansion and retention, others believe it’s even higher. “I would say it’s the 80-20 principle,� said Pat Kelly, director of economic development for Akronbased electric utility FirstEnergy Corp. “About 80% of the economic development projects we see are existing companies expanding.� FirstEnergy often partners with a chamber of commerce or community economic development director to make a case for a business expansion. Its economic development staff can, of course, assist with electric service plans, but it also maintains a database that includes available sites and demographic data on the region. Tom Waltermire, president and CEO of Team Northeast Ohio, the regional nonprofit organization that throws — and sometimes completes — the long passes of attracting companies from outside the region, understands where GCP is coming from and why the retention and expansion effort needs to be improved. Team NEO tracks and analyzes regional economic statistics, and Waltermire said data show that
tion and expansion program in Montgomery County, has developed itself into a single point of contact in the Dayton area. The program reaches out to local businesses and then coordinates a group of 50 government agencies and development organizations that can assist a business in navigating the expansion process. Kelly said GCP can start with a few basics. “One, they can increase the volume of calls in a strategic manner to the target industriesâ€? that are the main drivers of the regional economy, he said. “And they can utilize the larger economic development ecosystem that would be difficult for a local community to do.â€? Kelly was referring to using organizations such as Magnet, the Manufacturing Advocacy and Growth Network, and NorTech, a nonprofit that assists high-tech companies, to keep in close contact with growing firms in their particular industries. Kelly also praised GCP’s use of surveys to track businesses and industries. “As they do more and more surveys it allows them to see the trends that develop and create policies that improve the business climate in Northeast Ohio,â€? he said. â–
for the last several years, the growth of the region’s existing base has been lagging the national economy. “The public and the media put extra attention on the new, on the attraction; it’s just a little sexier,â€? he said. For this region, it doesn’t get much sexier than NestlĂŠ USA’s announcement last October that it would move its NestlĂŠ Pizza division to Solon by the middle of this year. The company will bring 250 jobs and $21.8 million in annual payroll. But, said Waltermire, “the growth of existing businesses is the number one thing we should be doing. So if we’re going to get the whole region to grow faster, the existing business base has to be growing faster, the question is, ‘How do we do that and do it effectively?’ â€? Team NEO has led the region’s primary business attraction since 2007. It also has played a role in attraction since JobsOhio made Team NEO its regional partner in 2011.
Down to basics But business retention and expansion is a major commitment, and Kelly of FirstEnergy said that while GCP already does a good job of what he calls “R&E� there is always more to do. BusinessFirst!, a business reten-
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But “a good number” of those companies have raised money from outside the region, and other LaunchHouse startups aim to follow their lead, he said. Companies that raise capital in other states sometimes move away. Take Flashnotes, which created a website where students can buy and sell course materials. That LaunchHouse company left for Boston two years ago because it couldn’t raise enough capital here, Goldstein said. Flashnotes raised $3.6 million earlier this year. Why can’t more LaunchHouse startups do that here? Goldstein’s theory is that Northeast Ohio doesn’t have enough Silicon Valley-style investors willing to make bets on all the software and Internetfocused companies graduating from the region’s three business accelerators, all of which give startups a small amount of capital and a heavy dose of mentoring, in exchange for equity. That’s why the LaunchHouse Accelerator is changing its strategy. For its next class, it plans to recruit startups developing physical products that connect to the Internet or somehow rely on software. Local investors might be more comfortable backing companies that make something tangible, Goldstein said. “Cleveland is still very much a Rust Belt town,” he said. A few local entrepreneurs echoed that comment, as did Paul Allen, director of the Bizdom accelerator in downtown Cleveland. Some Bizdom
graduates have gone outside the state to raise capital — and gotten better deals in the process, Allen said. “It’s often because the investors here don’t see the opportunity, or they see a vastly different value for the business,” he said. But the region’s culture is only half the challenge.
Capital crunch A few of Northeast Ohio’s most active early stage venture capital firms — Early Stage Partners, Glengary LLC and JumpStart Inc. — are out of cash. So are many of their peers across the country. So even those entrepreneurs who have been able to raise a few hundred thousand dollars from individual “angel” investors are having trouble raising the next round of capital, which typically comes from investment firms. The lack of local capital could kill promising young companies that otherwise would have been able to raise money, according to Stephen Haynes, CEO of Glengary. Many of them aren’t yet big enough to attract capital from late-stage investors in other states, Haynes said. Those companies “are nearing a funding cliff,” he said. That trend could affect all sorts of high-tech startups, including the many medical technology companies coming out of the Cleveland Clinic and Case Western Reserve University.
And it could get worse as more startups pour out of the three accelerators — LaunchHouse, Bizdom and Flashstarts in downtown Cleveland — and the many other new programs that are driving up the number of startups being born in Northeast Ohio. The college students launching companies through the Blackstone LaunchPad program won’t have to raise a significant amount of capital for a while, but Bob Sopko is worried about the future. He runs the Blackstone LaunchPad program at Case Western Reserve University, which is one of four local colleges participating in the program. “There’s a problem out there, absolutely,” he said.
So what do we do? Charles Stack, co-founder of Flashstarts, sees the problem — and a potential solution. In the past, if a company or investment firm wanted to raise money, they had to have one-on-one conversations with investors. It was illegal for businesses to announce in public that they were looking for capital, until last September, when the U.S. Securities & Exchange Commission changed the rule. Afterward, Flashstarts launched a marketing campaign designed to convince wealthy individuals to invest in the fund that Flashstarts uses to finance the companies in its program. So far the accelerator has raised more than $2 million. And
other funds could do the same. “Somebody just put a giant stent in, and now things can flow freely,” Stack said. Haynes, of Glengary, is one of many local investors who want the state of Ohio to put more money into the Ohio Capital Fund, a taxpayerbacked “fund of funds” that used to invest in venture capital firms throughout the state. But bills that would have renewed the fund failed to make it through the Legislature. Another option is to help companies raise money from out of state. Early stage venture capital firms might not make startups move if there’s a local group like Bizdom that can keep a close eye on them, Allen said. Bizdom also employs a more basic strategy designed to make sure its startups stick around: It has a rule stating that a startup’s headquarters must remain in Cleveland or Detroit, where there is another Bizdom accelerator. But it’s yet to be seen what would happen if a Bizdom company raised money from a firm that wanted a startup to move. The core problem — the lack of capital in Northeast Ohio — probably won’t be solved until a few more local tech companies find success, Allen said. That would put more capital in the hands of local investors and entrepreneurs, who could become investors themselves. Until then, local startups will have to make due. “We just don’t have enough of those successful serial entrepreneurs in Ohio,” he said.
The litmus test Adam Baratz wants his company to stay in Cleveland. But the cofounder of Betchyu knows that many local investors aren’t keen to invest in products like his, a self-improvement app that lets people place bets on whether a given person will meet his or her goals. The Bizdom graduate is building relationships with investors in San Francisco, and it has applied to join TechStars, a popular business accelerator in Boulder, Colo. If Betchyu does get accepted to TechStars — which makes investments in companies and attracts lots of other investors — the company plans to come home after the program ends. Out-of-state investors sometimes let startups stay put: Baratz noted how the New York venture capital firm that invested in Tackk, a Cleveland-based social media company, asked the business to move to the Big Apple. But the firm didn’t put up a fight when Tackk wanted to stay. If a 24-year-old entrepreneur like Baratz does end up leaving, that’s a bad sign for the region, according Len Gray, who runs inlaw.me, a Bizdom company that has developed an online marketplace for jobs in legal fields. He and Baratz have spent some time talking about the forces that encourage local startups to leave town. “If Cleveland can’t figure out a way to keep that guy, it’s got a real problem,” Gray said. ■
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THEWEEK APRIL 14 – 20 The big story: Victory Capital Management of Cleveland agreed to buy Birmingham, Mich.based Munder Capital Management and Munder’s Integrity Asset Management subsidiary in a deal that will create a firm with more than $37 billion in assets under management. The all-cash purchase will form a new independent investment advisory firm headquartered in Cleveland. Terms of the deal, and the name of the new firm, were not disclosed. The transaction is expected to close by the end of the third quarter. On second thought …: Associated Materials Group Inc. of Cuyahoga Falls, a manufacturer and distributor of exterior residential building products, withdrew its plan for an initial public offering. Last July, the company filed with the U.S. Securities and Exchange Commission for an IPO of up to $100 million. But in an April 15 filing with the SEC, Associated Materials said, “A determination has been made not to proceed with the initial public offering.” The company did not say why it pulled the IPO.
Back to the future: The Aurora Inn & Conference Center announced it has a new ownership group, which in turn is embarking on a redo crafted by New York-based designer Genevieve Gorder, of HGTV fame. The new owner is Aurora Hotel Partners LLC, which includes Aurora native Dan Bliss, Stephen Mansfield and Matt Lopatin. Terms of the sale were not disclosed. Bliss said the new owners want to reclaim the inn’s reputation for quality food, atmosphere and event spaces. Medina-based Riley Hotel Group will manage the property.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Miss Dots? This might put you over the Rainbow ■ A company affiliated with Rainbow Shops, the Brooklyn, N.Y.-based women’s apparel retailer, is in the process of acquiring roughly 140 store leases for $2.1 million as part of the ongoing Dots LLC bankruptcy. According to bankruptcy court records and an attorney representing Dots, Rainbow Southeast Leasing Inc. purchased roughly 30 store leases effective April 1 and has identified another 100 or so it also wants for the aforementioned price. Rainbow operates its namesake stores, plus sister brands 579 and Marianne, according to the company’s website. Its purchases bring the number of Dots leases sold — of the estimated 400 it had when it filed for Chapter 11 bankruptcy protection Jan. 20 — to an estimated 150. There are two parties negotiating to buy other leases, too, but those parties have not been disclosed. Any leases not sold through Dots’ Chapter 11 will be rejected and returned to their landlords. Emails sent to and phone messages left for Rainbow executives were not returned. Also for sale are Dots’ trademarks, domain name and other intellectual property. Hilco Streambank, a division of Northbrook, Ill.-based Hilco Global, has been retained to sell the company’s IP, which also includes a database containing information for nearly 2 million customers. An auction is sched-
uled for May. Jack Hazan, Hilco’s executive vice president, said he expects the www.dots.com domain to secure a mid sixfigure price because it is one word. “This is a significant retailer that has broad-based customer recognition and in a highly competitive market of women’s apparel and accessories,” Hazan said. “It translates well for many customers.” —Michelle Park Lazette
This app is generating more than pocket change ■ A smart phone app introduced in December has raked in more than $200,000 in revenue as 2,200 tax professionals nationwide have paid to use it, according to the cofounder of Parma Heights-based AppGiraffe LLC, which developed the app. TaxPocket is the company’s largest app by downloads, said Don Fowler, co-founder. The app allows taxpayers to download it for free and use it for taking images of receipts, tracking mileage with a GPS and recording deductions, among other things. Both iPhone and Android users may download the app, which has been under development since June. TaxPocket also allows tax professionals to manage their own portals. So if John Smith CPA has paid the $97 annual fee, he can customize his clients’ experiences, push notifications to them and receive client records through it — an experience not dissimilar to what he might have if he spent money to develop an app for himself, Fowler said. The direct interaction fostered by the app between tax professionals and their clients differentiates TaxPocket from other apps
A long time coming: Mansour, Gavin, Ger-
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lack & Manos Co. LPA, a boutique law firm in downtown Cleveland, said it plans to move to a new office on the 14th floor of North Point Tower. Exiting the 55 Public Square office building for the first time since it set up shop there in 1954, the now 50-person firm plans to open June 1 at North Point, 1001 Lakeside Ave.
COMPANY: Vitamix, Olmsted Township PRODUCT: S30 blender
Excerpts from recent blog entries on CrainsCleveland.com.
Learning curve: The Northeast Ohio Council on Higher Education has a new president in Robert W. Briggs, and with his appointment, a new focus. Briggs co-founded the Fund For Our Economic Future, a collaboration of public and private organizations that has raised roughly $100 million to support economic development initiatives. He believes the same type of collaboration must happen with education. NOCHE will broaden its focus to include students in preschool through the entire education pipeline with the aim of improving student academic success leading to college graduates entering rewarding careers in Ohio.
Hail to the (former) chief: Former President George W. Bush will give the keynote address at Cuyahoga Community College’s Presidential Scholarship Luncheon, an annual event that has brought in more than $11.5 million toward scholarships since its inception in 1992. This year’s luncheon will take place Thursday, Sept. 11, at the Renaissance Cleveland Hotel. Last year’s luncheon, which brought in more than $1.5 million, featured former President Bill Clinton. Exploring options: Beachwood-based aluminum product maker Aleris Corp. said it is “formally evaluating the potential sale” of its Recycling and Specification Alloys businesses. “While the businesses remain steady and profitable with excellent long-term growth potential, we are always reviewing our operations to ensure that Aleris is optimizing the value of its portfolio,” said Aleris CEO Steve Demetriou. Aleris said that following a “comprehensive review” of options for the unit, it “may choose to retain the business.”
Vitamix, which makes professional-grade blenders for home and commercial use, is going small with its latest product, the S30 personal blender. The company says the S30 offers “a sleek, compact design that allows users to easily create smaller batches and individual servings and streamlines everyday kitchen tasks.” It’s equipped with two containers for individuals and small families and has a lightweight base, which makes it easy to move, Vitamix says. The S30 has a 790-watt motor, a metal drive system and laser-cut, stainless-steel blades, which are standard on all Vitamix machines. The result is “a smoother blend, even with tough ingredients,” according to the company. The two shatter-resistant containers are designed to make it easy for users to prepare individual servings of smoothies and juices, chop vegetables, grind grains and produce smaller batches of soups, sauces, vinaigrettes and frozen desserts, Vitamix says. A removable blade base enables the S30 to handle thicker creations such as peanut butter or dips. Karen Haefling, vice president of marketing for Vitamix, says the S30 is designed for “the on-the-go fitness enthusiast, the home chef who wants to produce small batches of sauces or dips, and the family who wants to make their own personal blends with minimal cleanup.” The S30 has a suggested retail price of $399 and comes with a five-year warranty. It’s available exclusively at Williams-Sonoma and vitamix.com.
Boxing squirrels are a hit ■ You might scoff, but The Washington Post offered proof that selling art of squirrels prepared by a taxidermist to look as if they are boxing could be big business for a Cleveland auction house. The Post noted that when Akron-based Goodyear Tire & Rubber Co. decided to relocate its Akron headquarters last fall, “it fell to Clevelandbased auctioneer Rachel Davis to sell all the decor the company didn’t want to move.” Most of it was paintings and prints. Then someone found the stuffed squirrels. In a closet were four pairs of red squirrels in four separate glass boxes, each portrayed as pugilists. “The fellow I worked with had been a longtime employee,” Davis told The Post. “He told me those were in the lunch room as long as he could remember. Then one day they disappeared.” Davis found the squirrels were made in the 19th century by Edward Hart, an English taxidermist who lived from 1847 to 1928. She broke the Hart lot into four separate pieces and expected they “would bring $300 to $500 a piece.” But Christopher English and his partner, Stephen Dori Shin, who operate a high-end antiques store in Lake Placid, N.Y., had other ideas. The Post said that because of the low reserve, English “thought he might be able to snag them for next to nothing” and drove to Cleveland for the auction. The first pair went to English for $19,000. He got the second pair for $15,000. The price for the complete set of stuffed, boxing squirrels: $70,000.
that also track expenses and mileage, according to Fowler. AppGiraffe has partnered with the National Association of Tax Professionals to market it. “We thought an app that serviced the tax professional and the taxpayer industry made a lot of sense,” Fowler said. — Michelle Park Lazette
We suggested ‘Hank,’ but it didn’t make the cut ■ The nominations are in, and now it’s up to fans to decide whether the name for the newest Goodyear blimp should inspire thoughts of travel, steadfastness or speed. Akron-based Goodyear Tire & Rubber Co. announced Friday, April 18, that it has chosen 10 potential blimp names from more than 15,000 submissions. The company announced the new blimp and the contest to name it on March 14. The “larger, faster, and more maneuverable” airship took its first test flight a month ago and will be christened officially this summer, Goodyear said. The names were chosen on a variety of criteria, including whether it reflected airships’ history, Goodyear’s innovation and the “majesty of lighter-than-air flight.” Fans can vote for their favorite name from now through May 9. The options for the name of the newest Goodyear blimp are: Adventurer, Ambassador, Commitment, Excursion, Explorer, Goodwill, Inspiration, Pride of Goodyear, Resolute and Wingfoot One. The person who submitted the winning name will get access to the well-known airship for a day; the other finalists will receive a set of Goodyear tires. — Rachel Abbey McCafferty
Asked and answered ■ A Cleveland firm’s survey found that most employers “continue to ask candidates to self-disclose past criminal convictions on job applications, even though the U.S. Equal Employment Opportunity Commission recommends against it and there are state and municipal laws that outright ban the practice,” according to a story by Business Insurance, a sister publication of Crain’s Cleveland Business. The survey of nearly 600 employers by Cleveland-based EmployeeScreenIQ found that 66% of employers ask candidates to self-disclose past criminal convictions on job applications, while 78% do so at some point during the hiring process. Among other survey results, Business Insurance reported, 59% of survey respondents said criminal convictions are reported on 5% or less of their background checks, while 18% said convictions are reported in 6% to 10% of their checks.
Keep it quiet ■ Forest City Ratner Cos., part of Clevelandbased Forest City Enterprises, plans to make its Barclays Center in Brooklyn, N.Y., “a lot greener on the outside and possibly become a quieter neighbor in the process.” So said The Wall Street Journal, which reported that Forest City is slated to “coat the arena’s giant dome with a 130,000-squarefoot ‘green roof’ composed of small plants and a soil-like cover, resurrecting an idea that was cut years ago in an effort to contain costs.” The effort “is being driven by the next development phase at the site, known as Atlantic Yards, which calls for 6,400 apartments to be built in 15 towers — three that would surround the arena,” according to The Journal. By swapping a sprawling white roof with an expanse of greenery, the apartments should become more marketable.
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