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THE DYNAMICS BEHIND AN UNPOPULAR STRATEGY Many fans have resisted, but Indians are sticking to their pricing plan By KEVIN KLEPS kkleps@crain.com
41
Patrick Rishe said his research shows that 24 of the 30 teams in Major League Baseball use dynamic pricing. “It’s pretty clear that’s the way to go in terms of maximizing revenue,” said Rishe, an economics professor at Webster University in St. Louis and founder of Sportsimpacts, a sports consulting firm. The Indians first instituted dynamic pricing — a ticketing strategy in which the cost of a game varies depending on such factors as the opponent, the date, the day of the week and when the seat is purchased — on a limited basis in the second half of the 2012 season. During each of the last two seasons, dynamic pricing has been fully in effect, and it has been as warmly embraced by some Tribe fans as a midweek matchup in April against the Minnesota Twins on a rainy 40-degree night. The Indians are a combined 177-147 the last two seasons, a tenure that includes an unexpected run to the postseason in 2013. In those two years, the team’s attendance has ranked 28th and 29th, respectively, in MLB. In 2014, a campaign that started with the Tribe riding the momentum of a 92-win season the year before, the Indians’ average attendance dropped 6.3%, and their total attendance of 1,437,393 was the worst in baseball. The average crowd per game has plummeted from 22,726 in 2011, the last season with no dynamic pricing, to 18,428 in 2014. There are plenty of well-chronicled components that are contributing to the Indians’ low attendance, but there are teams in similar-sized markets with similarly finicky weather that are drawing 5,000 to 17,000 more fans per game than the Tribe. The Milwaukee Brewers (an average 2014 attendance of 34,535), Cincinnati Reds (30,576), Pittsburgh Pirates (30,155), Minnesota Twins (27,785) and Kansas City Royals (24,154) all pulled in at least 5,700 more fans per home date than the Indians, and only the Pirates and Royals had more victories than the Tribe’s 85. “Listen, we’re certainly not satisfied,” Indians president Mark Shapiro said. “I think we have a solid approach. There’s a variety of reasons. We had three rainouts that happened. No one’s mentioned that. We probably wouldn’t have dropped if we didn’t have those three rainouts.” The Indians had four home games postponed by rain in 2014, and three of the contests resulted in doubleheaders — essentially removing three home dates from the team’s schedule. The three extra dates — originally scheduled for a Monday,
See DYNAMICS, page 33
That’s the message of Case Western University professor who will host global forum By TIMOTHY MAGAW tmagaw@crain.com
Chris Laszlo insists he’s not a tree hugger. Still, the associate professor at Case Western Reserve University’s Weatherhead School of Management is one of the foremost researchers when it comes to corporate sustainability. But for Laszlo, corporate sustainability initiatives — like setting goals to reduce carbon emissions — shouldn’t be rooted in the idea of incrementally doing less harm to the planet. Instead, he said companies should focus on the idea of flourishing — a concept Laszlo and other researchers explore in the new book, “Flourishing: The New Spirit of Business Enterprise.” The ultimate goal, Laszlo said, is that humans and other life will thrive on the earth forever, and businesses can play a major role in making that happen. The idea is that businesses can flourish — take that as meaning “make big bucks” — by focusing their work on some of the biggest problems facing the globe. Consider General Electric’s eco-imagination initiative, which focuses on environmentally friendly products and services. It has brought in more than $100 billion in revenue since launching almost a decade ago. “This has nothing to do with tree hugging or singing Kumbaya,” Laszlo said. “This is about market opportunity. We teach this at Weatherhead, and we tell our students to go out and develop businesses that end up hugely profitable because they’re taking advantage of rising expectations. What they have seen is there is demand in the marketplace for products that solve a customer’s problem and do so with a positive attribute for the community, See PICTURE, page 6
THEY’RE FLOURISHING HERE A few examples of local companies that fit Case Western Reserve University’s definition of a flourishing enterprise, along with a list of speakers at this week’s event. Page 6
7
ALSO INSIDE: NEWSPAPER
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Tuesday and Wednesday night in April, August and September, respectively — would have padded the Tribe’s total attendance, but probably wouldn’t have provided much of a boost to the club’s average at the gate. For the Tribe, low attendance isn’t a new issue, but it seems to be getting more complex by the season. Shapiro said the Indians have a “three-tiered approach” to addressing the problem. Eliminating dynamic pricing is not part of the equation. “That’s something that’s going to stay,” the Tribe president said. “But I think the value proposition will be a piece of that or offer an
Make big bucks, but be part of big picture
CFO OF THE YEAR Crain’s highlights some of Northeast Ohio’s top fiscal officers ■ Pages 15-30 PLUS: GOLDEN LEDGER AWARD ■ JUDGING PANEL ■ & MORE
Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 41
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Cuyahoga County’s business court is evolving in the hopes of making the avenue for resolving complex business-to-business cases even more robust. Cuyahoga County Common Pleas Court doubled the number of judges hearing cases on the commercial docket from two to four this year, and new judges have been tapped to fill anticipated vacancies on the bench in 2015. The impetus of the commercial docket in Ohio — similar courts exist in at least 27 other states — was to make the region more receptive to businesses by creating a court specifically for cases between businesses. These cases often center on issues such as business liquidations, trade secret disputes, noncompete contracts and shareholder disagreements, among other complex topics. Because those cases now tend to be expedited much quicker than before the docket’s inception, the belief is that clients can save money through reduced attorney costs. Businesses, meanwhile, enjoy streamlined lawsuits that could have taken upward of several years in the past. While difficult to quantify, most believe the commercial court has been successful in creating a more hospitable legal climate for businesses. “Business litigators and their clients appreciate the innovation,� said Bruce Hearey, president of the Cleveland Metropolitan Bar Association. “It’s been a boon for business, and not only the ones located in Northeast Ohio, but those thinking of coming here. I think it’s a good selling point to entice businesses to locate here.� While a perceived plus for businesses, it means more work for arbitrators. Judge Richard McMonagle, one of the court’s original judges, joked that in 2008 when the Ohio Supreme Court pitched the idea of the dedicated business docket, they were told each participating judge could expect about 23 of those cases annually. In reality, the court’s original pair of judges saw about 15 times that activity each year over the first five years.
Growing demand Since Cuyahoga County’s commercial docket was established, 3,325 cases have been filed in it, and 2,966 (89%) of those have been resolved or disposed of, according to caseload data from between March 2009 and August 2014. That equals about 50 cases filed and nearly 45 cases disposed of on average per month. Overall use of the court has been
WHO’S WHO
BY THE NUMBERS
â– Judge Nancy Fuerst, three-year term beginning January 2014
Cases placed on the commercial docket at Cuyahoga County Common Pleas Court since March 2009:
■Judge Joseph D. Russo, three-year term beginning July 2014 ■Judge Richard McMonagle, one of the court’s original judges, will be replaced in the commercial court by Judge Cassandra Collier-Williams, who begins her three-year term in January. ■Judge John O’Donnell, another original judge, has been approved for an additional three-year term at the end of his current term, which ends June 30, 2015. Note: If O’Donnell wins election next month to the Ohio Supreme Court, Judge Michael Donnelly will assume O’Donnell’s duties and fill out his term. on the rise nearly every year. In 2010, the court’s first full year of operation, 540 cases were filed (or 45 cases a month on average). Comparatively, based on the momentum of 516 cases filed through August, the court is now on pace to see more than 750 lawsuits filed (or 64 cases a month on average) this year. Cuyahoga County’s 34 Common Pleas Court judges voted last June to make the docket a permanent feature following the pilot program launched in 2009. Last October, they moved to have four judges split the cases to lighten each judge’s load and resolve cases even quicker, explained John J. Russo, administrative and presiding judge at Cuyahoga County Common Pleas Court. To manage the workload, judges on the commercial docket get to hand off a civil or personal injury case for every commercial case they’re given. Conversely, cases appropriate for the commercial court filed elsewhere can be transferred to the commercial docket. McMonagle said that in his experience, it’s taken an average of 85 days for a case to turn over in commercial court. While less common, more complex cases can take between six months to a year. A few still have taken a couple years to resolve. “This docket is about access to justice,� John Russo said. The state’s goal is for those cases to run in fewer than 18 months overall — measurably faster than the two-year average those cases generally used to take. “This has been the most beneficial tool for my practice and anybody else that practices in commercial law,� said David Mayo, a partner at Benesch. “We know we’re going to get the attention of the judges, and we know they’re going to work hard.�
Volume 35, Number 41 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2014 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750
March-Dec. 2009 2010 2011 2012 2013 2014
342 540 653 614 660 *516
*Through August. The court is averaging 64.5 commercial cases per month this year, putting it on pace for 774 cases to be placed on the docket in 2014. Source: Cuyahoga County Common Pleas Court Mayo added that many who would’ve filed a commercial case in federal court are now predisposed to the county court because of the swiftness they’ve come to expect and familiarity with the docket’s judges.
Creating a better court Similar courts were permanently adopted in Ohio’s Hamilton and Lucas counties last year. Franklin County participated in the pilot, but their judges eventually disbanded the court in a narrow 9-8 vote with the majority reporting dismay over political implications the court created. John Russo said such concerns have not been an issue in Cuyahoga County, where judges now serve single, staggered, three-year terms. Replacement judges who offer to serve in the business court are chosen randomly, their names drawn from a hat. The same randomized process is used to pair a case with a judge. Some critics question the benefits of allowing judges only threeyear terms that can’t be served consecutively. Ricky Gurbst, a partner at Squire Patton Boggs who supports the court overall, said he believes the term limits are “counterintuitive to the notion of creating expertise.� But John Russo said a direct goal of the docket was never to create niche “experts,� but merely areas of specialty to foster faster resolutions by judges. John Russo said that while the court overall is being deemed a success, he aims to assemble the legal community before the end of the year to discuss suggestions on how to make the commercial court even better. “We think it’s a good time to give ourselves a report-card grade,� he said. “This will be a good time to hear from the community about what’s working and what’s not.�
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
5
THE RACE FOR CUYAHOGA COUNTY EXECUTIVE
Candidates have familiar focuses By JAY MILLER jmiller@crain.com
Frontier program and a $100 million expansion of the Venture Capital Fund as job-creating efforts he can take credit for. Earlier this year, the region’s Venture Capital Advisory Task Force highlighted a gap in a tier of funding that, if not available locally, often prompts companies to move to accommodate an out-of-the-region investor. “The county will do something if I’m the executive,” Budish said. “I don’t know what it will be yet. The venture capital authority would be a priority for me if we can get a (private sector) partner.”
The two candidates for Cuyahoga County executive — Democrat Armond Budish and Republican Jack Schron — have spent most of their adult lives in the private sector, not running for public office until reaching middle age. And the offices they have held have been legislative. As a result, each brings to their first run for an executive position experiences and strengths built on roles more as collaborators than initiators of policies. And each casts the results of bipartisan, executive-led governments as legislative accomplishments they shepherded.
Feeling social
THE ENDORSEMENT GOES TO ... See Crain’s editorial, page 10. Nonetheless, each wants to use his first time in a top government job to advance similar goals, though specific strategies and spending levels might differ. It’s an uphill battle for Schron in a county where voter registration tilts 3-1 to Democrats, and his opponent has deeper pockets. Still, Schron’s incumbency on Cuyahoga County Council gives him a familiarity with county government that Budish can’t match. In separate interviews with Crain’s editorial board, each put job creation and economic development at the top of the list of priorities. Those areas consume only a small part of the county’s annual spending, but they are key discretionary dollars, unlike the bulk of county spending that goes for mandated services. The $2.5 billion, 2014-2015 county budget allocated only 1.7% to development. More than 37% goes to social services, and nearly 36% is carved out for the courts, health and safety, and roads and bridges. Schron believes his 30 years building a family business, Jergens Inc., gives him the leg up in job creation. Jergens manufactures
“Many people are not getting the benefits they are entitled to, either because the system is too complicated or too intimidating.”
“You need to have somebody who has actually demonstrated they can walk in, shake hands with somebody and make a sale.”
– Armond Budish
– Jack Schron
and sells specialty fasteners, hoists, vices and clamps for manufacturers. “Everybody says you should create jobs” by supporting financially the expansion plans of businesses, Schron said. “But you need to have somebody who has actually demonstrated they can walk in, shake hands with somebody and make a sale.” Under County Executive Ed FitzGerald, a Democrat, a $100 million fund was created to help attract and expand businesses in the county, and the joint city-county Workforce Investment Board made the area’s job-train-
ing program more employer-oriented. Schron believes he can expand the effort. “One of the first things we’re going to do is bring together a business task force and ask, ‘How do we increase the jobs and the economic impact?,’ ” he said. “I’m a firm believer that jobs are a fundamental way to rebuild the community.” Similarly, Budish offered a plan for a county-financed venture capital fund. While House majority leader from 2009 to 2011 under Democratic Gov. Ted Strickland, Budish helped fund a renewal of the state’s Third
Budish, 61, was elected to the Ohio House of Representatives in 2007, and he has spent the years since then representing his hometown of Beachwood and other nearby eastern suburbs. He started practicing law in Ohio in 1979 with the firm of Hahn, Loeser and Parks. Schron, 66, has spent the last four years learning about the new county government as the county councilman representing a district that includes 18 outer suburbs from Gates Mills to Seven Hills. In addition, he’s a significant job creator, building Jergens over the last 30 years to a workforce of nearly 200 and starting Tooling University, an online job training program. But, Budish said, delivering social services is the primary role of county government. He would like to see the county get better at reaching people who are entitled to benefits but are not receiving them. “Many people are not getting the benefits they are entitled to, either because the system is too complicated or too intimidating,” he said. “With technology, there is no reason we can’t be going out into the communities, to senior centers and rec centers and explaining the rule for veterans benefits, or Medicaid or other programs and actually signing people up on laptops or iPads. Why not? These are not giveaways, these are things that stabilize our community. To me, it’s an economic See CANDIDATES, page 34
Northeast Ohio is sizing up retail superstores Local market is ‘extremely active’ as large land owners, developers and big-name companies plot their next moves By STAN BULLARD sbullard@crain.com
Amidst Northeast Ohio’s resurgent real estate development scene, a big factor is missing: active superstore proposals. The absence is all the more notable because superstores with more than 100,000 square feet of selling space under a single roof that require 20 acres or more to develop have been surfacing frequently around the rest of Ohio. For example, proposed sites for Seattle-based Costco operator have emerged in locations near Columbus, Dayton and Toledo. Stores of 124,000 square feet for Menards, the Eau Clair, Wis.-based supplier of building materials and related items, are rising near Dayton and Warren. However, owners of several huge 20-acre sites throughout Northeast Ohio are busily pitching proposals behind the scenes. Meijer, a hypermarket operator almost ubiquitous in the state outside Northeast Ohio, is said to be
entertaining multiple sites in the region. Reports of a Costco proposal in the southeast side in the Bainbridge Township/Aurora area are afoot, and prospective sites for a Menards in Lorain County are in play. All are in addition to the muchreported plan that Cuyahoga Falls has put together for a Menards there. The interest in large land parcels has gone from negligible a few years ago to “extremely active,” said Cliff West, an associate at Marcus & Millichap who has several listings in the 300-acre range in Northeast Ohio and adjoining states. “Christmas is right around the corner,” is the way West describes behind-the-scenes discussions by big land owners, developers and retailers in the region. “It’s busier on the retail front than I have ever seen.” West described this as a “sensitive time” because several developers and retailers are sizing up sites, performing environmental exams
and buttoning up preliminary negotiations before taking proposals to local officials — the time when they usually become public. “If it’s something the community would like to have, they will move to the next stage,” West said. “Then it becomes a site under contract” and people will discuss it. West declined to discuss any of his listings specifically. Steve Passov, a principal of the Beachwood-based Passov Real Estate Group which focuses on the retail market, said he has heard that each of those names is in play in the region, though he declined to discuss specific potential sites. “There has been increased interest from that cast of characters in the marketplace,” Passov said. “There are a lot of things coming. You are hearing a lot of conversations about big boxes now. You hadn’t heard the name of a big box mentioned for years.”
Anything’s possible This type of development has
been dormant since 2010, when the region’s last Costco opened in Strongsville after a decade of legal wrangling. With other stores in Mayfield Heights and Avon, observers felt the company was done here. Even more than most retailers, operators of mammoth stores decline to discuss prospective sites until approvals from local governments are obtained, land is purchased or permits are obtained. Too many things can make such a plan go awry. Costco is typical. Asked about an additional Northeast Ohio store, perhaps in the southeast, a Costco spokeswoman who declined to be identified by name said the company does not comment on such reports until it has a site ready to go. Asked about its interest in Northeast Ohio, Menards spokesman Jeff Abbott issued this statement in an email: “We are interested in building Menards stores in Avon, Brooklyn, Cuyahoga Falls and Mentor some day but are still working on it. No final decisions have been made
and no timeline has been established at this point in time.” Although the Cuyahoga Falls store has been publicly in play and Mentor was the site of a prospective store until Menards scuttled the site in 2012, the prospective Brooklyn location is new. Just one 20-acre vacant site comes immediately to mind in the inner-ring Cleveland suburb. There is a bucolic patch of grass of that size next to the current American Greetings Corp. headquarters in Brooklyn. It was the former Memphis Drive-in until the personal expression maker bought it in 2006 for potential future expansion. With construction of the American Greetings headquarters underway in Westlake, an affiliate of Los Angelesbased Industrial Realty Group bought the Brooklyn property in August. Stuart Lichter, chairman and president of IRG, said in a phone interview that his company views the empty land as a site for See SUPERSTORES, page 32
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
OCTOBER 13 - 19, 2014
COMPANIES GOING ABOVE AND BEYOND Congratulations to Farley Helms and Rocco DiPuccio on the sale of the historic Alcazar Hotel, Cleveland Heights!
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Northeast Ohio is one of the hubs of a growing movement among businesses to go beyond traditional sustainability efforts — ones focused simply on doing less harm — and making the idea of doing good a core part of their strategies. Here are some examples of local companies nearing Case Western Reserve’s definition of a flourishing enterprise.
Fairmount Santrol
GOJO Industries Inc.
Vitamix
Chesterland
Akron
Olmsted Township
The work: Fairmount Santrol, a provider of sand and sand-based products to oil and gas exploration and production companies, has a robust sustainability program. The company for years has worked to reduce its impact on the environment through the use of more sustainable technology, but over the last few years the company has worked harder to build a culture where its work force is focused on doing more good. The company offers paid volunteer time, strives for zero-waste facilities and taps its entire work force for ideas.
The work: One GOJO rep said the company’s sustainability efforts aren’t a “bolt on,� but rather “ingrained in the strategic thinking across the organization.� The company, a maker of skin health and hygiene products, is focused on improving people’s health with its products, increasing the positive impact and limiting the negative the business has on the environment and generating profits for the company and its stakeholders.
The work: Although Vitamix is a manufacturer of high-performance blenders, the company’s CEO, Jodi Berg, sees the firm almost like a wellness company, given that it’s in the business of making healthy foods — fruits and vegetables, specifically — taste good by mixing them together. So, the bulk of the company’s sustainability efforts are rooted in the wellness arena. Vitamix also has a highly localized manufacturing process, which it says allows the company to reduce waste and its impact on the environment.
The impact: Since 2006, the company has introduced a series of green-certified cleaning products, which now make up one of GOJO’s fastest growing service lines. By 2015, GOJO had pledged to reduce solid waste generation by 25%, water consumption by 30% and greenhouse gases by 5%. The company already has exceeded those goals.
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The impact: In 2013, Fairmount donated 9,000 hours of paid volunteer time and planted or donated 62,471 trees. Also, the company now operates 10 zero-waste facilities. The company recently went public. In a statement, Matthew F. LeBaron, managing director at American Securities, the private equity firm that owned Fairmount, said the company’s commitment to environmental stewardship should position it for “continued long-term success as a publicly traded company.�
The bottom line: “It was a business imperative,� said Nicole Koharik, GOJO’s global sustainability marketing director. “It was something we needed to commit to — not only as an initiative, but a core business strategy. That was the driver.� She added, “Those critics, rather than resisting, should think twice about their business and see sustainability in a literal sense.�
The bottom line: “It’s simply good business,� said Beau Daane, Fairmount’s director of sustainable development. “If you don’t operate this way, you’re going to have a problem at some point. If someone says, ‘What is all this tree hugging about?’ I’d say it’s about doing business better and smarter. If you’re not doing it, you’ll be in a tough position.�
The impact: As part of Vitamix’s wellness program, all new employees — after 90 days on the job — receive one of the blenders. The company also has smoothie stations in the break rooms. On the manufacturing side, the company uses reusable packaging for its components that it receives from suppliers, and some of the original containers are still in use. The company also refurbishes unwanted Vitamix machines to ensure they don’t end up in landfills. The bottom line: “There’s certainly a lot of room for us as businesses to own the responsibility of making the world a better place,� Berg said. She added, “You can’t make a big impact on the world if you spread yourself too thin and decide you want to affect everything and help everybody in every sort of way. That’s why we need to come together as a like-minded group of people.�
GLOBAL FORUM FOR BUSINESS AS AN AGENT OF WORLD BENEFIT “Flourish & Prosper�; Oct. 15–17 at Case Western Reserve University; www.globalforumbawb.com Featured speakers and presenters:
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Martti Ahtisaari President of Finland, 1994-2000 Nobel Peace Prize Winner Ilma Barros Adviser, Fowler Center for Sustainable Value Weatherhead School of Management, Case Western Reserve
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Jodi Berg President and CEO, Vitamix Michael Braungart Founder and scientific CEO of EPEA Internationale
Lyell Clarke President and CEO, Clarke Michel Giannuzzi CEO, Tarkett Harry Halloran Chairman and CEO, American Refining Group and ARG Resources Bart Houlahan Co-founder, B Corporation Michele Hunt Founder, DreamMakers Naveen Jain Entrepreneur
and philanthropist Chris Killingstad President and CEO, Tennant Simon Mainwaring Founder, WeFirst Sir Mark Moody-Stuart Former chairman, Anglo American and Royal Dutch/Shell Jane Nelson Director, Corporate Social Responsibility Initiative Kennedy School, Harvard University
Peter Senge Lecturer, MIT Sloan School of Management Founding chair, Society for Organizational Learning Raj Sisodia Co-founder, Conscious Capitalism Judy Sorum Brown Author, educator, poet Andrew Winston Founder, Winston Eco-Strategies Nadya Zhexembayeva Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management
PICTURE continued from page 1
environment and other stakeholders.� Laszlo and other high-profile thought leaders in the corporate sustainability arena will explore the concept of a flourishing enterprise at Case Western Reserve’s third Global Forum on Business as an Agent of World Benefit, which kicks off Wednesday, Oct. 15, and runs through Friday, Oct. 17. The goal of the conference, its organizers say, is to demonstrate how businesses and communities can come together so that each flourishes and the world benefits.
“This is an attempt to reinvigorate and give life to the sustainability movement that will inspire employees and customers and will make stronger business case to CEOs and other C-suite leaders,� Laszlo said. This concept of so-called conscious capitalism is a growing movement, particularly in Northeast Ohio, where it’s gained a bit of a foothold, according to Scot Lowry, the CEO of digital marketing firm Fathom in Valley View. Lowry and a small group of other believers created a group called The Purpose Capitol — the capitol being Weatherhead’s iconic Peter B.
Lewis Building — that’s focused on spreading the concept of doing good as a central business strategy. For instance, Fathom, one of the region’s fastest growing companies, offers employees paid time to volunteer and pro-bono services for nonprofits. “This concept isn’t about becoming a quasi-nonprofit,� Lowry said. “This is about maximizing value for all our stakeholders, not just the shareholders.� He added, “We view the profits as a result of operating this way. It’s proven in our experience that this is the best way to run a business.�
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Ancora Securities is rebranded in ‘tidier’ fashion By JEREMY NOBILE jnobile@crain.com
Cleveland discount dealer-broker firm Ancora Securities, a former subsidiary of The Ancora Group, has rebranded itself as America Northcoast Securities in the wake of a split from its previous parent company. Christopher Barone, president of now-independent America Northcoast Securities, said the divestment reflects a trend in the industry in which financial firms are looking to “derisk” and “get very focused on what they do.”
“The Ancora Group had an IRA and a broker-dealer. It was determined that those businesses should be separate,” he said. America Northcoast still will act as Ancora’s dealer-broker. “It’s just a cleaner, tidier way to present ourselves,” Barone said. America Northcoast’s service platform will focus solely on providing independent broker-dealers and advisers with technology, trading and concierge brokerage services through its 20-year relationship with BNY-Pershing LLC, an investment management firm headquartered in New Jersey.
“The Ancora Group had an IRA and a broker-dealer. It was determined that those businesses should be separate.” – Christopher Barone president, America Northcoast Securities America Northcoast has about eight employees, Barone said, and there won’t be any significant changes to staff coinciding with the rebranding. “Our firm is now working with
strategic partners to find independent and start up broker-dealers nationwide seeking industry arrangements that further reduce costs and increase day-to-day business efficiencies,” he said. Barone described the relationship with Pershing as a “piggyback” approach to the broker-dealer model, which is the “wave of the future for many small-to-midsized broker-dealers.” “The costs of not being independent are too high,” he said. Barone said America Northcoast traces its roots back 30 years as one of Ohio’s original discount broker-
dealer firms. While it has undergone numerous name changes, the firm was known as Daley Securities when it was acquired in the early 1990s by Maxus Investment Group — an investment advisory firm founded in 1973 by prominent Cleveland investor Richard Barone, who is Christopher’s father and chairman of The Ancora Group. Maxus was sold to Fifth Third Bank in the early 2000s, but Richard Barone retained Daley Securities, which would continue to grow and eventually help lead to the formation of The Ancora Group.
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Team NEO forecasts rapid growth for autos By JAY MILLER jmiller@crain.com
span, Moody’s forecasts, auto employment nationally will decline by 3%. That translates into an increase of 2,600 jobs over the next two decades. With Northeast Ohio trailing the nation in most facets of economic recovery, the business attraction nonprofit sees this forecast as a reason for optimism about the region. It’s also an important sales tool for Team NEO, which is in the business of pitching the region as place where businesses can grow. “For all the manufacturing creative destruction that’s been going on, when you have a significant
Economists see a strong decade ahead for the U.S. auto industry and, if they’re right, Northeast Ohio will be a big beneficiary, growing faster than the industry as a whole. In its third-quarter review and forecast for the regional economy, Team NEO reports that Moody’s Analytics, a respected economic analysis and forecasting firm, projects that employment in the auto sector in the 18 counties of Northeast Ohio will grow by 19% between 2011 and 2024. During that time
WHAT IGNITES YOU? E D U C AT I N G P H Y S I C I A N S , P H A R M A C I S T S A N D H E A LT H C A R E R E S E A R C H E R S
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manufacturing sector where we are growing faster than the U.S., that’s man bites dog,” said Tom Waltermire, Team NEO’s CEO, in an interview last week. This forecast is part of Team NEO’s quarterly review of the regional economy, which focuses on the trend in regional employment. There, Team NEO reports that employment in Northeast Ohio reached 1.8 million at the end of the first quarter of 2014, an increase of 10,000 jobs from a year earlier. At the same time, unemployment has dropped, to 7.6% from 8.3% in the first quarter of 2013. Team NEO also reports that the gross regional product is growing at a 1.2% rate annually. The auto industry’s contribution to the gross regional product will grow by 79% over the 2011-2024 period. That’s slightly faster than the automotive industry’s increasing contribution to the national economy. Nationally, Moody’s estimates the automotive sector will grow by 60%. Team NEO attributes the growth in Northeast Ohio auto employment versus the national decline to a greater reliance here on auto parts-making, which may be more labor-intensive than auto assembly or engine and transmission manufacturing. Of the 24,200 workers employed in auto-related industries in Northeast Ohio in 2011, about 64% worked for parts makers. “It makes sense you have (more labor) making parts than assembly,” Waltermire said. “So maybe this mix is unusual.” Auto industry economists have been forecasting growth in the do-
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mestic industry for several years, in part because of a return of some manufacturing to the United States from Asia, and because of anticipated worldwide growth in auto sales. In Northeast Ohio, an estimated 2,000 auto jobs were added between 2011 and 2014. IHS Automotive, an Englewood, Colo.-based consultancy, is forecasting a steady rise in auto production, domestically and internationally. IHS expects U.S. light-vehicle sales to rise from 15.6 million units in 2013 to 17.4 million in 2017, according to a report in Automotive News¸ a sister publication of Crain’s Cleveland Business. Worldwide sales, especially in China, are expected to grow at an even faster pace. Jacob Duritsky, Team NEO’s managing director for research, added that regional developments also play a role in the pace of growth here. In March, Ford Motor Co. said it would invest $168 million to bring production of its medium-duty trucks to its Avon Lake Plant, adding an undisclosed number of jobs. Then in June, the German auto parts maker Borgers AG said it would build a new manufacturing facility in Norwalk that could employ as many as 230 people. The company makes carpeting and insulation for passenger cars and commercial vehicles. Earlier Ford announced it would start making its popular EcoBoost engine at its Brook Park engine plant and General Motors Corp. has made a long-term commitment to build its international small car, the Cruze, at Lordstown.
Crain’s Cleveland Business is pleased to announce the hiring of a new reporter and a new sales account executive. Jeremy Nobile joined Crain’s editorial staff Sept. 12. He covers finance and legal affairs, including banking, law firms, accounting and insurNobile ance. Prior to joining Crain’s, he worked for the Record-Courier in Ravenna as a multimedia reporter covering breaking news, features, education and local government. Nobile, a native of St. Clairsville, Ohio, earned his bachelor’s degree in newspaper journalism with a minor in psychology from Kent State University in August 2010. Laura Kubler Mintz joined Crain’s sales team Sept. 26 as an account executive. A native Clevelander, Mintz was previously director of mar- Kubler Mintz keting and sales at the Maltz Museum of Jewish Heritage in Beachwood. Prior to that, she was an advertising account executive at WDOK-FM 102.1 for 18 years. Mintz has an extensive arts background and is a voice-over talent who has recorded radio, TV and on-hold announcements for many companies. “Laura and Jeremy pack wonderful talent and skills into their briefcases every morning,” said John Campanelli, Crain’s publisher. “But they are also bringing Crain’s something special: a passion to empower the region’s businesses. They will help us in our goal of transforming Crain’s Cleveland Business into a modern media brand that delivers the region’s best business news and information.”
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PUBLISHER:
John Campanelli (jcampanelli@crain.com) EDITOR:
Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Vote Schron Four years ago, Cuyahoga County was holding its breath. Voters had sent a resounding message the year before that county governance had to change. And, in the fall of 2010, the county was on the brink of transition as voters returned to the polls to elect the county’s first executive and an 11-member council. Could the new form of government rid the stench of endemic corruption that resulted in charges against dozens of public officials, county workers and contractors? You can’t blame residents who had their doubts when Ed FitzGerald and the new county council were sworn in on Jan. 1, 2011. The past four years have shown that FitzGerald and the council have done admirable work in restoring integrity and confidence in a county government that desperately needed restoration. Efficiencies have been accomplished, and the county is focused on economic development and job creation as it’s never been before. Now county voters must decide who will take the baton from FitzGerald as county executive, a job that some have called the second-most powerful in the state. FitzGerald is seeking Ohio’s most powerful job: governor. Fortunately, voters have two qualified, passionate candidates in Democrat Armond Budish and Republican Jack Schron. Both bring unique qualities to the role and both are capable of continuing the reforms and further shaping the county to be economically viable and to care for its residents. Budish brings a devotion to public service and the knowledge of downstate politics from his time spent in Columbus as a state legislator and speaker of the House from 2009 to 2011. Schron has the experience of being on the ground level of county reform as councilman for the county’s District 6, representing several eastern and southern suburbs. Equally important, Schron brings decades of business experience as the longtime president of tool maker Jergens Inc. in Cleveland. The county would benefit from both candidates’ qualifications and experience. However, we strongly believe that Schron’s wisdom as a business leader will allow him to effectively and efficiently run Cuyahoga County as a public servant with a CEO’s wisdom, as a fiscally responsible adminstrator who is consistently watching the bottom line. Northeast Ohio also will benefit from having a bipartisan mix of Democratic and Republican leadership at the helm of the county and its largest city. Mayor Frank Jackson and Schron both have shown a willingness to cross party lines when necessary, which is rather refreshing these days. We encourage heavily Democratic Cuyahoga County to break out of its partisan voting pattern and elect the first Republican candidate for countywide office in more than two decades. Elect Jack Schron for county executive, and continue to build on the foundation of economic viability, fiscal responsibility and efficiency.
FROM THE PUBLISHER
Looking to business to save the day We’re all familiar with the concept of “It’s sustainable.” sustainability in business. Chris Laszlo, a professor at Case’s It usually includes things like LEEDWeatherhead School of Management, certified buildings, energy-efused that example during a ficient lighting, reduced prodmeeting with Crain’s to explain uct packaging or maybe just a an idea he and others hope can bin for compostables in the ofreplace the traditional sustainfice kitchenette. ability movement. The decades-old sustainLaszlo believes that busiability movement has saved nesses can do better by not an incalculable amount of waonly reducing their negative ter, energy, natural resources footprints but by increasing and money. It also has provid“positive handprints,” by goed companies with lots of oping from not harming to helpportunities to crow about a JOHN ing, from “sustainable” to “reduced footprint” in their “flourishing.” marketing materials and an- CAMPANELLI “Business as an agent of nual reports. world benefit” is the concept. But there’s a real problem. SustainLaszlo is one of the minds behind this ability focuses on only one side of the week’s Flourish and Prosper event, a globstory. al forum on the subject at Case. Speakers Let’s say you become a sustainability include CEOs, entrepreneurs and a Nobel superhero and somehow manage to stay Peace Prize winner. (Read more coverage in business while cutting your company’s of that on the front page of this issue.) waste to zero, your water usage to zero It’s going to be a heady event. The goal and your energy consumption to zero. By is a complete mind shift. doing so, you would have worked a miraWhy can’t business shed its reputation cle and overcome the laws of thermody(among some) as being exploitive, damnamics … and you’d still be at zero. aging and self-serving? Why can’t busiImagine running into a married friend in ness be the one to fight poverty, empowthe grocery aisle and having this exchange: er women, cure disease, improve “Hey! Long time no see. How is your education and become a catalyst for marriage going?” good? Why can’t companies innovate
and flourish with the same values many of us hold in our personal lives: mindfulness, empathy, humanity, spirituality? Listening to Laszlo and his colleague Roger Saillant, who directs the Fowler Center for Sustainable Value at Weatherhead, it’s tough not to be inspired — and a bit skeptical. Sure, it’s easy to be at a flush company like Google and throw around some extra millions to build a school in Tanzania. But what about the rest of us, who are sweating to hit last year’s numbers or who need every bit of extra cash to fund growth and innovation? Laszlo and Saillant point out that the companies that embrace the concept tend to outperform their peers. They also have an easier time with talent acquisition and retention. They say it’s not charity or philanthropy. It’s not liberal or conservative. And it’s not fantasy. Of the world’s top 100 economies, half are businesses. With changed minds, changed focused and changed policy, business might just be able to save the world. Or at least change the conversation in the grocery aisle. “So, how’s business’ marriage with humanity?” “It’s flourishing.”
TALK ON THE WEB Re: Haslam family’s $50M donation to UT
Re: Unemployment rate drops to 5.9%
I wonder if The University of Tennessee’s Business School teaches how to bilk trucking companies out of hundreds of thousands of dollars. — Stephen Jerome
Scott Suttell, (who wrote about the September jobless figures), you’re a deceitful “journalist.” The reason for this number is because a record number of people are out of the work force. But you would rather shill for Obama. — Redbird25
Re: Business travel at Hopkins United, in fact, might be the best possibility for restoring some service. The airport and GCP could propose, “We’ll suspend [some percent] of your obligations to the airport if you restore service to Montreal, Kansas City, and start a flight to Frankfurt.” The airport and GCP could share the cost of the suspension and UA might even make a few dollars on the flights if they schedule them right. — Robert Salmon
Re: Ulmer’s new real estate practice chair Congratulations to Mary Forbes Lovett and Ulmer & Berne. I have had the pleasure of working with her when I was at KeyBank and am working with her on Talmer Bank and Trust transactions. The Cleveland real estate market continues to be on the move. — George Moy
Re: Not the same old Browns Congrats to Brian Hoyer and the entire Browns organization. Mondays feel so much better in Cleveland! — Walt Avdey
Re: Help for health care reform Let’s not forget the tremendous uncertainty that employers have faced and continue to face with the never ending changes and delays in this law. The blatant shifting of cost to employers and their employees from this legislation continues to hurt businesses, and there is no end in sight. It is time to start holding these politicians accountable for this mess. There is no better time than Nov. 4 to start. — Robert Klonk
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PERSONAL VIEW
The newer geography of jobs By RICHEY PIIPARINEN
In a recent Harvard Business Review piece, Roger Martin, former dean of the Rotman School of Management at the University of Toronto, detailed a changing of the guard within American firms. In 1963, nearly three-quarters of the nation’s top 50 firms were natural resource-based. By 2013, only 20% of top firms focused on raw materials. Instead, notes Martin, knowledgeintensive industries such as Apple comprised over 50% of top firms. The takeaway: Talent is the new oil. With this economic shift also came a shift in the nation’s demographics. Stanford economist Enrico Moretti calls it the “Great Divergence”, whereby a geography of “the haves” and “the have-nots” has developed in the battle for brainpower. The “haves” are those cities that have been able to cluster a critical mass of expertise. Think Boston and biotech. San Francisco and information technology. New York and finance. What’s more, these cities have created such a center of gravity that they form “black holes” so to speak — sucking up all the capital in their wake. This is likely to continue, according to Moretti. Who are “the have-nots” in this tilted landscape? “Detroit, Flint, Cleveland,” Moretti told NPR’s Morning Edition recently. In other words, those “haves” of the industrial age became lacking today. This brings to mind a quote by legendary Motown singer Marvin Gaye. “Detroit turned out to be heaven,” Gaye said, “but it also turned out to be hell.” Such is the nature of things. Wrote poet Robert Frost: “So dawn goes down to day, nothing gold can stay”. Except, of course, Silicon Valley and the like, which — according to proponents of the Great Divergence — are curiously immune to future economic shocks. But what if these experts are wrong? Or more provocatively: What if Silicon Valley is the next Detroit, or a region becoming a victim of change, if not its own oligopolistic success? One major mechanism for such a radical transformation is called “geographic arbitrage”, loosely defined as the practice of high-paid professionals moving to less-expensive ar-
Piiparinen is a senior research associate and lead at the Center for Population Dynamics at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. eas. From the firm perspective, the movement from high-cost areas is called “capital equalization”. AOL Co-Founder Steve Case has speculated these cost-cutting mechanisms will lead to a “the Rise of the Rest” — a moniker coining the nascent reemergence of second-tier cities. “The prediction of this view is the convergence of American communities,” acknowledges Moretti in his book “The New Geography of Jobs”. “Low-cost areas will attract more and more of the new, high-paying jobs. Cities that have been lagging behind — the Clevelands, the Topekas, and the Mobiles — will grow much faster. Bogged down by their high costs, San Francisco, New York, Seattle, and similar cities will decline.” But Moretti goes on to note that the data don’t support this view. “In fact,” he writes, “the opposite has been happening.” Yet there is data that do support this view. Specifically, in a new report brief I co-authored for The Center for Population Dynamics at the Maxine Goodman Levin College of Urban Affairs called “A Newer Geography of Jobs: Where Workers with Advanced Degrees Are Concentrating the Fastest”, the results suggest there is a next generation of second-tier metros that are entering into the top ranks of the knowledge economy hierarchy. Greater Cleveland is one of these metros. The analysis found that in 2005, 11.68% of Greater Cleveland’s workforce had a graduate or professional degree, ranking the metro 22nd in the nation out of 40. By 2013, however, the region gained about 44,000 workers with a graduate or professional degree, bumping its percentage of workers with an advanced degree to 17%, ranking 10th in the nation — one spot ahead of Pittsburgh. Greater Cleveland’s 12-point jump in the rankings was third-largest in the country, behind Indianapolis and Providence. Moreover, the region’s change in its concentration of highly skilled workers from 2005 to 2013 was
fifth-largest, behind Washington, D.C., Providence, Indianapolis and San Francisco. Now, in terms of broader economic growth, why does a concentration of highly educated workers matter? From the report brief: “(A) region’s highest-educated workers are likely to be job creators, not just job consumers. This primarily comes about two ways: (1) through direct job creation, such as a research doctor starting a biotech spin-off firm; and (2) through indirect job creation, particularly relating to the “downstream” effect a highpaying job has on the local service economy. Put simply, more income, more spending, equals more jobs.” Also, there is the “jobs follow people” effect. A perfect example of this is Google’s presence in Pittsburgh. Carnegie Mellon’s computer engineering program is top ranked in the nation. There is an established pipeline from Pittsburgh to Silicon Valley, yet it is a pipeline that is increasingly going two ways. Google is expanding its office footprint in the city’s Bakery Square development. The process of knowledge transference between the regions is intensifying as well. For instance, the new dean of Carnegie Mellon’s School of Computer Science is Google Vice President Andrew Moore. Taken together, perhaps Google sees the handwriting on the wall. Big tech, where it is housed, is becoming too costly. Specifically, attracting talent to live in Silicon Valley and San Francisco is becoming too costly. So, why not refine talent where it is produced? “It goes without saying that no matter how much talent a company might have, there are many more talented people working outside its boundaries,” begins a Harvard Business Review piece. “Yet all too many companies focus solely on acquiring talent, on bringing talent inside the firm. Why not access talent wherever it resides?” The Center for Population Dynamics’ current analysis suggests that top talent is increasingly residing in the Rust Belt. Again, such is the nature of things. “Out of the huts of history’s shame,” writes poet Maya Angelou, “I rise.”
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OCTOBER 13 - 19, 2014
GOING PLACES JOB CHANGES
Stephenson to director of enrollment management.
ARCHITECTURE
FINANCE
ARRAY ARCHITECTS: Laura Morris to principal and shareholder.
CHARTER ONE: Nick Baltas and Laura Golnick to loan officers, Home Lending Solutions Midwest Division.
PERSPECTUS ARCHITECTURE: Amie B. Rini to senior project director; Erin E. Vollmer to interior designer.
CONSULTING PRADCO: Michele Ridella to senior management consultant.
EDUCATION UNIVERSITY SCHOOL: Sara
ERIEBANK: David Bogardus to vice president, commercial lending. FEDERAL RESERVE BANK OF CLEVELAND: Susan Kenney to senior vice president.
CIUNI & PANICHI INC.: Kael Campbell and Bryan Haas to staff accountants. WESTERN RESERVE PARTNERS: Margaret Graham, Kevin Harper and Gregory Waller to senior analysts.
HEALTH CARE
Morris
Rini
Ridella
Stephenson
Baltas
Bogardus
Wolf
Armstrong
DELTA DENTAL: Michael Loeffler to executive director, Ohio sales and account management.
FINANCIAL SERVICE
UNIVERSITY HOSPITALS: John J. Wolf, D.O., to medical staff, Family Medicine Specialists.
APPLE GROWTH PARTNERS: Laura Shank to marketing director.
HOSPITALITY THE RITZ-CARLTON CLEVELAND: Emily Ebersbacher to catering sales manager.
LEGAL FISHER & PHILLIPS LLP: Scott W. Gedeon to of counsel; Anthony D. Dick to attorney.
MANUFACTURING RPM INTERNATIONAL INC.: Kenneth M. Armstrong to senior director of environmental, health and safety; Carrie Rogers to senior internal auditor; Justin Williams to global tax manager.
MARKETING BOONDOCK WALKER: Megan Conway to operations manager. CONTENT MARKETING INSTITUTE: Heather Meza to chief content alchemist; Pamela Muldoon to podcast network director; Tracy Mallette to audience development manager; Michele Linn to vice president, content; Jodi Harris to director of editorial content and curation.
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DeBernardo to director of operations.
DIX & EATON: Gregg LaBar to managing director. THE KARCHER GROUP: Hilary Stephens to online marketing specialist; Bonita Eberhart to office manager.
REAL ESTATE NORTHERN TITLE AGENCY INC.: Tracy Ferrell to marketing consultant.
SANCTUARY MARKETING GROUP: Julie Mamula to director of production.
SERVICE LEE HECHT HARRISON: Tim Slager to vice president, business development.
NONPROFIT AMERICAN ENDOWMENT FOUNDATION: Eric Kinaitis to editor/director of content marketing.
STAFFING
GREATER CLEVELAND VOLUNTEERS: Kirsten Frei-Herrmann to program director; Ross Jones to AAPR experience corps manager.
DIRECT CONSULTING ASSOCIATES: Johnny Yurkschatt to director, IT services practice; Brandon Maravich to recruitment manager.
YOUR HOMETOWN CHAGRIN FALLS: Kathleen Visconsi to executive director; Angie
DIRECT RECRUITERS INC.: Gina O’Donnell to lead recruiter, flexible packaging practice.
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Capital Strength Six ways to thrive as CFO of a high-growth firm By James Ritchie
FOs of rapidly growing companies are faced with great change as they take on a larger role in guiding organizational strategy and navigating a variety of new risks. But even as the role evolves, the heart of it remains the same: managing finances. John Masters The difference for CFOs in fastManaging Director moving organizations versus more Cleveland Bank of America traditional enterprises lies in the Merrill Lynch definition of “managing finances.” For firms that are expanding, focus needs to be on ensuring they have enough capital to make things happen. That means CFOs in such companies still have plenty of opportunity to use their time-honored technical skills — but also a multitude of new ones. Here, John Masters, managing director for Bank of America Merrill Lynch, Cleveland, offers some best practices for CFOs of high-growth firms:
• Watch the markets. Timing is everything when it comes to credit. It’s very possible to wait too long to try to develop new liquidity and then find that it’s not there for you. At some point you may realize that you’re going to have to make a move based not only on your needs but also on what the markets look like.
• Stay objective. The biggest pitfall is falling in love with an idea. The CEO says, “I want to go there.” The CFO says, “We have the capital; we can get there.” But after you invest the money and resources, you still have to be ready to go in a different direction if you aren’t getting results. For more on the right sources of capital for your Cleveland business, contact john.masters@baml.com
• Choose the right growth. The metrics you focus on will depend on whether your firm’s growth is organic, M&A-fueled or innovation-based, and how — and to what extent — it is leveraged. For example, some companies that are using leverage to fund growth might be closely monitoring cash positions. I know companies that are measuring sales based on location daily to make sure their investments are paying off in the time they expect them to pay off.
• Stack up to your peers. Benchmarking can give you a sense of whether your approach to risk is in line with that of other companies. We have tools that let customers compare themselves to averages for liquidity, leverage, working capital, inventory and other factors. Firms can measure their performance against vast amounts of benchmarking data through a Bank of America Merrill Lynch resource called PeerProfiler ®, which includes information aggregated from thousands of firms, along with industry-specific and publicly available data.
With the right connections, companies grow fast. baml.com/growth
• Free up cash. The vagaries of closing deals, fulfilling orders, and getting paid bring challenges when you’re pushing for growth. Having adequate cash or credit on hand lets you overcome the hurdles. When we’re working with teams, we make sure they’ve built in sufficient liquidity — six, 12, 24 months out — to do what they’re trying to do. Credit financing is a convenient and flexible source of capital for firms seeking to build new plants, bring new products to market, or even acquire another company. But it’s by no means the only option for middle-market companies, as equity capital is also a popular choice for firms pursuing growth of all types.
• Scale it back. Making big plans and carrying them out is the fun part of working in a rapidly growing company — but sometimes the CFO has to spoil the fun. If an idea carries too much risk, it’s often up to the CFO to suggest scaling it back, delaying it or dropping it. It’s like a double-edged sword. You can grow like crazy, which creates value, but you can also run out of cash. You have to manage growth carefully or it can be a bad thing.
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“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. THE POWER OF GLOBAL CONNECTIONS is a trademark of Bank of America Corporation, registered in the U.S. Patent and Trademark Office. ©2014 Bank of America Corporation 09-14-0809
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WWW.CRAINSCLEVELAND.COM
2014
CFO OF THE YEAR Crain’s Cleveland Business for the eighth year in a row is highlighting the area’s top fiscal officers with its CFO of the Year awards. In addition, the Golden Ledger Award is being presented this year for the first time. The Golden Ledger Award is given to one CFO who, throughout his or her career, has honorably represented their organization with exemplary performance, including leadership, market and monetary growth, strategy, integrity and contributions to the overall financial industry.
CRAIN’S CLEVELAND BUSINESS
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GOLDEN LEDGER AWARD Richard Fearon always advises young professionals to seek out new opportunities. As an entrepreneur, lawyer, scholar and accountant, he has embraced that perspective himself. His work has taken him across the world from California to Singapore. He founded and sold his own advising firm businesses in Silicon Valley, and managed development and strategic planning at massive companies from Transamerica Corp. to The Walt Disney Co. At Eaton, where the 58-year-old Fearon currently serves as vice chairman and chief financial and planning officer, he’s responsible for some of the biggest developments the $35 billion company has realized in its recent history. Asked if he’s a glutton for punishment, Fearon chuckles and admits, “I love a challenge.” “Sometimes I do wonder why I take on so many challenges,” he said. “But if I didn’t do that, I’d probably become a little bored. It’s that challenge that keeps me on my toes.” Fearon earned his bachelor’s in economics from Stanford University and his master’s in business administration from Harvard Business School, where he was a Baker Scholar. He also earned a J.D. from Harvard Law School and is a member of the State Bar of California. Through the 1990s, Fearon served as general manager for corporate development at Singapore-based NatSteel Ltd. before transitioning to Transamerica Corp. where he left as senior vice president of corporate development. Fearon in 2002 joined Eaton, a company that last year posted $22 billion in sales, in 2002 from Willow Place Partners, a Menlo Park, Calif.-based corporate advisory firm he founded in 2001 and soon sold. Through his tenure, he’s helped achieve 65 company acquisitions, many featuring massive, multibilliondollar companies. Fearon has worked at so many different companies because of his general philosophy on life and careers. “As long as you’re developing a deeper set of skills, you’re going to be able to do more important things, and you’ll be more valuable to your employer,” he said. “I’ve always followed a philosophy of taking on assignments, taking on jobs that would expand my own skill set.” Fearon encourages other young professionals to always be open to new opportunities that can better themselves. He calls it “strategic opportunism.” And it’s worked well for him. “In terms of my own career,” Fearon added, “it’s been very satisfying. I’ve found some great opportunities, and it has really played out better than I had hoped.” “This is a guy who is of such quality, I think if they were having a national contest, he’d be in the running,” said Mike Gibbons, senior managing director at Brown Gibbons Lang & Co. and a judge for the Golden Ledger award. “It’s inconceivable that you can find a CFO that’s any smarter than this guy. He’s really a cut
An independent panel of judges reviewed the nominees, taking into account the following: candidate background, including unique qualities and accomplishments; leadership in such areas as strategic planning and vision, business challenges, risk management and succession planning; financial management, including monetary growth, market share gains, profitability, strategic transaction and commitment to accounting standards; and other contributions (philanthropic, community, financial industry and board of directors service.)
above. And we’re proud to have him in Cleveland.” A major key to Fearon’s success: finding ways to keep sane. He has a varied set of interests, and he encourages others to also balance work with play. Fearon himself is an avid golfer, tennis player, wine collector, hunter and watch collector. Fearon serves on the boards of PolyOne Corp., Hawken School, The PlayhouseSquare Foundation and the Cleveland Museum of Art. He also chairs the CFO Council of the Manufacturers Alliance, a trade organization of leading U.S. manufacturing companies, and serves as the Northeast Ohio commissioner of the Third Frontier Commission. Fearon lives in the village of Bentleyville with his wife. His children, Robert and Erica, are attending Stanford University. In Fearon’s future plans, he said he might one day help his kids get a business going of their own, maintaining a culture of entrepreneurship in the family. His own advice to upcoming young professionals is to be hard working and focused. “You have to understand what you like to do, what you’re good at, and then think and imagine where you’d like to end up. Be willing to grab opportunities that come along that generally get you in the direction you’d like to end up. If the opportunity gives you more skills and advances you in the long term, grab it. And once you grab it, don’t look back.” — Jeremy Nobile
This year’s judges were: Kate Asbeck, senior VP and CFO, The Cleveland Foundation Jim Boland, retired vice chairman, Ernst & Young; and former president and CEO, Cavaliers Operating Co. Mike Gibbons, senior managing director, Brown Gibbons Lang & Co. Albert D. Melchiorre, president, MelCap Partners LLC Michael E. Stanek, vice president and CFO, Hunt Imaging LLC
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OCTOBER 13 - 19, 2014
NOMINEE — GOVERNMENT
FINALIST — GOVERNMENT
CARRIE KRENICKY
BRENT LESLIE
CFO, CLEVELAND PUBLIC LIBRARY
CFO, PORT OF CLEVELAND
Carrie Krenicky thrives in minutia. That special attention to detail has earned the Cleveland Public Library awards in bookkeeping for financial reports the institution isn’t even required to file. That drive, said Tracy Martin, grants and development coordinator at the library, is fueled by Krenicky’s desire for public accountability, which she instills in her finance department. “(Krenicky) is meticulous, detail-oriented and reliable,” the nomination said, “all desirable qualities of a CFO.” “She knows that every dime is public funds and needs accounted for properly,” Martin said. “That need for transparency is constantly on Carrie’s mind.” Krenicky joined the library in 1998, working her way up through the accounting department to achieve the role of CFO in 2011, which was prefaced by a run as “acting CFO” between 2010 and 2011. She oversees finances for the taxpayer-funded library’s $54 million in annual revenue and more than 730 employees. The library, like most tax-funded agencies, is seeing less funding allocated by the state. That shrinking support, coupled with lower collections on property taxes, has resulted in at least $20 million cut from the library’s budget in the past five years. Krenicky implemented the process of filing a Comprehensive Annual Financial Report (CAFR) — a rigorous and detailed budget plan required of state and municipal governments but not necessary for the library — and drawing up five-year plans projecting finances well into the future. Krenicky’s CAFRs have drawn certificates of excellence for financial reporting for the 2011 and 2012 reporting years (2013 results haven’t been returned). Such efforts, Martin said, build accountability into the library’s finance department and lead to superior financial planning. “Carrie provides the stability to ensure that there won’t be any surprises,” said Felton Thomas Jr., CEO of the Cleveland Public Library. Besides driving home the importance of public accountability at the library and instituting a new financial accounting system, Krenicky’s efforts have led to streamlined receipt processes and the creation of an online-payment portal for fines. And when it comes to explaining the minutia of ac-
If the Cleveland Port Authority were a ship, Brent Leslie could be its rudder: the mechanism pushing the craft forward from just beneath the water’s surface. From establishing an international presence for the port and helping to realize a $10 million increase in total assets in the past three years (net assets increased only $2.5 million over five years prior), to securing a permanent headquarters — Leslie is credited with making the port the economic force it is today. “He’s really provided leadership above and beyond the traditional role of a CFO,” said Will Friedman, CEO of the Cleveland-Cuyahoga County Port Authority. Friedman said Leslie, along with other members of the port’s senior management team, is shaping the port into an entrepreneurial force. Besides managing the port’s growing assets and leading development finance programs supporting $2 billion in local projects, Leslie also has contributed to some of the most significant changes the agency has ever seen, the nomination said. Leslie first came to the port in 2003 as a project accountant and quickly stood out as a leader, Friedman said, working his way up to CFO in 2007. His first action as CFO was updating the antiquated IT system to improve accounting efforts and increase productivity. After a shakeup in the port’s leadership, Leslie stepped in until an interim CEO was named. He made tough decisions in tumultuous times, Friedman said, streamlining some operations and downsizing staff to achieve a stronger bottom line. “That was the beginning of getting our expenses under control as well as growing the operating-line revenue for the port,” Friedman said. Among other efforts, Leslie led the proposal to acquire and build the port’s new administrative headquarters on West 9th Street, creating the agency’s first permanent home since it was created in 1968. Most recently, Leslie is credited with helping ink an agreement between the port and its Dutch shipping partner, Spliethoff Transport BV of Amsterdam, to add a second monthly sailing of what’s called the Cleveland-Europe Express between Antwerp, Belgium, and Cleveland in 2015. All those efforts are in addition to a bevy of recent high-profile economic development projects the port is helping support, from the rehab of the Ameritrust building to the makeover of Parmatown Mall. “We’re figuring out how to work smarter, and not just add more overhead,” Friedman said. “It’s about being more entrepreneurial. And I think we’re pushing the boundaries here.” Friedman said Leslie is partly driven by a desire to serve the community, noting he could just as easily be an investment banker, “but he enjoys public service and making a difference here.” Leslie last year was awarded the American Marshall Memorial Fellowship by the German Marshall Fund of the United States. An active community member elsewhere, Leslie is the chairman of the financial audit committee for the city of Rocky River and sits on the board of the FBI Citizens’ Academy Foundation of Cleveland, according to his nomination. He’s the vice chair of the finance committee for the American Association of Port Authorities and serves as the port’s representative on the Ohio Ports Council, among other roles. “Brent’s contributions, leadership and partnership with me and the rest of the team here have been instrumental in accomplishing what we have over these last four years,” Friedman said. “I don’t think we’d be where we are today without him.” — Jeremy Nobile
“Carrie (Krenicky) provides the stability to ensure that there won’t be any surprises.” – Felton Thomas Jr. CEO, Cleveland Public Library
counting to her employees and colleagues, “she’ll always make time for you,” Martin said. “You know you’re not her top priority, yet, she’s still willing to take that time out so not only her employees, but the management throughout the building can understand,” Martin said. “She doesn’t micro-manage though. She just helps you along the way. She encourages independence.” Besides her role as CFO, Krenicky is also a member of the library’s executive leadership team where she helps implement their strategic plan known as the CPL 150. She’s a member of the Ohio Society of CPAs and the Ohio Government Finance Officers Association. — Jeremy Nobile
The Shareholders & staff at Maloney + Novotny congratulate our clients and friends for their nomination as Crain’s CFO of the Year. Jim Ansberry Timothy McNeill
Congratulations to all nominees for your outstanding accomplishments.
Business Advisors and Certified Public Accountants Cleveland | 216.363.0100 Canton | 330.966.9400 Delaware | 740.362.9031 Elyria | 440.323.3200
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Congratulations to our CFO, Sean Hennessy, on being named Crain’s Cleveland Business CFO of the Year ©2014 The Sherwin-Williams Company
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NOMINEE — PRIVATE
FINALIST — PRIVATE
MICHAEL DEA
MARK ASTORINO
CFO, PRESIDENT, EQUITY TRUST CO. Jeffrey Desich, the CEO of Equity Trust Co. in Westlake, has supreme confidence in the ability of the company’s CFO, Michael Dea, to handle a flood of business and finance issues that come his way at the provider of self-directed IRAs and 401(k) plans. Including, it turns out, a flood. On the first morning that Equity Trust officially owned its striking Westlake headquarters building, Desich said, its elevators flooded. He said Dea was on the phone by 6 a.m. that day to fix the problem — a standard move for a CFO who is a trusted business confidante and routinely handles calls after hours and on weekends. The building “represents the broad range of things Mike handles,” Desich said in an interview. He said Dea “made that building happen, and he made it happen on time.” Indeed, the CFO nomination for Dea, submitted by the company’s chief operating officer, John Cameron, calls Dea “a jack of all trades” with a “unique ability” to handle duties “ranging from the day-to-day management of financial performance of the company to being responsible for the functions of compliance, audit, legal and business governance, and more complex tasks such as treasury management and all merger and acquisition work.” Desich said Dea played a lead role in overseeing the Westlake headquarters project in 2013, which involved consolidating six offices of the 400-employee Equity Trust into one building. Dea was responsible for working with state, county and local officials on financial incentive packages for the project, Desich said. In addition, Dea was the point person for working with the general contractor and managed the project’s financing, construction and deadlines. “All of this was accomplished in less than 12 months, a remarkable feat for the complete renovation of an 80,000-square-foot building,” the nomination stated. “The project was completed on time and below budget.” Since Dea began working at Equity Trust in August 2008, the company’s assets under management have grown from about $4 billion to more than $12 billion in 2014, according to the nomination. That expansion “is
CFO, CHROMAFLO TECHNOLOGIES CORP.
the result of organic and acquisitive strategies set forth under Mike’s leadership,” the nomination stated, noting that EBITDA “improved by 18% through aggressive cost management and revenue expansion.” Dea, before joining Equity Trust, held executive positions at a number of banking institutions, most prominently at KeyBank, where he was, among other positions, managing director of the commercial real estate group. Desich said he views Dea as whip-smart — the CFO “knocks out the New York Times crossword puzzle in about 22 minutes before he has his coffee” — and a trusted adviser on all manner of company operations. “He’s closely tuned into everything that’s going on,” Desich said, noting that Dea “is not just a numbers guy. He has great business sense.” Dea’s talents also extend to helping oversee Equity Trust’s annual “turkey bake,” a charitable event in which employees prepare turkeys that are donated to a local church for Thanksgiving. — Scott Suttell
When Mark Astorino joined Chromaflo Technologies Corp. in 2009 as CFO and treasurer, the Ashtabula company was then called Plasticolors Inc. A lot has changed in the five years since Astorino joined the supplier of colorant systems, chemical and pigment dispersions, and it goes well beyond the company’s name. Scott Becker, Chromaflo’s CEO, said his firm has undertaken a number of large-scale acquisitions over the past several years, including several deals in 2012 and 2013 that expanded the firm’s global footprint — and Astorino has played a key role along the way. “He’s proven himself at being adept at dealing with change,” Becker said. “He’s maybe the most ethical person I’ve ever met.” Becker, who described his CFO as a “very good strategic thinker,” said one of Astorino’s greatest challenges right now is the integration of IT systems with the acquired entities. And his work might not be done, as Becker noted that more acquisitions could be in the pipeline. The nomination, submitted by James M. Hill, executive chairman and partner for Benesh, which represents Chromaflo, echoed many of Becker’s sentiments. “Mark has taken the reins of the financial management of the company — including working on models of acquisitions and how they integrate, managing the treasury of a company that has grown in an accelerated fashion and dealing with numerous currencies,” the nomination said. “He is a very calm but strong individual — he works tirelessly but
does not expect all of his financial staff to work as tirelessly as does he. A very inspirational leader who can have a tough but constructive conversation with an employee.” Prior to joining Chromaflo, Astorino held a variety of leadership and senior positions, including at Hyde Park Restaurant Group; Catholic Charities of Ashtabula County; Martinet, Martinet & Recchia CPAs; and the Ohio Department of Natural Resources. In addition to his work at Chromaflo, Astorino is active in the community, including with the Civic Development Corporation of Ashtabula County; Our Lady of Peace Parish (Mother of Sorrows Catholic Church) ; and the Community First Credit Union. Additionally, he is involved with the Ashtabula County Emergency Management Agency as its public information officer; the Ashtabula Metropolitan Housing Authority as a member of its board of housing commissioners; and the Hospice of the Western Reserve as a vigil support volunteer. — Amy Ann Stoessel
NOMINEE — PRIVATE (ESOP)
JEFFREY HOOD CFO, ALLOY ENGINEERING CO.
The Holden Arboretum congratulates all of the finalists for the CFO of the Year Award. We are proud of our own Director of Finance, Jim Ansberry, whose dedication and leadership have been an invaluable part of our success.
Growing TOGETHER
holdenarb.org cbgarden.org
When Louis Petonovich told an executive headhunter about the qualities he wanted in a chief financial officer at Alloy Engineering Co., the search firm told him that sort of person didn’t exist. Petonovich wanted a high-drive, creative individual with an analytical mind like that of an engineer who also was reflective and cautious about certain financial decisions. “They told me that sort of person didn’t exist,” said Petonovich, Alloy’s president and CEO. “They said there was no such thing, and that it was an oxymoron.” Petonovich leafed through about 200 or 300 applicants, and he felt as if only two people fit what he was looking for, and Jeffrey Hood was one of them. “He is as focused on the small nickels and dimes as he is on the big dollars,” Petonovich said. “He’s committed to the financial stability of the company. As you know, for any company, especially if it’s growing, having someone with a foot on the gas as well as a foot on brake is important.” Hood not only oversees all of the
company’s financial needs, but also everything relating to the company’s employee stock ownership plan, or ESOP. “We’ve seen a significant return to the employees, and a lot of it has to do with his dedication to managing those numbers and being on top of them and making employees aware of where those numbers are,” Petonovich said. Over the last 18 months, beyond championing his own department, Hood also led the implementation of the company’s new enterprise resource planning software — a major undertaking at the company. See HOOD, page 22
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JIM ANSBERRY DIRECTOR OF FINANCE THE HOLDEN ARBORETUM Jim Ansberry is a busy man these days. That’s because the director of finance for the Holden Arboretum is front and center in efforts to integrate his organization with the Cleveland Botanical Garden, a combination that moved forward several weeks ago after approval from both boards. But that’s OK. Clem Hamilton, Holden’s president and CEO, has complete faith in his finance man. “Whatever challenge presents itself, Jim always does what it takes to meet that challenge,” Hamilton said. There have no shortage of obstacles — and accomplishments — in the 12 years Ansberry has been with Holden. For one, Ansberry, who came to the nonprofit from the private business sector, helped steer Holden through the Great Recession, a time when the organization saw the value of its endowment plummet. Hamilton said that the director of finance was “the ideal partner” for cutting the operating budget by 30% and for deciding the most effective way to resize the
organization. “We were able to reduce in such a way that, to our constituents … you wound up not being able to tell much difference,” he said. “We tore off the Band-Aid all at once.” In a similar vein, Ansberry also assisted in a reassessment of the organization’s assets, working to eliminate those that were
nonstrategic. Hamilton said that in all about 20 buildings were torn down from the arboretum’s 3,600 acres. But it hasn’t been all about cutting and trimming. In addition to nearly nine months of due diligence work preceding the botanical garden deal, Hamilton said Ansberry’s efforts have been essential in budgeting and deciding on capital improvement projects, approaching spending in a responsible manner. As if that wasn’t enough, Hamilton pointed out one other notable attribute: Ansberry’s a good writer. So much so, the director of finance has earned the nickname “master of the whereas,” for his efforts in writing board resolutions. Outside of work, the nomination said Ansberry has been a member of the Church of the Resurrection in Solon for over 36 years, and he’s served at St. Augustine’s Hunger Center and worked with Habitat for Humanity building houses. He also is treasurer of Holden’s board of directors and is a member of the Ohio Society of CPAs and American Institute of CPAs. “I’ve been running public gardens for 22 years, and I’ve never had a partner on the financial end to compete with Jim,” Hamilton said. — Amy Ann Stoessel
KATHY HEFLIN CFO, THE ALBERT M. HIGLEY CO. When The Albert M. Higley Co. reconstituted its former controller’s position to a chief financial officer’s role, it wanted to elevate financial operations to a higher level of management and deliberately sought to hire someone without a background in esoteric construction accounting. In Kathy Heflin, the 88-year-old general contractor gained an accounting professional who could
C O N G R AT U L AT I O N S t o Betty Goodman F i n a l i st fo r C ra i n ’s C F O o f t h e Ye a r A wa rd dŚĂŶŬ LJŽƵ͕ ĞƩLJ͕ for your dedicated service to our agency for over 35 years! Our mission: Preparing People with Barriers to Employment for a Brighter Future!
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See HEFLIN, page 23
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FINALIST — PRIVATE
FINALIST — NONPROFIT
RAYMOND MUELLER
BETTY GOODMAN TREASURER; CFO VOCATIONAL GUIDANCE SERVICES
CFO; EXECUTIVE VICE PRESIDENT MEDICAL MUTUAL OF OHIO Raymond Mueller is such an asset, his boss has hired him five times. So far, at least. “I hired Ray, for the first time, in the fall of 1986,” recalls Medical Mutual of Ohio CEO and chairman Rick Chiricosta, who at the time was a controller of Blue Cross of Toledo when Mueller was just an accountant. “We like to joke around — that he’s actually accepted five jobs reporting to me. That doesn’t mean I hired him and he left the company four times, though,” Chiricosta explains. No, theirs is not quite a George Steinbrenner-Billy Martin relationship. “There were no firings,” Mueller notes. The two have pretty much worked together, or at least at the same company, for all but five years since 1986. Mueller left for a time to work at an auto insurance startup, and sometimes worked in different parts of the company than Chiricosta. But his boss always found a way to make their paths cross again, and Mueller was always quick to accept. Both men say that’s a testament to the respect they’ve built up for one another over the years. As an executive, Chiricosta knows how to identify a valuable asset, as well as how to use it — including particularly valuable employees such as Mueller. “It goes beyond competence — Ray’s just one of those guys that every single person who meets him likes him immediately,” Chiricosta said. “He’s smart and he’s also a hard worker. … Once in a while I come to work especially early, but I never beat him here.” Mueller’s duties go beyond mere finance, too. He’s involved in strategic planning at the company and has also helped guide it through complicated scenarios, such as reacting and adjusting to the health care arena now that the Affordable Care Act is in place.
That’s in part because Mueller has the full confidence of his boss, a man he says is also his mentor. For his part, Chiricosta says that his CFO is not only one of his most trusted advisers and employees, but a friend. When Chiricosta’s children got married over the last couple of years, Mueller was at the weddings. Likewise, when Chiricosta was charged with starting a new life insurance subsidiary for Medical Mutual in 2006, Mueller was the first guy he called to join the new team. They are actually more like a winning battery than they are Steinbrenner and Martin, Chiricosta said. “It’s like a pitcher and a catcher,” Chiricosta said. “He knows what I want. I don’t have to ask for it — he already knows what’s going to be valuable to me.” Better yet, Chiricosta said: “I almost never have to shake him off.” Mueller, however, still seems to come at the job with all of the enthusiasm of a bat boy who still appreciates being in the park. “I like it because I know that every Monday morning, I’m going to come in and be surrounded by good people,” Mueller said. — Dan Shingler
Vocational Guidance Services was founded to help people. So it makes sense that the nonprofit would hire someone like Betty Goodman — and keep her on board for more than 35 years. Not only has she been an astute manager of the organization’s finances, but her passion for helping people shines through in her work and her personal life. Robert Comben Jr., president and CEO of Vocational Guidance Services, said Goodman has built an “incredibly effective” finance department during her long tenure with the organization, which employs people with disabilities, former prisoners and others with barriers to employment. What amazes him is that the finance department didn’t have to get bigger as Vocational Guidance Services grew. On a daily basis, the organization provides work opportunities and rehabilitation services to more than 1,000 people with barriers to employment. In 1999, the organization typically only employed about 330 people on any given day. Goodman has used technology to make the finance department more efficient. Over the course of the past six years, the department has installed software that allows it to process all financial transactions without using paper. Now she is “working to extend this technology to other areas of the agency,” including its human resources department, the nomination said. Vocational Guidance Services hired Goodman as its controller in 1979. She was promoted to CFO and treasurer in 2010. In that time, she has become an expert in matters related to government grants and contracts — and pretty much everything else the organization does, Comben said. “She’s an expert on VGS to say the very least,” he said. But it isn’t just her expertise that makes her stand out.
“Her dedication to service to the community and outstanding execution of VGS’ mission make her much more than just a financial executive,” the nomination said. For example, years ago, Goodman was “struck by the staggering number” of local children who were missing meals during summer break, the nomination said. So, in 2007, Vocational Guidance Services started serving food to children through a program run by the Ohio Department of Education. And two years later, she pushed to make sure needy people affiliated with Vocational Guidance Services weren’t going hungry. This time, she worked with the Ohio Department of Education to get support from the U.S. Department of Agriculture’s Child and Adult Care Food Program. The Streetsboro resident carries that same compassion with her on the weekend, too. Since 2012, she has spent most weekends helping out the Praise Dance Team at Shiloh Baptist Church in Cleveland. She regularly volunteers through the church and other organizations. For instance, she’s on the board of Dress for Success Cleveland and enjoys helping young women “successfully navigate their personal and professional lives,” the nomination said. — Chuck Soder
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RON COILL SENIOR VICE PRESIDENT; CFO OECONNECTION LLC Chuck Rotuno, OEConnection’s CEO, has known Ron Coill for more than 30 years and worked with him at three different companies. The stints together since the 1980s at KPMG, Rubbermaid and, for the last 13 years, OEConnection, have given Rotuno a strong connection to the Richfield company’s chief financial officer and reinforced a working relationship that he calls “truly unique.” “Ron is very even-keeled, the consummate financial professional and adviser to the CEO, who is … a little less than even-keeled sometimes,” Rotuno said in an interview. OEConnection, a provider of e-commerce services for the automotive OEM parts marketplace, was formed in December 2000, with Rotuno as CEO. Early in 2001, when he began looking for a CFO, Rotuno said Coill’s financial acumen, attention to detail and “ability to see both the forest and the trees” made him “the first and only choice for the job.” When Coill came on board in May 2001, OEConnection was a startup running its financial accounting systems on QuickBooks, Rotuno said. With Coill’s help, OEConnection has grown to a company with more than 60,000 users domestically, and one with a growing presence in markets including Australia, Canada and Mexico. “OEConnection has enjoyed a (compound annual growth rate) of 13% revenues and 20% earnings over the past decade, due in no small part to Ron’s financial leadership and stewardship of the business,” according to his CFO of the Year nomination. The company has accomplished this, Rotuno said, without taking on any debt or additional capital from its owners, Ford Motor Co. and General Motors. Further, the nomination noted, “OEConnection has returned a significant amount of cash to its owners during (the past decade), in addition to investing significantly in new products and infrastructure.” Coill has played “an integral role” in fostering the company’s growth while mitigating risk, Rotuno said. He “leads
the executive and leadership teams through a deep-dive of performance on a bi-weekly basis,” according to the nomination, and he presents the information quarterly to OEConnection’s management team and employees. “This ensures that everyone is aware of current results, challenges and opportunities, enabling the business to plan and overcome obstacles to achieve results,” according to the nomination. In addition to his financial duties, the nomination stated, “Ron has responsibility for information systems, national account relationships and our direct sales organizations. Very few finance professionals have the ability to not just report the results of the business, but to be accountable for delivering them.” Rotuno said he “can’t imagine running the business” without Coill. The company, which has a total of 300 employees in Richfield and Columbus and expanded its Richfield headquarters last year, once again is “bursting at the seams” and is evaluating further expansion options for its two offices, Rotuno said. Coill holds an MBA from the Fisher College of Business at Ohio State University and a bachelor’s degree in accounting from Kent State University. He also serves on the finance advisory board of the University of Akron. — Scott Suttell
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MARY MCDANIELS-THOBURN CFO, WESTERN RESERVE HISTORICAL SOCIETY When Mary McDaniels-Thoburn joined the Western Reserve Historical Society in 2009, the nonprofit was deep in debt and struggling to deal with the recession. But CEO and president Kelly Falcone-Hall said McDaniels-Thoburn not only seemed up for the challenge, she seemed downright “jazzed� about it. Falcone-Hall, who was then the director of Western Reserve’s Hale Farm & Village, said her first impression of McDaniels-Thoburn was that “she was just a breath of fresh air.� And, Falcone-Hall said, McDaniels-Thoburn did a great job quickly righting the ship. The society has now spent each of the past five years in the black. McDaniels-Thoburn serves as the society’s senior vice president of finance and administration/CFO, a role that puts her in charge of the nonprofit’s finances, its business office, its systems administration and human resources. She also oversees facilities and maintenance at the society’s History Center in University Circle. The nomination said that McDaniels-Thoburn had been entrusted with some of the Western Reserve Historical Society’s most complex recent transactions, including the stabilization of the 100-
year-old Hay-McKinney Mansion; the History Center Transformation Project at University Circle; the construction of a glass pavilion for the Euclid Beach Park Grand Carousel; improvements to the Crawford Auto-Aviation Museum lower galleries; and restoration of the Hay House gardens. “She also in 2014 guided us to the recent award of $1.25 million of State Capital Funds and is leading the project planning for same,� the nomination said. “Mary’s project management capabilities and persistent attention to detail were key elements of bringing each such project to completion on time and within budget.� As a leader, McDaniels-Thoburn is consistent
OCTOBER 13 - 19, 2014
and she doesn’t micromanage, Falcone-Hall said. The Western Reserve Historical Society is a collection of museums, plus a library, and McDaniels-Thoburn empowers people to manage their individual budgets. McDaniels-Thoburn is practical in her approach, Falcone-Hall said, and transparent and accessible. She has never been a teacher, but easily could have taken that path, she said. Her background is in public accounting and in consultancy for a nonprofit. McDaniels-Thoburn takes the time to sit down with the staff and educate everyone on how the finances work. “She spoke in a language that I could understand,� Falcone-Hall said. Falcone-Hall said the staff and board respect McDaniels-Thoburn, even when they don’t agree with her. The mother of three is a “good friend,� Falcone-Hall said, and kind and generous with her time. “As a female leader of the oldest nonprofit in Northeast Ohio, Mary role models professionalism, diplomacy, and tact for all whom she interacts with, at all levels and in all walks of life,� the nomination said. “Mary is also a donor to the WRHS. She does this to help keep salaries of the managers in her area competitive, and so the WRHS can reward, retain and attract good employees,� according to the nomination. “Mary also structured a financial model that allowed for retirement benefits to be restored on her watch. She and her husband attend nearly all of the benefits and other events of the WRHS, which are usually after normal work hours, and happen at least monthly.� — Rachel Abbey McCafferty
HOOD continued from page 18
Petonovich said it wasn’t unusual for him to stop in the office on a Saturday to find Hood reading manuals about the new software. “From the beginning, his mentality was to really commit to the company and do whatever it takes,� Petonovich said. Petonovich said 2013 was a year of great change for Alloy Engineering, which describes itself on its website as a designer and manufacturer of highquality alloy equipment for high-temperature and corrosive industrial applications. That year, Petonovich said the company “gutted� Alloy’s executive team, and Hood was one of the few people left. The company — with Hood’s help — also dissolved one of its divisions that wasn’t profitable and restructured operations at its facility in Wellington. “He stepped in and had a good handle on things,� Petonovich said. “Because of that, we had a significant year.� He added, “He’s tenacious, detail oriented, and I just have all the confidence in the world the numbers he gives us are always right.� — Timothy Magaw
THE PORT OF CLEVELAND
Congratulates Mr. Brent R. Leslie
www.cpl.org
Cleveland Public Library Board of Trustees and Staff congratulate Carrie Krenicky, CFO for her hard work and dedication.
on being named a finalist for
Crain’s CFO of the Year
O
Sean, n behalf of the staff, volunteers and board of Stan Hywet Hall & Gardens, congratulations on your nomination as CFO of the Year.
Sean M. Joyce, CPA Chief Financial OfďŹ cer
1RUWK 3RUWDJH 3DWK ‡ $NURQ 2+ A MagniďŹ cent Historic House Museum and Country Estate
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JAMES CARNOVALE SENIOR VICE PRESIDENT OF FINANCE, CFO JUDSON SERVICES INC. James Carnovale was no stranger to Judson Services Inc. when he was hired in 2010 as the organization’s senior vice president and chief financial officer. That’s because Carnovale had previously worked as an auditor for the organization in his role as principal with Howard, Wershbale & Co. “He came to us with his eyes fully open to us as an organization,”
said Cynthia H. Dunn, Judson Services president and CEO. Judson is a nonprofit organization that operates two retirement communities in University Circle (Judson Park and Judson Manor) and South Franklin Circle in Bainbridge Township. It also provides home- and community-based services through its Smart Living at Home program. Carnovale, who has 10 direct reports, has worked to position the finance department as an entity that serves the whole organization, Dunn said. “People feel more included … they understand decision-making on a financial analysis side,” Dunn said. “It’s been healthy for the whole organization.” Dunn credited Carnovale with
restructuring the debt for the South Franklin Circle project, which opened in 2009 in the middle of the recession, and for refinancing the debt on the Park and Manor campuses in University Circle. As a result, according to the nomination, the interest rate was significantly lowered, line of credit was paid down and the principal pay down was accelerated. Carnovale’s talents have paid off elsewhere for the organization. “Jim is a talented and successful contract reviewer/negotiator,” the nomination said. “His skills have saved the organization hundreds of thousands of dollars in utility bills, insurance premiums, health coverage contracts, benefits coverage. He is operationally very strong and more importantly, he provides
managers with the tools and education as to how to use the tools to successfully control expenses and maximize revenue.” Carnovale is on the board of deacons at Calvary Fellowship Baptist Church and is a financial stewardship trainer for Hannah’s Home, a home for pregnant teens in Mentor. He serves on AgeNet, a managed care network developed by LeadingAge Ohio, which negotiates contracts with commercial and government payors, and he is on the CHAMPS investment committee. Carnovale also is a long-standing member of the Ohio Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Dunn described Carnovale as both a teacher and team player.
“He’s a full package,” she said. “A good guy, very easy, fun to work with.” — Amy Ann Stoessel
HEFLIN continued from page 19
modernize its financial operations as well as its first female executive. Gareth Vaughan, Higley president, said, she “exceeded my expectations many times over.” Heflin has led initiatives to streamline and scrutinize billing and other procedures. In one case, she found the company was overpaying taxes, which allowed it to receive an $800,000 refund. Under her guidance, Higley also is well on the way to converting the firm to a paperless operation, and it is now keeping records in the cloud. Heflin also transformed the accounting function at the firm from a rigid operation viewed as a necessary evil by insiders to a dynamic part of the company. She takes a customer-focused approach, which calls for viewing fellow employees and subcontractors as clients of the company, as well as the people hiring it for construction jobs. “(Heflin) understands that while process, procedure and order are critical to running a good business, customer service is more important,” the nomination said. “She does whatever it takes to help everyone that seeks her out, and puts their priorities ahead of her own.” Moreover, Heflin was able to balance steps to modernize the company while showing respect for its traditions, all while learning the ins and outs of financial reporting and operations of a construction company. Heflin joined Higley after working for a variety of accounting, retail, marketing and technology firms. She has an MBA from Case Western Reserve University and an accounting degree from Ohio University. Described as someone who is easy to talk with, Heflin is also termed direct, energetic and intense. Today, Heflin is involved in every strategic initiative and has won the support to make difficult changes. For example, the company had toyed with joining a health maintenance organization. Heflin was able to analyze the impact of the change and help win buy-in for joining an HMO, a move that Higley said has saved the company tens of thousands of dollars. In addition to being involved in her church and children’s school, Heflin serves on the board of the American Heart Association and volunteers at the Junior Achievement Center. She belongs to the Construction Finance Management Association and the Ohio Society of Certified Professional Accountants trade groups and previously served as a member of OSCPA’s leadership council. — Stan Bullard
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SCOTT GAINER CFO; TREASURER CLEVELAND HEIGHTSUNIVERSITY HEIGHTS CITY SCHOOLS In more than 19 years as the CFO and treasurer of the Cleveland Heights-University Heights City School District, Scott Gainer, according to the nomination, “has built immeasurable trust in the community through transparency, good fiscal stewardship and collaboration.” It has showed at the polls. In November 2013, voters overwhelmingly passed a request for $134.8 million in bonds, which are being used to pay for a $157 million school renovation plan. In 2011, voters in the district passed a 6.9mill operating levy. Both issues received more than 57% votes in support. As a result of the bond issue passing, Cleveland Heights High School and two middle schools in the city, Monticello and Roxboro, are being renovated and modernized, “which will significantly benefit our com-
munities for the next 50 years,” the nomination said. Gainer’s “focus on operational efficiency and effectiveness,” according to the nomination, has saved the district “millions of dollars over the years.” Kal Zucker, who is nearing the end of his third term on the school district’s board, said he’s worked closely with Gainer “in some capacity for at least 15 years.” During that time, what has stood out most to Zucker is Gainer’s
calming influence. “As you might imagine, we have some challenges,” Zucker said. “Since we’ve worked together, we’ve faced a lawsuit, a levy cycle, budget cuts, and he has a way of talking you through those things, taking the facts and presenting them in a very clear way.” In 2010, Gainer was honored by the Ohio Association of School Business Officials as its CFO and treasurer of the year. Gainer and his finance team at the school district have been awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association in each of the last 12 years. The certificate, according to the school district, is “the highest form of recognition” in the areas of government accounting and financial reporting. “He’s extremely well-versed in a bunch of different areas — fiscal knowledge, school finances, school law — and he’s dependable,” Zucker said of Gainer. “His integrity is unimpeachable. He combines a broad knowledge with a very calming effect.” Zucker — who is the chief information officer at Kalcor Coatings Co., a paint manufacturing business in Willoughby founded by his father in 1961 — said Gainer is See GAINER, page 28
Congratulations James J. Carnovale on your 2014 CFO of the Year nomination!
RICK SMITH SENIOR VICE PRESIDENT; CFO; TREASURER FIRST FEDERAL LAKEWOOD Richard Smith left the University of Akron in 1982 with degrees in accounting and industrial management. He also picked up his certified pubic accounting license. There was a recession underway, and the best job that came along was in computer programming. The Trumbull County native took it and then a second computer job, working on Firestone Tire & Rubber Co.’s point-of-sale software. Then he found a company, Rondy & Co. of Barberton, a plastics recycler, that was looking for a computer programmer and a chief financial officer. Smith jumped. “I felt that on the financial side you have a greater breadth of what you do in any organization,” he said. “And I felt that a lot more of my strengths were in that area rather than computer science.” A couple of jobs later, in 2004, he joined First Federal Lakewood as CFO. He is responsible for the oversight of the finance division, which includes the accounting department and the investment portfolio. First Federal is a mutual bank, owned by its depositors, not shareholders. It’s among the last mutual banks in Ohio and, said president and CEO Thomas Fraser in an interview, First Federal is the largest of
pure mutuals left in the state. Smith’s responsibilities, though, go beyond spreadsheets and investment statements. “In addition to being a traditional financial officer who coordinates budgeting, planning and financial reporting and financial controls, Rick’s invaluable to us in the sense that he also helps with strategic planning and he partners with our business units to help develop and execute sales plans as well,” said Fraser. “He can play the traditional CFO role and help in revenue growth and expansion of our franchise.” Smith was instrumental in successfully navigating First Federal Lakewood through the 2007 finanSee SMITH, page 28
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FINALIST — NONPROFIT
NOMINEE — PRIVATE
JOHN RUSNACZYK
CYNDI SOBE
SENIOR VICE PRESIDENT; CFO ST. VINCENT CHARITY MEDICAL CENTER
CFO, AMRESCO LLC
Call him the pleasant CFO — everyone seems to like John Rusnaczyk. Just don’t think that means that you’re going to get a bad number by him. “He’s meticulous,” says St. Vincent Charity Medical Center senior vice president and chief operations officer Joan Ross. “But he’s just fun to work with — he’s one of those guys that it’s a pleasure to be around. … He’s a big-picture guy, but he’s also detail oriented. We’re very lucky.” If Ross sounds like a fan of her CFO, that might not come as a huge surprise to those who know Rusnaczyk well. Personable or not, he began his career, like many CFOs, as an accountant. “I like the accounting. I’ve always enjoyed working with numbers,” Rusnaczyk said. “I like it when things have to balance out and there’s an end result.” But with success came expanded responsibilities, and all of the gray areas that come with them. These days, Rusnaczyk is looking forward as often as he’s looking back, as part of his company’s team working on strategic issues and also as someone who is intimately involved with operations. Accounting and pure financial issues now take up only about half of his time or less, he said. He’s not only helping to navigate a major hospital company through the sea changes brought about by the Affordable Care Act, he’s also helping to turn around an organization that’s been losing money in recent years, but is edging ever nearer to break-even. There are challenges entailed in his job that
many CFOs would never encounter. For example, when most companies bill a customer for $100 worth of work, they expect to receive $100. Not so in health care, where hospitals such as St. Vincent bill out their charges, but then get told by Medicaid and private insurers what they’ll really pay. It’s up to the hospital to go after the patient for the difference. “I spend a lot of time on our revenue cycle,” Rusnaczyk said. “You can’t afford to leave a nickel on the table.” While that might not sound like a job for the nicest guy in town, his co-workers are quick to differ. For Ross, her CFO’s ability to quickly grasp and understand the organization’s operations is critical. Almost any CFO can tell other employees what they can and can’t do because of budgetary reasons, but it takes a really good one to realize what’s critical to operations and then find a way to make See RUSNACZYK, page 28
When Cyndi Sobe joined AMRESCO in 2012, she’d never worked for a manufacturer before. Not only that, the Solon manufacturer of biochemicals and reagents for the life sciences had just been purchased by VWR International, a distributor of laboratory supplies and services. “Cindy has brought a sophistication to our financial reporting,” said AMRESCO president Michael Mascali. “She’s worked effectively with all areas of the company to understand the operation and how it interrelates with our financials.” In particular, she has focused on risk mitigation and cost savings. “While these appear to be simple on the surface, in a manufacturing environment they can be complex,” Mascali wrote in his nomination form. Sobe was sheepish about the honor. “I’m not somebody who likes to be in the limelight,” she said. “I’m not really seeking attention.” Before AMRESCO, Sobe had spent a little more than nine years with Associated Materials LLC in Cuyahoga Falls in a series of finance and accounting jobs, eventually leading up to CFO and treasurer. Associated Materials is a distributor of residential building products. Sobe almost didn’t make it into the world of finance. After growing up in Akron and Stow, she headed for Miami University as a pre-med student. After deciding she didn’t want to be a doctor, she fell in with a group of friends at the business school and earned a bachelor’s degree in accountancy and then an MBA at Case Western Reserve University. Her first job was with the Ernst &
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Young accounting firm. After three-and-ahalf years there, she had tours of duty at area firms Jo-Ann Stores LLC, Moen Inc. and Revco D.S. Inc. The nomination describes Sobe as a key player in AMRESCO’s growth and stability. Mascali wrote that she played a key role in the recognition the company achieved in 2013 as business of the year from both the Solon Chamber of Commerce and parent company VWR International. “The level of understanding of AMRESCO’s financials and Ms. Sobe’s guidance have been instrumental in those achievements,” according to the nomination form. In addition, over the past 20 months, Sobe has taken the information technology and human resources departments under her wing. “Ms. Sobe has been a key player in AMRESCO’s growth and stability,” Mascali wrote. “Her dedication to assuring compliance, providing guidance to local or corporate leadership and overall dedication is what continues to drive monetary growth, market gains, profitability and stability for AMRESCO.” — Jay Miller
CONGRATULATIONS to all of the 2014 CFO of the year finalists.
We’re proud to recognize Brian Derrick, Senior Vice President and CFO, Summa Health System, as an exceptional and proven leader and finalist for CFO of the Year.
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FINALIST — PUBLIC
BILL RUFFING CFO SHAKER AUTO LEASE INC. Dennis Weisenberg, president and co-owner of Shaker Auto Lease, is a money man. He’s lucky that farming is not more lucrative, because if it were he might not have Bill Ruffing, the CFO that he readily admits is a key to his company’s success. “My whole family comes from agriculture,” said Ruffing, a native of Norwalk whose various family members have long been involved in raising corn, soybeans and other crops in Ohio’s bread basket. “So I went into agricultural economics in school.” That was in 1984, when Ruffing was attending the University of Toledo and farmers were facing some of the worst economic times in the nation’s agricultural history. Ruffing’s mom convinced him he should diversify, so he ended up changing to a double major and got degrees in both agricultural economics and accounting from Ohio State University. He went to work for what was then known as Ernst and Whinney, a “Big Eight” accounting firm, and then to
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Ameritrust, which was then one of the largest banks in Cleveland. When the bank was bought out by Society Corp., Ruffing’s job in corporate consolidation — a role that required Ameritrust to be the buyer, not the purchaser — was eliminated. It all worked out well for Weisenberg, though — a Society client told Ruffing he knew of a company that needed a CFO, namely Shaker Auto. That was 20 years ago this year and, today, Ruffing is about as indispensible as an employee could be. “He’s really kind of a CFO/COO,” said Weisenberg. His partner, Brian Davis, echoes
that sentiment. “Bill really has to carry multiple hats — he’s more than a CFO, it’s almost like having a fourth partner for us,” Davis said. Not only does Ruffing handle all of the company’s accounting and finances, such as managing its banking relationships. At Shaker, there also are more than 4,000 auto leases in 46 states that need to be tracked and managed. On top of that, Ruffing is responsible for nearly all of the company’s back-office operations, from handling its human resource needs to managing its information technology. “We do have some fun,” Ruffing says with a laugh. You would think he has enough to do, too. But on weekends Ruffing is still busy — farming. A family member left a 1,200-acre farm to Ruffing, his brothers and some other relatives, and the family uses it to grow corn and soybeans. One brother knows farming and manages the crops. Another knows machinery and keeps the tractors and other equipment running. Ruffing’s job? You have to ask? He’s the bean counter — as well as handling the rest of the finances, of course. — Dan Shingler
MY BENESCH MY TEAM
CONGRATULATIONS to all of the nominees and finalists for the CFO of the Year Awards!
We take particular pride in recognizing our clients and friends
SEAN HENNESSY CFO; SVP, FINANCE, THE SHERWIN-WILLIAMS CO. Sean Hennessy runs the show when it comes to finance and accounting at Sherwin-Williams, a publicly traded company with $10 billion in 2013 revenue and the employer of 45,000. With Sherwin-Williams for almost 30 years, the University of Akron graduate not only oversees the public company’s finance and accounting functions but also plays a role in strategic planning and a whole lot more, including business development, mergers and acquisitions and investor relations. Chris Connor, the CEO of Sherwin-Williams, described Hennessy as “a skilled business partner to me and the rest of the senior management team. (Hennessy) possesses keen business acumen and uses his experience at Sherwin-Williams to identify and solve complex business issues.” Connor said that Hennessy has helped the company achieve recognition for total shareholder return. Since 2002, a year after Hennessy became the company’s CFO, the company’s revenues have grown to $10 billion from $5 billion. Gross margins, cash and profit before tax have improved. That has helped the paint and coatings maker’s stock prices over the same period to increase to more than $200 per share from around $20 per share. Hennessy also has been the architect of its robust stock repurchase plan. Thanks to Hennessy’s “careful management” of its balance sheet, the company has had the cash flow to finance growth both organically and by acquisition. When several lawsuits regarding historic lead paint matters brewed, Hennessy ensured the company was financially capable of managing any outcome and reassuring both investors and the rating agencies, the nomination said. Even though the Great Recession hit the company and its construction industry customers hard, SherwinWilliams was able to continue to
open new stores, invest in research and development and its learning and development activities. Those investments meant the company was able to reap benefits when the economy recovered. Hennessy’s financial skills also have benefited other elements of the Northeast Ohio community. He served as a board member of the Cleveland Metroparks Zoo, the Greater Cleveland Sports Commission and Business Volunteers Unlimited. He also has volunteered his services to both St. Edward High School in Lakewood, where he graduated, and the Cleveland Catholic Diocese. Hennessy and his wife, Becky, have created the Becky Hennessy Endowed Master Clinician Breast Cancer Genome Fund at University Hospitals, and have contributed to research to find improved treatments and outcomes for a variety of cancers, particularly breast cancer. In addition to his financial prowess, Hennessy attends to the finance department’s need to mentor talent and leads efforts to coach other financial heads at the company’s business units. Sales, marketing and supply chain managers also seek out Hennessy to tap his problem-solving skills and extensive business experience. — Stan Bullard
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TODD WELKI COO; CFO CLEVELAND MUSEUM OF NATURAL HISTORY Todd Welki joined the natural history museum as chief financial officer in 2012, but Evalyn Gates, the museum’s CEO, has such confidence in her that she recently gave her the additional title and added duties as the institution’s chief operating officer. When Gates is not available, Welki runs the museum’s managers’ meetings and has helped “steer the ship between rocky cliffs” during the financial challenges of the past few years, Gates said, to help the museum meet its mission as an institution for education and research. Since joining the museum in 2012, Welki has completely modernized the financial systems of the museum. Under her guidance, the museum has fine-tuned its records and cash management system so it can make course corrections during the year and maintain a balanced budget. Welki is credited with the museum receiving a four-star rating from the Charity Navigator website for its financial reporting standards and, in
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2013, a clean statement from its auditors. Besides managing the business and finance office and human resources, a total of six people, becoming COO added to her responsibilities operations, facilities, protection, networking and visitor services, a staff of some 100 people. One product of that switch is that Welki led the installation of a new parking gate and ticketing system at the museum’s garage which turned it from losing revenue to producing it. “When she took over the business department, she opened communications with other departments,” Gates said. “That makes a big difference and lets us focus more time on the parts of our jobs dealing with education, doing research and creating exhibits.” Welki joined the museum
after stints with the Free Clinic of Cleveland and Project: Learn, an adult literacy program. However, her career before that was in financial and accounting roles at public companies, including Hudson-based Jo-Ann Stores Inc. and Akron-based Roadway Express Inc. She also worked in tax at public accounting firms KPMG and the former Arthur Andersen LLP. Besides that extensive experience, she holds a certificate in nonprofit management from Case Western Reserve University and now teaches nonprofit accounting as an adjunct professor at her alma mater, John Carroll University. Welki also serves on the board of Boys and Girls Clubs and remains active with the Free Clinic. Peter Anagnostos, the museum’s chief development officer, said Welki also distinguished herself as the museum’s CFO by spending time in its galleries talking to visitors and asking what they think of the museum. Co-workers say Welki has a strong work ethic, is highly ethical, takes time to lunch with her staffers if they have gone through a hard time or have something to celebrate, and can interject a little humor into otherwise serious business meetings. — Stan Bullard
TIMOTHY MCNEILL CFO, BETTCHER INDUSTRIES INC. Timothy McNeill recently led the financial components of Bettcher Industries Inc.’s transition from a familyowned company to one with a 100% Employee Stock Ownership Plan structure. And he did so without the use of an independent financial adviser, president, chairman and CEO Don Esch said in an email, saving the company money and making sure everything was done correctly. The company executed a 30% ESOP transaction in late 2011, a process in which McNeill was “resourceful and tireless,” the nomination said. “Tim has been instrumental in transitioning Bettcher Industries from a closely controlled family structure to an international corporate structure, which has facilitated significant top-line and bottomline growth in the last three years,” the nomination said. Bettcher makes equipment for the meat and other food processing industries, as well as the industrial and medical device markets. McNeill joined the company in approximately 2006, Esch said.
Esch liked him because he had a “good mix of credentials,” having worked at companies like Nordson Corp. and Avery Dennison Corp. McNeill has been integral to the company’s internal expansion, Esch said. Today, the company sells into 65 countries around the world. It takes a lot of work to manage different kinds of currency and oversee cash in lots of places. McNeill also needs to have a deep understanding of the company, as part of his role as CFO includes oversight of Bettcher’s IT department and technology upgrades. “Through these many changes, Tim has improved the quality of his team through individualized coaching, strategic hiring and other educational and development activities. At the same time, Tim has maintained an open
and accessible posture that has allowed him to guide and mentor employees outside his department,” the nomination continued. “Finally, Tim’s financial leadership on the ESOP team was not a small thing. An opportunity arose with the selling shareholders that made the ESOP purchase possible but it required that we research, define, write, finance and execute the transaction within ten weeks. The goal was achieved and recently passed muster with our first Department of Labor audit. Tim’s tireless efforts were the driving force behind the achievement in such a short time.” Esch said McNeill is an “engaging,” “gregarious” person who loves Cleveland sports and never forgets a name or a face. “He’s just true blue Cleveland, that’s for sure,” Esch said. The nomination also noted that he’s dedicated to his triplet sons and his wife, and likes to give back to the community. He currently serves on the board of directors of the Second Harvest Food Bank of North Central Ohio, where he also serves as treasurer, and serves on the advisory board of directors for Universal Metal Products in Wickliffe. — Rachel Abbey McCafferty
On behalf of the Board of Directors and all the Caregivers at St. Vincent Charity Medical Center,
Congratulations, John! We are proud to serve the people of Cleveland under your leadership.
John Rusnaczyk 8956 9>1>391< %6M35B
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BRIAN DERRICK SENIOR VICE PRESIDENT; CFO, SUMMA HEALTH SYSTEM Being in charge of a hospital system’s finances in today’s everchanging health care landscape is “stressful” and “challenging,” said Thomas P. O’Neill, vice president and CFO of Summa Hospitals. O’Neill is thankful that Summa has Brian Derrick leading the way. “It’s happening much faster than we envisioned four years ago when we put together our long-range plan as we were searching for a per-
son for Brian’s position,” said O’Neill, who in 2011 was part of the search team that selected Derrick as the CFO of the health system. “We anticipated a lot of changes would happen and put Summa in position to adjust to those changes, but it’s probably happened twice as fast as we thought it would. That makes it difficult from a planning perspective, but Brian has handled it well and effectively.” Derrick led Summa’s search for a minority investor, which resulted in “the addition of $250 million of liquidity and aligned with Summa’s mission, vision and values,” the nomination said. According to the nomination, the large investment improved Summa’s debt-to-capitalization and
cash-to-debt ratios by 27% and 70%, respectively. Derrick also secured funding for new financial software systems, which improve productivity and enhance the health system’s reporting capabilities. Possibly most impressive of all is that Summa has improved its total assets by $380 million (29%) during Derrick’s three-year tenure. “He’s a very hard worker,” O’Neill said of his colleague. “He doesn’t limit his efforts to Monday through Friday. He’s concerned about Summa and working with Summa whenever the need arises.” O’Neill added that Derrick is a strategic thinker who “challenges the norm, challenges assumptions and evaluates the situation for what it presents.”
The nomination credits Derrick for guiding Summa to a position of financial strength during “turbulent economic times.” Since 2011, Summa has reinvested more than $133 million in property, plant technology and other equipment, which, according to the nomination, helps the health system “meet the health care needs and charitable mission of the community” it serves. O’Neill said Derrick excels in another crucial area: communication. “He has all of the skill sets, which are important, but in his position, he also needs to be able to challenge the organization from a strategic perspective and communicate those situations to members of management or staff,” O’Neill
said. “And he’s effective at doing that. He also possesses compassion in his delivery, which I don’t necessarily think you see in all individuals from a CFO perspective.” — Kevin Kleps
GAINER continued from page 24
“great at working collaboratively with our superintendent.” Zucker noted that Gainer has worked well with all of his superiors during his nearly twodecade tenure at the school district. A recent board evaluation of Gainer’s work credited him with “spearheading the smooth operation of our district during difficult times.” The nomination said Gainer is very active in the community, donates time for “interviews with graduate students” and “inexperienced school CFOs,” giving them “insight of the qualities and attributes they need to be successful.” — Kevin Kleps
SMITH FIFTH THIRD BANK PROUDLY CONGRATULATES THE 2014 CRAIN’S CFO OF THE YEAR NOMINEES AND FINALISTS
continued from page 24
cial crisis, according to the nomination. In fact, over the last five years, First Federal achieved record asset growth of over 35%. His efforts in the community, establishing and nurturing relationships, have resulted in a number of new, profitable relationships to the bank over his decade in Lakewood. “It’s almost like being back when I started in the banking industry, just a little more sophisticated, larger,” he said. “The contact with the customers is very special; it’s been a fun experience.” It’s valuable for the bank as well. “Rick’s provided great insight into how we position ourselves in this environment in Cleveland where we’re not going to have many community
RUSNACZYK continued from page 25
Fifth Third Bank. Member FDIC.
those things happen. “John’s really tied in with operations closely, in addition to what he does with finance,” Ross said. “It’s a big plus . . we discuss everything, from revenue sources, to operations, he’s even highly involved with our supply chain.” For his part, Rusnaczyk says he’s happy to be able to contribute, and also glad not to be tied to a desk or stuck in the same office all day, every day. He likes to get out and talk to people throughout the hospital, he said. “One of the things I really like with this job is I’m not sitting in an accounting office just adding things up — I’m out in the hospital,” he said. “It gives you a sense of accomplishment.” — Dan Shingler
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SEAN JOYCE CFO; VICE PRESIDENT, OPERATIONS STAN HYWET HALL & GARDENS Having worked at both Coca-Cola and Walt Disney World, Stan Hywet Hall & Gardens president and executive director Linda Conrad said she’s come across some pretty impressive people in the finance world. However, she said Sean Joyce — Stan Hywet’s chief financial officer and vice president of operations — is in a league of his own. “He’s a multi-dimensional leader,” Conrad said. “He’s probably one of the best CFOs that I have worked with.” Conrad came to Stan Hywet — the former estate of Goodyear Tire & Rubber Co. co-founder F.A. Seiberling — at a particularly difficult time for the historic park and museum. The nonprofit was still struggling to recover from the economic collapse of 2008, and it needed a financial leader that could craft a quick turnaround. Joyce, who came from Goodwill Industries, was that person. He reorganized the accounting team and put in place strategies and other measures to guide the nonprofit to profitability in 2010. “It was clear that we needed to find opportunities to maximize earned income and fine-tune our capability in the organization to manage our assets really well,” Conrad said. “Sean was a very critical partner in putting all those plans together.” Joyce helped develop a strategic plan that was inclusive of input from Stan Hywet’s entire management team, according to the nomination. The plan has helped the organization grow its profits and visitation. Since 2010, for instance, youth visitation has tripled and membership continues to grow. Also, the nomination said operating revenues — before investment gains and losses — are up almost 20% since his arrival while expenses have been kept in check.
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Not only is Joyce the financial leader of the organization, he’s also one of the leaders that serves as its face within the community — a role that Conrad said he performs exceptionally well. He’s in charge of the organization’s operations, which include information technology, horticulture and facilities management. He also assumed the role of president of Stan Hywet’s wholly-owned, for-profit subsidiary, ARCC Inc., an architectural restoration business. “This is not a typical CFO job,” Conrad said. “He really is the senior operations leader, a strategic thinker, as well as a great finance leader. On top of that, he also acts as a face of the organization out in the community. He relates to folks
throughout the organization and the community very, very well.” Joyce also is active in the community. He’s the current and founding board president of Dancing Classrooms Northeast Ohio, an organization that launched about six years ago that uses ballroom dance to teach students confidence, respect for others and the tools to be a good student and citizen, according to the nomination. He also coaches soccer, basketball and baseball and has been a volunteer reader to elementary students in Akron’s schools. “He is beyond being the money guy,” Conrad said. “He is a great leader, great administrator, is creative and a visionary. “ — Timothy Magaw
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FINALIST — PUBLIC
JON P. MARTEN EVP, FINANCE AND ADMINISTRATION; CFO PARKER HANNIFIN Quiet, thoughtful and empathetic aren’t terms typically used to describe America’s corporate leaders. But Jon Marten, executive vice president of finance and administration at Parker Hannifin Corp., isn’t your typical CFO. Marten’s role at Parker Hannifin extends far beyond his duties managing the company’s $13 billion in annual revenue, noted CEO Don Washkewicz. With a brain for financial acumen, but the heart of a leader, Marten is credited with instilling a new paradigm for behavior embraced by the company’s more than 58,000 employees across the globe dubbed “Winning with Integrity.” Rooted in the seven virtues, the program preserves and enhances Parker Hannifin’s worldwide reputation by encouraging all leaders and employees to conduct themselves by a unique standard rooted in ethical behavior and decision making. And not only did Marten help write the program, he travels across the world to teach its tenets. “This program is powerful from the standpoint it gets people thinking about how to rationalize what’s right and what’s wrong, and teaches people to make proper judgments when there’s not a clear black-and-white situa-
tion,” Washkewicz said. “He took it upon himself to do this.” That, in turn, draws respect from employees and colleagues. “He’s a quiet-change leader,” Washkewicz said. “He’s got great leadership, but he’s not going to do it with a hammer.” Marten joined Parker Hannifin as a financial analyst in the aerospace group in 1987 before achieving his current role in 2010. His 27-year career includes steering the company through some of the largest changes the company has
ever seen from implementing the new behavior model for employees to restructuring its financial shared services business model just last year. The recent restructuring alone is projected to result in $133 million in annual savings, while a new approach to shareholder relations has resulted in more returns for investors. Marten also has helped Parker to build upon its streak of 13 consecutive years of greater than 10% cash flow as a percent of sales despite an uncertain global economic environment, according to the nomination. Parker Hannifin has repurchased more than $1.6 billion of its own stock, increased its annual dividend payout by 84% under Marten’s lead and completed 19 company acquisitions. All those efforts coupled with the “Winning with Integrity” model mark some of the most sweeping changes the company has undergone and equally positions the company for future viability, Washkewicz said. Ever modest, notes Chris Farrage, vice president of human resources and external affairs, Marten talks little about himself. Marten is an active church member and remains involved in foster-to-adopt programs in California. He’s also an active member of Manufacturers Alliance for Productivity & Innovation and Financial Executives International. “He’s done a great job with integrity. And he’s done a good job at continuing the good work that we started about 13 years ago,” Washkewicz said. “We’re looked upon in a much different light today than we were in the past.” — Jeremy Nobile
Bettcher Industries congratulates
Timothy McNeil for being named a 2014 CFO of the Year award finalist!
To learn more about Bettcher, visit us at www.bettcher.com.
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industrial development, in part because he also views its access from Memphis Avenue as an industrial area. “We’re not thinking retail,” Lichter said, but added: “I’m certainly going to call Menards.”
NEWSLETTER SCHEDULE WEEKDAYS: Morning Roundup and daily headlines MONDAYS: Real Estate Report TUESDAYS: Health Care Report WEDNESDAYS: Dealmaker Alert and Manufacturing Report THURSDAYS: Small Business Report FRIDAYS: Shale and Energy Report
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Land-rich Lorain County, particularly Avon, is mentioned as a potential site for both a Menards and a Meijer, insiders say. Avon already is home to a Costco. Asked about reports that a Meijer proposal is being put together near Leavitt Road in western Lorain County, Chris Haas, the owner of Avon-based All Pro Freight trucking firm, who has a large parcel there as well as other sites in Avon, declined comment. Avon Mayor Bryan Jensen said the city has not received proposals from Menards, Meijer or developers wooing them. However, he gets regular unsolicited reports about them. “We hear that all the time from residents,” Jensen said. “They saw a flier or know someone at one of the companies and they are coming here.” Avon has highly prized undeveloped land available on both sides of the Lear-Nagle Road interchange with I-90, which opened last year. The mayor said he hopes one may land in his town. Another potential site for a bigbox store — on paper at least — is the former Geauga Lake Park site, which includes 320 acres in Aurora and 220 acres in Bainbridge Township that Sandusky-based Cedar Fair has on the market. But such an
idea is unlikely to get a welcome reception. Aurora city officials are crafting design standards for its portion of the former amusement park under a mixed-use zoning voters approved last spring. Mayor Ann Womer Benjamin said the city is willing to work with prospective developers, but its standards likely would not allow big-box stores on the site. “We want to have combined uses throughout the property,” Womer Benjamin said. “There are already big box stores on State Route 43 in Geauga County to serve this market and we have specific standards for the streetscape on 43 in Aurora.” Although zoning might open the door for a superstore on empty sites in Bainbridge Township, the preference would be to fill empty stores in the Marketplace at Four Corners and Four Corners North before building more, said Tracy Jemison, president of the GeaugaGrowth Partnership, who has worked with the township to ensure the Geauga Lake land is developed to its maximum economic potential. “It’s an issue that no one wants to deal with,” Jemison said, but no formal proposal has surfaced yet. A natural site for a big-box store is the 100 acres in Twinsburg fronting I-480 that Dr. Bahman Guyuron had assembled as a retail site early last decade and carefully worked out approvals with Twinsburg Township and city of Twinsburg officials for a multitenant, 1 million-square-foot fashion mall. That pre-development work stopped when the recession hit in 2008 and preliminary tenant interest evaporated, according to Greg
Guyuron, a vice president at Passov and the property owner’s son “It’s really one of the last properties contiguous to an interstate in our region,” Greg Guyuron said, and word of revived tenant interest in the region prompted him to start actively marketing the site in September. “If the city would support a bigbox there, we’d definitely consider it,” he said. Access to the site is through Twinsburg Township, where the guidelines were designed not to permit a superstore. Robert Kagler, Twinsburg Township administrator, said anything different than the fashion mall plan would require a new discussion.
A gap to fill In looking at a map of Meijer locations in Ohio, its operations reach from Sandusky through Columbus and Cincinnati; its absence in Northeast Ohio is conspicuous. Meijer had planned to develop land in Twinsburg 15 years ago before it decided not to enter the Northeast Ohio market. The site now is a Cleveland Clinic family health center. Frank Guglielmi, a Meijer spokesman, said the company does not discuss long-term plans for development but plans to open 11 stores next year, none in Northeast Ohio. Its focus is on entering the Wisconsin market with four stores this year, he said. However, Guglielmi noted that the company’s real estate team is in talks with land owners and communities about sites in the Midwest on a daily basis.
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DYNAMICS continued from page 1
alternative to that.” The first two elements of the Tribe’s three-pronged approach are team performance and creating a “more compelling” fan experience. The Indians believe the combination of a club with an excellent young pitching staff and a 21-year-old ballpark that will be dramatically transformed this offseason is helping them in that regard. The third approach, the “value proposition,” is an intricate mix of ticket prices, seat locations, concessions and other factors. “How do we deliver value to our fans?” Shapiro said. “We’ve lowered the price of our concessions over the years, we’ve talked about $10 bleacher seats over the years, but we still feel like we’re missing some piece of the value proposition to our fan base.” A common complaint from Tribe fans is the $10 ticket referenced by Shapiro isn’t a $10 seat at the box office on game day. That seat might cost $16 at the ticket window on a weeknight, Shapiro acknowledged. Barry Kahn, the founder and CEO of Qcue, which produces dynamic pricing software that is used by more than 20 MLB teams, including the Indians, said fans generally are more price-conscious when they purchase something in person, compared to shopping online. “I think you get a different response from fans when they’re seeing a price in a window vs. buying it online,” Kahn said.
It’s not always dynamic Buy early and save is a common mantra in professional sports. Indians tickets are cheapest for season-ticket holders, and individual seats are priced the lowest when they first go on sale prior to the season. But even the cheapest seats at Progressive Field — the $10 tickets in the upper bleachers — went mostly unoccupied in 2014. Shapiro said 60% of the club’s $10 tickets weren’t purchased. And it’s not as if the rest of the seats are exorbitantly priced. According to Team Marketing Report’s 2014 Fan Cost Index, the Indians’ average ticket price of $21.31 was the sixth-lowest in baseball, and well below the MLB average of $27.93. The low demand is resulting in the Tribe exploring ways “to provide more strategic discounts and value propositions next season,” Shapiro said. The club president said “pricing at some points will clearly be impacted in a way that provides fans that desire it more value.” Asked why baseball fans in the Cleveland market seem more resistant to a pricing strategy that is common not just in professional sports, but in many industries, Shapiro said, “It’s hard for me to say relative to other markets. “Obviously the Cavs, there doesn’t seem to be much pushback to them doing it at all, and they’ve been doing it longer than us,” he said. “But again, I think we need to continue to communicate it, continue to create the understanding that it’s not all dynamic. It’s only dynamic if you show up at the box office.”
‘Smart preseason pricing’ is a must Robert N. Stavins, a business and
government professor at the John F. Kennedy School of Government at Harvard University, founded Sports and Entertainment Analytics LLC in 2012. The small company works with eight MLB teams, plus the commissioner’s office, on ticket pricing strategies. Stavins said dynamic pricing “can play an important role, but it’s not a substitute for smart preseason pricing.” The Harvard professor said clubs must analyze such factors as the “demand of both different parts of the ballpark and different parts of the season.” Dynamic pricing should take into account “unaccounted-for changes in demand,” Stavin said,
and he believes teams need to get their prices in line at the start. “Some clubs, and I’m not referring to the Indians, don’t know their situation,” said Stavins, who made it clear he hasn’t worked with the Tribe and isn’t familiar with the team’s attendance problems. “It’s possible some could use dynamic pricing excessively, or try to, because they didn’t have preseason pricing right in the first place,” he said. As the Indians enter another offseason of evaluations, Shapiro is adamant that the Tribe’s fan base remains engaged, and he points to the Indians’ strong local TV and radio ratings as examples.
In 2014, the team’s broadcasts on SportsTime Ohio produced an average rating of 6.17, a 14% increase from the season before and the fifth-best norm in baseball. Tribe games on TV reached more than 90,000 households per broadcast — 53,000 ahead of the Colorado Rockies and only 12,000 below the San Francisco Giants, who were fifth in average audience size. “I feel like the level of engagement is strong,” Shapiro said. “Both TV and radio ratings are really good. They’re good compared to the league, and they’re good compared to our peer markets — which means I don’t think there’s a disconnect. There’s still a challenge.”
IN-HOME DRAW The Indians’ television ratings on SportsTime Ohio ranked fifth among the 30 teams in Major League Baseball. The top five: Rating Change 1. Cardinals 7.76 -12% 2. Tigers 7.62 -21% 3. Pirates 7.49 -6% 4. Royals 6.51 Even 5. Indians 6.17 +14% Source: Sports Business Journal Indians broadcasts also ranked first in prime time in Northeast Ohio — by a 60% margin, according to Nielsen data.
Fast Fa ts About Issue 4 t CMSD would build 20 to 22 new schools and refurbish 20 to 23 schools without raising taxes.
t The state would contribute more than $2 for every $1 the District spends on new construction.
t The bond issue would have an estimated net economic impact of $456.8 million in local and state funds.
t Issue 4 would generate $2.5 million a year for maintaining schools without raising taxes.
t CMSD has spent its construction dollars prudently while building and renovating 41 schools. The District saved $42.2 million by refinancing and paying off debt early.
t The school board has prioritized jobs for city
residents, minorities, women and small businesses on construction projects.
t The facilities plan, aligned to The Cleveland Plan, allows
flexibility to start new school models and provide quality options in every neighborhood.
t The independent Bond Accountability Commission,
which was created in 2001, would continue to monitor the use of bond funds.
ClevelandMetroSchools.org
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OCTOBER 13 - 19, 2014
CANDIDATES continued from page 5
istration and redeploy it into” services.
development issue.” Schron, too, ties the social services into economic growth. “The number one thing, bar none, that’s going to help stop the drug problem and reduce the social service needs is a job,” he said. Schron also believes that the new, reformed county government has not fully made the transition from the old, less-efficient style of government. “We haven’t done things to improve social service delivery,” he said. “If we are better able to deliver services through technology and bring in efficiencies, we’ll take money that’s been used for admin-
Contact: Phone: Fax: E-mail:
Playing both sides Both men stress their ability and willingness to work across party lines and in Columbus, with state officials. Because of his tenure on county council, and the generally collegiality that has developed there, it’s Republican Schron who has the closer relationships with county officials. Indeed, despite Democrats holding an 8-3 majority on council, Schron was elected to chair the economic development committee. He also believes he has a good
Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com
relationships with Democrats. Indeed, several Democrats who lost in the primary to Budish are supporting Schron: former North Olmsted Mayor Thomas O’Grady, former county sheriff Bob Reid and retiring state Sen. Shirley Smith. And, naturally, he believes the administration of Republican Gov. John Kasich will more quickly answer his phone calls than they will calls from his opponent. Cuyahoga County, ever underserved by Columbus, has suffered without strong allies in the capitol city. Budish, though, believes his years in Columbus give him greater entrée to statehouse officials. He
made history of a sort when, upon taking over as House speaker in 2009, he made the important clerk’s office bipartisan, retaining the Republican clerk as deputy to a new Democratic clerk. When Republican Bill Batchelder took over as speaker in 2011, he respected Budish’s judgment and retained the new tradition. As a member of the first county council, Schron gives himself, and council, credit for helping shape the programs that FitzGerald created, and some of the ideas he is promoting in this campaign are continuations of programs begun under FitzGerald. For example, in the interview
REAL ESTATE
AUCTION
OFFICE FOR LEASE
Location, Location, Location
MAYFIELD VILLAGE OFFICE/RETAIL SPACE
First floor, basement and 3 upper floor offices. High traffic area, 10 min. to airport, I-480. Redevelopment or move-in ready. Asking $155,000.00. Fairview Park. Excellent condition.
TUES., OCT. 21ST AT 10:00 AM 2 FLOORS OF COMM. KIT. EQUIP. 1111 Superior Ave., Cleveland Stainless!! Well Maintained!! Newer!! FRI., OCT. 24TH - 10:00AM LANDSCAPES CO., INVENTORY REDUCTION Mowers, Trucks, Tractors & More!!
11811 E. Hill Dr., Chesterland, OH SAT. OCT. 25TH – 10:00AM 26150 Richmond Rd., Bedford Heights, OH MONTHLY WAREHOUSE AUCTION PICK UP TRUCK POWER TOOLS, HOME GOODS… Something for everyone! Selling in 2 Rings and all day!! 5255 N. ABBE RD., SHEFFIELD VILLAGE, OH
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
COMMERCIAL SPACE 1681 sq.ft. House converted to office
6 UPCOMING AUCTIONS
with Crain’s editorial board, Schron talked about finding savings by updating several independent county computer systems. That effort began in 2011 when FitzGerald hired the first county information technology director, Jeff Mowry, who has been streamlining the county’s IT operation and planning how to merge the disparate systems. Still, it’s an uphill battle for Schron as Budish turns to the airways in the race’s last month. In their post-primary campaign filings, filed June 13, Friends of Armond Budish reported $619,018.02 on hand. Friends of Jack Schron had $91,806.17. The next filings are due on Oct. 23.
FOR LEASE
1,877 sq. ft. (25 x 75) w possible outdoor patio. Co-Tenants include CVS, Aladdin's, Charter One, Yours Truly. Minutes from I-271 at Corner of Wilson Mills and SOM. Good Exposure, High Traffic. Owner Motivated to Lease.
440-537-5445
Call 440 667 6102 FOR SALE – BANK OWNED 9,640 SF +/- Retail Plaza Stark Co. - Plain Twp., OH Ag Real Estate Group, Inc. 216-504-5000 www.agrealestategroup.com
FOR SALE OR LEASE
BEDFORD HTS. 20,000 SQUARE FEET 13,000 SQUARE FEET 10,000 SQUARE FEET
440-232-2243
For daily on-line updates, sign up @ CrainsCleveland.com/Daily
FOR LEASE
REALTORS:
FOR LEASE Westlake Ohio Beautiful 4150 sf retail space available in newer upscale area. Ideal for medical, professional or retail use. Great parking. Favorable lease terms. 14,000 vehicle traffic count average. You will love the location. ERA Rath Realtors. Call Jim Coughlin 440-331-0900 ext. 212.
Now is a great time to promote your Luxury Properties to high-end prospects.
Call 216.522.1383
CLASSIFIED
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BUSINESS SERVICES
1/4 mile north of LCCC corner of Hoag & Abbe. High traffic count. Near Med. & Rest.’s , 1.9 Acres. EXCELLENT CONDITION!!
C. W. JENNINGS INDUSTRIAL EXCHANGE
Legal Notice
Global Expansion Consulting Construction • Acquisitions Exporting • Financing
On October 6, 2014 the United States Bankruptcy Court for the Northern District of Ohio-Eastern Division granted a motion approving, amongst other things, Bidding Procedures for an Auction Sale of substantially all the non-disposal well assets of D&L Energy, Inc. and Petroflow, Inc. (the “Debtors”) in their bankruptcy proceedings jointly administered under case #13-40813. The Court also approved naming the Bid of Resource Land Holdings, LLC for $7.65 million as the Stalking Horse Bid for substantially all the non-disposal well assets (as defined in the Stalking Horse APA) of the Debtors.
TUES., OCT. 28TH – 5:00PM 25 BLDG. LOTS ON GREY HAWK GOLF COURSE IN LA GRANGE, OH 22 Min’s from Hopkin’s Airport 10 ABSOLUTE • 15 RESERVE Call for specific lot info! Live & Play at Grey Hawk! THURS., OCT. 30TH – 10:00AM 10000 HUDSON-AURORA RD., HUDSON, OH MAJOR MASONARY CONT. MUST SELL EVERYTHING! PETTIBONES LIFTS, FORK LIFTS, MORTAR MIXERS, TRUCKS TRAILERS, MASSIVE AMOUNT OF SCAFFOLDING!!
GREAT SALE!!!
SEE WEBSITE FOR TERMS, CONDITIONS & PICS!!! 216-990-1831
1-877-BID-ROSEN
www.BIDROSEN.com E-MAIL US YOUR AD... DDONALDSON@CRAIN.COM
LEGAL NOTICE
(855) 707-1944
MEET SMARTER
TRAVEL LESS
Rocky River Multi-Site Video Conferencing, Meetings, Webinars Depositions, Interviews, and Training plazawestconferencecenter.com
FLYNN ENVIRONMENTAL UST REMOVALS • REMEDIATION DUE DILIGENCE INVESTIGATIONS
(800) 690-9409
Classified Ads WORK! 216-522-1383
440-333-5484
BUSINESS FOR SALE Selling a Business? Ohio Business Brokers Assoc. WWW.OBBA.ORG Find hundreds of businesses. Find a good broker to help.
Buying a Business?
Only Qualified Bidders and/or their representatives can participate at the Auction. A Qualified Bid must contain a signed Asset Purchase Agreement (“APA”), a redline of the proposed changes to the Form APA, a 10% deposit, a statement agreeing to comply with the Bid Procedures, evidence of authority to enter into the proposed APA, and evidence of financial wherewithal. Qualified bids must be received no later than 5 PM EDST on Monday, October 20, 2014. Further information, including copies of the Order Approving Bidding Procedures, the Bidding Procedures and the Stalking Horse APA, are available from Mark Kozel, SS&G Parkland Consulting, LLC, Investment Banker for the Debtors at mkozel@ssandg.com or 440/394-6152. If there is at least one Qualifying Bid other than the Stalking Horse Bid, an Auction will be held at 10:00 A.M. on Friday, October 24, 2014 at the law offices of Roetzel & Andress LPA, One Cleveland Center, 9th Floor, 1375 East 9th Street, Cleveland, Oh 44114. The Debtors shall announce the Highest and Best Bid within 24 hours of the conclusion of the auction. Objections to the Sale Motion must be filed so as to be received no later than October 27, 2014 at 12:00 Noon EDST. The Sale hearing to consider approving the sale of the Debtors’ non-disposal well assets will be held on October 28, 2014 at 9:30 A.M. in the United States Bankruptcy Court for the Northern District of Ohio-Eastern Division located at 10 East Commerce St., Youngstown, OH 44503.
Crain’s Cleveland Business on-line @ CrainsCleveland.com
BUSINESS SERVICE OWNERS!
FOR SALE
CABINETS KITCHEN & BATH
Submit your business card to promote your service.
Locally Made ProMark Cabinets
Contact Denise Donaldson at 216.522.1383
(216) 453-3654
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OCTOBER 13 - 19, 2014
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
THE WEEK OCTOBER 6 - 12 The big story: TimkenSteel expects to begin construction next month on a $40 million advanced quench-and-temper facility in Perry Township, near the company’s Gambrinus Steel Plant. The Canton-based company said the new facility will enable it “to produce more valueadded steel for demanding applications.” TimkenSteel said the facility will be fully operational within two years. It will perform heat-treat operations and have capacity for 50,000 processtons annually of 4-inch to 13-inch bars and tubes. The facility will be located near three existing thermal treatment facilities. The next frontier: The University of Akron will be able to fund a long list of high-tech projects with the $5 million it won from the Ohio Third Frontier Commission. The school won seven different grants from the Third Frontier program. Cleveland Clinic took home two grants worth just over $3 million. Smaller grants went to Kent State University and three local startups. Most of Akron’s haul came in the form of two larger grants from the Third Frontier’s Innovation Platform Program, which aims to pair research centers with Ohio companies that need their services. It will use a $3 million grant to develop all sorts of advanced materials for medical purposes, such as “protective coatings for medical devices and antimicrobial materials for wound healing.”
The good fight:
The former owner of the Cleveland Cavaliers is teaming up with University Hospitals to fight a condition he knows too well. Together, the Marylandbased Foundation Fighting Blindness — which is chaired Gund by Gordon Gund, who lost his sight at age 31 — and UH’s Harrington Discovery Institute will contribute up to $50 million in new funding and resources toward an effort that could fund up to 30 scientists developing new drugs designed to treat blindness. The scientists will receive funding through the initiative — which is being called the GundHarrington National Initiative for Fighting Blindness — over the course of roughly 10 years.
Lubrizol advances: Lubrizol Advanced Materials Inc. is moving forward with a $30 million expansion project in Brecksville that will create about 70 jobs. The company was approved for a seven-year, 55% tax credit for the project by the Ohio Tax Credit Authority. The project will “ensure the long-term retention and future growth of Lubrizol’s Advanced Materials in Brecksville,” the company said. The expansion will be completed over three years. It includes about 100,000 square feet of renovated space for employee offices, conference rooms, customer and visitor areas, and general meeting/collaboration rooms. Tag, you’re it: The Horseshoe Cleveland is sporting a new look on its second floor with the Oct. 8 opening of the $4 million Tag Bar and Lounge devoted to sports and electronic table games. The 2,000-square-foot virtual gaming center features 40 electronic table games, including blackjack, roulette and craps. The bar also has 35 flat-screen TVs ranging from 50 inches to 80 inches. Nailed it: There was something for virtually every taste in the 15 nominees announced Oct. 9 for the Rock and Roll Hall of Fame Class of 2015. Cleveland-born Nine Inch Nails made the cut, as did the legendary Lou Reed, punk/garage rockers Green Day and Joan Jett & the Blackhearts, best known for the iconic song that could be the Rock Hall’s motto: “I Love Rock ‘N’ Roll.” Ballots will be sent to an international voting body of more than 700 artists, historians and members of the music industry. The 2015 induction ceremony will be held on April 18, 2015, in Cleveland.
35
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Historic apartments enter new era with investor’s buy A Rochester, N.Y.-based apartment ownership and operations group is the new owner of the four- and seven-story Left Bank apartments, long known as a Cuyahoga River-view home for artists with low rents in the Flats. Through 1250 Riverbed St. LLC., which takes its name from the address of the twobuilding complex, the investors on Sept. 30 paid $875,000 for the 28-suit property. The county values the site at $414,000 for tax purchases, but the price is far below the seller’s original $3 million asking price. Peter Hungerford, managing member of 1250 Riverbed, said his firm’s first order of business is to tackle substantial deferred maintenance on the building and retain its current 25 tenants. He said the budget for improvements is “six figures,” although he would not disclose it specifically. “We’re aware of the history of the property and we’re respectful of the Flats,” Hungerford said. “It continues to house active artists and we would like to keep all the tenants.” The seller was Newman & Newman LLC, which originally put the building for sale in 2008 when part-owner Tom Newman, who has since died, said the owners wanted to move on from managing it. The buildings in the complex date from 1913 and 1919. The taller one has a boarded-up opening to the top of the Superior Viaduct. Councilman Joe Cimperman said the building’s ornate steel balconies were the work of a former part-owner who made
WHAT’S NEW
STAN BULLARD
The Left Bank apartment buildings in the Flats were purchased for $875,000 on Sept. 30. each reflect the tenant in the suite, such as brushes for an artist or musical notes for a musician. Its arched windows look directly at the Cuyahoga River. Left Bank has been apartments for decades, long before Stonebridge and Nautica installed apartments nearby. Hungerford said his group owns apartments in Cleveland and Columbus, but he declined to identify them or disclose the size of its portfolio. — Stan Bullard
Sometimes, stronger regulation wouldn’t be so bad Regulatory flaws perpetuated an atmosphere of risky lending practices that ulti-
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
State of the art
COMPANY: Zing Anything, Akron PRODUCT: Citrus Zinger Sport The Akron company thinks it has a better options than “guzzling down sugary sports drinks” to staying hydrated — with some flavor — while exercising. Zing Anything says its latest product, the Citrus Zinger Sport, is an eco-friendly, reusable bottle with a built-in juicer and a hands-free, flip-up straw. “Users can mix up their own infused water creations right in the bottle and take it wherever they go,” the company says. The Citrus Zinger Sport “offers taste, convenience and versatility, whether it’s being carried to yoga or clipped into a 10-speed mountain bike, a tasty, all-natural drink is right at hand,” according to Zing Anything. Joshua Lefkovitz, CEO of Zing Anything, says the product “allows people with an active lifestyle to enjoy nutrient rich, flavored water infusions without fumbling around with lids or worrying about spills.” The Citrus Zinger Sport can be used with Clementine oranges, lemons or limes, though users also can add ingredients such as strawberries, ginger or cucumber for a unique twist. The Citrus Zinger Sport comes in five colors. It complements existing products in the Zing Anything family that include the Aqua Zinger, Vodka Zinger, Salad Zinger, Kid Zinger and Citrus Biggie. For information, visit www.zinganything.com.
mately resulted in the recent financial crisis, according to a new study by researchers at the Federal Reserve Bank of Cleveland. Disparities in how banks and shadow banking organizations are regulated effectively encouraged bank holding companies to lend through less-regulated subsidiaries, the researchers found. The study, led by Cleveland Fed economist Yuliya Demyanyk and Elena Loutskina, an associate professor at the University of Virginia, shows that lending through nonbank mortgage companies allowed bank holding companies to retain regulatory capital and avoid expensive loan losses, enabling riskier lending while still following banking regulations. Demyanyk and Loutskina say their research documents that mortgage companies — even when they were the subsidiaries of bank holding companies — originated riskier mortgages to borrowers with lower credit scores, lower incomes, higher loan-to-income ratios, and higher default rates. “Regulators are trying to close the regulatory gap between traditional and shadow banking institutions,” the researchers wrote. “Still, the interconnectedness of nondepository and depository institutions poses unique risks to the stability of the financial system,” they added. “A better understanding of what went wrong before the crisis will help us assess any ongoing or emergent risks and adjust the regulatory system to manage them.” For the full report, go to tinyurl.com/oljhgbe. — Jeremy Nobile
Beachwood High School math teacher/LEGO artist Arthur Gugick is gaining an international following as an AFOL — Adult Fan of LEGOs. For pure pleasure, check out a recent story from The Daily Mail in the United Kingdom, about Gugick, 54, who “has built hundreds of scale miniatures of global landmarks and detailed portraits of popculture icons using nothing but the little colored bricks.” His work “spans a wide variety of subjects, from portraits of John Lennon and Jimi Hendrix to model replicas of Big Ben and the White House,” according to the story. “He has even recreated historical works of art by Van Gogh and Leonardo da Vinci.” Gugick told the paper that his day job is a big help. “I use a lot of mathematics when building the architectural landmarks,” he says. “For the Roman Coliseum I needed calculus. For the Taj Mahal I actually had to write my own computer software to help me make the dome.” Depending on the size of the project each model contains 5,000 to 20,000 pieces, The Daily Mail noted. Gugick owns more than 1 million pieces in total, all sorted by size and color. It takes Gugick two to three months to complete a project.
Wellness — at a price There’s a Cleveland connection to a $50 million penthouse that’s for sale in New York. CNBC.com runs a periodic feature called, “The most expensive house (we could get into).” A recent installment, in Manhattan’s Greenwich Village, features a “stunner … (that) makes sure its owners are healthy as well as wealthy,” according to the website.
Marketed as “wellness real estate,” the duplex is in a building “that features not only high-end finishes, but perks aimed at boosting one’s health like vitamin C-infused showers, purified water, posture-support flooring and circadian lighting,” CNBC.com said. The purchase of the home “also grants you access to sleep, stress management and nutrition programs through the Cleveland Clinic and access to a wellness concierge.” Your neighbors, should you have $50 million to spend, would include health guru Deepak Chopra and actor Leonardo DiCaprio.
Refined tastes Reuters reported that Cleveland-born billionaire investor Gary Klesch is about to complete the purchase of a second European refinery and “is already looking to his next deal in a sector that others are scrambling to exit.” After buying a struggling refinery in Wales in July, the American entrepreneur who made his fortune through investments in distressed European businesses expects to add a third European plant to his portfolio within months, Reuters said. The news service said Klesch, 67, head of the Geneva-based Klesch Group, “raised eyebrows when agreeing to acquire the Milford Haven refinery, Britain’s smallest, in a deal that closes this month. Europe’s aging refining industry has been caught between declining demand and increased competition from state-of-the-art overseas operations, forcing a wave of closures over the past years.” Klesch was born in Cleveland to a boxer father and educated by Jesuits. He started his professional career at Cleveland investment bank McDonald & Co. and then went to the U.S. Department of Treasury, which he followed with several positions in investment firms before setting up the Klesch Group in 1990.
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