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www.crainscleveland.com Vol. 27, No. 41/$1.50 OCTOBER 9 - 15, 2006 LATENEWS IN A FLASH ■ KENT STATE TURNS DEAL WIDENS TRANSTAR’S FOCUS TO CAMPUS REACH INTO SOUTHEAST RENOVATIONS, ■ Transmission parts supplier Transtar Industries Inc. of Walton CONSTRUCTION. PAGE 3 Hills, a portfolio company of private equity firm Linsalata Capital Partners of Mayfield Heights, has acquired Atlanta- based APD Transmission Parts. Terms of the deal were not disclosed. The purchase was made in part to boost Transtar’s presence in the southeastern United States. Transtar, with 34 Tops draws locations nationwide, currently has annual revenues of $255 million, according to Linsalata’s attention web site. — Shawn A. Turner KEYCORP VET MOVED INTO SENIOR VP POST of private ■ Peter D. Moore, a 28-year veteran of Cleveland-based Key- Corp, has been named senior vice equity firm president of commercial banking for Key’s Akron and Mahoning Valley regions. He replaces Jim Unidentified pursuer Castrigano, who “moved on” after three years on the job, said Key could align with local spokesman Michael K. Sherman. Mr. Sherman declined to discuss grocer in its bid for Mr. Castrigano’s departure further. Previously, Mr. Moore was director NE Ohio supermarkets of the KeyBanc Capital Markets Industrial Group. — Shawn A. By JOHN BOOTH Turner [email protected]

ATTENDANCE RATE AT JANINE BENTIVEGNA An unexpected and, as yet, AKRON ZOO GOES WILD Developers Ross Farro (left) and Spencer Pisczak are set to close as early as today, Oct. 9, on the purchase of 330 unidentified contender may be in acres of Duke Realty Corp. land in Greater Cleveland. the running for the 46 Tops super- ■ With almost three months left in markets in Northeast Ohio that are the year, the Akron Zoo already on the market. has beaten last year’s attendance According to a knowledgeable record of 223,918 visitors, source within the local grocery busi- reaching that mark this year on Familiar faces to buy ness, a private equity firm is pursu- Oct. 3. Zoo officials credit new ing the local Tops stores. The source, exhibits, including a pair of jaguar who requested anonymity, would cubs, with driving the attendance not disclose the name of the private boost. — John Booth equity firm, but indicated the would- 330 acres of Duke land be investor could involve a locally YMCA EFFORT TO ZERO IN ON HEALTH ISSUES based grocer in running the Tops stores. ■ Cleveland has been selected by Farro, Pisczak no strangers to REIT, Northeast Ohio market Pittsburgh-based Giant Eagle Inc. the YMCA of the USA as one of 13 also is believed to be a player in the By STAN BULLARD from Duke Realty Corp. cities to join the YMCA Activate Tops talks. It is known that Giant [email protected] In a joint venture with a New York-based invest- America: Pioneering Healthier Eagle president David Shapira has ment fund they refused to identify, the two men Communities initiative. The YMCA visited at least one local Tops store wo real estate development pros are putting formed Industrial Partners LLC to buy the land in a of Greater Cleveland is creating a within the past two weeks. Giant their bucks behind their belief in Northeast deal that is set to close as soon as today, Oct. 9, 10-person leadership team to head Eagle spokesman Dan Donovan said Ohio. Messrs. Farro and Pisczak said in an interview. up the Cleveland project, which he did not know of the visit and Office building developer turned restaura- Duke, an Indianapolis-based real estate investment will bring together community could not comment on it. Tteur Ross Farro is returning to the region’s commercial trust, has been marketing the land for sale as part of leaders to address obesity, Though three months have passed real estate business by teaming up with longtime indus- its exit from Northeast Ohio for sunnier economic physical inactivity and poor since Dutch parent company Royal trial broker and developer Spencer Pisczak to buy 330 climates. The land sale is sandwiched between the nutrition in the area. A total of 48 Ahold N.V. put its Northeast Ohio acres of undeveloped land in four local business parks See DUKE Page 14 cities are now part of the 3-year- See TOPS Page 12 old initiative. — Shannon Mortland ACCOUNTING FIRM SETS UP IN BROADVIEW HTS. Despite heated races, GCP mostly quiet on election front ■ A new accounting firm has begun operating in Broadview Heights. Four-employee Irwin & By JAY MILLER governor and U.S. Senate, GCP is not ability to support candidates. Like- GCP document as a member of the Associates CPAs Inc. is working [email protected] endorsing any candidates in the wise, GCP’s advocacy committee — committee. Asked last week whether out of a 1,500-square-foot office at Nov. 7 election. Instead, it largely is which is charged with shaping the he is still on the committee, Mr. 8280 Creekside Trace. The firm, The Greater Cleveland Partnership focusing its advocacy efforts in group’s public policy agenda — has Ashmus responded, “I don’t know, headed by Elizabeth A. Irwin, will considers advocacy central to its mis- support of State Issue 3, which not been active. The committee has am I?” provide consulting, tax and sion as a business development orga- would bring casino gambling to the no chairman, and a number of Similarly, Allan Krulak, vice presi- accounting services. — Shawn A. nization, but its advocate’s voice state. members were not even aware of dent of government affairs for Forest Turner largely is muted in the current election The organization has allowed its their status on the committee. City Enterprises Inc., said, “I’m on it cycle. political action committee to atro- Among them is attorney Keith (the advocacy committee), but I Despite high-profile races for phy, and with it, the organization’s Ashmus, who is identified in a 2005 See GCP Page 8

SPECIAL SECTION 41 6 SMALL BUSINESS

NEWSPAPER Couples mixing marriage and business find a

71486 01032 ■ balance between personal, professional Page 21 Entire contents © 2006 by Crain Communications Inc. 0 PLUS: TECH-SAVVY BOOKSELLERS ■ ON THE JOB ■ & MORE CCLB 10-09-06 A 2 CCLB 10/6/2006 4:46 PM Page 1

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REGULAR FEATURES COMING CRAIN’S ON THE WEB Bankruptcies ...... 18 NEXT WEEK Classified ...... 30-32 Editorial ...... 10 A buyer’s market Scrolling news 700 W. St. Clair Ave., Suite 310, Going Places ...... 27 If you’ve noticed a lot of ■ You now can keep tabs on all the latest Cleveland, OH 44113-1230 Letters ...... 10-11 For Sale signs, you’re not breaking business news by downloading the free Phone: (216) 522-1383 Crain’s news ticker for your computer’s desktop. Fax: (216) 694-4264 List: Colleges alone. What’s behind the glut www.crainscleveland.com Users can choose additional feeds for real estate, & universities..28-29 of homes available, and will manufacturing, technology and other industry- Publisher/editorial director: Reporters’ Notebook ..34 the market improve? Find out related areas. To get the news ticker, visit Brian D. Tucker ([email protected]) Stocks ...... 34 in Crain’s Fall Real Estate www.CrainsCleveland.com/NewsTicker. Editor: Mark Dodosh ([email protected]) Tax Liens ...... 19 Outlook. Managing editor: Scott Suttell Crain’s Blogosphere ([email protected]) ■ Become part of the hip crowd spending their Sections editor: Amy Ann Stoessel CORRECTION ([email protected]) days reading the blogs. The Crain’s blogs include Design editor: Kristen Miller The rent range for downtown run slightly above $20 per square foot. interesting commentary on business, sports, ([email protected]) Cleveland’s Class A office market was Todd Gabriel’s title at Grubb & Ellis Co. finance and marketing. Read the blogs at Senior reporter: Stan Bullard incorrectly reported in a Page One was also incorrect. He is a senior vice www.CrainsCleveland.com/Blogs. ([email protected]) Reporters: story in the Oct. 2 issue. Class A rents president. David Bennett ([email protected]) Shannon Mortland ([email protected]) Jay MIller ([email protected]) John Booth ([email protected]) Shawn A. Turner ([email protected]) Designer/reporter: Joel Hammond ([email protected]) Research editor: Deborah W. Hillyer ([email protected]) Cartoonist/illustrator: Rich Williams

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OCTOBER 9-15, 2006 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 State Industrial seeks land swap to expand

rather than in Oklahoma. needed because the new building untaxed and city-owned, there is no Planned deal with city would let manufacturer State Industrial envisions a new, would sit on city-owned land that now tax appraisal. 50,000-square-foot building that is part of the St. Clair Avenue freeway To make way for the reconfigured overcome property loss due to Innerbelt changes would house a data services center on-ramp, which drops down into the Innerbelt, State Industrial would be and a new manufacturing operation trench carved out when the Innerbelt giving up a 40-space parking lot and By JAY MILLER a new structure adjacent to its long- that might be used to mix and pack- was constructed in the 1950s. a data center in a 14,300-square-foot [email protected] time, multibuilding home at 3100 age cleaning products in aerosol No price has been set for the land building on Hamilton at the freeway’s Hamilton Ave. containers. The new building would the company would acquire, but legis- edge. The city of Cleveland and State Bill Barnett, State Industrial’s vice cost about $3 million, Mr. Barnett lation authorizing the sale is working Joseph Sidotti, the city’s commis- Industrial Products Inc. are working president and general counsel, said said, though he emphasized that its way through Cleveland City sioner of neighborhood development, on a land swap that will allow the the plan would allow the 95-year-old plans are preliminary. Council. The legislation authorizes the said the city could sell the land for the supplier of industrial cleaning prod- company to expand its business and, Part of the new building’s estimated sale at “not less than fair market new building as soon as the end of this ucts to replace a building that will be in particular, its manufacturing oper- cost is for 3,000 truckloads of dirt, value.” It does not list the value of the year. However, because the state lost to the Innerbelt’s makeover with ations in Cleveland, which it prefers, Mr. Barnett said. The dirt would be land, and because the property is See STATE Page 6 INSIGHT Upscale townhomes set to rise near Case

By SHANNON MORTLAND next June, Mr. Gest said. Two of the [email protected] homes already are sold, including one to Mr. Gest and his wife, Kristen, both Five upscale townhomes are of whom are Case graduates. The Gest about to be built just off the Case family will move from their home in Western Reserve University campus Shaker Heights, he said. — a type of building project Univer- “My son and future children are sity Circle hasn’t seen in decades. going to be able to run and play” in The townhomes are being built by University Circle, he said. “My wife The Doan Brook Co., a Shaker and I (already) go to the Botanical Heights real estate developer and Garden about twice a week.” investment firm, in partnership with The townhomes will range from Case and University Circle Inc., the 1,700 to 2,000 square feet and will be nonprofit group that promotes the priced from $280,000 to $315,000, arts, education and health care Mr. Gest said. In a departure from district east of downtown. the traditional method of home Doan Brook owner Donald Gest building, Mr. Gest said, the buyers said his company is buying from will be able to customize their town- University Circle Inc. about a half- homes at no additional cost. acre on East 118th Street across from “The price is the price,” he said. Case’s Village at 115, which is a new “We’ll provide all custom cabinets apartment-style dormitory campus for people, granite for the kitchen, for students. marble for the bathrooms and oak RUGGERO FATICA Doan Brook plans to begin hardwood floors that will be stained One of Kent State’s biggest capital improvement projects is the renovation of Franklin Hall, which will be the construction early next month and for the owner.” new home for the School of Journalism and Mass Communication. expects to complete the project by See HOMES Page 6 THE WEEK IN QUOTES A FLASH OF ACTIVITY “I’ve seen the office “We wanted to have Kent State spending more than $100M on a bevy market go from people with of building projects spread across its campuses terrible to wonderful disabilities out in the and back. However, community.We want By SHANNON MORTLAND lectures, is handicapped-accessible only on the first the industrial market them to get out where [email protected] floor and cannot accommodate wireless tech- nology. It’s practically a poster child for how educa- is a much more they live, work and ent State University is pouring $125 million tional needs have changed, Mr. Creamer said. consistent market communicate.We feel into renovating and expanding its old “When you thought about building an education buildings and constructing a few new ones building in 1965, you thought only about a chalk- than the office that is the best way in an effort to remain competitive in a high- board at the front of the classroom and putting a Ktech world that is accustomed to wireless connec- certain number of seats in the room,” he said. market. Office is for a person with tions, air conditioning and spacious classrooms. Kent State is embarking on a $20 million over- much tougher in disabilities to live The initiative is part of Kent haul of the building to transform State’s plan to bring most of its “We have a large number it into the new home of the Cleveland.” their lives.” buildings on the main campus of buildings that are 35 School of Journalism and Mass – Ross Farro, buyer, with Spencer – Dennis Allen, CEO, Hattie up to today’s educational stan- to 65 years old, and Communication. Though jour- Pisczak, of 330 acres of Larlham. Page 15 dards by 2010, an effort that will nalism is one of Kent State’s undeveloped land from Duke be financed by the university all face significant biggest programs, it now is Realty Corp. Page One with state appropriations and issues because of sheer spread across the main campus, through private donations. In deferred maintenance.” Mr. Creamer said. The project is some cases, all that will exist of – David Creamer, senior vice expected to be completed in fall “Have your own life “We believe women the old buildings is the outer president of administration, Kent 2007. outside of the shell, said David Creamer, senior State University This summer, the university launch differently vice president of administration spent $39 million to renovate two workplace. ... That's than men, in different at Kent State. residence halls, repair roofs and renovate the bath- “We have a large number of buildings that are 35 rooms in Dix Stadium. The college’s main athletic probably the most ways and for different to 65 years old, and all face significant issues because stadium was built in 1970 and needed improve- important thing.You reasons.” of sheer deferred maintenance,” Mr. Creamer said. ments to avoid more deterioration. Mr. Creamer “Instead of just going in and fixing electrical systems, said Kent State also plans to upgrade the stadium’s need to have your – Victoria Colligan, co-founder, we’re trying to make sure we’re looking at what is seating and entry areas. own life together.” Ladies Who Launch. Page 25 needed to provide an effective education today.” Upgrades abound Franklin Hall is perhaps one of the best examples – Mary Ellen Schuster, assistant of an outdated building on campus. Built in 1926, it Kent State has 33 construction projects now general manager of Schuster's has no air conditioning, was built only for large See KSU Page 33 Westview Gardens, who runs the business with her husband. Page 21 CCLB 10-09-06 A 4 CCLB 10/6/2006 3:47 PM Page 1

4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 9-15, 2006

For assistance with your real estate Unit of L.A. parking goliath in Cleveland or in other parts of the United States, contact: keeps Cleveland drive going

Terry Coyne “The building is in good Senior Vice President L&R makes fourth downtown purchase shape. It has good (216) 453-3001 by gobbling up 113 St. Clair building bones.” www.TerryCoyne.com – David Damus, vice president and general counsel, L&R By STAN BULLARD became the owner of the 113 St. Clair Investment [email protected] office building and its parking garage after it was the only bidder at a Sept. David Damus, vice president and An affiliate of L&R Auto Parks, 11 sheriff’s sale, which ended a general counsel of L&R Investment, dubbed the largest parking lot owner 2-year-old foreclosure on the prop- said the company previously bought in Los Angeles by the Los Angeles erties by Los Angeles-based Sun Sun Life’s mortgage on the building 1350 Euclid Ave., Suite 300 • Cleveland, Ohio 44115 • (216) 861-3040 Times, is continuing its drive to buy America Life. L&R paid $4.5 million for an amount he declined to www.grubb-ellis.com downtown Cleveland properties. for the properties at auction, but the disclose; public records also don’t L&R Investment Co. on Sept. 22 figure doesn’t tell the whole tale. show that amount. The price paid at the sale is credited to the mortgage holder, he said. The county values both properties at a total of $9 million. Mr. Damus said the three-level parking garage was “the main economic driver” in the transaction, though he insisted L&R has no plans to demolish the office building for its parking business. “The building is in good shape. It has good bones,” Mr. Damus said, though he added L&R is unsure of its next step with the office property. The purchase is L&R’s fourth in downtown Cleveland. Over the summer, it paid a total of $20 million to buy two parking lots and a parking garage. Mr. Damus said L&R was attracted by land prices “that are much more reasonable” than on the West Coast. Sports and entertainment venues give Cleveland an edge over other Midwest cities, he said. The 130,000-square-foot office building is 70% empty, according to Kevin Piunno, managing director of Midwest Real Estate Partners, who handled the building while it was in receivership. The prior owner was a partnership led by Ostendorf-Morris Colliers Chairman Bill West. Mr. West said it’s the first building he’s lost to foreclo- sure and called the entire situation “a No pain. Lots of gain. disaster.” The building lost tenants to newer buildings in the weak downtown market, although that market has started to improve of late. Mr. West said the deadly factor was uncer- tainty about whether the building might be taken to expand the Cleve- land Convention Center, which sits next door. Mr. Piunno agreed that the potential BUSINESS SWEEP CHECKING of a convention center makeover “was like a black cloud over the property” Interested in making your business’s returns bigger and and prevented closing even below- stronger with as little effort as possible? Then feel the power .15% market lease deals. Government and APY* civic leaders are no closer to deciding Introductory APY is guaranteed of BUSINESS SWEEP CHECKING, where you earn interest through February 28, 2007. whether to repair or replace the convention center than in 1994, when and we do the work. Each night, we automatically sweep the issue surfaced. your idle checking balances into an interest bearing money Mr. Damus said if the 113 St. Clair building is needed for another pro- market savings account.** You run your business, we earn 5 ject, “we’ll deal with that.” Asked if EARN IN OUR L&R is buying anything else in the you money. No sweat. To apply stop by any branch, visit Cleveland area, Mr. Damus said, REWARDS PROGRAM. ASK US HOW. NationalCity.com or call 888-NCB-4BIZ (622-4249). “We’re always looking for good opportunities.” ■

Volume 27, Number 41 Crain’s Cleveland Busi- ness (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113- 1230. Copyright © 2006 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and Business Banking • Personal Banking • Investments • Mortgage Loans at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. *Offer applies to Business Sweep Checking accounts opened at National City offices located in Ohio by 11/30/06 with funds not currently on deposit. Annual Percentage Yield (APY) applies to all balances in excess of target balance up to $1,000,000 (888)909-9111. and is guaranteed through 02/28/07. After 02/28/07 the APY may change. Minimum opening deposit $20,000. One account per customer or taxpayer ID. Limited to small businesses with sales under $5 million annually. Not available for Private Client Group, Corporate Banking or public fund accounts. Offer may be withdrawn at any time. **By law, the number of sweeps from the savings account back to the checking account is limited to six per statement cycle. On the sixth sweep, all REPRINT INFORMATION: 800-290-5460 Ext. 180 funds are transferred back to the checking account and all sweep activity is suspended until the start of the next statement cycle. Points from National City is a National City Corporation® service mark. Member FDIC • ©2006, National City Corporation® CCLB 10-09-06 A 5 CCLB 10/4/2006 2:45 PM Page 1

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6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 9-15, 2006 Machaskee hangs State: Longtime city shingle for PR firm resident wants to stay continued from PAGE 3 “The timing is tricky. We Former PD publisher opens Key Tower office holds an easement on the property, want to keep them here.” development could not begin until the state vacates the land when it – Joseph Sidotti, commissioner By JOHN BOOTH civic organizations to privately held closes the St. Clair ramp. That action of neighborhood development, [email protected] businesses. is not scheduled until 2013, according city of Cleveland “It’s a little early as far as what to a spokeswoman for the Ohio committed to this.” Former Plain Dealer publisher kind of shape it’s going to take,” he Department of Transportation. State Industrial, formerly State Alex Machaskee has started his own said. “Everything from looking at the “The timing is tricky,” Mr. Sidotti Chemical Co., has been in the neigh- public relations and consulting firm, possibility of (working with) a book said, because State Industrial will borhood since it was started in 1911. It setting up shop in Key Tower. publishing house in Belgrade to need to take possession of the city’s continues as a supplier of industrial Mr. Machaskee, 68, who was at working with one of the developers property, bust up the concrete ramp maintenance products that range the newspaper’s helm in Northeast Ohio. and build its new building before the from sink sanitizers to lithium grease from 1990 until his “It’s just not my It’s kind of all over the state is ready to tear down the old that operates at temperatures as high retirement from the nature to go down lot.” building. as 500 degrees. position in June, said to Florida and play Since vacating the But the city will do whatever it can Mr. Barnett said the company had while his business in the sand.” publisher’s chair, Mr. to help, Mr. Sidotti said. sales last year of about $100 million. cards read “Alex Mach- Machaskee said he “We want to keep them here,” he It has 237 employees in Cleveland askee & Associates, – Alex Machaskee, retired has traveled to Serbia, FILE PHOTO/JESSE KRAMER said. Plain Dealer publisher; and 1,100 worldwide. LLC,” for now, it’s a Greece and Alaska. Alex Machaskee’s new public relations Mr. Barnett said the family-owned Councilman Joe Cimperman, one-man operation. owner, Alex Machaskee On the local front, and consulting firm will focus on mar- & Associates, LLC company wants to expand here, too, whose downtown Ward 13 includes “It’s just me,” he he has joined the keting, media relations, corporate even though it operates a state-of- State Industrial’s campus, also is explained. “The ‘Associates’ will Cleveland State University board of coaching and special events. the-art manufacturing plant in Okla- working to make sure the company happen if I get some business.” trustees and the Cleveland Council homa that also could be expanded. stays put. The business will focus on “mar- on World Affairs. larger” than what he needs, and he “We have the opportunity to con- “You can’t say enough about keting, media relations, corporate “It’s just not my nature to go down plans a move to a smaller space on struct a bigger manufacturing plant them,” he said. “They open their to Florida and play in the sand,” he st coaching and special events,” Mr. the 51 floor in January. in Tulsa, but we would rather do it in buildings for meetings, they open said. Machaskee said. “That’s going to kind of signal my Cleveland,” he said. “We’re very the building for events.” ■ Though he has no signed clients Mr. Machaskee’s current space in getting down to brass tacks and yet, Mr. Machaskee said he is in talks Key Tower is on the 41st floor, but he working the business side of it,” he with several prospects, ranging from says it’s “about seven or eight times said. ■ Homes: Case amenities a part of new townhome purchase

continued from PAGE 3 an additional one-time fee of $150 The townhomes will come stan- for check-out privileges at Case’s

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8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 9-15, 2006 GCP: With PAC support gone, GCP’s voice grows soft

continued from PAGE 1 we stepped back to focus our goals The organization through its gambling to the state. “We haven’t had any don’t know how active I’ve been.” and put it (candidate endorsements) board came out this election cycle in “The (COSE) staff recommended dialogue this time The Council of Smaller Enterprises, on the back burner,” said Carol support of State Issue 3 and two that COSE not endorse Learn and which is the partnership’s small busi- Caruso, GCP’s senior vice president issues in Cuyahoga County — Issue Earn,” said Thomas Pitrone, chairman around. The PAC got ness division, has maintained its inde- for government advocacy. “It wasn’t 18, the health and human services of the COSE advocacy committee. depleted.” pendent advocacy effort, though it anything but a lot on our plate.” levy, and Issue 19, which supports a A louder voice in the past – Robert Smith, board member, has chosen to endorse only some GCP was created in March 2004 by tax on cigarettes to provide public Greater Cleveland Partnership ballot issues, just like its parent. the merger of the Greater Cleveland money for the arts. The group also is The organization used to be more Both groups’ web sites provide Growth Association, Cleveland opposing State Issue 2, which would active in making recommendations both the Growth Association and members with research on candi- Tomorrow and the Greater Cleve- increase the state minimum wage to members come election time. For COSE, corporate PACs such as the dates and issues on the November land Roundtable. The COSE/Greater and would impose additional report- instance, in 2002, the COSE/Growth KeyCorp PAC and the Calfee Halter ballot. The information includes Cleveland Growth Association PAC ing requirements on business. Association PAC endorsed candi- & Griswold Fund for Good Govern- responses from candidates to sepa- came with the merger. COSE has taken the same posi- dates for governor, attorney general ment, and from Growth Association rate GCP and COSE questionnaires tions on three of those four issues. and the Supreme Court, as well as 13 They have issues and COSE staff. in races for governor, Congress, the However, it is taking no position on candidates for the Ohio Legislature The PAC never had a large bank state Legislature and the Ohio Although GCP is mum on candi- the gambling issue, called the Learn and two for the U.S. House of Repre- account. In 2002 it took in only Supreme Court. No candidates are dates this fall, it is staking out posi- and Earn campaign, despite its sentatives. $33,255.71 and made political tagged as preferred or endorsed. tions on four ballot issues deemed parent organization’s prominent In that year, contributions came contributions of $8,500, all to Cleve- “When GCP was formed (in 2004) critical to the region. role in pushing to bring casino from the volunteer leadership of land City Council campaigns, according to its filings with the Ohio Secretary of State. The next year it raised $34,378.04 and spent $34,053.20 on state campaigns that included various Ohio House and Senate campaign committees and Bob Taft’s cam- Finally, a prescription drug plan paign for governor. In November 2003, Growth Asso- ciation chairman Robert Smith told that’s a good deal for business. Crain’s Cleveland Business that the group planned to grow the PAC, but with the merger a few months later, that didn’t happen. Even so, in 2004, the PAC, by then renamed the Greater Cleveland Part- nership/COSE PAC, endorsed three SM Introducing Nationwide Select. Ohio Supreme Court candidates and three Ohio House aspirants. The first affordable prescription drug plan of its PAC-ing it in kind to feature generic drugs, convenient mail- The GCP advocacy committee, order delivery, plus a low $10 co-payment* to which under the Growth Association recommended candidates and issues keep your employees happy and healthy. for the organization and the PAC to support, completed a 2005-2006 It’s a unique, easy-to-implement plan that costs policy agenda last year that focused on advocacy for economic development up to 50% less than traditional plans. Simply put, and on workforce development issues, it’s a good deal for business. such as bolstering NASA Glenn Research Center and bringing casino gaming to the state. Nationwide Select is the product of two trusted But the advocacy committee, now leaders — Nationwide, a leader in insurance and formally called the Government financial services, and Medco,® the nation’s leading Advocacy Network, apparently has pharmacy benefit manager — joining forces to done little related to the coming election. benefit businesses everywhere. “We haven’t had any dialogue this time around,” said Mr. Smith, who Nationwide Select — had been chairman of the PAC board but is now less active in the organi- Delivering big relief for your business. zation. “The PAC got depleted.” Since that last burst of endorse- ments in 2004, the PAC doled out To learn more visit nationwide.com/health only $3,800 in 2005 and 2006 and or call: raised $1,814.04. That money went to candidates In Cincinnati: 513 984-0786 for the Ohio General Assembly and In Cleveland: 216 378-7899 to Frank Jackson’s Cleveland may- oral campaign, which received In Columbus: 614 781-9920 $1,500 to according to campaign spending reports. The PAC’s 2006 semi-annual report to the Secretary of State’s office showed an ending balance of $2,073.73 Most of the incoming money now comes from a handful of GCP staff Nationwide Select — Generics Prescription Drug Plan members, who appear from a read- ing of the campaign reports to make twice-monthly payroll deductions to the PAC. As for future of the GCP political action committee, Ms. Caruso said, “Just now, literally, we are relaunch- ing it.” She said she hopes to rebuild it to where it can spend between $30,000 and $40,000 a year on political con- * Applies to covered generic drugs filled by mail or first fill at retail. Not available in all states. Contact your broker for details. Underwritten by Nationwide Life Insurance Company. tributions. Nationwide, the Nationwide framemark and On Your Side are federally registered service marks of Nationwide Mutual Insurance Company. “We’re going to kick this off for Medco is a registered trademark of Medco Health Solutions, Inc. next year,” she said. ■ © 2006 Medco Health Solutions, Inc. All rights reserved. CCLB 10-09-06 A 9 CCLB 10/4/2006 2:47 PM Page 1

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10 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 9-15, 2006

PUBLISHER/EDITORIAL DIRECTOR: Brian D.Tucker ([email protected]) EDITOR: Mark Dodosh ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Smoke out moke Less Ohio, the coalition behind State Issue 4, should be named Smoke Screen Ohio. Its proposed constitutional amendment isn’t an anti-smoking initiative at all. That’s why Svoters who want to snuff out smoking in most public places statewide should vote “no” on Issue 4 and “yes” for Issue 5, the ballot initiative of the similarly named Smoke Free Ohio. Tobacco giant R.J. Reynolds Co., other tobacco companies and the Ohio Licensed Beverage Associa- tion are among the financial supporters of Smoke COMMENTARY Less Ohio’s efforts. That roster should give voters a clue that the coalition’s primary goal is to head off the imposition of severe restrictions on smoking that Getting to the bottom of the buzzword would go into place with the approval of Issue 5. However, there is a more insidious aspect to ow, here’s some language from Going Forward — An executive’s way of process in writing, liberally adding buzz- Smoke Less Ohio’s proposed amendment than a a press release that will catch saying “in the future,” (such as) “We lost words and company acronyms to make simple desire to allow patrons of bars, bowling alleys your attention: “Do you hate it $10 million last quarter, but going forward, it sound far more complicated and and restaurants to light up. Approval of Issue 4 … when the IT geek tells you to we’ll execute our vision more proactively.” important than it really is. N‘power down’ your computer (when he Do companies ever “go backward?” But, like the products that TV’s would invalidate any local ordinance or law already in effect that prohibits smoking in places other than means to turn it off)? Or when your Employee Rustout — A workplace Big-Haired Lady hawks, wait, there’s those specified in the amendment, and would teenager gets straight D’s on her report malady in which an employee’s potential more. The Buzzword Dictionary has an prevent local governments from adopting such card and tells you she’s ‘deferring is underused and his/her performance is interesting, two-page primer in the back titled “10 Words or Phrases You Should measures in the future. That language means the success’ until next semester?” mediocre. Rustout is more subtle and This from the folks at Marion insidious than its better-known Never Put in a New Release.” amendment would overturn laws in nearly two Street Press, a small, indepen- BRIAN counterpart, employee burnout. Some of my favorites: dozen Ohio cities, including Columbus, where dent book publisher in Oak TUCKER Enronym — Any word formed Actionable — We’re tired of actionable strong public smoking bans have been put in place. Park, Ill., that specializes in from the base “Enron,” usually steps, actionable results, actionable tech- Rather than take a giant step backwards in books about words, writing and signifying some sort of corporate niques. Avoid the term unless you have promoting public health, Ohioans should reject journalism in an attempt to malfeasance. (The BD defines the to differentiate those items from the Issue 4 and should adopt Issue 5, with its strong ban promote their latest offering, term, “Enron” as undermining inactionable items you’re promoting. on smoking in public places and at places of employ- “The Buzzword Dictionary.” the future, courtesy of former Leveraging our assets — Any company ment. The backers of Issue 5 include the American The subtitle on the small, Sen. Tom Daschle, who said, “I that doesn’t “leverage its assets” goes out Cancer Society, the American Heart Association, the paperback book is “1,000 Phras- don’t want to Enron the Ameri- of business. Everyone already assumes you es Translated from Pompous to can people. I don’t want to see do. Don’t waste time repeating it. American Lung Association and the Ohio Hospital English,” and that pretty much tells the them holding the bag at the end of the day Robust — It’s a term that best Association. We’d say these groups have more interest tale. just like Enron employees have held the describes coffee. Calling a product in keeping the lungs, hearts and organs of Ohioans Here’s a brief sampling of some defin- bag.”) “robust” tells the customer little or noth- free of diseases such as cancer than R.J. Reynolds. itions: EMV — E-mail voice. The tone of a ing. Try spelling out the benefits. It’s So, on Nov. 7, remember: When voting on smok- Geek handshake — The process of person’s voice on the phone that signals more effective. ing issues, less isn’t less at all. To be smoke-free, vote introducing yourself to someone by text he’s reading his e-mail instead of listening This is a little book that is comical and “no” on Issue 4 and “yes” for Issue 5. messaging your business card info, even to you. useful. It should be required reading in though he or she may only be 10 feet away. Proceduralize — To formalize a every corporate suite in America. ■ Yes on 19 LETTERS ith high-profile political races and a raft of contentious statewide issues on the ballot, it 2000 VC activity a poor comparison for today W would be easy to lose sight of Issue 19, the Cuyahoga County health and human services levy. ■ We hope voters don’t make that mistake. I was reading your Oct. 2, page 3 story, is short, if you use Wilt Chamberlain as unfulfilled promise of Internet technology. County officials are putting this 2.9-mill levy “VC investment dollar dropoff hitting your reference point. They ultimately wised up, though, and home,” and wanted to comment. Overall, Based on this misleading comparison, stopped buying IPOs. The lag effect of that before voters well before the expiration at the end of I’m disappointed. I don’t think the article the article gives the impression that is still being felt, including in the venture 2007 of the 3.0-mill levy that the new levy would accurately reflects what is going on in something is “wrong” because of the capital industry, where less capital is being replace effective next January. They’re trying to en- Northeast Ohio. dropoff in investment and that people in invested today on a national basis. That’s a sure that there will be no break in the flow of taxpayer First of all, I think it is misleading to Northeast Ohio should be concerned. correction from the excesses of the bubble dollars to basic services that are lifelines to those compare current venture capital activity The headlines don’t help, either. It reads burst and is a good thing. county residents who are among its most vulnerable. with the year 2000. That year was an like, “Here’s our idea of the story, let’s The situation in Northeast Ohio, Whether it’s providing care for abused or neglected anomaly of historic proportions, as all select the facts to fit it.” however, is very different. First of all, it’s children or hot meals to senior citizens, the county the data show. It was truly a bubble in During 1999, 2000 and 2001, there was a different market from the coasts and in counts on this levy to aid its people in need. The terms of capital raised and invested and too much venture capital chasing deals. a different part of its market develop- added cost over the current levy for most of those who now, five or six years later, in capital lost. That drove up valuations, caused too much ment cycle. Venture capital was aban- It’s really misleading to use an anomaly money to be invested in speculative doned in this region a decade ago, but is are better off is negligible — a little more than $3 per as the baseline for comparison. If you go to ventures with inexperienced management now resurging — in its earliest forms. $100,000 in assessed value of a homeowner’s dwelling. this link, http://www.nvca.org/ffax.html, teams and ultimately drove down returns. Since the bubble period, Early Stage Thanks to tight state budgets, county governments and look at the second table, you will see There was a brief period when that Partners and JumpStart opened their must rely on their residents to pay the cost of human that the year 2000 is all out of proportion model worked, because the public markets doors and began investing in local busi- services. It’s why we urge voters to approve Issue 19. with other years. What you have done is the (individual investors) were welcoming any nesses. Reservoir Venture Partners hired equivalent of saying that a person 6 feet tall and all initial public offerings based on the See LETTERS Page 11 CCLB 10-09-06 A 11 CCLB 10/5/2006 2:02 PM Page 1

OCTOBER 9-15, 2006 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 Letters: Region’s VC THE BIG ISSUE Do the recent school shootings have you worried that such problems could occur in your funding in good shape neighborhood schools?

continued from PAGE 10 Jonathan Murray Tim Biro and established a Cleve- Managing director land presence. Early Stage Partners Draper Triangle Ventures of Pitts- Cleveland burgh opened a Cleveland office and made its first three investments from Setting the ETF record its new fund in Northeast Ohio. Oak- ■ wood Ventures, a St. Louis-based I am writing regarding the Sept. 18, medical firm, has opened a Cleve- Page 21 story, “ETFs popular land office and hired a former Cleve- investment tool despite money land Clinic Foundation executive to managers’ mixed opinions.” I thought you should be aware of staff it. DWAYNE COGGINS JOHN KUSAR PAM INGRAM DEBORAH RIDGWAY The NorthCoast Angels network some inconsistencies and inaccura- Northfield Center Madison St. Louis, Mo. Chardon was formed to supplement Ohio- cies I noticed in the article about Township TechAngels of Columbus, which exchange traded funds. No. It’s parenting (that’s I think parents need to If I had kids, I would feel made its first three investments in 1. “We don’t believe in doing Yes. There’s no neighbor- the problem). People want raise their children. We let like pulling them out of the Northeast Ohio and ArchAngels of that,” he said. “In ’99, it led everyone hood you can actually to make excuses, but it TV and gangs raise our public schools and putting Akron. Morgenthaler, which a to get into tech” prior to the technol- move to now (that’s safe). comes down to morals. kids. them in private schools, decade ago moved its venture activ- ogy sector’s collapse roughly two We live in a society that’s but even that’s not a ities to Silicon Valley, has invested in years later.” almost out of control. solution. ■ one local startup and is active in Technology is a sector of the looking at others. markets, whereas ETFs are an At least two other venture capital investment vehicle (like mutual funds) that are broadly diversified. firms of which I am aware are ➤➤ Let us know what you think. Vote in our online poll at www.CrainsCleveland.com considering opening Cleveland This is an apple/oranges compari- offices. I know all this because I son. spend my days working with these 2. The increased popularity has people. led to rising prices for the Spider, WRITE TO US I think it is also potentially with the fund’s price climbing to $137 a share in early September, up Send your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, misleading to look at only small 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230; or e-mail to [email protected] periods, as you do later by compar- about 13% from $121.50 on Sept. 5, ing the first half of 2006 with the 2005. ■ first half of 2005. Northeast Ohio The Spider (symbol SPY) is an remains a thin market for venture ETF that tracks the S&P 500 index. capital, and single deals distort The price of the SPY closely tracks periods. this index, thus the reason for the I think it would be more meaning- price increase is due to appreciation ful, and more educational to your of the stocks that compose the S&P readers, to take a longer view and to 500 index, not because of increased look at the evidence of activity out- popularity or demand of the Spider. lined above. 3. ETFs that specialize in interna- Would all these firms be opening tional markets, for instance, can add Cleveland offices if there: 1. Was up to $380 in expenses to a $100,000 not good deal flow?; 2. Were not investment, he said. The same good prospects for investment?; 3. investment with some traditional Was not an intention to increase mutual fund companies, mean- venture capital investing in this while, can carry expense costs total- region? ing just $100, he added. ■ As to the people you wrote about, The average expense ratio for a Mort Cohen, nice a man as he is, is Foreign Large Cap Blend Stock not a venture capitalist. He invests in mutual fund is 1.55% (according to PIPES, which are private invest- Morningstar), while most Large Cap 7EAREPLEASEDTO ments in public entities. These are ETFs run .30% to .60%. On a investments that are made in $100,000 portfolio, the expenses on companies that have gone public ETFs would be approximately $850 but have not met their milestones to $1,250 lower than the average mu- tual fund. ANNOUNCETHAT and, thus, cannot raise more capital from public markets. This is not ven- 4. … the Internal Revenue Service ture capital, but later-stage debt fi- has lowered the tax rate on divi- nancing. dends to 15%, investors have to hold It’s a mistake to equate what Clar- the dividend-paying stock for 60 ion is doing with what is happening days, something ETFs don’t always here in the local venture capital do. ■ industry. Clarion is not active in the ETFs are based on indexes and venture capital market. I know only change the components as 'REGORY&*OHNSON 3ENIOR6ICE0RESIDENTn)NVESTMENTS because I have lunch with Mort often as the index changes, which quarterly and we talk about it. I can can be as little as 90 days, and often -ICHAEL*7EINHARDT 3ENIOR6ICE0RESIDENTn)NVESTMENTS only conclude that you used Mort’s as annually. Many actively managed quotes because they fit the precon- mutual funds, however, have 6IRGINIA&"ENZ 2EGISTERED#LIENT2ELATIONSHIP3PECIALIST ceived notion of the story. turnover rates of up to 200% annual- Crystal Ventures has moved its ly, so they would be much more like- *ENNIFER!,E-ASSENA 2EGISTERED#LIENT2ELATIONSHIP!SSOCIATE investing activities to China and is ly to violate this rule. In fact, we not active in the local market. know of no ETFs that change their 3USAN&(ILFER #LIENT2ELATIONSHIP!SSISTANT Peter Kleinhenz is based in components faster that 90 days. Columbus and, though he is active Carnegie Capital Asset Manage- HAVEJOINED"AIRDS#LEVELANDOFFICE in the Cleveland market, he is not as ment Co. strongly believes that ETFs in touch with local market condi- represent a more viable investment !T "AIRD FOR OVER  YEARS WE HAVE PUT OUR CLIENTS INVESTMENT NEEDS FIRST AS A MATTER OF tions as are Mike Stubler of Draper, alternative for many investors due to PRINCIPLE#ALLFORAFINANCIALPARTNERWITHYOURBESTINTERESTSINMIND a variety of people at JumpStart and the low costs, tax efficiency and BioEnterprise, and me and my part- broad diversification across compa- ners at Early Stage Partners. Why nies. That being said, there are 0UBLIC3QUARE 3UITE are none of us quoted? Because certainly situations when other #LEVELAND /( what we said didn’t agree with the investment alternatives may make      preconceived story line of scarcity sense, particularly when investing WWWRWBAIRDCOM and decline? small amounts on a periodic, ongo- Lots of people, including your ing basis. readers, know about the activity I Gary P. Wagner 7EALTH-ANAGEMENT#APITAL-ARKETS0RIVATE%QUITY!SSET-ANAGEMENT have described above. Director of client relations It makes you look uninformed not Carnegie Capital Asset ¥2OBERT7"AIRD#O)NCORPORATED-EMBER.93%-EMBER3)0#-#  to include it. Management Co. CCLB 10-09-06 A 12 CCLB 10/5/2006 3:29 PM Page 1

12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 9-15, 2006 Modern look goal of Americhem expansion Tops: NE Ohio stores’ By DAVID BENNETT concentrates for the plastics industry. The State Controlling Board has ap- [email protected] The concentrates are used in molded proved a $180,000 grant for the road- plastic auto parts and vinyl siding. way improvement project. buyer still unknown Americhem Inc. is embarking on a Other Americhem customers include An Americhem official, who $3 million expansion project that’s producers of nylon fibers used in declined to give his name, wouldn’t continued from PAGE 1 “We evaluate multiple Tops stores up for sale, Tops spokes- designed to put a modern face on the goods such as carpet and luggage. comment on the expansion project opportunities in multiple woman Tracy Pawelski said it’s “not chemical manufacturer’s headquar- Plans call for reconstructing 1,130 because the company still is drawing necessarily” true that finding a locations. I’m sure the ters in downtown Cuyahoga Falls. feet of Main Street between Portage up designs. He said the company buyer is taking longer than expected. Tops scenario is one of The project includes a 2,000- Trail and Broad Avenue to provide employs 200 in Cuyahoga Falls, in- Shortly after the stores were put on square-foot addition to Americhem’s better access to Americhem’s build- cluding 90 at the East Broadway site. those situations we are the block in July, company officials building, 225 E. Broadway St., that will ing, which is just east of where Main The city’s application for the road- evaluating.” were optimistic that they could sell house a $2.3 million research-and-de- Street and Broadway Street intersect. way grant states the project will retain all the Ohio locations by the end of – Dan Donovan, spokesman, velopment center for the company’s Jennifer Syx, deputy director of all 90 jobs, which pay an average of Giant Eagle the year. global operations. The space will be development for the city of Cuyahoga $36.42 per hour in wages and benefits. “These things always take time,” used for color concentrate research Falls, said the roadway project will aid Americhem has another plant on Ms. Pawelski said. Heinen said his chain is “not an and other analysis work, according to not only Americhem, but also other Steels Corners Road in Cuyahoga Falls, From web sites following the Tops active participant” in the Tops sales documents filed with the Ohio businesses that might locate to Main as well as plants in Elgin, Ill.; Salisbury, saga to talk among drivers of delivery talks, but he would not rule out Department of Development. Street. The city is dedicating a portion Md.; Concord, N.C.; and Mansfield, trucks, recent rumors of a sale entirely taking another look at some Americhem produces custom of the vacated roadway to parking for Texas. It also has operations in Eng- announcement have painted a locations “when Tops makes their color concentrates and additive Americhem employees. land and China. ■ moving target: In some corners, decision about how they want to word was to have come a month ago. dispose of the stores, if there are In others, it’s in the next few weeks. stores left over.” Asked several questions about Calls seeking comment from rep- Giant Eagle as a possible buyer of the resentatives of Dave’s Supermarkets, Northeast Ohio Tops stores, company Acme Fresh Markets and Rego Bros. Cultivate Your Knowledge. spokesman Mr. Donovan offered Inc. were not returned. Attend the Weatherhead Breakfast Series. several variations on a single answer. Brian K. Garson, a Cleveland real “We evaluate multiple opportuni- estate investor and former president ties in multiple locations,” he said. of Fisher Foods Inc., was involved 10 “I’m sure that the Tops scenario is years ago with an investment group one of those situations we are evalu- that made a play for Riser Foods Inc. DATE AND TIME: ating.” — a publicly traded company Giant Eagle’s last purchase of formed through the combination of Monday, October 16, 2006 multiple stores from a single chain in the Stop-n-Shop grocery coopera- 7:30 – 9:30 a.m. Ohio was in 2004, when it bought tive and Fisher Foods. That move eight Big Bear stores in the Colum- eventually spurred Riser’s purchase bus area. by Giant Eagle in 1997. LOCATION: It is unclear whether Giant Eagle’s Mr. Garson said that same group interest in Tops is that of a solitary took a look at the current Tops sale George S. Dively Building buyer, or if the company is likely to but decided in August not to bid. 11240 Bellflower Road pursue a deal in tandem with one or “Our group’s interest, in our eval- uation of the package, was primarily (on the Case Campus) more local grocers in order to avoid possible antitrust concerns that the real estate,” Mr. Garson said. could be raised by the Federal Trade “Because of the (other bidders’) COST: Commission. interest in the stores, it was our consensus to see what happened in 35 program Tops’ Ms. Pawelski would not / comment on store visits by specific the bidding process and decide what includes breakfast and parking possible buyers, saying only, “The our next move was after that.” process, and what you would expect Though speculating, Mr. Garson might happen during the process to said he expects an announcement identify a prospective buyer, has concerning Tops’ future in North- been happening since July 6.” east Ohio to come within the next few weeks. ■ INVESTING IN START-UPS Heinen’s Fine Foods president Jeff FEATURING University School Panelists: Dave Morgenthaler, Morgenthaler Ventures, Cathy Panzica, Panzica Investments, A SCHOOL FOR BOYS • AN EDUCATION FOR LIFE and Chris Sklarin, Chrysalis Ventures Moderator: Dr. Scott Shane, A. Malachi Mixon III Professor of Entrepreneurial Studies Why University School? ...we know boys! For 116 years University School has been providing a foundation for learning which sets boys on a path of intellectual curiosity and instills in them the value The panelists will discuss: of a high moral character. Discover more on our website and visit. • Investments and industries venture capitalist prefer; OPEN HOUSE: Shaker Campus • K-8 • Whether the entrepreneur or the investment opportunity Oct. 15: 1-3:30 pm is most important; and Hunting Valley Campus • 9-12 Oct. 17: 8-10:30 am • Investing in Northeast Ohio.

THIS EVENT IS OPEN TO THE PUBLIC.

To attend, please register by October 13—seats will fill quickly. Phone: 216/368-6413 • Web: www.weatherhead.case.edu/breakfast/crains UNIVERSITY SCHOOL www.us.edu UPCOMING BREAKFASTS: Shaker Campus • Grades K–8 • 216.321.8260 Hunting Valley Campus • Grades 9–12 • 216.831.2200 November 13, 2006 February 5, 2007 March 5, 2007 April 16, 2007

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