20130722-NEWS--21-NAT-CCI-CL_--
7/19/2013
3:15 PM
Page 1
THE PERFECT MODEL: NATURE FOTOLIA
SAM DOSHI
The design of Japan’s so-called “bullet” train emulates the beak of the kingfisher, a bird that can dive into water without making a splash. The design allows the train to travel faster, use less energy and make less noise.
Great Lakes Biomimicry pushes companies and schools to embrace ideas inspired by plants, animals By CHUCK SODER csoder@crain.com
T
See BIOMIMICRY Page 9
0
NEWSPAPER
74470 83781
7
29
om Tyrrell has had little trouble recruiting people to start stealing all those unpatented ideas Mother Nature has been creating for the past few billion years. Mr. Tyrrell and the rest of his team at Great Lakes Biomimicry have convinced local corporations, foundations and colleges that the natural
world is full of ideas worth copying. Now those parties are taking steps to support Great Lakes Biomimicry and its mission: To make sure that people all over Northeast Ohio — be they researchers, business executives or students — take cues from the most prolific inventor in history. So much so that biomimicry becomes part of Northeast Ohio’s culture.
FLATS FORWARD Nonprofit composed of various stakeholders ready to steer area in new direction ■ Page 3
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 29
20130722-NEWS--22-NAT-CCI-CL_--
7/18/2013
3:01 PM
Page 1
$ YOUR WEALTH IS ABOUT MORE THAN DOLLARS AND CENTS. IT’S ALSO ABOUT LEAVING A LEGACY THAT GOES BEYOND YOUR GENES. That’s why Fifth Third Private Bank Advisors want to know about more than just your assets. Asking about your family, passions and the legacy you want to create helps us design a personalized plan specifically tailored to accomplish your goals. Put our more than 100 years of curiosity to work for you. And the family business. Learn more at 53.com/legacy.
Deposit and credit products provided by Fifth Third Bank. Member FDIC. Equal Housing Lender. Fifth Third Private Bank is a division of Fifth Third Bank offering banking, investment and insurance products and services. Fifth Third Bancorp provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a registered broker-dealer and registered investment advisor. Registration does not imply a certain level of skill or training. Investments, investment services and insurance: Are Not FDIC Insured - Offer No Bank Guarantee - May Lose Value Are Not Insured By Any Federal Government Agency - Are Not A Deposit Insurance products made available through Fifth Third Insurance Agency, Inc. © Fifth Third Bank 2013.
,
20130722-NEWS--1-NAT-CCI-CL_--
7/19/2013
3:10 PM
Page 1
$2.00/JULY 22 - 28, 2013
THE PERFECT MODEL: NATURE FOTOLIA
Southwest rebuffs latest MetroHealth development County-subsidized provider defends decision to open nearby Middleburg Hts. health center By TIMOTHY MAGAW tmagaw@crain.com
SAM DOSHI
The design of Japan’s so-called “bullet” train emulates the beak of the kingfisher, a bird that can dive into water without making a splash. The design allows the train to travel faster, use less energy and make less noise.
Great Lakes Biomimicry pushes companies and schools to embrace ideas inspired by plants, animals By CHUCK SODER csoder@crain.com
T
See BIOMIMICRY Page 9
29
om Tyrrell has had little trouble recruiting people to start stealing all those unpatented ideas Mother Nature has been creating for the past few billion years. Mr. Tyrrell and the rest of his team at Great Lakes Biomimicry have convinced local corporations, foundations and colleges that the natural
world is full of ideas worth copying. Now those parties are taking steps to support Great Lakes Biomimicry and its mission: To make sure that people all over Northeast Ohio — be they researchers, business executives or students — take cues from the most prolific inventor in history. So much so that biomimicry becomes part of Northeast Ohio’s culture.
The paint on the walls at MetroHealth’s new $23 million health center in Middleburg Heights has barely dried, but that hasn’t stopped Southwest General Health Center — the dominant health care force in southwestern Cuyahoga County — from taking digs at its newest competitor. Make that its unrepentant, newest competitor. In an interview last week with Crain’s, Southwest CEO Thomas Selden blasted MetroHealth for opening a health center roughly two miles southeast of his hospital and chided the health system
subsidized by Cuyahoga County for offering what he characterized as duplicative services. Mr. Selden, whose hospital boasts a leading 42.5% market share in the area 20 miles southwest of Cleveland, went on to say MetroHealth would have been better served by investing the $23 million it spent in Middleburg Heights into its aging campus on West 25th Street in Cleveland. “I’m irritated by the fact that this country’s cost of health care is being driven by overbuilding and construction,” Mr. Selden said. “This is not McDonald’s versus Burger King, where you have McDonald’s on one corner, then Burger King See HEALTH Page 6
Diebold’s next-gen ATM targets mobile millennials By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
When Devon Watson describes the automated teller machine of the future, it’s not a clunky gray terminal that sucks in a card and spits out money. It’s an electronic financial hub that lets customers take banking into their own hands, literally, by interacting with their smart phones and tablets. That shift in the sophistication and function of the ATM described by Mr. Watson, senior director of software product management at ATM maker Diebold
Inc., is in response to changing consumer wants as the tech-savvy millennial generation becomes more of a market force and more people worldwide embrace the use of mobile devices. And it is obvious Diebold intends to be a driver of such change. Last week, Diebold announced a partnership with Paydiant Inc., creator of cloud-based mobile wallet and payment technology, that will let customers use their smart phones instead of credit or debit cards to withdraw money from their ATMs. See DIEBOLD Page 7
0
NEWSPAPER
74470 83781
7
CRAIN’S SPECIAL REPORT What will Cleveland look like in the future?
FLATS FORWARD Nonprofit composed of various stakeholders ready to steer area in new direction ■ Page 3
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 29
This section examines how the city fits into the regional discussion and the importance of maintaining a strong urban core. Pages 11-18. Additional stories, photos and video at www.CrainsCleveland.com/cle2030.
20130722-NEWS--2-NAT-CCI-CL_--
2
7/19/2013
3:37 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
COMING NEXT WEEK Financial changes afoot In next week’s special section, learn about a change in financial reporting standards and the challenges businesses face in getting employees to sign up for retirement programs.
JULY 22 - 28, 2013
A LONG WAY TO GO The ratio of unemployed people per job opening has improved since the end of the recession, but it’s higher than it was at the start of the downturn. There were about 3.1 unemployed people per job opening in May, compared with 6.2 per job opening in June 2009. Heading into the recession, though, the figure was at 1.8 in December 2007. Here’s a look at the ratio in January of each year since 2010:
Date
Unemployed
Job Openings
Ratio
Jan. 2013
12,332,000
3,611,000
3.42
Jan. 2012
12,748,000
3,415,000
3.73
Jan. 2011
13,992,000
2,868,000
4.88
Jan. 2010
15,016,000
2,751,000
5.46
SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV
REGULAR FEATURES Best of the Blogs .........21 Big Issue .......................8 Classified ....................20 Crain’s Special Report: CLE 2030 .....................11-18
WWW.CRAINSCLEVELAND.COM
Editorial ........................8 Going Places ...............10 List: Largest Hotels .....19 Milestone ....................21 Reporters’ Notebook....21
CORRECTION Sarah C. Flannery chairs the mentoring committee of the Women’s Leadership Council of United Way of Summit County. Her role with the council was reported incorrectly in the profile of Ms. Flannery that appeared in the July 15 Who to Watch in Law section. Ann-Marie Hagenbuch, vice president of business banking at FirstMerit Bank, is chair of the council.
700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editor: Kevin Kleps (kkleps@crain.com) Sports Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Rachel McCafferty (rmccafferty@crain.com) Manufacturing and energy Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Yannucci Grim (lgrim@crain.com) Events Manager/Operations & Logistics: Christian Hendricks (chendricks@crain.com) Events Manager/Promotions & Sponsor Relations: Jessica Snyder (jdsnyder@crain.com) Advertising director: Nicole Mastrangelo (nmastrangelo@crain.com) Senior account executive: Adam Mandell (amandell@crain.com) Account executives: Dawn Donegan (ddonegan@crain.com) Andy Hollander (ahollander@crain.com) Lindsie Bowman (lbowman@crain.com) John Banks (jbanks@crain.com) Sales and marketing assistant: Michelle Sustar (msustar@crain.com) Office coordinator: Denise Donaldson (ddonaldson@crain.com) Digital strategy and development manager: Stephen Herron (sherron@crain.com) Web/Print production director: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Lauren M. Rafferty (lrafferty@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com)
Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Chris Crain: Executive Vice President, Director of Strategic Operations Brian D. Tucker: Vice president Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Mary Kramer: Group publisher G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation
20130722-NEWS--3-NAT-CCI-CL_--
7/19/2013
2:27 PM
Page 1
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
3
Flats Forward aims for unified plan Nonprofit of various stakeholders ready to steer area’s next iteration of development By JAY MILLER jmiller@crain.com
The appeal of Cleveland’s Flats always has been the energy that builds from the almost daily mix of activities on the Cuyahoga River and along the valley that surrounds it. In the 1980s, the Flats had machine shops, docks and truck traffic that dominated the daylight hours. Its bars and night clubs made it party central at night. But that environment collapsed in the 1990s when the bars
got too rowdy and some of the industry drifted away. Since then, until recently, the Flats languished. No one had a plan for the next phase in the life of the city’s oldest neighborhood. A new organization, called Flats Forward, plans to change that situation. The hope now is for an even more diverse, more vital neighborhood that capitalizes on the Flats’ unique location. It’s simply not possible in most center cities to sit down to dinner at a
riverfront restaurant and be unexpectedly thrown from sunshine to shade by a 700-foot-long ore boat headed downriver to a steel mill while a train crosses a lift bridge behind the ore boat — all going on below a corporate jet coming in for a landing at a nearby lakefront airport. Nor in most downtowns can you see hikers, bikers and skateboarders dodging a steady parade of dump trucks carrying stone and salt and watching rowing sculls skim around a big bend in the crooked river, with volleyballers just out of sight beyond the trees on the west bank at Wendy Park. “That kind of motion is visually stimulating,” said Adam Fishman,
chairman of Flats Forward, a new organization that hopes to guide the rebuilding of the Flats. “And there is a varied and wonderful tapestry of property uses that find their way along the Cuyahoga River.” It’s also what’s made it difficult to get everyone on the same page when it comes to figuring out what’s next for the Flats.
For the good of the order Some longtime industrial employers, whose businesses are tied to the river and the Flats, have complained that plans to bring bike trails and other recreational uses close to heavily traveled truck routes present public safety prob-
THE WEEK IN QUOTES
Catalogs remain key marketing materials
— Chris Allen, CEO, Biomimicry 3.8. Page One
— Thomas Selden, CEO, Southwest General Health Center. Page One
“It’s one thing to just shift population from one part of town to another. We need to increase population. I don’t want it to be robbing Peter to pay Paul.” — Michael Fleming, executive director, St. Clair Superior Development Corp. Page 11
“The region will not survive without a strong structural core. … And if Cleveland is strong, the housing market in the suburbs will be strong as well.” — Joel Ratner, president and CEO, Neighborhood Progress Inc. Page 12
See FLATS Page 20
INSIGHT
“Everybody thinks the Northeast Ohio initiative is leaps and bounds ahead on this education and economic development piece.”
“This is not McDonald’s versus Burger King, where you have McDonald’s on one corner, then Burger King building on the other. These are hospitals building right next to each other.”
lems. Some residents have expressed safety concerns and others are worried the Flats will become overdeveloped and gentrified. Tourists and others complain about the Hustler Club and the other adult destinations close to what is expected to be family recreational areas in the future. Mr. Fishman, who is a partner in Fairmount Properties, one of the developers of the Flats East Bank project, said Flats Forward hopes to bring everyone together to plan the future. “For Flats Forward we have to do what’s good for the whole, not for any individual property owner or any individual constituent group,” he said, adding that businesses such as
B-to-B print product still useful in sales By LAURA STRAUB
MARC GOLUB
Dan Deagan, owner of Deagan’s Kitchen & Bar, is set to open his second Lakewood venture, Humble Wine Bar, in August.
RESTAURANTS BEGIN TO BANK ON LOANS Some institutions opening the lending spigot, though local operators say obstacles still remain in obtaining financing By KATHY AMES CARR clbfreelancer@crain.com
D
an Deagan approached four different banks for a loan to open his first restaurant, Deagan’s, but none expressed interest in financing his Lakewood gastropub during the tail end of the recession. He then connected through a mutual friend with a loan officer at Chase Bank in Canton, which agreed to finance 61% of PHOTO PROVIDED the project with a five-year Deagan’s Kitchen & Bar is a favorite among foodies. Small Business Administration requiring 30% in upfront capital for a proloan. Mr. Deagan and three business partject that costs just under $300,000. ners covered the rest of the restaurant “We’ve been ahead on paying down concept — a project total of “just under our loans, and our track record with $400,000,” Mr. Deagan said — with cash Chase helped us in not having to put as and their homes for collateral. much (money) down,” he said. Three years later, Mr. Deagan is about to open Humble Wine Bar in Lakewood See LENDING Page 7 with that same lender, which now is
It may be a digital world, but there still is a place for the good ol’ print catalog in business-tobusiness sales. Just ask CJ Milo, a sales consultant at Today’s Business Products, a distributor of office furniture and supplies on Snow Road in Middleburg Heights. When he first started at Today’s, Mr. Milo accompanied an experienced salesman on calls. At a routine appointment at Notre Dame College in Euclid, the pair felt the wrath of disgruntled secretaries, who heckled the emptyhanded salesmen and demanded the newest edition of Today’s catalog. Fortunately, the veteran salesman kept four cases of catalogs in the trunk at all times so that he could hand out the books at a moment’s notice. That experience taught a valuable lesson to Mr. Milo, who said print catalogs continue to help him in his career. Despite detailed information customers can find online about their products, distributors and other business-to-business sellers agree the physical presence and permanence of a print catalog remains a powerful marketing tool — and an expense worth the cost, even for a 1,040-page monster like the catalog Applied Industrial Technologies released this month. “Our catalog sits on someone’s desk or shelf like a salesperson holding a sign; ‘Looking for something? Call Applied,’” said Jennifer Belt, catalog marketing manager for Applied, a seller of bearings and industrial parts headquartered in Cleveland. “It’s a passive prompt to our See CATALOGS Page 5
20130722-NEWS--4-NAT-CCI-CL_--
4
7/19/2013
2:56 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JULY 22 - 28, 2013
Modern Ben Rose institute helps revenue streams flow
LEASED 34300 LAKELAND BLVD EASTLAKE, OHIO
By TIMOTHY MAGAW tmagaw@crain.com
Newmark Grubb Knight Frank is pleased to announce two leases at Visit 34300 Lakeland Blvd. in Eastlake. TerryCoyne.com Or Call Terry at Terry Coyne represented the Landlord 216.453.3001
1350 Euclid Ave, Ste. 300 Cleveland, Ohio 44115
The Benjamin Rose Institute on Aging’s glistening, $11.4 million headquarters on Cleveland’s East Side is poised to be more than a functional new office space for the century-old nonprofit dedicated to seniors issues. The institute’s leaders suggest the mere hillside presence of the 31,214square-foot headquarters on Fairhill Road, which has a cascading view of downtown’s skyline, could help shed more light on the nonprofit and perhaps sprinkle some unexpected revenue into the organization’s pockets. While the space was designed to allow Benjamin Rose to host its own educational programming, the building has attracted rentals from throughout the Cleveland community. Some of the organizations that have used or plan to use meeting space in the building include the National Council on Aging, St. Luke’s Foundation, Cleveland Leadership Center and Eliza Bryant Village. As part of its newfound enterprise, Benjamin Rose also has partnered with caterer Food For Thought in Mentor. “It’s almost like found money,” said Benjamin Rose president and CEO Richard Browdie. “We hadn’t expected to have a lot of that. But since it’s there, it’d be kind of silly not take advantage of it because we aren’t going to use all of the space ourselves all of the time.”
PHOTO PROVIDED
The Benjamin Rose Institute on Aging’s new $11.4 million headquarters on Fairhill Road is attracting revenue in the form of facility rentals. Benjamin Rose’s new headquarters is only a stone’s throw from its previous home, Kethley House, on the same piece of property. Last year, the organization sold for $17.4 million the 144,000-square-foot Kethley House to Kindred Healthcare Inc. of Louisville, Ky. The site also had served as the site of Benjamin Rose’s former nursing home, which closed in 2006. “We were so nestled back in the woods with the Kethley House location,” said Muffy Kaesberg, who served as chairwoman of Benjamin Rose’s board during the relocation. “Now, we’re much more interesting and modern- looking. People will see us on the hill and pause and say, ‘Who’s that?’ ” The new headquarters overlooking
Martin Luther King Drive features high ceilings and glass walls and is filled with natural light. The building also boasts a 2,846-square-foot conference room, an outdoor terrace, a full-service catering room and other amenities. Mr. Browdie cautions that Benjamin Rose isn’t foregoing its mission of advocating on behalf of the elderly for the event-planning business. Instead, he sees it as helping ensure the institute remains financially healthy well into the future. “We were tickled by the possibility that there might be purely commercial use possible (with the building), but it wasn’t until we got in here and took a look at how it was going to turn out that we actually saw it as a possibility,” Mr. Browdie said. ■
New hedge fund targets small firm stocks SALT • SALT • SALT • Water Softener • Industrial • Food • Ice Melt • Sea Salt
Call For Pricing!! Minimum Delivery: 1Pallet
1-800-547-1538 Salt Distributors Since 1966
By MICHELLE PARK mpark@crain.com
A new hedge fund in Cleveland has attracted more than 40 investors and is investing in the stock of small companies, a strategy it will keep even as it grows, its founder says. Ben Mackovak, a 32-year-old Willoughby native, commenced operations on March 1 of Cavalier Capital LLC — named for his “beloved” Cleveland Cavaliers and the mascot of the University of Virginia, where he earned his MBA. His two employees and he have grown the fund’s assets under management by more than 60% since then, though he wouldn’t say how much of the fund’s maximum $300 million has been raised. He did say the goal is to raise all of that $300 million over the next couple years. Cavalier Capital is a long/short equity hedge fund, industry speak for a fund that buys and holds equities it anticipates will increase in value, and “shorts” other equities it anticipates will decline in value. The fund is investing only in the stock of companies that trade in the United States with roughly $1 billion or less in market capital-
ization, so long as they have enough trading volume to ensure liquidity, said Mr. Mackovak, its president. It has yet to invest in a local company, but would with the right opportunity, he said.“We’re trying to find these small diamonds in the rough that the rest of Wall Street is ignoring,” Mr. Mackovak said. “We’re really looking for good businesses, predictable businesses, businesses with valuable assets that are underappreciated by the market. We’re not trying to invest in the website that could be the next Facebook.” The hedge fund itself will stay small, too. Large hedge funds can’t invest efficiently in small-cap companies, Mr. Mackovak said. “They simply have too much money to put to work,” he said. “We’re a deliberately small fund, and we’ll always be a small fund.” The firm’s first fund, called Cavalier Capital Partners LP, counts 43 investors at present, Mr. Mackovak said. All are high-net-worth individuals and family offices, which manage money for wealthy families. Once Cavalier Capital has a 12month track record, it will pitch itself to institutional investors, such as endowments, he said. “Those types of investors typically
aren’t going to take a bite at a small startup fund,” said Mr. Mackovak, whose business is in the City Club building in downtown Cleveland. Mr. Mackovak most recently worked for six years for a long/short hedge fund, Rivanna Capital, in Charlottesville, Va. He previously worked for a money manager in Newport Beach, Calif. “It’s always been a dream of mine to start a business and build a business, but you really can’t do this straight out of college,” he said. “You need a certain level of experience. I started my career during the dot-com collapse, and so I saw that painful market meltdown, and I was at Rivanna Capital for the financial crisis, and again experienced a very tumultuous period in the financial markets. Having that experience is an advantage.” In the first quarter of 2013, 297 hedge funds were launched and 196 were liquidated, according to Hedge Fund Research Inc. out of Chicago. For the most part, the number of hedge fund launches has increased year by year since 2009, following a year (2008) when 1,471 of them were liquidated, more than double the number that year that were launched. ■
Volume 34, Number 29 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 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
20130722-NEWS--5-NAT-CCI-CL_--
7/19/2013
12:05 PM
Page 1
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Catalogs: Customers appreciate tangibility continued from PAGE 3
customers indicating that this is a partnership, and we’re here to help,” Ms. Belt said. Pete Santee, Applied account manager in the Akron region, uses the catalog every day. In his first year with Applied, Mr. Santee handed out between 400 and 500 catalogs to current and prospective customers. Mr. Santee uses the catalogs as an introduction to new clients in his territory. The big print catalog showcases nearly 30,000 products of the 2.5 million parts offered by Applied. The front of the book has a timeline of the history of Applied, which helps acquaint customers with the company, Mr. Santee said. “When making cold calls, I would be lost without catalogs,” he said. The presence of a catalog also is an influential instrument for returning customers. One of Mr. Santee’s large national accounts keeps a supply of catalogs on the shop floor within arm’s reach of the maintenance workers. The workers use them as a reference tool to find the correct parts for repairs on the machinery throughout the day, he said.
Print doesn’t go offline Kim Loyed, office administrator at Citizens Academy at 10118 Hampden Ave. in Cleveland, said using her catalog to call Today’s Business Products has gotten her out of many a bind. “I was trying to think of a specific situation,” Ms. Loyed said. “But it happens so often.”
MARC GOLUB
Pete Santee, an account manager for Applied Industrial Technologies, says he would be lost without the 1,000-page catalogs he brings along on sales calls. At least two times last year, the charter school experienced service interruptions with its Internet providers. But because of Today’s print catalog, Ms. Loyed still could call and order the products she needed and get them the next day. “Electronics will break, the Internet will go down, so I think catalogs are the best cushion,” Ms. Loyed said. She actually prefers to use the print catalog for day-to-day orders, in part because it helps her pinpoint staff needs. Not all the teachers have access to computers, but the catalog can be passed around easily, marked with the tabs included in the book and returned to Ms. Loyed
to put together an order. The catalog helps Ms. Loyed to order quickly and efficiently because she feels it is much easier to navigate than the website. “It’s faster to find what I’m looking for because everything is colorcoordinated,” she said. She also appreciates the tips on subjects such as choosing the right keyboard platform, the benefits of privacy filters and desktop ergonomics.
Forget-me-nots Positive customer experiences like these are why Jean Gianfagna, founder and president of Gianfagna Strategic Marketing, recommends
print catalogs to her clients. One client Ms. Gianfagna wouldn’t identify stopped producing its print catalog three years ago to cut costs; however, this year, the client is on the fast track to bringing the catalog back due to high sales force demand. “The catalogs are a great leavebehind for salespeople,” she said. They also are appreciated by many customers. According to Jeffrey Dross, corporate director of education and industry trends at Kichler Lighting, a lighting manufacturer on East Pleasant Valley Road in Independence, most lighting retailers only display 1% to 10% of the large product lines available on the market. There may be five to six variations of a light fixture that the retailer simply has no room to display. Printed catalogs provide an accurate rendering of those variations that are not displayed in the showroom. “The product comes off a lot better on a printed page than it does on a monitor or a screen or a phone,” Mr. Dross said. Viewing the image on a screen can lead to color inaccuracies or unclear images, and ultimately a disappointed customer, he said.
Paperless? No way Although print catalogs guarantee an accurate portrayal of the product, business-to-business sellers recognize online catalogs have some features and advantages that print does not.
5
Applied Industrial implemented many of these features in this year’s debut of its digital catalog. The catalog includes videos, CAD drawings and additional images. With the digital catalog Applied also can track customer usage, which gives it valuable analytics, and it’s environmentally friendly. But while online multimedia content can add to the presentation of products, it is harder to implement than many sellers realize, Ms. Gianfagna said. “Lots of business-to-business companies don’t have the resources to create rich content and media,” she said. Though a print catalog may seem like it would be more expensive than an online version because of paper and printing costs, much of the production expense is the same for online and print, Ms. Gianfagna said. At a time when many business owners are re-evaluating costs, a print catalog often can fall victim to penny pinching. About 20 years ago, Kichler Lighting scaled down its catalog by 60%. This mini catalog helped cut print costs without cutting down the catalog altogether. All 3,000 products still were represented, just in smaller type with shorter product descriptions. However, sales force distribution of the mini catalog is down 50% these days. Not all companies are experiencing the same print decline as Kichler. Rick Voigt, president and CEO of Today’s Business Products, said in the last 10 years he has had only one customer come to him and say, “No, I want to go paperless.” ■
Howard Hanna Homes of Distinction
No one sells more high-end real estate than Howard Hanna.
During the first quarter of 2013, Howard Hanna listed
8 out of every 10 homes sold in the $700K to $1 million price range and EVERY home priced over $1.5 million. With our professional and respected team of REALTORS®, it’s easy to understand why we are the broker of choice for distinctive homes.*
www.howardhanna.com
*First quarter residential list side sold units NEOHREX statistics January 1, 2013 through March 31, 2013. Statistics as of 7-2-13. (Information deemed reliable but not guaranteed.)
20130722-NEWS--6-NAT-CCI-CL_--
6
7/19/2013
2:23 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Health: Competition heats up
16000 Pearl Road, Strongsville Available for Lease • • • •
Custom Suites 1,250 to 4,400 SF 0HGLFDO RU 2IÂżFH 6XLWHV $YDLODEOH ,QGLYLGXDOO\ &RQWUROOHG +9$& ; 5D\ 5RRPV $YDLODEOH
• • • •
continued from PAGE 1
building on the other. These are hospitals building right next to each other.� To help fend of what he sees as an unnecessary intrusion in his market, Mr. Selden on July 10 sent to local residents a letter that accuses other hospital systems — only MetroHealth is mentioned by name — as charging a facility fee, or as Mr. Selden characterized it in the letter, a fee “just to walk in the door.� He noted that Southwest wouldn’t charge such a fee at its urgent care centers or physician offices. Mr. Selden said that Southwest had no plans to soften its rhetoric in its fight to keep patients. Also, despite being critical of the health care building boom, Mr. Selden defended Southwest’s own $128 million construction project, which includes an expanded emergency department, a new critical-care unit, the conversion of most of the hospital’s two-person rooms into private suites and a new patient bed tower. “We’re not building an unnecessary addition to the hospital,� Mr. Selden said. “We’re building something the public has asked for. They want more privacy and comfort.�
$PSOH 6XUIDFH 3DUNLQJ (DVLO\ $FFHVVLEOH RQ 3HDUO 5RDG $FURVV IURP WKH )XWXUH *LDQW (DJOH (DV\ $FFHVV WR *URZLQJ 5HVLGHQWLDO $UHD
FOR MORE INFORMATION, CONTACT: Jack W. Drescher, CPA, SIOR 216-861-7200 www.ostendorf-morris.com
The building blocks
of business NYCB Business Liquid CD 12-MONTH CD
0.70
% APY 1
JULY 22 - 28, 2013
Merchant 4 Services
Credit 3 Card
Business Solutions Checking with Interest
NYCB Business Liquid CD
‡ 1HHG DFFHVV WR \RXU IXQGV" *HW PD[LPXP à H[LELOLW\ ZLWK ,Q %UDQFK 3HQDOW\ )UHH :LWKGUDZDOV2 ‡ 0LQLPXP WR RSHQ LV ‡ 0LQLPXP EDODQFH WR HDUQ LQWHUHVW LV ‡ (DUQ WKH VWDWHG $3< LI \RX KDYH RU RSHQ DQ\ LQWHUHVW EHDULQJ %XVLQHVV &KHFNLQJ DFFRXQW
MetroHealth hits back Asked to respond to Mr. Selden’s comments, MetroHealth’s new CEO, Dr. Akram Boutros, defended the facility fees as nothing new to the health care landscape. Also, depending on the type of insurance, Dr. Boutros said MetroHealth’s cost to patients often comes at or below what other providers, including Southwest, charge for similar services. “Of all the hospitals you could attack over this issue, how could you attack the hospital that provides the largest portion of free care in the county?â€? Dr. Boutros said. Last year, MetroHealth provided $133 million in uncompensated care to the indigent — up 33% since 2008. “We bend over backwards to make sure everyone has access to care whether they can afford it or not,â€? he said. It’s no secret MetroHealth’s decision to lay stakes in Middleburg Heights was driven by its need to bring more Medicare and commercially insured patients — and thus more revenue — into the hardpressed health system’s coffers. Also, Dr. Boutros said MetroHealth needed to add capacity to accommodate ballooning patient volumes at MetroHealth’s nearby Strongsville site, which is slated to close today, July 22, given the recent opening of the new Middleburg Heights site. Still, Mr. Selden stressed that services now are being duplicated. In 2011, he tried to persuade the driving force behind the expansion, former MetroHealth CEO Mark Moran, from building in Southwest’s backyard. Mr. Moran’s successor sees the competition in the southwestern section of the county as healthy for the marketplace. “I’m not sure why all of the sudden that Southwest is upset,â€? Dr. Boutros said. “Isn’t competition good? It makes us all excel and do a better job. ‌ Frankly, I don’t get it, but to each their own. We all manage our businesses differently.â€? While MetroHealth was the only health system Mr. Selden chastised by name in his letter, the Cleveland Clinic also has expanded services in Southwest’s territory at its nearby health center in Strongsville by extending hours for its urgent care
McDonald Hopkins
services. A Clinic spokeswoman confirmed the Strongsville site charges a facility fee but defended it as nothing new, noting facility fees help cover the cost of running hospitals and outpatient locations.
Battling brands The rift between MetroHealth and Southwest General is the latest evidence of escalating friction among Northeast Ohio’s ultra-competitive health care providers. Ultimately, though, it takes a lot of work to flip a patient from one health care provider to another. The Cleveland Clinic and University Hospitals have had a hard time draining any meaningful market share from each other despite their own costly expansion projects. “If you think the brand loyalty around Coke and Pepsi is strong, the brand loyalty around health care is just as strong,â€? said Bill Ryan, president of the Center for Health Affairs, an advocacy group for local hospitals. Still, the tendency of patients not to switch providers hasn’t stopped long-simmering tensions between the Clinic and UH from bubbling back to the surface this summer. In June, the Clinic rolled out plans to build a medical education building on its main campus with Case Western Reserve University, despite UH’s longstanding relationship with the university as its “primaryâ€? affiliate in medical education. Also, not to be outdone by University Hospitals’ recent announcements it would take over EMH Healthcare in Elyria and Parma Community General Hospital, the Clinic swiftly revealed it would expand operations at its relatively new family health center in Avon to include a new inpatient hospital. Thomas Campanella, executive director of the health care MBA program at Baldwin Wallace University, said escalating competition in the market isn’t necessarily a bad thing. “I am still ultimately a believer in competition, so I don’t have an issue with providers, in effect, going into communities and competing against each other,â€? he said. “What I think is needed, though, is just much more transparency from a cost and quality standpoint.â€? â–
BUSINESS HOUR B A conversation with former Congressman Steve LaTourette: The political and policy landscape in Washington, D.C.
P\1<&% FRP ‡
Thursday, August 1, 2013 Noon to 1:00 p.m. EDT – Business Hour
1 Annual Percentage Yield (APY) is accurate as of July 19, 2013 and is subject to change without notice. The interest rate UHPDLQV À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usiness Liquid CD. 2 $ SHQDOW\ PD\ EH LPSRVHG IRU ZLWKGUDZDOV EHIRUH PDWXULW\ 7KH SHQDOW\ ZLOO EH ZDLYHG LI WKH ZLWKGUDZDO LV PDGH DIWHU WKH ÀUVW VL[ GD\V RI WKH DFFRXQW WHUP RU DIWHU WKH ÀUVW VL[ GD\V IROORZLQJ DQ\ SDUWLDO ZLWKGUDZDO 3 &UHGLW FDUGV DUH LVVXHG E\ )LUVW %DQNFDUGŽ D GLYLVLRQ RI )LUVW 1DWLRQDO %DQN RI 2PDKD 4 7UDQV)LUVWŽ LV D WKLUG SDUW\ SURYLGHU RI PHUFKDQW VHUYLFHV 2IIHU PD\ EH ZLWKGUDZQ DW WKH GLVFUHWLRQ RI WKH EDQN DW DQ\ WLPH 7KH EDQN LV QRW UHVSRQVLEOH IRU W\SRJUDSKLFDO HUURUV
McDonald Hopkins, 600 Superior Ave., Suite 2100 Downtown Cleveland RSVP: mcdonaldhopkins.com or call: 216.348.5400 to register.
McDonald Hopkins LLC 600 Superior Ave., East, Suite 2100, Cleveland, OH 44114 • 216.348.5400 Carl J. Grassi, President Shawn M. Riley, Cleveland Managing Member Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach mcdonaldhopkins.com
20130722-NEWS--7-NAT-CCI-CL_--
7/18/2013
3:45 PM
Page 1
JULY 22 - 28, 2013
WWW.CRAINSCLEVELAND.COM
CRAIN’S CLEVELAND BUSINESS
Lending: Eateries often need track record All around Cleveland, eateries driven by both emerging and established restaurateurs are popping up, and while some banks still are leery of lending to those who operate within the higher-risk industry, other institutions are opening up the lending spigot. “In the past, banks in general heard ‘restaurants’ and they ran the other way,” said Adam Berebitsky, managing director at Clevelandbased accounting services firm SS&G. Now, he said, some banks recognize the spate of economic development and associated new
restaurant growth downtown and in Cleveland neighborhoods, and want to be a part of that growth. “Many of Cleveland’s chefowned restaurants have shown they have the cash flow, they’re viable, and they’re here to stay,” said Mr. Berebitsky, a director of SS&G’s restaurant practice group. Shawn Dougherty, vice president of business banking in Northeast Ohio for JPMorgan Chase, which is working with Mr. Deagan, said he prefers to work with chef-driven restaurants over chains. “Local operators tend to be more committed financially and person-
Diebold: ATMs one day may work without cards continued from PAGE 1
A few weeks earlier, Mr. Watson and Jim Block, director of advanced technology at Diebold, gave presentations on “The ATM Reimagined” at ATM Industry Association conferences in London and Montreal. Diebold recently has rolled out a conceptual design that illustrates how the company plans to adapt ATMs to better suit millennials — those consumers born between the early ’80s and mid ’90s. The design takes its cues from today’s smart phones, tablets and other mobile devices, with an intuitive interface that allows users to scroll like they would on a cell phone. The new features cater to two connected and growing demographics: the aforementioned millennials and mobile device users across the globe. The rising popularity of mobile devices is one of the biggest trends driving the future of the ATM, Mr. Watson said. “It really does change people’s behavior,” he said. Millennials, in particular, are a demographic that expects to have mobile applications and clear interfaces in the electronic devices they use. And, Mr. Watson said, they are a very vocal group of consumers with different — and greater — expectations of technology than the generations who came before. “Banks need to treat them a little bit differently,” Mr. Watson said.
Bag the card Diebold has done research of its own with millennials, a group that will make up the majority of the work force by 2025, Mr. Watson said. The company has conducted panels with consumers and taken a close look at outside research on that generation, too. “You see that they are fundamentally different in the way that they value things,” Mr. Watson said. He gave an example, saying one study showed more than 40% of 18to 24-year-olds considered a text message just as meaningful as a phone conversation. In Diebold’s next-generation ATM, the design would enable interaction between mobile devices and the ATM, Mr. Watson said. In the not-too-distant future, visiting an ATM could be a card-free experience. A customer could set up a transaction directly from his or
her smart phone or other mobile device, transmitting that information to the ATM and using a QR code to verify when the consumer arrives at the terminal. The partnership with Paydiant will allow this kind of interaction. According to Diebold’s July 18 announcement, Wintrust Financial Corp., a bank holding company in Rosemont, Ill., will pilot the mobile wallet with Diebold, Paydiant and FIS of Jacksonville, Fla., a provider of banking and payment technologies. Mr. Block said he sees a “rich future” in these self-service banking models.When conducting financial transactions, customers want security, control and convenience, Mr. Block said. Allowing customers to use their mobile devices instead of taking out a card that easily can be scanned by a would-be identity thief fits in with those goals.
Ahead of its time Mr. Watson said the design of the ATM Diebold has been showing to employees and attendees at trade shows pushes the machine to the edge of its limits, but is likely to change as the different concepts it includes move to market. In a message emailed to Crain’s by a Diebold spokesperson, Mr. Watson declined to share other possible features of future ATMs, saying it was too early to do so. Michael Lee, CEO of the ATM Industry Association, said in an email that he believes Diebold will continue to be a “major global innovator” in the ATM business going forward. Mr. Lee also said he sees the ATM “growing in importance” as the banking industry moves toward allowing more alternative transactions at the terminal, such as bill payments and currency conversion. The ATM also has the opportunity to brand itself as more of a self-service hub by aligning with consumers’ mobile devices. Though future ATMs will allow for all sorts of financial transactions, Mr. Watson also sounded confident in the future of physical money. The value and volume of cash circulated globally is actually going up, he said. And he sees ATMs with bidirectional uses, allowing customers to withdraw money and deposit it, as a growing market. “Cash isn’t going away anytime soon,” he said. ■
ally to their concepts,” he said. “Deagan is a great example. If you’re not ready to put your house on the line, you’re probably not a great (loan) candidate to us.”
Finance dance Until recently, serial restaurateur Alan Glazen paid cash to open his concepts, which include his ABC and XYZ taverns, two Erie Island Coffee Co. locations, and the purchase of two buildings totaling $200,000 on Waterloo Road in Cleveland’s Collinwood neighborhood. Mr. Glazen thought pledging 100% personal cash as collateral toward his first commercial real estate loan reflected sufficient commitment, but his personal and company bank, a larger institution, did not agree. “(The bank) stated we are in ‘an unacceptable industry,’” he said. So Mr. Glazen shut all accounts with that institution and moved over to Cleveland-based KeyBank, which approved the recent mortgage, though Mr. Glazen was mum on specifics of that deal. “My experience is that no bank will loan you any money unless you have the cash and/or equity to
secure every cent of the loan,” he said. “In other words, you can only get the money if you already have it.” Michael Symon Restaurants for years was self-financed, but that company’s growth prompted a banking relationship with Akronbased FirstMerit Bank around the time the second B Spot opened during 2011 in Strongsville. Sure, Mr. Symon’s good name helped foster the banking connection, but FirstMerit needed convincing the B Spot growth strategy was sustainable. “(The bank) took a hard look at how we run our business — sales versus cost, debt incurred and how we plan to pay down debt,” said Mr. Symon’s business partner, Doug Petkovic. The restaurant group since then has added four more B Spots (two of which operate seasonally), with plans to open at least three more over the next two years in Pittsburgh, Columbus and Detroit markets. “Now we meet with them every year and discuss our growth plans,” Mr. Petkovic said. “We don’t seek loans piecemeal.” Zack Bruell prefers to work with private investors, though he has worked with Chase Bank to help
finance two restaurants: L’ Albatros in 2008 and Cowell & Hubbard in 2012. He said Chase wouldn’t finance Chinato — which opened in downtown Cleveland in 2010 and was at the time the chef’s fourth restaurant in six years — because of a lack of a track record with the bank. That situation changed with the opening of Cowell & Hubbard. “We have a track record now because our loans are being paid down,” Mr. Bruell said. “It’s a great time to go to banks if you’re bankable because rates are so low.”
The SBA way Banks always have been wary of lending to restaurants because of their high failure rate. When the credit markets froze during the recession, banks further restricted lending to those businesses. More small businesses, however, have been able to qualify for SBA loans since the U.S. Small Business Administration in 2010 raised to $5 million from $2 million the cap on its 7(a) guaranteed loans and fixed asset loans. “A lot of banks are looking at SBA loans” to support local restaurateurs’ growth plans, SS&G’s Mr. Berebitsky said. “They see some of the local operators’ same-store sales increase and expanding into multiunits, so they’re more willing to sit down now with customers who present viable concepts.” ■
The NEO
continued from PAGE 3
7
Dealmaker
This fall, Crain’s Cleveland Business will publish a special editorial feature dedicated to the people and forces driving the region’s dealmaking.
Issue date: September 2 Ad close: August 22 For advertising information, contact Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com
20130722-NEWS--8-NAT-CCI-CL_--
8
7/18/2013
4:47 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JULY 22 - 28, 2013
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Wet and dry
F
unny thing about the weather. It can be pouring in one place and dry as a bone not too far away. The same holds true with government finances. One government body can be awash with funds while others thirst for dollars to deliver the services their constituents rightfully expect. The phenomenon is on display in Ohio, where Gov. John Kasich two weeks ago was able to plug another $966 million into the state’s rainy day fund. The latest deposit brings to nearly $1.5 billion the amount of money that over the last three years has been put into the Budget Stabilization Fund, as it formally is known, by the governor. It’s a noteworthy accomplishment, considering that back in 2010, when Gov. Kasich still was candidate Kasich, incumbent Ted Strickland was struggling to balance a budget battered by the recession. An improving economy that helped revive tax revenues as well as cuts by Gov. Kasich in state aid sent to local governments and school districts eliminated a projected $8 billion deficit and set the stage for budget surpluses going forward. It’s also noteworthy that once the state had enough money for a rainy day, it chose not to restore the dollars it took away from the cities, many of which remain parched for revenue and still wrestle with balancing their own budgets. Instead, the governor and various members of the Republican-controlled Legislature decided to buy votes ahead of their 2014 re-election campaigns by cutting income taxes for individuals and small business owners. The tax cut for the latter group is hard to justify. It ostensibly was made to keep more money in owners’ hands so they could hire more workers or reinvest in their companies. “I favor the small business income tax cut because I think it will spur economic activity,” Ohio Senate President Keith Faber said last month as the Legislature hashed out the next two-year state budget. However, the tax reduction gives most small business owners less than $400 in extra money, which is barely enough to cover a full-week’s pay for a minimum-wage employee. Gov. Kasich took a bow for putting another billion dollars into the rainy day fund. But after the news conference at which the latest contribution to the fund was announced, he wouldn’t take questions. It’s the second time in a month that the governor has pulled a Garbo-esque disappearing act with reporters after a significant media event. The first occasion was the ceremony where he signed the state budget, which contains the tax cuts. Is he afraid he will be asked about why the state continues to stiff local governments? We’re not into soaking the rich, and we know governments don’t create wealth. However, they build the roads and provide the police and fire services on which businesses depend. And they need money to do it. The governor and Legislature in hard times took from local government significant chunks of money they had received for decades. In not restoring it during better times, they have made a big mistake.
FROM THE PUBLISHER
LaTourette takes a club to the club
S
truth, we will.” teve LaTourette was known in his “We” in this case is the Main Street years here as a soft-spoken but Partnership, a group Mr. LaTourette now effective prosecutor and congressheads that is dedicated to supporting man. Lately, freed from the shackles more moderate and responsible Repubof Congress and election-driven decilicans in elected office. To that end, Mr. sions, he’s taking the gloves off. LaTourette and his group were angered Target: radically conservative at the club’s targeting of Rep. Republicans and the groups BRIAN Simpson, one of the House’s they conceive. more moderate Republican In his crosshairs is the so- TUCKER members and a close ally of called “Club for Growth,” a group House Speaker John Boehner. raising money to try to unseat “Members of Congress are moderate Republican office elected by the men and women holders. After the club recently who live in their districts; their said it would oppose longtime loyalty and responsibility is to Idaho Rep. Mike Simpson, Mr. those constituents and not the LaTourette labeled the club a Club for Growth,” Mr. La“cancer” on the party — his Tourette said. “The era of the Club for party. Growth getting a free pass is over. They “The Club for Growth is a cancer on will be held accountable.” the Republican Party (and is a group) I can only imagine how Rep. Boehner that prides itself on supporting right, — a conservative who’s been known to divisive and obstructionist candidates,” work in bipartisan fashion to get things he said. “They are certainly entitled to done in Washington — feels about being support any candidate they want for any elected speaker in an era that has reason they want, but it would be nice if spawned ultra-conservative groups such they told the voters the truth about their as the Tea Party, the Club for Economic organization. Growth and Karl Rove’s Conservative “And if they won’t tell the voters the
Victory Project. Speaker Boehner is a bit like the dog that caught hold of that speeding car’s bumper. Here’s hoping he can hold on, for the sake of our state and our country. ***** IT WAS DISAPPOINTING to read last week that the four eastern suburbs that had contemplated a merger have taken a different turn, namely by agreeing to “study” a shared-services concept. When the leaders of Pepper Pike, Orange, Moreland Hills and Woodmere announced two years ago that they were thinking of creating one city of 13,500 people and 18 square miles, we applauded the move. Since that first announcement, however, the question has been whether the individuals could hang in there under vocal pressure from certain constituents. In this space, I have asked whether elected officials would be inclined to give up their fiefdoms in exchange for a broader good, namely reducing duplicated services in such compact, adjacent and tiny communities. Now it appears we may know the answer. ■
THE BIG ISSUE Is Northeast Ohio doing enough to attract immigrants to the region?
RICK PLANT
CARL BURGESS
MARY SOUTHERN
SARAH LIMEER
North Olmsted
Lakewood
Cleveland
Fairview Park
No, but I wouldn’t be able to tell you why. Maybe there aren’t enough jobs or maybe it’s the climate.
Yes. I feel like they are doing enough but I do wish there was a little more diversity.
Yes, I would say so because we have a lot of immigrants here. I talk to a lot of people from other countries.
No. Are they doing anything at all?
➤➤ Let us know what you think. Vote in our online poll at www.CrainsCleveland.com
20130722-NEWS--9-NAT-CCI-CL_--
7/18/2013
3:44 PM
Page 1
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
9
Biomimicry: Area firms heed call to innovate like Mother Nature continued from PAGE 1
If the concept continues to spread, it could have a dramatic impact on the region’s ability to create products, processes and jobs, according to Mr. Tyrrell, who is best known for founding American Steel & Wire in the 1980s and now is volunteer CEO of Great Lakes Biomimicry. The method works, Mr. Tyrrell said, describing how Japan’s socalled “bullet” train was able to travel faster, use less energy and make less noise after its nose was rebuilt to mimic the beak of a bird Tyrrell that can dive into water without making a splash. Other inventors around the world have created solar panels that mimic leaves, cars frames inspired by the way trees handle structural stress, and radio chips based on the technology in your ears, according to an online TED Talk speech given by biologist and author Janine Benyus. She helped popularize the concept of biomimicry and now is helping Great Lakes Biomimicry. “Nature’s solved every problem that there is out there,” Mr. Tyrrell said.
Joining the flock Mr. Tyrrell isn’t the only Northeast Ohioan with that attitude. Parker Hannifin Corp. of Mayfield Heights has used biomimicry to design products in the past, but now the producer of motion and control technology is working to weave the concept into “what we do every day,” said Peter Buca, vice president of technology and innovation with Parker Hannifin’s fluid connectors group. Great Lakes Biomimicry convinced Parker Hannifin and three other local corporations to donate a total of $400,000 to create four fellowships for University of Akron students studying for a new biomimicry Ph.D. Besides conducting research, the fellows are tasked with teaching the principals of biomimicry to researchers and executives at the four companies: Parker Hannifin, paint maker Sherwin-Williams Co. of
Cleveland, skin care company “By all accounts, everybody thinks GoJo Industries Inc. of Akron and the Northeast Ohio initiative is leaps Ross Environmental Services Inc., a and bounds ahead on this education waste management company in and economic development piece,” Elyria. Mr. Allen said. Because of the program, Parker The path to prosperity Hannifin is working to see whether it Despite Great Lakes Biomimicry’s could create a filtration system inspired by the water spider, which progress, the organization still faces gets air from a bubble it carries some big hurdles. For one, it’s run by around under water. Other ideas are volunteers. The group is working to raise $4 on the table, too, Mr. Buca said. “You start to get ideas for new million so it can become a more products just from the conversa- formal nonprofit with about eight tion,” he said. “It’s just that exciting.” employees and no “six-figure Those corporate fellowships are salaries,” Mr. Tyrrell said. The group just one item on Great Lakes Bio- has no need for a planning grant, he added, citing the progress it already mimicry’s résumé: ■ Earlier this month, the group has made. “We’ve proved that we’re capable secured $100,000 to support two more Ph.D students who for at least of doing this,” he said. After four years, the organization one year will spend some of their time teaching biomimicry principals aims to support itself by licensing to local elementary school students out its economic development methods to simiand their teachers. “Nature doesn’t use those lar groups and The GAR Founby working with dation in Akron weird toxic chemicals local biologists provided $50,000 that we’ve been using to provide biofor a fellow who since the Industrial mimicry-related will work with the Revolution.” consulting services, National Invensaid Don Knechttors Hall of Fame – Douglas Paige, associate ges, who is vice School in Akron, professor of industrial design, president and diand the Nord Cleveland Institute of Art rector of economFamily Foundation of Amherst provided the same ic development for Great Lakes Bioamount for a fellow who will work mimicry. The licensing tactic previously with Lake Ridge Academy in North has been used by GLIDE, a business Ridgeville. ■ Multiple local colleges — such incubator at Lorain County Commuas the Cleveland Institute of Art, nity College, according to Mr. Baldwin Wallace University and Knechtges, a longtime local execuLorain County Community College tive who recently served as GLIDE’s — are adding biomimicry elements managing director. Great Lakes Biomimicry has a long to more of their classes. Great Lakes Biomimicry has been working with way to go to get “from an inspiring idea to a monetized product,” said each of those schools. ■ Great Lakes Biomimicry has Mr. Allen, of Biomimicry 3.8. However, he said he has been formed a partnership with the most well-known biomimicry organization in the United States, Biomimicry 3.8, which Ms. Benyus helped start. The Montana-based nonprofit is providing the local group with biomimicry expertise and content used to teach the concept in schools. Biomimicry 3.8 eventually plans to help Great Lakes Biomimicry license its economic development system to other organizations that have relationships with Biomimicry 3.8, CEO Chris Allen said.
impressed by how many allies the local group has amassed over the past few years. “The level of stakeholder engagement is unprecedented,” he said.
Talk about staying power Among those allies is Douglas Paige, associate professor of industrial design at the Cleveland Institute of Art, which provides some of the courses that count toward the University of Akron’s biomimicry Ph.D. Now the two schools have formed a committee to explore the idea of offering a joint master’s
degree in design based on biomimicry. Mr. Paige described the concept as “a new way of thinking” that could help companies develop products that are more sustainable. “Nature doesn’t use those weird toxic chemicals that we’ve been using since the Industrial Revolution,” he said. Plus, Mother Nature’s inventions have “been proven through evolution for millions of years,” said Mr. Buca, of Parker Hannifin. What about the inventions that didn’t work? “They’re gone,” he said. ■
S
D L O
Colliers International is pleased to have facilitated the sale of the 55,775 square foot Discount Drug Mart Center in Westlake. Ryan Fisher Ň ryan.fisher@colliers.com 216.239.5060 Ň www.colliers.com/ohio
DEVELOPERS’ SHOWCASE
Interest Rates Are Rising Lock your rate with CBS today! ŽŶǀĞŶƟŽŶĂů ĂŶĚ ^ business ĮŶĂŶĐŝŶŐ ĂǀĂŝůĂďůĞ ĨƌŽŵ $250,000 - $7,500,000: Ͳ ŽŵŵĞƌĐŝĂl Real Estate Ͳ ƵƐŝŶĞƐƐ ĐƋƵŝƐŝƟŽŶ Ͳ ƋƵŝƉŵĞŶƚ Ͳ ŽŶƐƚƌƵĐƟŽŶ Presented by
Flats East Bank %YKYWX PM – 7PM
Call Jonathan to save LJŽƵƌƐĞůĨ ƟŵĞ ĂŶĚ money! WƌŽǀŝĚŝŶŐ ŽŵŵĞƌĐŝĂů >ŽĂŶ &ŝŶĂŶĐŝŶŐ ŝŶ WĂƌƚŶĞƌƐŚŝƉ ǁŝƚŚ ƌĞĂ ƌĞĚŝƚ hŶŝŽŶƐ ^D
Jonathan Mokri
440-526-8700 jmokri@cbscuso.com
www.cbscuso.com
For more information: www.naiopnorthernohio.com
20130722-NEWS--10-NAT-CCI-CL_--
10
7/18/2013
3:48 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
GOING PLACES
JULY 22 - 28, 2013
TECHNOLOGY STARK & KNOLL: Kathleen A. Hahner to attorney.
JOB CHANGES EDUCATION KENT STATE UNIVERSITY: Yvonne Delgado to corporate and foundation relations officer.
FINANCIAL SERVICE
MANUFACTURING CLIFFS NATURAL RESOURCES INC.: Raga Elim to vice president, global corporate and government affairs.
BROWN GIBBONS LANG & CO.: Brian D. Dora and Mark J. Nadaud to senior analysts; Connor T. Greenlees and Maxwell A. Halsted to analysts.
MARKETING
THORNHILL FINANCIAL INC.: Michael J. Miller to audit partner; James L. Kilgore to tax manager; Gordon C. Short to senior manager; Tara E. Szerpicki and Steven A. Manos to audit staff; Oana C. Stef and Ashley A. Davis to tax staff.
NONPROFIT
HILEMAN GROUP: Heidi Rakow to front-end developer; Michelle Law to inbound marketing analyst.
HEALTH CARE
SOCIETY OF ST. VINCENT DE PAUL, DIOCESE OF CLEVELAND: Jerry Zurowski to manager, Culinary Apprentice Training Program. THE UP SIDE OF DOWNS, NORTHEAST OHIO: Toni Mullee to executive director.
AKRON GENERAL PARTNERS PHYSICIAN GROUP: Osei-Tutu Owusu, M.D. (internal medicine and medical oncology) and Shyam Bhakta, M.D. (cardiovascular disease and interventional cardiology) to medical staff.
CBRE INC.: Mike Schumaker to senior project manager.
LEGAL
DIRECT RECRUITERS INC.: Justin Doyle to project coordinator, automation practice.
BENESCH: Madeline McGrane and Christian Moratschek to associates. MAZANEC, RASKIN & RYDER CO. LPA: Neil S. Sarkar to partner.
REAL ESTATE
STAFFING
EXPERIS: Josh Healan to manager, business development Experis Engineering.
ON THE WEB
Story from www.CrainsCleveland.com
ADATASOL: Anna Tomko to junior developer. MCPC INC.: Devon Campbell to director of sales; Jason Schmock to continuous service engineer; Joe Sekura to CTO-Microsoft practice; John Fitzgerald to desktop support technician; Tina Starkey to operations service center manager.
Delgado
Owusu
Bhakta
BOARDS ASSOCIATION FOR CORPORATE GROWTH CLEVELAND: Karen L. Tuleta (Morgenthaler Private Equity) to president; Murad A. Beg to president-elect; Brad Kostka to executive vice president, brand; John Saada Jr. to executive vice president, programming and innovation; Joseph F. Maslowski to executive vice president, resources; Joseph C. Adams to treasurer; M. Joan McCarthy to secretary; Sean McCauley to immediate past president. ALZHEIMER’S ASSOCIATION CLEVELAND: Steve Osgood (Square Foot Cos.) to president; Marsha Spitz to secretary. CLEVELAND METROPOLITAN BAR ASSOCIATION: Jonathan Leiken (Jones Day) to president; Bruce G. Hearey to president-elect; Anne Owings Ford to vice president; Darrell A. Clay to vice president, membership; Sonali B. Wilson to
McGrane
Moratschek Hahner
vice president, diversity and inclusion.
AWARDS CLEVELAND FOUNDATION: Art J. Falco (PlayhouseSquare) received the 2013 Homer C. Wadsworth Award. CLEVELAND METROPOLITAN BAR ASSOCIATION: John H. Lawson received the 2013 Honorable William K. Thomas Professionalism Award; Janice Edgehouse Rieth (Schneider, Smeltz, Ranney & LaFond PLL) received the 2013 Justice for All Volunteer of the Year Award; Lori Urogdy Eiler (East Cleveland Shaw High School) received the 2013 Liberty Bell Award; Kimberly F. Bixenstine (University Hospitals) received the 2013 President’s Award. PRACTICE MANAGEMENT INSTITUTE: Dennis Nordquest (Akron General) received the 2012-2013 Outstanding National Host Client Award.
RETIREMENT CLIFFS NATURAL RESOURCES INC.: Dana Byrne, after 34 years of service, effective July 1.
Send information for Going Places to dhillyer@crain.com.
&R[ %XVLQHVV KHOSHG /LEHUW\ 0DUNHW NHHS PRUH WKDQ WKHLU EUHDG ORFDO .LHUVWHQ 7UDLQD FR RZQHU RI WKH /LEHUW\ 0DUNHW SUHIHUV WR GR EXVLQHVV ZLWK ORFDO VXSSOLHUVĹ?WKDWĹ‘V ZK\ VKH WUXVWV &R[ %XVLQHVV IRU IHDWXUH ULFK SKRQH VHUYLFH :LWK DZDUG ZLQQLQJ ORFDO VXSSRUW ZHĹ‘UH DYDLODEOH LI VKH HYHU QHHGV LW 7KLV ZD\ VKH FDQ JHW EDFN WR GRLQJ ZKDW VKH GRHV EHVW PDNLQJ WKH PRVW GHOLFLRXV ZRRG Ĺľ UHG SL]]DV LQ WRZQ &DOO WRGD\ DQG VHH KRZ \RXU EXVLQHVV LV RXU EXVLQHVV
ASK ABOUT NEXT-DAY PROFESSIONAL INSTALLATION
%XVLQHVV 3KRQH
35
$
/mo*
Ĺ˜ (YHQLQJ DQG 6DWXUGD\ LQVWDOODWLRQ DSSRLQWPHQWV DYDLODEOH Ĺ˜ 3ULFH JXDUDQWHHG IRU \HDUV Ĺ˜ ,QFOXGHV XQOLPLWHG QDWLRQZLGH ORQJ GLVWDQFH
coxbusiness.com | 866.791.2688
*Offer ends 9/30/13. Available to new commercial subscribers of Cox Business VoiceManagerSM Anywhere. Prices based on 2-year service term. Equipment may be required. Prices exclude equipment, installation, taxes, and fees, unless indicated. Phone modem provided by Cox, requires electricity, and has battery backup. Access to E911 may not be available during extended power outage. Next-day installations are subject to availability; eligibility restrictions may apply. Other restrictions apply. Š 2013 Cox Communications, Inc. All rights reserved.
Makeover begins on the former Parmatown Mall Phillips Edison Co., the Cincinnati-based owner of the former Parmatown Mall, said it has launched the initial phase of repositioning the complex as The Shoppes at Parma. So far, the work consists of redoing the mall and open-air shopping center property with new parking lots, new sidewalks, lighting and other infrastructure. Roy Williams, senior vice president of Philips Edison’s Strategic Investment Funds, said in a statement, “Before we can begin on the major phases of the project, we must lay the groundwork on this important first step. Construction of new buildings and major renovations will come at a later date.� However, this initial work will allow the shopping center owner to add several freestanding restaurants or stores. Mr. Williams emphasized this is only the beginning of the remaking of the 1 million-squarefoot complex. “Our plan is to go far beyond a basic facelift and redevelopment for this longstanding regional shopping center,� he said. “Besides bringing in additional shops, restaurants and services, we will create a more attractive, pedestrian-friendly, family-oriented environment that will act as a town center for Parma residents and surrounding communities.� — Stan Bullard
20130722-NEWS--11-NAT-CCI-CL_--
7/18/2013
4:05 PM
Page 1
SPECIAL REPORT
CLEVELAND: THE FUTURE IS NOW
W
ithout any changes, the city of Cleveland could continue to shrink. What we do now can halt that decline and reverse the trend.
This section analyzes how the city of Cleveland fits into the regional discussion and the importance of maintaining a strong urban core. From creating more attractive neighborhoods to assessing and combating the impact of flight to the suburbs, efforts are in motion to make the city a better place to work, live and play for the next generation — the Cleveland of 2030.
The image above was photographed by Judy Rawson, former Shaker Heights mayor and contributor to Crain’s CLE 2030 section. More of her photos can be found at www.judyshakerrawsonphotos.com.
City’s long-term vitality depends upon bolstering population and engaging tomorrow’s leaders By TIMOTHY MAGAW tmagaw@crain.com
I
t’s no secret the rapid infusion of young professionals into Cleveland’s urban core has helped lift downtown and a handful of the city’s once-forgotten neighborhoods. Many of the nowurbanized 20- and 30somethings, for one, longed for something with more character — maybe a little more rust — than the outer-ring suburbs where many were raised. Now that they’re here and, in many cases, active residents in their communities, the challenge will be keeping them in the city
limits over the long-term. At the same time, city leaders will be tasked with maintaining the momentum that in recent years has drawn a horde of young professionals to the city. Still, it won’t always be about plucking folks from another part of the region, and planting them into Cleveland’s urban strongholds like downtown or the Ohio City, Detroit Shoreway or Tremont neighborhoods. The real challenge, one with which Cleveland has no doubt struggled in the past, will be bringing new bodies into the city’s fold. See FUTURE Page 16
ONLINE
INSIDE ■ Three Cleveland neighborhoods that represent area reinvestment efforts 12-13
The conversation into Cleveland’s future continues with extensive online coverage, including:
■ Commentary on the importance of downtowns and their influence on regional progression 14-15
■ Photo galleries highlighting redevelopment efforts in Detroit Shoreway, North Collinwood and Slavic Village ■ A look back that sheds light on how things
■ A look at current efforts, future plans to move city forward 17 ■ Fighting flight and abandonment 18
can both change and remain the same. See some headlines and photos from Crain’s archives ■ Video interviews with young professionals on how they envision Cleveland’s future ■ Ongoing reader discussion on Crain’s Cleveland Business’ LinkedIn page
www.CrainsCleveland.com/cle2030
20130722-NEWS--12-NAT-CCI-CL_--
12
7/18/2013
4:06 PM
Page 1
SPECIAL REPORT
CRAIN’S CLEVELAND BUSINESS
JULY 22 - 28, 2013
Efforts turn to remaking neighborhoods
F
or many who live in Northeast Ohio’s outer suburban sprawl, when they hear about Cleveland’s population loss of about 100,000 since 1990, they still think of “white flight” as the major reason. While that may have been true many years ago, the loss of population now is more likely to be “poor flight.” According to a study released this spring by the Brookings Institution, Northeast Ohio, like most metro areas in the country, has seen a huge increase in suburban poverty. From 2000 to 2011, those living below the poverty line increased by 7% in Cleveland, while those living below the poverty line in the suburbs increased by 85%. For Tom Bier, a professor of urban studies at Cleveland State University, the poverty numbers in the suburbs are not all that surprising. “The poor are like anyone else. They want to live in a better place and have better schools for their kids,” he said. “The housing market in Northeast Ohio has been flat or declining in recent years, and they find they can live in Euclid or Cleveland Heights or Bedford with the same costs and subsidies and they do that.” But what this trend has done in Cleveland proper is create some housing market
ON THE WEB Photos can be viewed by scanning the quick response codes — located within each of the following neighborhood stories — with your smart phone, or visit www.CrainsCleveland.com/cle2030 to view neighborhood photo galleries.
numbers that show the real issue the city has to deal with. Since 1990, the city has lost 20% of its population, but has only lost 7% of its housing units. And a good number of those housing units are in poor shape. The city of Cleveland proper has an excess of 44,650 housing units. That averages out to about 3,000 per ward (accounting for 15 wards as of January 2014). The median year that a home was built in Cleveland is 1925. But the market often corrects itself, and it is possible to see that happening in some parts of Cleveland. Mike DeCesare, president of Case Development LLC, is building 14 townhomes on Bridge Avenue, halfway between Ohio City and Gordon Square. Mr. DeCesare bought six parcels of land for the project, which is called Waverly Station. He since has demolished homes that were in poor condition and has sold all 14
units, priced between $179,000 and $299,000. Nine units, on which construction will be started in September, will be going on sale at the end of this month. Mr. DeCesare’s clientele, not surprisingly, are white-collar workers in their 20s and 30s and empty-nester baby boomers. “I’m just finding that the people we’re selling to want to be part of a neighborhood, and they didn’t feel they were part of a neighborhood in the suburbs,” said Mr. DeCesare, who built single family homes in the western suburbs for 35 years. “They are also seeing this is a good investment for them.” How so? Cleveland’s 15-year tax abatement for new homes drops the property taxes on a $150,000 home from about $3,000 a year to about $600, a savings of about $36,000 over the life of the abatement. Mr. DeCesare also is offering to knock $5,000 off the purchase price if the buyer performs 40 hours of community service (community garden work, tutoring, church community outreach programs). Of course, any success in urban redevelopment is contingent on the success of an area’s public schools. Cleveland schools historically have ranked near the bottom of achievement indicators, and for the 2011-2012 year, the
district ranked 609 out of 610 in the state. But voters did approve a 15-mill levy last year — which could add about $65 million annually to the district budget — and the plan is to set up incentives for individual school improvements and give parents more choice in finding schools for their children. Still, officials with the school district also point out recent improvements, such as increasing graduation rates and improvements in school ratings. Planners also point out the options of private and charter schools, specifically Catholic schools on the near West Side. But whether the limited number of private school options and possible public school improvements keep the new millennials in the city once they have children is a big question that has no clear answer. Also unclear is whether it is better for the region if Cleveland siphons off the young market and baby boomers from the suburbs. “The region will not survive without a strong structural core,” said Joel Ratner, president and CEO of Neighborhood Progress Inc., a citywide community development nonprofit. “And if Cleveland is strong, the housing market in the suburbs will be strong as well.” — Daniel J. McGraw
NORTH COLLINWOOD DETROIT SHOREWAY
MARC GOLUB PHOTOS
T
he development of Gordon Square Arts District was a long time coming. Twenty years ago, there were no theaters, few restaurants and certainly no townhomes in the Battery Park area near the lakefront. But in many ways, the development of the area started with some old buildings at the intersection of West 65th Street and Detroit Avenue and rippled out. And that rippling effect is the plan for the area just south of Gordon Square. The area used to be three separate neighborhoods — Stockyard, Clark-Fulton and Brooklyn Centre — but the community development corporations in those areas started to dissolve about five years ago, and the Detroit Shoreway Community Development Organization — which oversees Gordon Square — integrated the neighborhoods into its planning sphere. The three neighborhoods are bound by Interstate 90 to the north, I-71 to the south, West 65th Street to the west and West 25th Street to the east. The population of that area is about 25,000, with nearly half being of Hispanic descent (mostly Puerto Rican). The area has the largest Hispanic population of any area in the state of Ohio. “What we have been able to do is coordinate vacant properties to be
MORE PHOTOS Take a journey through the development that is spilling beyond West 65th Street and Detroit.
used for yard expansions or community gardens and work with our police department to make the area safer for our residents,” said Megan Meister, the program director for the Stockyard, Clark-Fulton & Brooklyn Centre Community Development Office. “Our next phase will be to use the distinctive nature of this part of Cleveland to its advantage.” The major anchor will be to turn the intersection of West 25th Street and Clark Avenue into a hub that centers on Hispanic cultural organizations and retail, including theater and restaurants. At this point, the project is dubbed “La Villa Hispana.” The thinking goes like this: Cleveland has no true Hispanic neighborhood center like other ethnic groups; about 5,000 people work a few blocks south at MetroHealth Medical Center, where a $500 million redo is planned for the 38acre campus; Ohio City and Gordon Square are nearby; and the Cleve-
land Metroparks Zoo is just to the south. If the West 25th -Clark intersection can be revived, planners think they can take advantage of the rippling effect of nearby successes. Of course, it is difficult to see that now. Retail on the southern portion of West 25th is full of bars, laundromats and a plasma-buying service — a stark contrast to the bustling hub that has formed in recent years around the West Side Market to the north. And Seymour Avenue, just a few blocks north of West 25th and Clark, became famous the world over this year for hostages being held in a house for a decade. But for Jeff Ramsey, executive director of the Detroit Shoreway Community Development Organization, the similarities between Gordon Square and the future La Villa Hispana are strikingly similar. “In the 1990s, we had buildings about to be torn down, a poverty rate at about 40%, and no one thought anyone might move into that neighborhood and watch a movie or eat at a restaurant,” Mr. Ramsey said. “But we’re in this for the long haul. And we think some of the elements are in place to make this work, because the market is now there.” — Daniel J. McGraw
A
bout four times each summer, Beachland Park on Cleveland’s East Side holds summer concerts with the beautiful backdrop of the sun setting on Lake Erie. The park, near East 185th Street and Lakeshore Boulevard, is private; homeowners on three streets that dead end at the lake pay annual dues for membership and many also contribute to pay for the bands. The concerts have been going on for 14 years now and are free to the public, but not publicized. “We have felt that this is a wonderful space here in the city of Cleveland, and we thought the park wasn’t used as much as it could be,” said Jim Grove, a Cleveland attorney and organizer of the concerts. Many showing up to the concerts at Beachland Park for the first time have the same reaction: “Are we in the city of Cleveland?” one woman asked at the June show this summer. For North Collinwood, being part of Cleveland and the eastern outpost of the city has presented its share of challenges in recent years. The Euclid Beach amusement park and the Collinwood rail yards are long gone; and the poverty of the east side has pushed its way in. In 2000, there were about 900 vacant housing units, and that number ballooned to up to more than 1,600 by 2010. Between 2000-2010, the population dropped by about 15% and
MORE PHOTOS View more images of the revitalization efforts taking place around this East Side neighborhood.
about 350 housing units were demolished. The focus on redevelopment has centered on the Waterloo Arts District, a very short retail strip that sits right along I-90. The plan is to develop music and arts retail, and to use the nearby older housing stock as an artists colony partially subsidized with public and private grants. There also is hope that the changeover in management of the three parks along the lakefront — Euclid Beach, Villa Angela and Wildwood — from the state to the Cleveland Metroparks will clean them up. Cleveland City Councilman Mike Polensek said the Waterloo development near I-90 and the park improvements along the lake will have a ripple effect that will eventually improve economically disadvantaged areas between the two. There are a lot of big “ifs” in that scenario. Lakeshore Boulevard, the main east-west thoroughfare, has little retail and is now mostly three-story apartment buildings with a high
20130722-NEWS--13-NAT-CCI-CL_--
7/18/2013
4:08 PM
Page 1
SPECIAL REPORT
JULY 22 - 28, 2013
SLAVIC VILLAGE
MORE PHOTOS
C
View the progress this community has made in rehabbing its housing.
leveland Councilman Anthony Brancatelli doesn’t mince any words when he talks about the neighborhood where he grew up. He knows Slavic Village very well: It was where his grandparents settled in the early 1900s, where he graduated from high school and where he ran Slavic Village Development for about 15 years. “Slavic Village was an ethnic ghetto,” he said. “It was a neighborhood for immigrants to live close to the steel mills, where they did lowskill, back-breaking labor and some of them lived in 800-square-foot shacks. But it was home. And that’s why it still has a special place in a lot of people’s hearts.” As well as being home to about 73,000 people 60 years ago (20,000 now), Slavic Village also is known as being home to the start of the national foreclosure housing mess. In 2007, when the nation first started to notice foreclosures growing in huge numbers, ZIP code 44105 had more foreclosures than any other ZIP code in the nation (783). Journalists and urban planners have since documented all the
percentage of Section 8 tenants. Likewise, East 185th Street, once the major business center of the neighborhood and home to ethnic bars, meat markets and bakeries, is mostly thrift stores and hair salons. Joseph Compoli, an attorney whose office is on East 185th Street and former president of the street’s merchant association (now disbanded), is skeptical. “If East 185th St. continues to decline, this neighborhood will keep declining as well,” Mr. Compoli said. “I hope Waterloo succeeds, but they are going to need about a thousand artists to move into North Collinwood to make it work. Aren’t other parts of the city trying to do that as well?” — Daniel J. McGraw
mortgage fraud, land flipping, and government ignorance that went on in Slavic Village in those years. Some things have changed, some have not. Mr. Brancatelli and others within the city’s planning community think Slavic Village still has too much housing for its current population, and that a combination of tear-downs of dilapidated homes, rehabs of ones worth saving and new housing construction are all needed to right the ship. Two projects are doing that, and
they are seen as a bellwether of how future projects might do. Third Federal Savings & Loan, which started in Slavic Village 75 years ago and still has its headquarters there, is partnering with Zaremba Homes to build a 95home development across the street from its headquarters. The Trailside Slavic Village homes will be single-family and townhouse design and will run between $126,000 and $132,000. “Third Federal has been wooed by suburbs to relocate for many years,” said spokeswoman Jennifer Rosa, “but we have always thought Slavic Village is a great location for us and we believe enough in this community to invest in it.” The other project is a public/private partnership between Forest City Enterprises Inc. and Safeguard Properties, a Valley View company
CRAIN’S CLEVELAND BUSINESS 13 that maintains foreclosed properties for banks. Nonprofits Neighborhood Progress Inc. and Slavic Village Development also will have small stakes in the entity, which is called Slavic Village Recovery LLC. The business plan will be to use data from the nonprofits to identify homes that can be acquired for free or for very little money, rehab them for about $40,000 to $50,000 and then sell for about $60,000. Slavic Village Recovery LLC hopes to do about 50 homes this year, and if that works out, perhaps hundreds more. No public money will be used. “What we are seeing now,” Mr. Brancatelli said, “is that a lot of potential younger homebuyers see Slavic Village as one of those areas that is very diverse and in a great location. And that’s how things have changed. A lot of the bad loans
If your business needs a forklift, you need a loan from US. U.S. Bank works hard to tailor the right solutions for your business. With the help of a trusted U.S. Bank Business Banking specialist, you can manage your cash flow, payments, and loans for future growth. Straight business talk that speaks to your business, so more business owners like you can get what they need to move forward.
and property flipping was based on race baiting. But more and more we’re seeing racial diversity as a positive.” — Daniel J. McGraw
RATES AS LOW AS
2.49
% APR*
QUICK LOAN
Call Jerry Archambault Business Banking 216.623.5975
branch
usbank.com/smallbusiness
*Applications subject to credit approval. The 2.49% rate applies to new or used vehicles & equipment loans up to 80% LTV and terms up to 36 months for credit qualified applicants. Disclosed rate reflects 0.50% discount based on automatic monthly payments from a U.S. Bank Business Checking account. Standard fees apply. Advertised rate is as of June 1, 2013 and subject UP change without notice. Some restrictions may apply. Deposit products offered by U.S. Bank National Association. Member FDIC, ©2013 U.S. Bank
20130722-NEWS--14-NAT-CCI-CL_--
14
7/18/2013
4:18 PM
Page 1
SPECIAL REPORT
CRAIN’S CLEVELAND BUSINESS
JULY 22 - 28, 2013
IF THE CENTER DOES NOT HOLD ...
Regional progress begins with urban investments Judy Rawson, trained as a lawyer, served as member of council and then mayor of Shaker Heights from 1991-2007. She now works as a photographer.
A LOOK BACK A look through the pages and headlines of Crain’s Cleveland Business from 1996 is instructive in providing a snapshot of where we are — and where we might be going — after a generation of development. Scan the above QR code to peruse coverage — from the convention center to the lakefront’s place in the city’s economy, or go to www. CrainsCleveland.com/cle2030.
By JUDY RAWSON
R
ecently, hundreds of participants from all over Greater Cleveland pulled a 10-ton truck through eight Cleveland neighborhoods to celebrate the value of shared work. Fun idea. Is it just art, or does this matter? Could a similar effort pull Greater Cleveland onto a smarter path for economic growth? And should suburbs do part of the “pulling� to benefit Cleveland? The research is clear. As a study by CEOs for Cities concluded: “Strong urban cores attract and develop talent, make businesses more productive, foster creativity and innovation, are greener and more sustainable and provide more opportunities for all of their residents.� So we can succeed. And Cleveland proper is at the heart of the effort. Consider a few facts: ■Trained college graduates flock to places with a cutting-edge reputation, density, an active vibe and a nightlife. Suburbs come much later, after the kids arrive. ■No metro area can create a muscular economic engine if the heart is on life support. Detroit is battling bankruptcy largely because
The Global Center for Health Innovation will open in October. FILE PHOTO/ JASON MILLER
the downtown city collapsed. Grosse Pointe will suffer, along with every other suburb. â– According to a report from the Brookings Institution and the Greater Ohio Policy Center, the next economy will be metropolitan-led, with winners being from those metropolitan regions that link human capital, innovative activity and infrastructure to interesting, livable places that attract new market activity. The city of Cleveland is richer than we think in terms of three of those factors. Lots of manufacturing innovation is occurring in sectors such as auto, aerospace, medical devices, advanced energy and bioscience. We have renowned medical, cultural and educational magnets, soon to be linked by the Global Center for Health Innova-
MBA program options that work for you.
Looking to get your MBA? Ursuline offers several MBA Program options for students interested in pursuing graduate studies in business: an Evening Master’s of Business Administration Program, a weekend Executive Master’s of Business Administration Program, and an Online Master’s of Business Administration Program.
tion. Neighborhoods in the city are full of interesting places and wonderful restaurants. But, there are the two terrible facts that could doom us. ■First, we’re not doing enough to develop local human capital needed for those innovative jobs of the future. So Cleveland schools matter to all of us. ■Second, we are wasting our precious tax dollars if we keep building new roads, sewers, and schools and abandoning what we already have. “Fix it First� as a regional motto would save land, perfectly usable infrastructure and future tax dollars. The Northeast Ohio Sustainable Communities Consortium, headed by Hunter Morrison, has run fiscal projections that are dire: If we don’t change our habits, then by 2040 local governments in Northeast Ohio will need to spend 20% more than what they take in just to support current spending patterns! So what are the lessons? ■One: We live in a metropolitan region and can only thrive if we thrive together. Think of Detroit. Then think of Boston or Portland. ■Two: We must start living smarter, or face a choice between fiscal death, draconian cuts in service levels or ever-higher taxes. ■Three: Cleveland proper should indeed be the home to major eco-
nomic development projects. Cleveland has the land, the existing infrastructure connections and the density for projects of scale that will permit a long-term difference for all of us. â– Four: This is not a zero-sum game. Suburbs also need economic development. Under the new, $100 million county fund for economic development, we need a unified plan and a fair formula for allocating funds to spur new projects. That formula should give greater — but not exclusive — weight to urban projects of scale that can most effectively “move the needle.â€? The new regional economic development fund must also capture some return on each investment: If the county fund invests $10 million in a new project in City A, then a fair share of the new tax revenues generated by that project should return back into the regional economic development fund for the next project (in the next city). We’re all in this together. â– Five: We, as voters, should support those courageous political leaders who articulate and then implement a change strategy for shared prosperity. Honestly, this stuff is not easy. Greater Cleveland can be a showcase. But success will require political will, a long-range view and courage. We need to start immediately. â–
Strategic Leadership CertiďŹ cate Program $W &X\DKRJD 9DOOH\ &DUHHU &HQWHU
Classes begin Monday, Aug. 26 2QH HYHQLQJ D ZHHN IRU PRQWKV
ursuline.edu/admission/graduate 440 646 8119
)RU PRUH LQIRUPDWLRQ FRQWDFW &ROOHHQ 6LPRQ DW ZZZ WUL F HGX VWUDWHJLFOHDGHUVKLS
%UHFNVYLOOH 5RDG %UHFNVYLOOH 2KLR
20130722-NEWS--15-NAT-CCI-CL_--
7/19/2013
11:12 AM
Page 1
SPECIAL REPORT
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS 15
DO OUR DOWNTOWNS MATTER?
Northeast Ohio’s vitality depends upon cities’ reinvigoration Hunter Morrison is executive director of the Northeast Ohio Sustainable Communities Consortium, a regional collaboration developing a vision and framework for a 12-county region in Northeast Ohio. The framework will be completed this year and will link economic development strategies with housing, land use, transportation and infrastructure investments. The consortium will hold community open houses July 29 to Aug. 7, and also has an online planning tool Imagine MYNEO. Find out more at VibrantNEO.org.
downtowns and university districts and the compact, walkable “traditional” neighborhoods. Downtown Cleveland’s rental housing market is booming. New apartments and retail serves university communities in Akron, Cleveland and Youngstown while artists and young professionals find new opportunities in downtown Canton and Ravenna. Across Northeast Ohio, we come to our downtowns for their symphonies, theaters, festivals and sporting events. Like Portland, we come to our cities in search of a better life. A key to our region’s vitality will
be found in the rediscovery of our downtowns. Once again the vital cores of our communities, they draw the talent, energy and entrepreneurial spirit that our region needs to prosper in the 21st century. Strengthening our downtowns with additional compact, mixeduse development; linking them once again to each other with bike trails, commuter rail and express bus; and leveraging their vitality to support the neighborhoods that surround them will be an essential component of our region’s effort to become more vibrant, resilient and sustainable. ■
WIKIMEDIA COMMONS
Aging industrial cities like Youngstown are a dichotomy of decline and revival.
By HUNTER MORRISON
F
or a long time I thought Bob Dylan had it right — about cities as well as people — when he sang that verse of “It’s Alright, Ma (I’m Only Bleeding)”: “… He not busy being born is busy dying.” Dylan offers a simple either/or proposition that easily explains the trajectory of cities: You are either Detroit (the dying city) or Portland (the vibrant city). But, what if you are both? That’s the story of Northeast Ohio and its seven legacy industrial cities — Cleveland, Akron, Canton, Youngstown, Warren, Lorain and Elyria. Each has lost population, jobs and vitality since the 1960s, the last decade before whole communities left their old neighborhoods for the suburbs, traveling the new freeways in pursuit of their American dream. Come with me to downtown Youngstown, the center of one America’s most rapidly depopulating cities, on a late spring Saturday night. It’s all happening on Federal Street in the heart of downtown. East Federal Street has been taken over by Slavic Fest, where Harmonia, down from Cleveland, plays exuberant folk and gypsy music to a packed crowd. A short walk across the central square and we are on West Federal and Phelps, just down the hill from the Youngstown State campus. Outside Roberto’s Restaurante, Steve Fazzini belts out Sinatra to the crowded sidewalk cafes that line the street. Across the street at the Lemon Grove, Howard Howe’s Point 5 Band plays a repertoire that ranges from Motown to Miles to a cool, diverse and appreciative house. A normal summer night full of life and vitality in a city that is busy dying. How can that be? How can a city be at the same time “busy being born” and “busy dying”? That’s what’s happening … not just in Youngstown but in communities throughout our region. On the one hand our region has lost population and jobs and has for decades lagged behind the rest of the nation in both. While the loss has fallen most heavily on our legacy industrial cities and the suburban communities that surround them, the impact is felt throughout the region. Since 1970, we have developed more land with roads, and sewers and water lines but have fewer people to pay the cost of maintaining it. Like Detroit, we abandon our cities in search of a better life. On the other hand, we see signs of vitality in our region’s historic
Let’s work together to bring more
meetings to Cleveland.
W
ith $2 billion in visitorrelated infrastructure development,
Cleveland is becoming a dynamic meeting destination. Joe Pulizzi, Founder of Content Marketing Institute, will showcase Cleveland by bringing his company’s 2013 national meeting home. And, Positively Cleveland is here to help. Whether you’re a professional who has a hand in your
“When you meet in Cleveland, it’s special.” - Joe Pulizzi
organization’s meeting planning or you’re simply a resident full of civic pride, Positively Cleveland can support you – and even reward you – for bringing a meeting home to Cleveland. Visit ClevelandChampions.com to learn more.
20130722-NEWS--16-NAT-CCI-CL_--
16
7/19/2013
12:04 PM
Page 1
SPECIAL REPORT
CRAIN’S CLEVELAND BUSINESS
Future: Sense of community key continued from PAGE 11
“It’s one thing to just shift population from one part of town to another,” said Michael Fleming, executive director of the St. Clair Superior Development Corp. “At the end of the day, we need to increase population. I don’t want it to be robbing Peter to pay Paul.” Young leaders like Mr. Fleming aren’t short on ideas of how to grow the city’s numbers. Mr. Fleming — a native Clevelander who moved back to the city in 2004 after stints in Boston, Miami and Madrid, Spain — suggests one way is to foster an environment welcoming of immigrants.
VIDEO COMMENTARY Scan the QR code to view more online interviews with young professionals who offer their thoughts on Cleveland’s future. Mr. Fleming and others also speak of those smaller quality of life issues — more green spaces, grocery stores and other amenities — that will make Cleveland’s urban areas more attractive to individuals beyond their barhopping, post-college years.
JULY 22 - 28, 2013
JOIN THE ONLINE CONVERSATION Log on to www.LinkedIn.com and visit the Crain’s Cleveland Business group to interact with others on Cleveland’s future.
After all, a thriving city is based on more than a sprawling convention center or new hotels, they say. It’s about creating a sense of community. “The existence of a Marriott doesn’t make a city a place to be,” said Ahmed Abonamah, 30, an associate at Squire Sanders in Cleveland. “Places like the West Side Market, however, do.”
Calls to action Cleveland’s accessibility was one of the main reasons Mr. Fleming, 37, decided to come back to the city. Unlike in Chicago or New York, Mr. Fleming said it’s easier for young professionals to have a seat at the table with the city’s movers and shakers. “I’ve always felt like, even when I was just getting started here and getting reacquainted with Cleveland in 2004, I was only one degree of separation from, say, the mayor,” he said. “There’s something special about that and the opportunity to be involved in decision making.” Eric Wobser, who heads Ohio City Inc., the community development group charged with reinvigorating the up-and-coming West Side neighborhood, has had the opportunity to be entrenched in the city’s happenings at a relatively young age. At age 34, Mr. Wobser, in addition to work in Ohio City, now serves on Cleveland’s school board and in the past has worked as an aide in Mayor Frank Jackson’s administration. “It’s not as much that people are afraid to give young people opportunities, but young people don’t know how to engage in the system,” Mr. Wobser said. “We need to help them understand ways to get involved. As much as we all would love it to be the case, sitting at a brewery on West 25th and complaining about the city isn’t
going to change anything.” Still, some young professionals feel as if their voice isn’t as recognized as it should be. Mr. Abonamah feels as if community leaders are more receptive to the needs of young people largely because they’re becoming a bigger cohort of the city’s population, though there’s room for improvement. However, Mr. Abonamah said the onus shouldn’t simply be on the city’s leaders. Young people — himself included — need to seek out those opportunities. “I don’t know whether there’s an emerging class behind (the current leaders), and that I think is something that should be thought about and focused on,” he said. “Who will take the reins and continue the momentum that was built when the current crop of leaders move on to what’s next or retires?”
Growing a pipeline For Lindsey Polichuk and other members of the Cleveland Professional 20/30 Club, the ingredients for a growing urban core are rooted
in engagement. They say young people want to be connected with their surroundings — both physically through a robust public transportation system and a walkable downtown, and emotionally through a network of like-minded individuals. “Keeping the talent in the city is about keeping them engaged,” said Ms. Polichuk, 31, the group’s current president and the due diligence coordinator for Partners Environmental Consulting in Solon. The importance of young professionals to Cleveland’s current and future success is no secret. Mr. Wobser says the influx of young people into Ohio City was one of several catalysts for the neighborhood’s resurgence. He speaks of growing the city from its urban core outward, and young professionals are the perfect vehicle to fuel that evolution. “It’s all about growing a pipeline of people who see a lifestyle for themselves here now when it’s about bars or whatever,” he said. “But if we grow that pipeline, it’ll help us grow that group of people who will decide to stay.” ■
Largest national staffing firm headquartered in North East Ohio. Call today to see how we can help you improve your overall staffing experience.
Defining Cleveland’s skyline Thank you, Cliffs Natural Resources, for your commitment to the city of Cleveland and your ongoing confidence in Jones Lang LaSalle.
Mentor 440-974-3391 Cuyahoga Falls 330-926-9680 Independence 216-328-8168
Middleburg Hts. 440-243-8790 Elyria 440-324-2880 Norwalk 419-663-1166
jll.com/cleveland For a copy of our Cleveland Skyline Review, email clevelandskyline@am.jll.com. Leasing – Sales – Management – Office – Industrial
www.nescoresource.com
www.talentalley.com
20130722-NEWS--17-NAT-CCI-CL_--
7/19/2013
12:25 PM
Page 1
SPECIAL REPORT
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS 17
Momentum builds as key interests develop vision Region’s stakeholders form long-term plans to mobilize continued rejuvenation efforts By JAY MILLER jmiller@crain.com
G
reater Cleveland has made great strides over the last two decades setting itself up for the future. It has built two stadiums, an arena, two lakefront museums and a convention center. These civic monuments — which no doubt will be in place for the next 20 years and beyond — by some accounts help to confer “big-city” status on the community. Local business, government and civic leaders have identified industries they believe should be the community’s focus for the decades ahead so the next generation will have a reason to build careers here. And, because of a commitment by the state of Ohio to remake the central interchanges of the region’s freeway system, the city will have a traffic system most metropolitan areas will envy. Those basic improvements are important. But they only lay the groundwork for the future, and by most measures, the Cleveland area is still struggling with a host of issues. Only Detroit, Youngstown and hurricane-decimated New Orleans lost more population between the 2000 and 2010 census than the Cleveland metropolitan area. The median income in the Cleveland metro ranks 21st among the 25 largest metro areas in the United States. And Area Development, a leading magazine and online resource for people who decide where to put new business operations, ranks the Cleveland area 41st among 50 major metropolitan areas as successfully emerging from the recession. So there is more work to do.
Change agents The impetus for change is coming from several directions, from the city of Cleveland itself and from a
handful of organizations, generally nonprofits that believe Cleveland can be the center of a diverse region. The city administration believes the urban core has a strong future, both as a place where people come to work and play but also to live. And developers in neighborhoods like Ohio City, Tremont and Detroit Shoreway are building all manner of housing while on the East Side, University Circle and Little Italy have become live-work destinations. All are part of a citywide plan undertaken by the Frank Jackson administration, which believes it can be a place for those who are young or think young. “We identified what are the assets and asked ourselves how do we build on those assets,” said Ken Silliman, the mayor’s chief of staff. Key among those assets, said Mr. Silliman, is the lakefront. “The next 10 to 20 years will see lakefront neighborhoods become more attractive,” he said. Complementing the renewal of the urban core is the efforts of the nonprofits, which are calling on their constituencies, even holding open meetings to talk about the future. It’s a pioneering strategy and a dramatic change from the past, when big locally based banks and a few steel and heavy industries dominated the economy and held sway over regional economic decisions. Some are focused on increasing the region’s population, others at reducing the cost of government and improving social services. Others, meanwhile, are trying to tie the Northeast quadrant into a single economy that would have a stronger Cleveland at its center. Each piece of the network may have its own goals, but they all share the key objectives of increasing population, boosting the education level of citizens and, of course, creating jobs and economic growth. “One of the main goals we need to have is that the people of Cleveland will be prepared for the jobs being created and that they have access to those jobs,” said Brad Whitehead, president of the Fund for Our Economic Future. The 9-year-old Fund believes by focusing on jobs for people of all income and education levels, the region can avoid exacerbating the
“The next 10 to 20 years will see lakefront neighborhoods become more attractive.” – Ken Silliman chief of staff for Mayor Frank Jackson
“One of the main goals ... is that the people of Cleveland will be prepared for the jobs being created.” – Brad Whitehead president, Fund for Our Economic Future
“Immigration is a slice or two of the pie. There’s a lot of other slices in terms of boomerangers ... and college alumni.” – Joy Roller president, Global Cleveland problems of income inequality, crime and poverty. Mr. Whitehead added that planning may be especially fruitful for a midsize region such as Cleveland. “We’re not so small that we can’t compete globally,” he said. “But when you get really, really big it’s hard to execute a strategy that links innovation to work force to the marketing you do.”
‘No-growth sprawl’ Mr. Whitehead’s Future Fund is a collaboration between more than 60 regional foundations, united with the goal of improving the region’s competitiveness in the global economy. The Fund also helped create a
newer entry into the region’s planning network — the Northeast Ohio Sustainable Communities Coalition. NEOSCC was created in 2011 by four metropolitan planning organizations, such as the Northeast Ohio Areawide Coordinating Agency, six county governments and several other organizations. Its purpose, which landed a $4.25 million federal planning grant, is to promote a regional approach to issues important to economic growth, such as work force development, transportation, housing, broad approaches to land use and environmental issues. This, in short, is a way to tackle what is called no-growth sprawl, the increase in the number of developed acres in the region at a time when the population is stagnant or falling. In June 2012, NEOSCC released the results of a survey, the “Conditions and Trends Report,” that found that sprawl is costing Greater Cleveland and all of Northeast Ohio dearly. As people live farther away from their jobs, commuting costs increase; the supply of housing on cheap land in outlying communities woos people, leaving the inner city with vacant homes; and the cost of maintaining hundreds of local governments raises taxes. For example, NEOSCC’s research indicates that because of the cost of governing in the sprawling region, local governments will see their costs grow by nearly 20% without substantial tax increases. “NEOSCC is presenting to us the scenario of how bad things can be in order to give us the opportunity to change that trajectory, to change the dynamic,” said Grace Gallucci, the organization’s chair and the executive director of NOACA.
Not to mention … While Ms. Gallucci said the sustainable communities coalition’s focus will be “helping people to understand the long-term implications of their choices” and how it might affect sprawl, others are looking at how the region will pay for some of the other changes coming in the years ahead. At the Center for Community Solutions, executive director John Begala said his Cleveland nonprofit has started a study of how the cost of health and social services will likely grow in Greater Cleveland and in Ohio. He said Ohio is graying, people are getting older, and that will bring with it an increased cost. With financial help from the Cleveland Foundation and research help from the Federal Reserve Bank of Cleveland and several university and private researchers, Mr. Begala said the center is preparing a report due in 2014 that will look at the future cost of social services and the tax implications of those costs. As for growing the region’s population, that is a task being tackled by Global Cleveland. Launched in 2011 with a goal of attracting 100,000 new people to the region in 10 years, the nonprofit was initially backed by the Cleveland Foundation, Forest City Enterprises and Huntington Bank. President Joy Roller said Global Cleveland hopes to attract new residents, through immigration and other avenues, to a community that can tout its low cost of living and its rich arts and cultural institutions. “Immigration is a slice or two of the pie,” she said. “But there’s a lot of other slices in terms of boomerangers — people who grew up here — and college alumni who have gone to school here.” ■
WHERE ACADEMIC EXCELLENCE MEETS THE REAL WORLD
Interluxe AuctioN Online Bidding Begins July 20th
Reserve bid only $1.45 Million!
All of our core classes begin with a real-world business challenge posed directly from Northeast Ohio-based companies, large and small.
Stunning Moreland Hills Estate One of Cleveland’s most spectacular suburban estates set on 5.7± private acres with endless amenities including 2,400 sq. ft. master suite & more! Built for $9 million, selling over & above the starting bid of $1.45 million. Broker: Mark Zervos, OH SAL.0000374870 2̆HUHG )RU 6DOH %\
Call for more details:
1 (888) 415-5893
Our integrated track courses are team taught by expert faculty. We combine several business disciplines into each class, empowering you to quickly assess real-world business problems and implement the best solutions.
Online Bidding Provided By:
www.InterluxE.com Platinum Real Estate
www.GrandEstatesAuction.com
Interluxe and Grand Estates Auction Co. are not licensed auctioneers in the state of Ohio. Interluxe provides marketing and online bidding services only. 7KLV DG LV QRW DQ R̆HU WR VHOO LQ states where registration is required.
Learn more and apply: go.jcu.edu/mba
20130722-NEWS--18-NAT-CCI-CL_--
18
7/19/2013
12:03 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
SPECIAL REPORT
JULY 22 - 28, 2013
Land reuse strategies address population loss, excess housing By JAY MILLER jmiller@crain.com
I
t costs about $10,000 to tear down an abandoned home in Cleveland. With nearly 7,000 properties already in line for demolition and another 6,500 likely to join them in the next five years, the cost to the community is pegged at more than $135 million. That doesn’t include the uncollected taxes on foreclosed homes, another $29.2 million. Those are the hard costs of the flight to the suburbs and the abandonment of aging homes, as calculated by Case Western Reserve University and the Vacant and Abandoned Property Action Council. The council is an ad hoc think tank composed of representatives from institutions and organizations that deal with issues related to prevention and reclamation of abandoned property in Cuyahoga County. Those costs are only a part of what it will take to turn around decades of decline in the city. It doesn’t include the untallied cost of turning those vacant lots into something more than a patch of brown. That’s been a problem of central cities — where schools and safety also are of concern — for decades. Of course, that problem has been intensified by the more recent mortgage crisis, which hit Cleveland early. So early, in fact, that the city has been called ground zero of the foreclosure avalanche. “Cleveland is a bellwether,” Dan Immergluck, a professor in the city and regional planning program at
Georgia Tech, told the New York Times in 2009. “It’s where other cities are heading because of the economic downturn.” So while the rest of the country was beginning to be hit by foreclosures and abandonment, Cleveland was searching for solutions.
Not enough people The 1950 census tallied 914,808 Cleveland residents. Civic leaders and the builders of the interstate freeway system expected that population arc to continue upward. But by 1970, it was down to 750,879 people, and the 2010 census put those numbers at 396,814. Even more startling, the 2010 census tallied 207,536 housing units and estimated that nearly 20% were vacant or abandoned. The people had departed for the suburbs and more distant cities and towns, leaving homes and apartment buildings behind. The administration of Frank Jackson has worked hard to fight the flight of people and the abandonment of homes. At the macro level, Mayor Jackson has developed programs to improve the schools and redevelop the lakefront. Those are important elements of the mayor’s plan to make Cleveland what he often calls “a city of choice” — one that he believes will draw people back to the city. “A lot of what (Mayor Jackson) has done is built on that premise,” said chief of staff Ken Silliman. “We’re creating neighborhoods of choice, where people will pick a place to reside and do business. …
We want to make the neighborhoods more competitive.” It’s an effort that’s working in a few places, notably downtown, Ohio City and Tremont. But at least as important as those big-picture plans is the grassroots work the city and its partners are doing in the neighborhoods with the most homes on the path from abandonment to demolition. The city believes that some neighborhoods — including Edgewater, Ohio City and Tremont — are strong enough to stand on their own. Houses are selling at market rates, and homeowners are reinvesting in their properties. Most will need some attention, but others — including Slavic Village, Hough and Central — are clearly in distress and in need of considerable city, philanthropic and private investment.
Taking it to the bank Eliminating vacant lots is essential because nothing demoralizes a neighborhood, or sinks property values, more than a home abandoned and vandalized. Many believe demolition is critical, said Jim Rokakis, director of the Thriving Communities Institute, a project of Western Reserve Land Conservancy that focuses on clearing blighted properties and rebuilding neighborhoods. But Jeff Johnson, councilman in the Glenville neighborhood, said the city and county are pursuing too many teardowns and are not making it more attractive to rehab older homes, which he thinks is the best way to solve the housing problem.
The Directors of Barnes Wendling CPAs are thrilled to have one of their partners recognized for his expertise and dedication to the accounting profession. Robert G. Zunich, CPA, ABV begins his term as Chair of the Board of the Ohio Society of Certified Public Accountants 2013-2014 activity year. Rob was unanimously recommended by the nominating committee last year to serve in this position. This new position follows many years of service to the Ohio Society of CPAs. • Ohio CPA Foundation Development Committee • Peer Reviewer • Centennial Campaign General Appeal Committee • Executive Board • Governmental Affairs Advisory Council
www.barneswendling.com and 800.369.6375
MARC GOLUB
Re-Imagining Cleveland is a vacant land reuse initiative to repurpose neglected properties into gardens, farms, orchards and other green space projects. “A lot of us don’t agree that demolition is the right solution,” he said. Mr. Rokakis understands Mr. Johnson’s concerns. But he said many homes are beyond repair, and homes that are allowed to stand vacant bring down property values and encourage crime, such as the stripping of copper and other valuable materials from the homes. Most would agree the innovative Cuyahoga Land Bank has been a major help. It has had some success acquiring abandoned properties mired in the foreclosure maze. The land bank, created in 2009, is backed financially by government agencies, some of the banks that created the crisis and legal settlements arising from reckless lending. It handles the legal and financial wrangling it takes to clear titles. But that’s not the end of the problem. “We really have to find a way to not only work at removing blight but work actively on what’s next,” Mr. Rokakis said. “There is a planning process that has to be engaged in.” Turning the dirt lot left by demolition into any kind of green space takes property values up another notch, closer to a fair market value. Building single, in-fill homes in Cleveland isn’t going to happen, Mr. Rokakis said, as long as existing homes are available for as little as $40,000 in some suburbs. Joel Ratner, president of Neighborhood Progress Inc., said his nonprofit is working on finding where housing rehabilitation will work and where other solutions are needed. “The answer to that is very different from Glenville to Slavic Village to Detroit Shoreway,” he said. “The markets are different, the housing is different, so there is not a cookiecutter answer. In some places, we’ll save housing. In other neighbor-
hoods, you wouldn’t want to save the housing.”
‘There’s a lot of work to do’ For the neighborhoods in that last category, the city looked for another solution. That work started, in 2009, on a small scale, suggesting what can be done with more time and money. Starting with $250,000 from the Cleveland Foundation for a study, and then $500,000 in federal urban redevelopment money for the first phase of implementation, the city and its partners in the community — neighborhood groups and broader-based nonprofits, including Neighborhood Progress — developed a program that addresses the problem of vacant lots. It’s called “Re-imagining a More Sustainable Cleveland,” and it includes a guidebook of sorts that offers ways to spiff up abandoned lots, many of which the city will sell to neighborhood groups and individual buyers for as little as $1. The “Re-imagining Cleveland” playbook, which was spearheaded by Terry Schwarz of the Cleveland Urban Design Collaborative of Kent State University, also offers examples for turning vacant lots into vineyards, gardens and parks or selling them to adjacent property owners for landscaped side lots. Among the 56 projects funded in that first round were 13 community gardens, six pocket parks, two side yard expansions and two orchards. The city in 2011 announced it had raised $1 million to whittle down the inventory of vacant lots a little more. “It’s not going to be easy,” said NPI president Mr. Ratner. “There is a lot of work to do.” ■ Writer Daniel J. McGraw contributed to this story.
20130722-NEWS--19-NAT-CCI-CL_--
7/19/2013
11:18 AM
Page 1
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
19
LARGEST HOTELS
RANKED BY NUMBER OF GUEST ROOMS(1)
Name Rank Address Phone/Website
Number of guest rooms
Number of Meeting Group meeting space Corporate room rooms (square feet) room rate ($) rate ($)
Full-time employees
Hotel owner
General manager
1
Kalahari Resort & Convention Center 7000 Kalahari Drive, Sandusky 44870 (877) 642-6847/www.kalaharimeetings.com
884
45
215,000
95-195
94-594
519
Todd Nelson
Brian Shanle
2
Hotel Breakers One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com
650
3
2,898
NA
97-279
NA
Cedar Fair LP
Katie Wobser
3
Renaissance Cleveland Hotel 24 Public Square, Cleveland 44113 (216) 696-5600/www.renaissancecleveland.com
491
33
64,000
279
129-299
375
CTF Hotel Holdings Inc.
Theona Simbrat
4
DoubleTree by Hilton Cleveland East Beachwood 3663 Park East Drive, Beachwood 44122 (216) 464-5950/www.clevelandeastbeachwood.doubletree.com
404
17
20,000
129-229
99-169
230
Twin Tier Hospitality LLC Satish Duggal
Robert Trammell robert.trammell@hilton.com
5
Cleveland Marriott Downtown at Key Center 127 Public Square, Cleveland 44114 (216) 696-9200/www.clevelandmarriottdowntown.com
400
17
17,000
179-269
99-199
NA
Wells Real Estate Funds Bob Megazinni
6
DoubleTree by Hilton Cleveland Downtown-Lakeside 1111 Lakeside Ave. E., Cleveland 44114 (216) 241-5100/www.doubletreecleveland.com
379
10
10,347
119-189
89-179
142
The Hotel Group
George Iannacone
7
Cleveland Airport Marriott 4277 W. 150 St., Cleveland 44135 (216) 252-5333/www.clevelandairportmarriott.com
372
16
15,500
149+
109+
125
Thomas Point Ventures
Greg Huber greg.huber@marriott.com
8
Holiday Inn Cleveland South/Independence 6001 Rockside Road, Independence 44131 (216) 524-8050/www.hiindependence.com
364
18
20,000
129.00
89-109
70
Janus Hotels & Resorts Inc.
Tom Moore
9
Breakers Express One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com
350
0
NA
NA
89-199
NA
Cedar Fair LP
Mike Levy
10
Holiday Inn Cleveland-Strongsville 15471 Royalton Road, Strongsville 44136 (440) 238-8800/www.holidayinn.com/cle-strongsvil
303
10
12,500
139
79-99
95
Hospitality Ventures Management Group
Scott Schmelzer sschmelzer@histrongsville.com
11
InterContinental Hotel & Conference Center(2) 9801 Carnegie Ave., Cleveland 44106 (216) 707-4100/www.intercontinentalcleveland.com
299
13
35,000
NA
NA
450
Cleveland Clinic
Campbell Black
12
Marriott Cleveland East 26300 Harvard Road, Warrensville Heights 44122 (216) 378-9191/www.clevelandmarriotteast.com
295
15
15,000
229
NA
NA
Western and Southern Insurance-Eagle Realty
Kenny Didier
13
Hyatt Regency Cleveland at The Arcade 420 Superior Ave. E, Cleveland 44114 (216) 575-1234/www.cleveland.hyatt.com
293
9
7,100
259
99-249
127
Skyline Cleveland Acquisitions Inc.
Tim Meyer
14
Embassy Suites Hotel Cleveland Rockside 5800 Rockside Woods Blvd., Independence 44131 (216) 986-9900/www.embassysuites-rockside.com
271
13
17,500
159-209
129-169
135
AP/Aim Independence Suites TRS LLC
Ed Sylcox
15
Holiday Inn Westlake 1100 Crocker Road, Westlake 44145 (440) 871-6000/www.ichotelsgroup.com
266
11
11,000
89-119
79-119
86
Cleveland Airport Hospitality, LLC Twin Tier Hospitality
Janet Remalius jremalius@twintierhospitality.com
16
Sheraton Cleveland Airport Hotel 5300 Riverside Drive, Cleveland 44135 (216) 267-1500/www.sheraton.com/airportcleveland
242
14
16,000
189
NA
132
Oakbrook Hotels
Marc Jacobs marc.jacobs@sheratonclevelandairport.com
17
Hilton Garden Inn Cleveland Downtown 1100 Carnegie Ave., Cleveland 44115 (216) 658-6400/www.clevelanddowntown.stayhgi.com
240
14
20,000
169
99-169
100
CLOH Associates LLC
Coleman Hughes
17
Ramada Elyria 1825 Lorain Blvd., Elyria 44035 (440) 324-5411/www.ramadaelyria.com
240
7
10,280
74.99
69.99
15
NA
Karen Cannan
17
Sawmill Creek Resort & Conference Center 400 Sawmill Creek Drive, Huron 44839 (800) 729-6455/www.sawmillcreek.com
240
25
50,000
85-165
105-195
50
Gregory Hill
Gregory Hill
20
Crowne Plaza Cleveland Airport 7230 Engle Road, Middleburg Heights 44130 (440) 243-4040/www.crowneplaza.com/clevelandarpt
238
14
16,000
129-169
99-139
10
Toledo Inns Inc.
Michael Levy mlevy@crowneplazacle.com
21
Castaway Bay 2001 Cleveland Road, Sandusky 44870 (419) 627-2106/www.castawaybay.com
237
8
7,691
99-259
99-259
NA
Cedar Fair LP
Tyler Adams
22
Clarion Inn and Conference Center 6625 Dean Memorial Parkway, Hudson 44236 (330) 653-9191/www.clarioninnhudson.com
233
14
15,000
99
69-89
65
Sai Living Inc.
Tom Hibsman
23
Bertram Inn and Conference Center 600 N. Aurora Road, Aurora 44202 (330) 995-0200/www.thebertraminn.com
224
30
27,000
119
109-119
50
B and I Management
Frank Doctor frankd@thebertraminn.com
24
Days Inn & Suites Richfield 4742 Brecksville Road, Richfield 44286 (330) 659-6151/www.daysinn.com
216
6
10,000
79
72
NA
Sandip Thakkar
Sandip Thakkar sthakkar68@hotmail.com
24
Embassy Suites Cleveland-Beachwood Hotel 3775 Park East Drive, Beachwood 44122 (216) 765-8066/www.embassybeachwood.com
216
7
5,878
159-249
109-229
68
NF II Beachwood OP CO Steven Mitchell LLC DBA Embassy steven.mitchell@interstatehotels.com Suites Beachwood
26
Sheraton Suites Akron/Cuyahoga Falls 1989 Front St., Cuyahoga Falls 44221 (330) 929-3000/www.sheratonakron.com
209
14
23,000
189
99-149
NA
Riverside Community Urban Redevelopment Corp.
Jeffrey Lynch
27
Ritz-Carlton, Cleveland 1515 W. Third St., Cleveland 44113 (216) 623-1300/www.ritzcarlton.com
205
13
24,466
249-299
169-259
250
Rock Ohio Caesars Hotel LLC
Kelly A. Steward kelly.steward@ritzcarlton.com
27
Wyndham Cleveland at PlayhouseSquare 1260 Euclid Ave., Cleveland 44115 (216) 615-7500/www.wyndhamcleveland.com
205
9
13,079
139-205
89-169
80
PlayhouseSquare Foundation
Brian Moloney
29
Hilton Akron/Fairlawn 3180 W. Market St., Akron 44333 (330) 867-5000/www.akronhilton.com
203
16
17,000
149
119-189
75
RDA Hotel Management Tim Winter Co. timothy.winter@hilton.com Rennick Andreoli
30
Sandcastle Suites One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com
187
NA
NA
NA
NA
NA
Cedar Fair LP
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) All information as of June 1, 2013. (2) The number of employees represents the total number of employees working at the InterContinental Hotel & Conference Center and the InterContinental Suites Hotel.
Paul Mesenburg
RESEARCHED BY Deborah W. Hillyer
20130722-NEWS--20-NAT-CCI-CL_--
20
7/19/2013
12:06 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JULY 22 - 28, 2013
Flats: Organization sets limited goals continued from PAGE 3
financial irregularities. Mr. Lammon currently is director of operations and advocacy for the Downtown Cleveland Alliance, an organization that promotes downtown and operates privately financed downtown cleanup and security services. He will continue in that role at DCA.
Cargill Deicing Technology’s Cleveland salt mine and the several stone distributors who need river docks are anchors that will remain. Formed officially last October, the nonprofit Flats Forward has put together a board of directors that includes Flats residents and representatives of the varied recreational, industrial and business organizations that use the Flats. It also has hired Mark Lammon to be its president and is looking to hire another staff person. Flats Forward replaces the Flats Oxbow Association, a similar organization that closed in 2011 amid
Contact: Phone: Fax: E-mail:
Keeping it simple Flats Forward will have limited goals. It will focus on developing a master plan for the Flats and promoting the neighborhood. Most Cleveland neighborhoods have formal community development organizations that develop housing and
Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com
provide a range of services that might include day care, retail storefront renovation or even financial services. “We need an organization where everybody can get together and have a constructive dialogue about moving the Flats forward,” Mr. Lammon said. “The biggest thing for this group I think is going to be advocacy and outreach.” Mr. Lammon said he expects to attract about $150,000 annually from foundations, the city of Cleveland and private contributions to run the organization. Eventually, Flats Forward might evolve into an organization like the downtown alliance and provide
similar services. For now, the goals are simpler. “We all agree on what way we’re going,” said Joe Blanton, a board member and plant manager at Cereal Food Processors Inc. on Merwin Avenue. “Is that enough said?” Another board member, Linda Barley, is also optimistic. “I’m impressed with the quality of people working together, not against each other,” she said.
Next acts Given the organization’s early stage, Mr. Fishman wasn’t venturing into what kind of development it will advocate in the Flats. But several directions appear inevitable. First is the future development at Flats East Bank project. Mr. Fishman said the recently opened,
REAL ESTATE
AUCTION
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
LAND
COMMERCIAL PROPERTY
CHARTWELL AUCTIONS | AUG 22 COMMERCIAL / INDUSTRIAL / OFFICE / LAND / RESIDENTIAL
40.5 Acres for development in the City of Chardon
Chartwell Group, LLC - Featured Listings
ALL PROPERTIES OFFERED ABSOLUTE OR WITH BELOW MARKET PUBLISHED RESERVE PRICES!
Beautiful wooded rolling acres with a small river next to the Geauga Park District. Walking distance to Home Depot, Walmart and the Commercial district. Zoned R3 up to 3.5 homes per acre.
1 Former Goodwill Headquarters
5
Omni Fitness Club
5777 Grant Avenue t 110,945 SF Industrial Bldg. t Receivership - Bring Offers! 7500-7510 E. Pleasant Valley t 90,200 Total SF t Corporate Campus
(216)798-2633 Roger (owner) 2295 E. 55th St. Cleveland, OH 44103 59,000 SF Office/Warehouse/Storefront
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
Suggested Opening Bid: $50,000 3-Stories on 2+ acres, new HVAC, 9’12’ ceilings, 7 docks, 2 elevators, fully sprinklered, cafeteria w/kitchen equipment, cameras/security system. Tons of parking. 1 Mile North of I-77 & E 55th interchange. On-Site Inspections: Tues., July 30, Aug. 6 & 13, 10:00 am - 12:00 Noon.
2
6600 W. 130th St., Middleburg Hts., OH 44130 60,000 SF Operating Fitness Center
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
Suggested Opening Bid: $100,000 3-Story fitness center on 5.35 acres. All equipment & memberships could be available. Unlimited possibilities for the building and site. Zoned: General Business. High traffic area near corner of Pearl Rd. & 130th. On-Site Inspections: Thurs., Aug. 1, 8, 15, 1:00 pm - 3:00 pm.
6
Former KFC Restaurant
563 Bronson St., Medina, OH 44256
135,000 SF Ind./Warehouse/Distribution
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
Suggested Opening Bid: $50,000 Metal & masonry construction with 132,000 SF fully sprinklered industrial space, 3,000 SF office & 13,600 SF lower level storage. 7.24 acre site w/100+ car prkg. 18’-26’ ceilings, 11 docks & 3 drive-ins, rail siding w/2 doors. Minutes from I-71, SR-18, I-76, I-271 & I-80. On-Site Inspections: Wed., July 31, Aug. 7 & 14, 10:00 am - 12:00 Noon.
3
Receiver Ordered Sale!
22301 Rockside Rd., Bedford, OH 44146
OFFERED WITH A PUBLISHED RESERVE OF ONLY: $85,000 Lender directed sale, 3,066 SF, partially equipped w/drive-thru, seating for 40+ & parking for 22+. high traffic area next to Walmart & zoned B-3. On-Site Inspections: Tues., Aug 6 & 13, 2:30 - 4:00 pm.
7
40,212 SF Office / Retail
4415 Lee Road, Cleveland, OH 44128 (NE Corner of Lee & S. Miles Rd.)
OFFERED WITH A PUBLISHED RESERVE OF ONLY: $97,350
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
3-Story plus full walk-out lower level on 2/3 acres. Perfect opportunity for general/med, offices or retail use. Directly across street from a 474,000 SF power retail center. Highly desirable retail/office/location. Minutes from I-90 & I-271. On-Site Inspections: Thurs., Aug. 1, 8 & 15, 10:00 am - 12:00 Noon.
Suggested Opening Bid: $46,500 12,895 SF on 2.72 acres. Corporate seller directs sale w/built-in financing! Zoned for car salvage, repair & storage. 36,000 SF additional land usage of railroad rite-of-way. On-Site Inspections: Thurs., Aug 8 & 15 & Tues., Aug. 20 from 2:30 - 4:00 pm.
4
8
Former Rose Lounge
2.85 Acre Development Site with Mixed-Use Zoning
Engle Road, Middleburg Hts., OH 44130
OFFERED WITH A PUBLISHED RESERVE OF ONLY: $100,000 3219 Copley Rd., Copley, OH 44321
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
Suggested Opening Bid: $22,500 4,300 SF multi-purpose bldg. on 0.50 acres. Contents removed & bldg. is ready for renovation. 40+ parking spaces, zoned I-1, industrial. SELLER FINANCING BEING OFFERED! On-Site Inspections: Wed., Aug 7, 14 & 21, 2:30 - 4:00 pm.
High traffic area near Bagley/Engle Road intersection & great visibility from I-71. Prime location for office, hotel & more.
9 10 Acres Adjacent to Eastland Mall, Columbus, OH 43232
OFFERED ABSOLUTE, REGARDLESS OF PRICE!
Suggested Opening Bid: $10,000 Prime commercial location near wellestablished mall. Tenants include: Macy’s, Sears, JC Pennys, Champs, Vitamin World. High traffic area with great demos. Minutes from I-270.
ATTENTION INVESTORS & HOME BUYERS:
Also included in this sale are 6 houses in Shaker Hts./Brunswick/Medina, 12 Houses in Youngstown / Campbell and 3 Home Sites
For Brochure & Terms of Sale, Call:
www.ChartwellAuctions.com 216-360-0009 21 Chartwell Group, LLC / Chartwell Auctions, LLC OH Auctioneers - Michael E. Berland, Gordon J. Greene & Mac Biggar
List your Auction, Industrial, Commercial, Luxury Property or Retail Space Here! Crain’s Cleveland Business’ classifieds will help you fill that space.
23901 Aurora Road t 156,430 SF Industrial Bldg. t 4,537 SF Office Area
Crain’s Cleveland Business on-line @ CrainsCleveland.com
Contact: R. M. (Mac) Biggar, Jr., SIOR, CCIM or David R. Stover, SIOR
216-360-0009 www.ChartwellGroup.com
Contact Denise Donaldson at 216.522-1383
CLASSIFIED BUSINESSES FOR SALE National Online Professional Foodservice Distributor w/ local store. Retail/Wholesale since 1994. Owners to retire.
20950 Center Ridge Rd., Rocky River, OH 44116
6060 Parkland Avenue t 60,044 SF Office Building t For Sale or Sublease
DON’T FORGET: For all the latest business news...online
$275-million Phase I — the 18-story Ernst & Young office tower and Aloft hotel — covers only three of the 24 acres developers Wolstein Group and Fairmount Properties control. Next will be at least 140 units of luxury housing and retail shops and restaurants that open onto a riverfront park, a $120 million investment. In addition, recreational activities are growing rapidly in the Flats. The planned Canal Basin Park will be a hub for hiking and biking on the Columbus Road peninsula. The Cleveland Rowing Foundation has opened a boathouse in Rivergate Park, a new, 2.8-acre Cleveland Metropark along the river near the Columbus Road Bridge. Once fully developed, the seven-acre park will include a skateboard park and a terminus for the Towpath Trail. ■
216-381-5540 leave message
FOR SALE BAR & RESTAURANT ND
Plus 2 FLOOR APARTMENT D 1-2-3 Liquor License STATE ROAD in PARMA, OH Ag Real Estate Group, Inc. 216-504-5000 www.agrealestategroup.com
FOR SALE
BUSINESS SERVICES
Have Buyers for Metal?
Want to Buy or Sell a Business
Stamping & CNC Shop, Machine Shop, Product Line.
Free Seller Market Analysis
216-641-7897
See our listings at
It’s Stys Inc. since 1962
www.empirebusinesses.com
We sell Equip. & Businesses.
440-461-2202
20130722-NEWS--23-NAT-CCI-CL_--
7/19/2013
3:21 PM
Page 1
JULY 22 - 28, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
21
THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
JULY 15 - 21
Managing a joint venture in property management
The big story: The Cleveland Clinic announced several major leadership changes at its regional hospitals. Among the moves taking effect Sept. 1: Jan Murphy, a 35-year veteran of the Clinic, will vacate her role as president of Fairview Hospital and become chief operating officer of the Clinic-managed Sheikh Kalifa Medical City in Abu Dhabi. Dr. Neil Smith, vice president of medical affairs at Fairview, will assume the presidency there. Jeff Leimgruber, president of Hillcrest Hospital since 2006, will leave the health system, and Dr. Brian Harte, president of South Pointe Hospital, will take over as Hillcrest’s new president. Dr. Robert Juhasz, medical director for the Clinic’s Willoughby Hills Family Health Center, will become South Pointe’s new president.
■ Cushman & Wakefield Cresco in Independence wants to add a property management business and has formed a joint venture with Columbus-based real estate and property management powerhouse Continental Realty Inc. to make it happen quickly. The two just started the venture with the hiring of Judy Simon, a well-known Northern Ohio property manager, who has been director of asset services at CBRE Group for the last 14 years. Joseph Barna, a Cresco partner, said the new venture uses contacts and the crossselling skills of its 18 brokers. Continental Realty will provide its systems and expertise to the venture to assist Ms. Simon in building a management portfolio here. “We’ve never provided full-service property management before,” Mr. Barna said. He said the two companies were natural partners because they often work together and are members of the Cushman & Wakefield Alliance, led by the major international brokerage. Ms. Simon said she left CBRE because she wanted to prospect for business on her own, which was not her responsibility at CBRE. David Browning, CBRE’s Cleveland managing director, said he wished Ms. Simon well and appreciated her desire to build her own unit. — Stan Bullard
On track for growth:
TOA Technologies raised $66 million from Technology Crossover Ventures of Palo Alto, Calif., which counts Facebook, Netflix and Groupon among its previous investments. The Beachwood-based provider of software for managing mobile work forces said the investment will power the company’s continued global expansion. The company will use some of the money to hire sales and customer service teams in other countries. However, the company also plans to continue hiring at its headquarters, where it employs 56 people. TOA has 460 employees worldwide.
Brushing into trouble: Sherwin-Williams Co. of Cleveland ran into a roadblock to proceeding with its planned, $2.3 billion acquisition of Mexican paint maker Consorcio Comex. The Federal Competition Commission of Mexico, in a 3-2 decision, voted against authorizing the acquisition. Sherwin-Williams chairman and CEO Chris Connor said, “We are disappointed by this decision, but remain hopeful that we can adequately address the commission’s objections and proceed with the transaction.” The companies were given 30 working days to submit a formal appeal of the commission’s decision.
The past is the future: Plans for a new hotel in downtown Akron marry the landmark Greystone Hall ballrooms and meeting rooms with construction of a tower to create a 160room hotel at 103 S. High St. in a $40 million project. Akron Mayor Don Plusquellic said the hotel at the city-owned Greystone Hall “will work closely with the John S. Knight Convention Center and preserves the historic Greystone facility.” A joint venture by Philadelphia-based Amerimar Realty Co. and Greystone Partners LLC, a group formed by five prominent Akronarea business people, will develop the hotel. Royal sweeps in: Vacuum cleaner maker Royal Appliance Mfg. Co., a subsidiary of consumer and industrial products giant TTI Group of Hong Kong, was approved by the U.S. Bankruptcy Court in Nashville as the winning bidder for the assets of Oreck Corp., which had been in Chapter 11 bankruptcy proceedings. Royal Appliance is part of TTI Floor Care, which is based in Glenwillow and will add the Oreck line of vacuum cleaners to its Dirt Devil and Hoover brands. The (Nashville) Tennessean reported that its bid of more than $17 million beat out a bid by members of the founding Oreck family.
Remember IPOs?:
Associated Materials Group Inc., the big producer of vinyl windows and siding that is based in Cuyahoga Falls, filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of its common stock. The company intends to use proceeds from the offering to redeem part of the 9 1/8% senior secured notes due 2017 issued by its subsidiary, Associated Materials LLC.
■ Rich Rodman is getting ready for an event
that he thinks will happen in September. Mr. Rodman is one of three Ohio University students behind a Cleveland startup company called Crowdentials. The company is creating regulatory compliance software for equity crowdfunding. One problem: Crowdfunding — the process of raising capital from nonaccredited investors (people who don’t have gobs of money) — isn’t yet legal in 48 states (just Georgia and Kansas). Crowdentials already is marketing software that gives websites that pair startups with accredited investors (the people with the money) with startups a way to confirm that they are indeed accredited. But the company also is creating a version designed to help Joe Schmo invest in the next Google without violating any regulations. There’s just one catch: The regulations haven’t been approved. The federal government more than a year ago passed a law called the Jumpstart Our Business Startups Act (get it, JOBS Act???) that would make the process legal nationwide — once the Securities and Exchange Commission clarifies how the process will be regulated. The SEC was supposed to release the rules months ago. Word on the street is that they’ll finally get to that issue in September, Mr. Rodman said. “Which means it’ll probably be January,” he said. In the meantime, his team — which is participating in the FlashStarts business
MILESTONE
BEST OF THE BLOGS
A startup slightly ahead of its time
Excerpts from recent blog entries on CrainsCleveland.com.
Don’t spend it all in one place
COMPANY: Tendon Manufacturing Inc., Bedford th
OCCASION: Its 30 anniversary Owner Mike Gordon and his business partner, Greg Tench, began operations of Tendon Manufacturing on July 1, 1988, when they purchased the assets of the machine shop of Gould Electronics’ RSD division. It was a unique deal “in that it preserved all the jobs of the current shop employees and provided us with our first customer,” Mr. Gordon says. Today, Tendon Manufacturing is a contract manufacturing company specializing in sheet metal fabrication and machining. It also offers in-house powder coating, laser fabrication, welding, silk-screening and contract assembly. In addition to making product directly to customer specifications, Mr. Gordon says, Tendon Manufacturing has full mechanical design capabilities. Indeed, the company recently was certified to the ISO 9001:2008 standard in design. Tendon Manufacturing occupies about 36,000 square feet at 20805 Aurora Road. For information, visit www.tendon.com. Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.
■ The economy is getting better, but pay raises in 2014 “will only be slightly more generous than they have been over the past few years,” according to CNNMoney.com. “Employers anticipate increasing worker salaries by an average of 2.9% in 2014, just a little better than the 2.8% boost they gave this year,” the website reported, based on an annual survey of 1,500 midsize and large U.S. employers by consulting firm Mercer. While a vast improvement from 2009, when raises averaged 2.1%, “the expected pay increases are still a far cry from mid2000 levels when they averaged around 3.5%,” said Catherine Hartmann, a principal in Mercer’s Rewards consulting business. The main culprit: high unemployment. With the jobless rate at 7.6%, “employers in many industries still have the upper hand when it comes to hiring and can easily recruit and retain employees without increasing salary offers,” CNNMoney.com reported. Also weighing on wages are “increased costs tied to retirement and health care benefits, which leave less available money for salary increases.” “Employers expect to give their top-tier workers raises averaging 4.6%,” according to the story. “That’s compared with average pay increases of 2.6% for average workers and 0.2% for their worst performers. And almost half of all projected raises for 2014 will go to the top third of workers.”
A cut above ■ A Forbes.com critique of a recent list of the nation’s 20 best steakhouses rose to the
accelerator in Cleveland’s Theater District — is focusing on a website serving accredited investors and preparing for the day when the rules are released. — Chuck Soder
A for-profit option for motivating donors ■ Two local wealth managers are putting their money behind a for-profit program that looks to assist nonprofit organizations in growing their endowments. Daniel Bonder and David Kottler have invested roughly $20,000 to establish the Donor Motivation Program of Northeast Ohio. That money buys them access to research and training as licensees of the Donor Motivation Program, which is based in Pittsburgh. Now, in their roles as “donor motivation specialists,” they will make money when hired by nonprofits for their help. “With the recovery … there was a hope that the fundraising would recover as well,” said Mr. Bonder, who is a founding partner of Beacon Financial Partners, a wealth management firm in Beachwood. “It really hasn’t recovered that much, so the need (for help) has become greater.” The Donor Motivation Program, which was launched in 1995, serves as an intermediary between nonprofits and potential donors. Thus far, the local Donor Motivation Program has hosted three events about the challenges nonprofits face; it has yet to be hired by a nonprofit in Northeast Ohio. — Michelle Park
defense of a Beachwood establishment. Forbes.com quibbled with TheDaily Meal.com’s methodology — something a lot of people do when it comes to Forbes.com’s own lists — and objected to some overrated places making the top 20. The “most obvious omission” from the list, Forbes.com wrote, “was Red The Steakhouse, a simply phenomenal restaurant with locations in Cleveland, Boca Raton and Miami’s South Beach.” The site said Red “is one of the very, very few U.S. eateries actually importing real Japanese beef.”
A game for the ages ■ Cleveland, are you ready for some highlevel pickleball? If so, you’re in luck. The Wall Street Journal ran a fun profile of San Antonio truck driver Joe Torres and his identical twin brother, John, who hold the title of doubles champions at the Texas Senior Games in pickleball, a sport the paper calls “a mixture of tennis and ping pong.” The 60-year-olds have participated in more than 20 tournaments. But the National Senior Games in Cleveland, which started last Friday, July 19, are “the first time the twins compete at the national level,” The Journal said. Indeed, this is the first time pickleball has been part of the National Senior Games. “My brother and I have always been competitive,” Joe Torres told the newspaper. “In our family it seemed like, once you turn 40, they just didn’t do anything. But we loved the game of tennis and that kept us active all our adult lives, and now we’ve switched over to pickleball and I think we’ll play a long time.” John Torres, also a truck driver, said pickleball is ideal for older adults because it isn’t very physically demanding, and there is a greater emphasis on strategy than on brute strength.
20130722-NEWS--24-NAT-CCI-CL_--
7/19/2013
1:37 PM
Page 1
ENGINEERING: UNIQUELY EUROPEAN. PRICING: UNIQUELY COLLECTION. Mercedes-Benz of North Olmsted
569
$
All-New 2014 Mercedes-Benz E350 4MATIC®All-Wheel Drive
Porsche of North Olmsted
The redesigned 2013 Boxster. Lease for $599/month.
Per month lease for 36 months. $4,414 due at signing. ($3,050 down payment, $795 acquisition fee, $569 first payment)
599 24
$
$54,400 MSRP, 7-Speed Automatic Transmission, Premium 1 Package: Rear View Camera, mbrace2™, COMAND® w/Navigation and Voice Control, iPod®/MP3 Media Interface, SiriusXM® Radio w/ 6 Mos. Service, Power Rear-Window Sunshade, 18” AMG® Wheels, Sport Package, harman/kardon® Logic 7® Surround Sound System, Heated Front Seats
/ MONTH MTHS
$1,494 due at signing Excludes tax, title and doc fee. No security deposit required.*
Porsche of North Olmsted A Part of Collection Auto Group 28400 Lorain Road, North Olmsted, Ohio 44070
Mercedes-Benz of North Olmsted
855-218-1288
Open 24/7 at: www.clevelandporsche.com #1 PORSCHE DEALER IN OHIO
28450 Lorain Road . 888-450-8064 . www.mbohio.com *Financing or leasing through Mercedes-Benz Financial is subject to tier one credit approval. 2014 E350 – 36 months, 10,000 miles per year. 25¢ per mile thereafter. $4,414 due at signing. Doc fee, tax and title additional. No security deposit. In-stock units only or while supplies last. Lease offers expire 7/31/13. Available to qualified customers only. © Mercedes-Benz USA, LLC.
$599 per month for 24 months at 5,000 miles per year, .30¢ per mile after 10,000 miles, $1,494 due at signing (First payment $599, acq. fee $895 and $0 cash down). Tax, title and doc fee additional. Payment or upfront fees do not include sales or county tax. Financing is subject to credit approval. Stock# PD114760. MSRP $57,385. Security deposit waived. Offer good through 7/31/13. ©2013 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of all traffic laws at all times. Vehicle shown includes optional equipment available at additional cost.
Maserati of Cleveland THE ALL NEW 2014 MASERATI QUATTROPORTE IS HERE.
$1,199
per month for 44 months with $6,999 due at signing*
SALE PRICE
2013 Maserati Gran Turismo Convertible
$119,399
MSRP $145,475
Available in All-Wheel Drive. Come in today for a test drive.
NERO/NERO STOCK #TD074166
Maserati of Cleveland 28300 Lorain Road, North Olmsted 888-918-7931 www.maseraticleveland.com *$795 Acq fee. $250 Documentation fee, Security Deposit, DMV fees & Sales Tax due at signing. Based on 10,000 miles/year with $0.60 for each additional mile. Qualified S Tier buyers through Ally Financial. Offer is only good while supplies last. Ad must be present at arrival to dealership and before the write up of a deal. Offer nontransferable. Offer can be canceled at anytime without notice by dealer. Vehicle image for illustration purpose. Offer expires 7/31/2013
WHERE ABOVE AND BE YOND COMES STANDARD.
www.collectionautogroup.com