GETTING AHEAD of the CURVE Manufacturing Across the Coun- Sector

20141124-NEWS--1-NAT-CCI-CL_-- 11/21/2014 3:37 PM Page 1

$2.00/NOVEMBER 24 - 30, 2014

Product demand sparking business Manufacturing industry is getting significant boost from companies investing in tooling and equipment

By RACHEL ABBEY McCAFFERTY [email protected]

Manufacturers across the nation have opened their wallets to buy more tooling and equipment this fall. That’s driving business for the companies that make those products, and it indicates growing JANET CENTURY optimism in the industry at large. Esperanza executive director Victor Ruiz, a product of Cleveland public schools, says the Hispanic community is critical to Cleveland’s growth. Bill Beattie, president of Bar- MORE INSIDE dons & Oliver, a Brown Gibbons Lang machinery mak- & Co. report shows er in Solon, said high growth for U.S. companies GETTING AHEAD OF THE CURVE manufacturing across the coun- sector. Page 19 With help of Esperanza, Hispanic graduation rates in Cleveland have soared try are ap- 30% proaching 80% capacity utilization, which is a high The graduation rate of Hispanic By TIMOTHY MAGAW of white and black students. And considering the His- number based on historical norms. Cus- students in Cleveland public [email protected] panic population was one of the fastest-growing com- tomers that might have been putting off schools in 2011, an all-time low. munities in the city and poised to make up a major In 2011, Cleveland Metropolitan School District part of the future workforce, concerns continued to purchasing equipment are having a CEO Eric Gordon decried the district’s dismal Hispan- mount. harder time doing so now, he said. Bar- 64.3% ic graduation rate as a crisis in the community. But in a few short years, the district managed to dons & Oliver makes equipment for pro- The current graduation rate for At 30%, that figure — an all-time low — was more double the Hispanic graduation rate to about 61% in cessing tube, pipe and bar for a diverse Hispanic students, an all-time best. than 20 percentage points lower than that of the dis- 2013, which is more in line with the national average. range of industries, including energy, trict’s overall student population and well below that See CURVE, page 8 See DEMAND, page 17 Firefighters banking on Lorain County with latest addition By JEREMY NOBILE Dec. 31, pending regulatory ap- ographic footprint and bolstering 18 employees with the merger, said ing its fourth acquisition in about [email protected] provals. Financial terms of the membership since the adoption of CEO Ben Laurendeau. The deal will as many years in the transaction transaction were not disclosed. its community charter in 2005. take Firefighters to $235 million in with Sun. Firefighters Community Credit The deal is rooted in succession Firefighters, which currently serves assets with about 32,000 members “It’s just very difficult for a small Union in Cleveland is continuing planning for Sun, from which CEO Lake and Cuyahoga counties, will and 80 employees. credit union to survive with addi- expansion efforts with its first foray Brenda Hammond will retire in De- take over operations of Sun’s five Mergers of credit unions have tional regulatory burdens (and) ag- into Lorain County at the end of the cember, and in strategic planning Lorain County locations. The deal become increasingly common ing memberships. … There are a lot year via its acquisition of Sun Cen- for Firefighters, where board mem- has been in the works since spring. since the end of the Great Reces- of forces that make it hard to sur- ter Federal Credit Union of La- bers have been pushing the credit Firefighters will add $35 million sion, Laurendeau said, especially vive,” he said. “We want to be an Grange.The transaction takes effect union to continue expanding its ge- in assets, about 4,000 members and for Firefighters, which is complet- See FIREFIGHTERS, page 8 47

7 ALSO INSIDE: SMALL BUSINESS

74470 83781 profitable and entrepreneur-friendly ■ Pages 13-15 by Crain Communications Inc. Vol. 35, No. 47

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2 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014 Sale to private equity firm should bolster Q Holding Co.

By MIKE McNULTY Both 3i and Q Holding have a terest in the company.” ence and network to help acceler- end market strategies makes 3i an Rubber & Plastics News common goal of expanding in a Q Holding primarily serves the ate the company’s continued inter- ideal partner for this phase of the number of regions. The transac- automotive, medical and pharma- national expansion.” business.” Precision molded rubber and sil- tion, which is subject to standard ceutical markets with goods made Relyea said there are excellent With its expertise and contacts in icone components maker Q Hold- regulatory approvals, is expected to by Qure Medical and QSR. growth opportunities for Q Holding Europe, 3i will be able to help Q ing Co. of Twinsburg will get an op- close in mid- to late-December. not only in the United States but in Holding navigate in its bid to grow Q Holding President and CEO Mexico, Europe and China. “We further in Europe, he said. A good portunity to further expand its Well positioned growing business in Europe and in Randy Ross said the company’s have a terrific depth of resources to portion of that growth is expected other regions of the world under management team and workforce Richard Relyea, a 3i North Amer- help them grow.” to be organic driven by the creation the guidance of a new owner. of about 1,100 will remain intact. ica partner based in New York, said 3i is a leading international in- of new or improved products, he Private equity firm 3i Group The firm operates six manufactur- Q Holding “is an excellent business vestment manager based in Eng- added, but some could come via P.L.C., with a strong foundation in ing facilities in the United States and a global leader in the majority land. It is well-known throughout acquisitions. Europe and elsewhere, plans to and China, selling products in of its product categories. It’s well Europe where it has had a strong “I see this (acquisition) as a ben- purchase the company and its more than 50 countries, and has a positioned in the markets it serves.” base since the 1940s, Ross said. efit to us in order to find the right three operating businesses — Qure sales and engineering office in Ger- He said his firm is looking for- It “has the network to help us be platform for us as we expand in Eu- Medical, QSR, and Quadra Tooling many. ward to working with Q Holding’s a global partner to our key cus- rope,” according to Ross. and Automation — from Industrial He said the management team management team “to build upon tomers. Our shared vision of ‘cus- Relyea agreed, noting that in ad- Growth Partners for an estimated was given an opportunity to invest this strong platform for growth, in tomer first’ philosophies and 3i’s dition to organic growth, selective $160 million. in the operation, “so I have an in- particular leveraging our local pres- unique position to help support Q’s See Q HOLDING, page 7

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher: John Campanelli ([email protected]) Editor: Elizabeth McIntyre Let your ([email protected]) Managing editor: Scott Suttell ([email protected]) Sections editor: Amy Ann Stoessel ([email protected]) Assistant editor: Kevin Kleps ([email protected]) Sports Senior reporter: Stan Bullard health plan go ([email protected]) Real estate and construction Reporters: Jay Miller ([email protected]) Government Chuck Soder ([email protected]) Technology Dan Shingler ([email protected]) Energy, steel and automotive Tim Magaw ([email protected]) to the birds. Health care and education Rachel McCafferty ([email protected]) Manufacturing and energy Jeremy Nobile ([email protected]) Finance Research editor: Deborah W. Hillyer ([email protected]) DoD you see a solution to the Cartoonist/illustrator: Rich Williams ggrowing gaps in your benefi ts? Art director: Rebecca R. Markovitz ([email protected]) Events manager: Jessica Rasmussen ([email protected]) YourY employees may. Special events coordinator: Kim Hill ([email protected]) Marketing strategist : Michelle Sustar ItIt’s called voluntary insurance, and almost ([email protected]) Advertising director: Nicole Mastrangelo 660 percent of employees wish their employer ([email protected]) ooffered it1. Account executives: Dawn Donegan ([email protected]) Andy Hollander ([email protected]) Lindsie Bowman ([email protected]) In this changing insurance landscape, Afl ac has John Banks ([email protected]) ooffered voluntary coverage and nothing else for Laura Kulber Mintz ([email protected]) Office coordinator: Denise Donaldson nnearly 60 years. And it shows. With a one-day ([email protected]) aaverage turnaround2 for online claims, Afl ac is a Web Editor: Damon Sims ([email protected]) ggreat way to make employees happy, which may Digital strategy director: Nancy Hanus mmake you happy as well. ([email protected]) Audience development director: Eric Cedo ([email protected]) BBest of all, Afl ac comes at no direct cost to Web/Print production director: Craig L. Mackey ([email protected]) eemployers like you. Just add a payroll deduction, Production assistant/video editor: nnotify your workforce and let it fl y. Steven Bennett ([email protected]) Billing: Lana Semaan, 313-446-6091 ([email protected] ) Credit: Todd Masura, 313-446-6097 CallC your local agent and visit ([email protected]) Customer service/subscriptions aafl ac.com/business 877-824-9373 Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Chris Crain: Executive Vice President, Director of Strategic Operations KC Crain: Executive Vice President, Director of Corporate Operations Dave Kamis: Vice president/production & manufacturing 12013 Afl ac WorkForces Report, a study conducted by Research Now on behalf of Afl ac, January 7 – 24, 2013. 2Afl ac Company Statistics, October 2013, One day processing turnaround based on business Anthony DiPonio: Chief Information days after required documents are received. Online claims available for Accident, Sickness, Cancer & Wellness claims. Coverage is underwritten by American Family Life Assurance Company Officer of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. Worldwide Headquarters | 1932 Wynnton Road | Columbus, GA 31999 Thomas Stevens : Chief financial Officer Mary Kramer: Group publisher Z131176 11/13 G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) 20141124-NEWS--3-NAT-CCI-CL_-- 11/21/2014 1:13 PM Page 1

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4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014 SOLD Cleveland is anxiously 1120 WEST 120TH STREET BRUNSWICK, OHIO awaiting the madness City is among top two or three sites in ticket sales for NCAA tournament

By KEVIN KLEPS [email protected]

Newmark Grubb Knight Frank In late March, the NCAA men’s is pleased to announce the sale of Visit basketball tournament will return the 100,301 square foot industrial TerryCoyne.com to Cleveland for the fourth time. building at 1120 West 120th Street Or Call Terry at On this occasion, a Final Four in Brunswick, Ohio. 216.453.3001 berth will be on the line, and the city is already getting a taste of the Terry Coyne and Kristy Hull 1350 Euclid Ave., Suite 300 madness. Cleveland, Ohio 44115 represented the buyer, As of Thursday, Nov. 20, fewer RRR Brunswick Acquisition LLC. than two dozen individual tickets remained for the Midwest Regional semifinals and championship, which will be held March 26 and 28 at Quicken Loans Arena. As many as 3,000 more tickets could be available on the eve of the event, said Jeff Bacon, the Mid- American Conference’s senior associate commissioner for championships and sport development. Because of that, the MAC will soon ARE YOU WORKING WITH A start collecting names for a waiting KEVIN KLEPS LOAN PROCESSOR OR A DEAL MAKER? list. Quicken Loans Arena will host the NCAA Midwest Regional semifinals and title There are 13 cities that will host game on March 26 and 28, 2015. March Madness games prior to the But Pacini said Cleveland has bar,” are much more costly. The Call the lender that can get your deal closed. 2015 Final Four, and Cleveland is in been “pacing ahead” of other 2015 Fan Experience tickets range from the top two or three in ticket sales, Bacon said. NCAA tournament venues. $295 to $1,015 for individual days, “The tournament always sells “We’re doing very well compared and $455 to $15,800 each for all well, but we are outperforming the to other markets,” he said. “Without three Cleveland games. norm,” Bacon said. having seen the numbers, if you Jonathan Mokri There will be four college hoops look at a facility like Syracuse, they’re playing in a dome, and they How sweet it is 440.526.8700 teams traveling to Cleveland for the Sweet 16 and Elite Eight, and the obviously have a much longer road There will be plenty of high-pro- [email protected] NCAA requires each university to to sell it out.” file organizations working together purchase at least 500 tickets. The Two of the four regional sites for to make sure Cleveland’s first Sweet schools have the option of purchas- the Sweet 16 will be held in facilities 16 is a success. ing an additional 750 tickets each. If that can hold crowds of at least The MAC and Cleveland State are they decline, those seats are made 49,000 — the Carrier Dome in Syra- running the basketball operations, AGGRESSIVE available for purchase — but not cuse, N.Y., and NRG Stadium, the the Cavs and the staff at The Q will until the day before the event, 71,500-seat home of the Houston take care of the in-arena logistics, BUSINESS FINANCING which in Cleveland’s case would be Texans. The other 2015 Sweet 16 and the sports commission will hosts — Staples Center in Los Ange- make sure the hotels are ready and UP TO $10 MILLION Wednesday, March 25. “Odds are heavy that a lot will get les, with a capacity of 18,997, and the participating schools get turned back in to us,” Bacon said. The Q (20,562) — aren’t nearly as “unique experiences,” Pacini said. “We’ll get those turned into us large. But Cleveland’s arena is no Cities that have hosted the re- Toll Free: 888.697.9555 | www.cbscuso.com slouch. The Q’s capacity is the gional semifinals and finals have S Wednesday at noon, so there will be Providing Commercial Loan Financing in Partnership with Area Credit Unions SM Providing ommercial Loan Financing in Partnership with Area redit nions a huge push in those 24 hours be- NBA’s third-largest, and only six projected an economic impact of $8 tween Wednesday and Thursday. college teams play in larger venues. million to $10 million, Pacini said. That will be their best chance (to Pacini believes the heightened He said the sports commission like- buy tickets).” interest is due in part to Cleveland ly will do an economic study of the The number of tickets that be- getting selected to host games on event, but it’s “comfortable with come available depends on the the second weekend of the tourna- that number.” draw. If Ohio State plays here, as ment, after being home to opening- Pacini compared the Midwest the Buckeyes did in the rounds of weekend contests in 2000, 2005 and Regional to the MAC tournament in 64 and 32 in 2011, that total goes 2011. terms of the number of visitors. The down significantly. The same goes “The advantage we have is this is MAC men’s and women’s basket- if Cleveland State, or a MAC school the first time that a team will quali- ball championships annually bring such as Kent State or Ohio, makes fy for the Final Four out of Cleve- a combined 16 teams and 14 games an unexpected run to the NCAA land,” the sports commission VP to The Q in March. According to a tournament’s second week. said. “There’s certainly a high level study released by the conference in of interest and demand.” June 2013, the four-day MAC tour- In addition to the small allotment nament that spring produced an Cleveland is ‘pacing ahead’ of individual tickets — as of Nov. economic impact of $14.5 million, A sold-out venue for the NCAA 20, only eight of The Q’s 33 sections with 70% of the visitors from out- tournament, especially for three had tickets that could be purchased side the region. games that eventually determine a (at $200 a pop), and the seats avail- “There are more teams and more Final Four participant, is nothing able in each upper-level spot were games for the MAC tournament,” new. extremely limited — basketball en- Pacini said. “When you balance it In fact, Jeff Pacini, the Greater thusiasts can buy Fan Experience out, it’s very similar. The advantage Cleveland Sports Commission’s packages from the NCAA. Those of the regional is you have a mas- vice president of business develop- tickets, which the NCAA says in- sive TV audience seeing Cleveland ment, said the sales thus far are clude a “pregame happy hour with showcased and seeing Cleveland in “sort of what was expected.” light hors d’oeuvres and a cash the spotlight.”

Volume 35, Number 47 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, ex- Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 cept for combined issues on the fourth week of December and fifth week of December at 700 West year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2014 by Crain Communications change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207- $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation De- 9911, or email to [email protected], or call 877- partment, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. 824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other loca- REPRINT INFORMATION: 212-210-0750 tions), or fax 313-446-6777. 20141124-NEWS--5-NAT-CCI-CL_-- 11/21/2014 3:21 PM Page 1

NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5 CANDY MAN SHINES IN SKIN SECTOR La Lumiere gets $20 million investment from Johnson & Johnson for mask it’s developed that uses LED light to fight acne and aging

By CHUCK SODER [email protected]

An entrepreneur who once modeled himself after Willy Wonka could have another huge hit on his hands. Johnson & Johnson just invested $20 million in Jay Tap- per’s latest company, which has developed a mask that uses LED light to fight acne or wrinkles, depending on which version you buy. The company, La Lumiere, has generated about $10 million in sales since February, when the illuMask started appearing in Walmart, Target and other stores throughout the country. That’s a lot of illuMasks, considering that the device only costs $30. It’s significantly cheaper — often many times cheaper — than other light therapy devices on the market. But Tapper is aiming higher: He expects sales to quadruple next year. Sound far-fetched? Consider this: Tapper already has played a key role in commercializing a string of hit products, including the Spin Pop (a spinning lol- lipop), the Dish Doctor (a spinning dish scrubber) and the Original Goody Bag (a bag full of CONTRIBUTED PHOTO candy and toys). He and the La Lumiere founder Jay Tapper wants to teams he’s worked with over the sell the illuMask “to the masses.” That’s years have sold several busi- why it costs only $30. nesses to big-name companies in the consumer products sector, including Procter & Gamble, Unilever and Hallmark. Plus, La Lumiere, which has offices in Oakwood Village and New See MASK, page 18 Hanna-Ostendorf merger includes new digs Brokerage soon will be housed at US Bank Centre in PlayhouseSquare

By STAN BULLARD Howard “Hoby” Hanna IV, the brokers to do more business local- [email protected] Cleveland-based president of the ly, nationally and globally.” Howard Hanna Midwest unit of To combine, O-M will exit the Hanna Chartwell and Ostendorf- Pittsburgh-based Howard Hanna 1100 Superior office building, Morris Co. will start the new year — Real Estate Services, said the newly which has been its home for 30 and their future as a merged com- renovated office will allow the firms years, and Hanna Chartwell will mercial real estate brokerage — on to start working together in a fresh leave the Tower at Erieview, 1301 E. the seventh floor of the 16-story US environment that also gives them Ninth St., where it has been located Bank Centre building in Playhous- room to grow. since 2006. eSquare. Howard Hanna last June an- Hanna and O-M will shed space Mac Biggar, a founding principal nounced the purchase of Osten- to become more efficient as they of Hanna Chartwell, said the com- dorf-Morris, a 75-year-old firm con- combine operations, Biggar said. O- panies landed at PlayhouseSquare sidered the dean of the city’s M is in about 20,000 square feet, to participate in the excitement of commercial brokerages. It plans to while Hanna Chartwell is in about the theater district’s revival and combine O-M with Hanna 8,000 square feet. continue to support downtown. Chartwell, a commercial realty bro- The new office will accommo- In taking 15,000 square feet of the kerage and auction firm the resi- date about 100 people from the building at 1350 Euclid Ave., the dential brokerage acquired in 2013 combined companies, with about combined company also obtained to enter the commercial business 30 offices and 40 work stations as leasing and property management here. well as shared desk space for bro- assignments for US Bank Centre “We’re excited to develop the re- kers, who spend substantial from its ownership, a joint venture lationship with (the owners) and do amounts of time in the field. The of office and industrial developer business with them at the build- space can accommodate about 100 STAN BULLARD Ross Farro and Moreland Hills- ing,” Hanna said. “The new space is staffers from the combined firms Hanna Chartwell and Ostendorf-Morris Co. will occupy the seventh floor of the based Wolstein Group. designed to inspire our commercial See DIGS, page 16 16-story US Bank Centre building in PlayhouseSquare. 20141124-NEWS--6-NAT-CCI-CL_-- 11/21/2014 1:12 PM Page 1

6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014

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By JAY MILLER “It looks like manufacturing is up [email protected] MORE ON THE WEB a little bit,” said Jack Kleinhenz, the For a breakdown of the monthly job Cleveland Heights economist who The Northeast Ohio jobs roller- numbers by industry, a look at Crain’s created the ACE model. “We’re also coaster — recently more like a kid- previous monthly reports, links to seeing the benefits of (growth in) Nowacki Asset Management LLC die coaster because of its modest employment data resources and more, the national economy that is mov- up-and-down slopes — continues. go to our ACE Report homepage: ing a little faster.” The region in October saw a Of the 1,272-job increase, 737 of slight month-to-month gain of crainscleveland.com/acereport. those jobs were in manufacturing, a 1,272 jobs in the non-farm private 0.34% increase. Service industry sector over September, according land. “I don’t see it picking up or jobs grew by 535, a 0.06% increase, to the Ahola Crain’s Employment slowing down.” the report shows. Report. That’s a 0.11% increase to Northeast Ohio’s gain, however, “That’s not surprising. We’re still 1,161,098 jobs in October from lags slightly behind the month-to- a manufacturing-based economy 1,159,825 in September. month employment growth (in Northeast Ohio) that’s tied to After a steady increase over the statewide and nationally. Ohio the auto industry,” Kleinhenz said. early months of 2014, up months gained 6,290 private sector jobs in “We’ve seen a reasonably strong have been followed by down October, according to the ADP Re- uptick in car sales.” months, with the biggest dip in July. gional Employment Report, a 0.14% Closer to the ground, Jeff Ahola, Seasonally adjusted employment in increase. Nationally, ADP reported CEO of Ahola Corp., said his com- June reached 1,162,665 in the seven a 230,000 increase in the working pany is seeing another kind of em- counties of Northeast Ohio before a population, about a 0.17% increase. ployment growth. loss of 6,645 jobs in July to 1,156,020. The ACE Report is based on pay- “We’re seeing more and more October to October, employment roll data from 3,000 employers businesses getting formed and they Nowacki Asset Growth of $1 S&P 500 Total Growth of $1 in 2014 is up 13,494 jobs over the gathered by The Ahola Corp., a tend to outsource their payroll pro- Period Management (NET) Million Return Million like month in 2013, a 1.17% in- Brecksville payroll and human ser- cessing” to Ahola and competing May 2011 - Year End -7.46% $925,400 -6.37% $936,300 crease. vices firm. ADP LLC, a Roseland, companies, he said. “The sales reps “What (the ACE Report) shows is N.J.-based human resources and here see people who have been sit- 2012 29.99% $1,202,927 16.00% $1,086,108 that growth is happening, but it’s payroll management firm, compiles ting on opening up their franchise 2013 51.76% $1,825,563 32.39% $1,437,898 slower than anyone would like,” similar information based on its or ramping up a new business. 10/31/2014 21.59% $2,219,459 10.99% $1,595,988 said Joel Elvery, an economist with payroll processing base of 24 mil- Now, they are starting to get these the Federal Reserve Bank of Cleve- lion workers nationwide. business formed.” Note: Returns are shown in U.S. dollars after fees. Date of inception for Nowacki Asset Management is May 2nd, 2011.

Nowacki Asset Management (NAM) is a registered investment advisory firm specializing in CRAIN’S BLOGS value-oriented investment management. All client assets are included in one composite and invested using a value-oriented strategy. NAM claims compliance with the Global Investment GET THE LATEST FROM OUR EDITORS AND REPORTERS, INCLUDING: Performance Standards (GIPS®). The S&P 500 Total Return index is subject to volatility and EDITOR’S CHOICE: Managing editor Scott Suttell HEALTH CARE: Reporter Timothy Magaw breaks the NAM composite may or may not be more volatile than the index. Past performance is not aguarantee of future performance. Investments carry risks and the potential for loss. Results as rounds up news and views about business, and down the latest news about the region’s hospitals. of 10/31/2014 are still subject to final verification by an independent third-party. NAM only uses stories of interest in Northeast Ohio. Weekdays Tuesdays short-term margin or leverage to buy securities after a client commits to deposit funds and the SPORTS BIZ: Assistant editor Kevin Kleps writes WHAT’S COOKING: Twice per month, freelance funds are in the process of being transferred, but the money has not yet completed the transfer process. To receive a list of composite descriptions of NAM and/or a presentation that complies about the Browns, Cavaliers, Indians and much more. reporter Kathy Ames Carr has morsels on the local with the GIPS standards, contact Michael T. Nowacki at (440) 488-6936 or write Nowacki Asset Weekdays restaurant scene. Management, 29525 Chagrin Blvd. Suite 301, Pepper Pike, Ohio 44122, or [email protected]. CRAINSCLEVELAND.COM/SECTION/BLOGS 20141124-NEWS--7-NAT-CCI-CL_-- 11/20/2014 3:46 PM Page 1

NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7 Ricerca will ‘have Q HOLDING continued from page 2 acquisitions in Europe and North America within the fragmented silicone molding sector would benefit Q Holding. Any acquisitions would have to fit well with the to hire,’ not cut its companies within the Q Holding operation, he cautioned. Concord workforce Stronger base As Q Holding’s companies have grown, Ross said, By CHUCK SODER according to Croley, who had “The level of funds you need to continue growing gets [email protected] served as chief restructuring officer bigger.” for Ricerca. 3i can help the company in that department and has Ricerca Biosciences will survive. While working to restructure the a bank of contacts in Europe, which made it a good The idea that Ricerca might close company, they “fell in love with the match for Q Holding, he said, adding that 3i reached out down or lay off lots of people has business,” according to Martell, to him and proactively courted the company because of been tossed out the window by the who noted that roughly a third of its its growth potential. investors who just bought the employees hold doctorate degrees. Q Holding has strong representation in NAFTA coun- chemical research company. They feel like there are opportu- tries and in China, he said. And its sales and engineer- They’d rather help the company nities for Ricerca to grow. A few of ing office in Germany is a good beginning for the com- grow — and add more employees. the company’s European competi- pany in Europe. “We’re going to have to hire,” tors have gone out of business. Its next logical step is to put a manufacturing opera- said Cliff Croley, Ricerca’s new CEO. Plus, pharmaceutical companies tion in place in Europe, Ross said. “We know that for sure.” are starting to spend more on re- Both QSR — a maker of automotive, industrial and An Akron-based investment firm search and development, Croley RUBBER & PLASTICS NEWS aerospace rubber goods, such as connector seals and ig- Q Holding Co. of Twinsburg “is an excellent business and called Main Market Partners LLC said. nition insulators — and Qure Medical — a producer of bought Ricerca last week. “We think the market timing is a global leader in the majority of its product categories,” elastomeric products, including catheters and syringe according to 3i North America partner Richard Relyea. The firm describes itself as a right,” he said. plungers, for the medical and pharmaceutical industries “growth-oriented equity invest- Today, the pharmaceutical in- — can operate out of the same facility, he said. happy with the company’s present position and looking ment group” — which is a good sign dustry accounts for about one-third “Normally they operate out of separate plants,” he forward to the development of new products that will for Ricerca’s 200 employees, most of Ricerca’s revenue, which is in the said, “so down the line we could be talking about two help Q Holding’s operations grow. of whom work at the company’s range of $40 million to $50 million separate plants. Ultimately ... we’re going to need more headquarters in Concord. annually. The rest comes from the brick and mortar.” (McNulty is a senior reporter at Rubber & Plastics News, Croley said the company had agricultural chemicals industry and But that’s down the road. Right now, Ross said he’s a sister publication of Crain’s Cleveland Business.) been “underperforming.” Much of other chemical-related businesses. Ricerca’s revenue traditionally has The company’s new owners see op- come from pharmaceutical compa- portunity to expand in those areas nies. In recent years, those compa- as well, though they wouldn’t go nies have spent less on drug devel- into detail about their plans. opment, which meant less demand Ricerca’s new owners have access for Ricerca’s services. to the financing the company might Thus, Ricerca in August sent a let- need to expand. Today, the compa- ter to the state of Ohio saying it ny is “well capitalized” and debt might lay off a significant number of free, according to Croley, who said employees or close down. he couldn’t provide details about But Croley said the company sent the company’s previous financial the letter to cover its bases. In early situation. September, Croley told Crain’s that And if Ricerca needs even more layoffs could be prevented if Ricer- money, Croley said Main Market ca found a buyer for at least part of Partners could probably find it. The the business. And Ricerca already company regularly makes invest- had identified a few potential buy- ments with other investors. ers. “We have partners who are there Brag. One potential buyer already was and ready for us when the time is working on behalf of the company. right,” he said. Ricerca had hired a management Ricerca — which was previously consulting firm called Croley, owned by large investment funds — Martell & Associates, which special- may benefit by having local owners, izes in helping companies deal with Croley said. Main Market Partners challenges and changes. isn’t required to sell the company Did your company have a stellar year? That company is named after after a given number of years, he Cliff Croley and Michael Martell, added. who also run Main Market Partners But it won’t be long before Ricer- Looking for a unique way to thank your clients? from the same office in Akron. ca starts growing again, Croley said, In order to prevent a conflict with noting that the company would their role as management consul- look a lot different in six months. tants, they didn’t express interest in “I predict you’re going to see a buying Ricerca until company offi- place that’s just absolutely cranking cials asked it they would consider it, — and growing,” he said. An ad in Crain’s is the best way to boast

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8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014 CURVE FIREFIGHTERS continued from page 1 ments with teachers and principals. Ruiz said, depends on whether Es- continued from page 1 partly because The district’s overall graduation As Esperanza’s programming has peranza can attract the required active player, and so this is part of its “very seri- rate continues to inch upward — expanded, so has its budget. In funds to do that work. of our growth and expansion ous strategy” to the most recent data put it at a 2009, the organization was barely a Meanwhile, late last year, the strategy.” establish itself as record 64.3% — but the improve- $600,000-a-year operation — a fig- United Way of Greater Cleveland The deal is bittersweet for Ham- a “true commu- ments among the Hispanic popula- ure that is expected to reach about and the district announced that a mond, who has served members at nity financial in- tion have been among the most $2 million next year. Some of the group of local nonprofits would as- Sun for more than 34 years. But it’s stitution” with a dramatic. group’s major funders have includ- sist select schools in the district in the best interest of the credit broader foot- Some of the credit, of course, can ed The George Gund Foundation, with academic and social support union’s members, she said, and print and expan- Laurendeau be attributed to the district, but Saint Luke’s Foundation and Unit- services for students and their fam- even employees who will now have sive member- much of the success can be chalked ed Way of Greater Cleveland. The ilies. One of the schools Esperanza further career opportunities. ship base. up to Esperanza, a local nonprofit Cleveland Foundation has been works with is Luis Munoz Marin el- “As regulatory compliance be- “But we certainly are not at- that retooled its strategy to focus one of the group’s biggest backers ementary school in Tremont, which comes more prevalent, more and tempting to put any credit unions primarily on guiding young His- and helped fund its work to revamp over the last year has seen a 500% more small credit unions across the out of business or steal other busi- panics toward graduation. its strategic plan to focus on gradu- increase in the number of parents United States are choosing to merge ness from other credit unions,” he “If we want to grow Cleveland, if ation issues. coming through the school’s doors, with much larger credit unions to said. we want to have those 21st century “They’ve really seen significant according to its principal, Jeffery be able to continue serving the Beyond accomplishing Firefight- jobs, the population we’re going to improvements,” said Bob Eckardt, Keruski. membership that has made them ers’ various growth goals of branch- turn to 15-20 years is the Hispanic the foundation’s executive vice “It’s very difficult for educators to successful,” Hammond said. es, members and assets, chief mar- community,” said Victor Ruiz, Es- president. educate children without having “With that being said, I felt that keting officer Jennifer Norris said peranza’s executive director and a “They’ve moved beyond scholar- parent support and creating those (Firefighters) was our best choice in the acquisition of Sun benefits the product of the Cleveland public ships to ensure kids get all the sup- community relationships,” Keruski our surrounding area,” she said. latter’s members by offering con- schools. “We weren’t going to be port they need,” he said. “The dis- said. “What an organization like Es- “Their focus is on excellent member temporary, technology-driven ser- ready (with the current graduation trict only has the kids a certain peranza does is bridge that gap. service and creating loyalty as well. vices like text and email alerts, re- rate.)” number of hours a day. It’s hard to They’ve been able to engage the Sun Center FCU was in a position to mote deposit and a mobile app. Esperanza was birthed in the ear- provide the individual enriched ser- Hispanic community, but also the select a partner that we felt mir- Firefighters also is a member of a ly 1980s as a vehicle to award stu- vices when you’re in a group set- community as a whole.” rored our overall business plan, and shared-branching network — a na- dent scholarships. ting. Groups like Esperanza can Jose Feliciano, who chairs the fortunately Firefighters saw value in tional network of credit unions that While that’s still part of the have additional hours and offer Hispanic Roundtable, described Es- (Sun).” allows the cooperative sharing of group’s mission — it gave out those individualized services to the peranza as the “most important or- Laurendeau predicted that con- more than 5,000 facilities across the $120,000 in student scholarships students.” ganization in the Hispanic commu- solidations will continue, based on country. this year — Esperanza has focused nity.” factors including the need to attract “This collaborative partnership However, he expressed some will provide our Lorain County more so on developing programs Parental support younger members, the growing designed to help students complete worry that it may be taking on too costs of meeting new regulations members much more technology, high school. For example, Esperan- With three years of marked suc- much and cautioned against push- that smaller credit unions might services and locations in our imme- za now offers three rounds of Ohio cess under its belt, Ruiz said Esper- ing Esperanza to solve every educa- find hard to absorb, and the loom- diate area,” Hammond said. “In ad- Graduation Test prep each year, anza is looking to expand its educa- tional issue the Hispanic communi- ing retirements of leaders of many dition, it affords Firefighters mem- one-on-one mentoring, tutoring tional mission as it pieces its new ty has. credit unions formed decades ago. bers in Cuyahoga County the same and services. strategic plan. Still, he lauded the district CEO’s He added that he’s “pretty opti- benefits.” The organization also offers what The bulk of its programs now are willingness to work with the His- mistic” another deal for Firefighters Firefighters was founded in 1936 it calls Saturday Academy, which geared toward middle and high panic community and particularly could materialize in 2015 that exclusively for members of its runs six consecutive weeks and school students. He envisions Es- Ruiz’s leadership. would bring the credit union into namesake safety force. The credit provides students information on peranza focusing more on third “Victor is one of our young su- yet another new market. But those union opened membership up to all careers, colleges, college-entrance grade and even pre-school reading perstars,” said Feliciano, a partner talks are early on. Firefighters’ oth- in 2005. But while the institution testing and financial aid, and pro- programs and STEM — science, at BakerHostetler and a former city er mergers in recent years were also continues to evolve, there aren’t grams designed to support stu- technology, engineering and math- prosecutor. “We need to keep sup- partly driven by retirements of the any plans to change the name. dents’ parents. The group teaches ematics — education. He’d also like porting him and developing him. acquired credit unions’ CEOs. “The history and heritage of our parents, for example, how to read to see Esperanza do more work to He’s really taken that organization Laurendeau describes Firefight- credit union is very important to report cards and make appoint- boost school attendance. All of that, to proverbial next level.” ers as a “breakout” credit union our board,” Laurendeau said.

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NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9 CRAIN’S BUSINESS DIVERSITY COUNCIL Earlier this year, Crain’s Cleveland Business formed an 11-member minority advisory board to provide objective, constructive input on minority-based issues for Crain’s. The Crain’s Business Diversity Council has met regularly since April. This is one in a series of profiles of its members. MICHAEL J. HOUSER profit eliminated his program, which sent employees to run after- Political and community activist school programs at area schools. So he knows what it’s like to Michael J. Houser knows that struggle in his career. But he also other members of the Crain’s Busi- knows what it’s like to persevere. ness Diversity Council have more “If I ran every year, how could I business experience. not become an elected official?” he So what does he bring to the said on Oct. 29, immediately after group? For one, more diversity. interviewing for a government rela- The 26-year-old political junkie is tions position at a large local orga- the youngest member of the coun- nization. cil, which Crain’s formed this past In Houser’s opinion, businesses spring. His age gives him a unique that embrace diversity shouldn’t just perspective. add a person’s skin color or ethnic For instance, he’s involved in sev- passion for politics. background to the list of things they eral local organizations for young Houser later served as a field or- evaluate when hiring someone. professionals, such as Engage! Cleve- ganizer for We Are Ohio, a group They also should consider whether land, Cleveland Young Professional that worked to repeal Ohio Senate the person lives in their community Senate and Social Society Cleveland. Bill 5, a law that would have re- — whether that community is in the Those groups have helped him get to duced the power held by unionized inner city or in a suburb. know some of the up-and-coming state employees. Next, he spent a For one, local people might care leaders in Northeast Ohio. year as president of the Northeast a little bit more about helping a lo- “Young people are going to be Ohio chapter of the Ohio Young cal company, he said. But hiring lo- the future of our city,” he said. Black Democrats, a group he re- cal people also ensures that the Plus, he has first-hand knowl- mains involved with today. community surrounding a given edge of some of the challenges that He has worked for two Democra- business remains strong. keep some young people from suc- tic congressmen in Ohio — U.S. Sen. “You help your economy, people Free Estimates - Contact Us Today! ceeding these days. Sherrod Brown and U.S. Rep. Tim have jobs, and the cycle continues,” After graduating from Cleve- Ryan — and he even ran for a seat in he said. land’s Lincoln-West High School in the Ohio House of Representatives. Houser is vice chair of the Cleve- 2006, Houser struggled during his But he finished third in the prima- land branch of the NAACP Young Double Enterprises LTD, first year at Kent State University. ry this past May. One of his oppo- Professional Committee. He con- Cleveland, Ohio, USA But he graduated with a degree in nents, Democrat Stephanie Howse, tinues to work with the Boys & Girls public communications in 2011. went on to represent District 11, Club of Cleveland as well as New Phone: (440) 230-9000 While at Kent State, he served as which includes much of Cleveland’s Tech East, which is located at an intern on the campaign of Mari- East Side and Garfield Heights. Cleveland’s East Technical High E-Mail: [email protected] an Harris, a Democrat who served Houser also was recently laid off School. He also is active with one term in the Ohio House of Rep- from a part-time position as an ed- Bethany Christian Church (Disci- resentatives. That experience ucation specialist with the Boys & ples of Christ) in Cleveland. helped ignite his already-growing Girls Club of Cleveland. The non- — Chuck Soder

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10 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014

PUBLISHER: John Campanelli ([email protected]) EDITOR: Elizabeth McIntyre ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Giving thanks With last week’s winds ripping the last of the leaves off the trees and dumping early snow on driveways, highways and windshields, it might be tempting to feel some lake-effect damage to our attitude. But it’s Thanksgiving week. And while there are always reasons for business people to worry, this is not the week to fret. Instead, it’s the week to count the things that are keeping the cold away, the reasons for optimism that may be actually making us FROM THE EDITOR eager for the months ahead. Thankfully, there are many: ■ Brain gain: Cleveland is in fifth place nationally in the growth of population with advanced degrees. We should listen first, then act ■ More than 13,000 people now live in downtown Cleveland, where apartment occupancy remains In the business world, “net- businesses to the purchasing of questioning on your part and a whole working” is out, “relation- departments of large corpora- lot of listening. Find out what the other above 95%. In eight years, the city-center population ships” are in. tions to try to increase pro- person needs to succeed, Bailey said, is expected to hit 25,000. It’s who you know, who curement and supplier diver- with a simple request: “Share with me ■ All three of our professional sports teams, for the knows you and the value you sity. The NMSDC has 24 what it is that you desire that you’re not moment at least, sit with either a winning record or bring. affiliates nationwide, includ- receiving today.” Then explain how you And the most useful tools to ing one in Ohio, with more can meet their needs and deliver. championship potential. help you bring that value than 12,000 certified minority- That’s when I realized that Bailey had ■ We can fill up our tanks for less than $3 a gallon. might surprise you: Your ears. owned businesses and 1,750 really nailed it: The key in any good rela- Clifford Bailey delivered this corporate members. tionship — whether it’s business or per- ■ Our national deficit is less than half of what it was advice to a gathering of minor- ELIZABETH His recommendations were sonal — is the ability to listen. So often, in 2009. ity business owners in Inde- geared that day toward minor- we are so busy talking that we forget to MCINTYRE ■ Retailers are seeing strong early demand and are pendence who eagerly used ity business owners, but it hear what the other person is saying, and expecting a profitable holiday shopping season. those tools to hear what the struck me that he was deliver- we lose the opportunity to find out what president and CEO of TechSoft Systems, ing solid advice for all entrepreneurs they need to be successful. And that’s the ■ U.S. oil production is at an all-time high, and oil Inc. had to say about building business looking to grow their own businesses. takeaway. If you can help someone reach imports are at their lowest levels in more than a relationships and a successful business. It begins, Bailey said, in knowing your his or her goals — you both succeed. decade. TechSoft is a Cincinnati-based tech- core strength — then working hard to be It all starts with building a network — nology firm that he founded in 1983. He the best in that area. not a social network of acquaintances ■ The stock market is at or near all-time highs. was in town to speak at a lunchtime “You don’t want to be on the sidelines that you’ve piled up on LinkedIn — but a ■ Lending rates remain low, allowing businesses and gathering of the Northern Ohio Minority asking, ‘What didn’t I do to get in the network of support, a group of people you consumers to access funds to spend, invest and Business Enterprise Input Committee game?’ ” he said. “If I’m good, they’re go- make real and genuine relationships with. about growth strategies for minority- ing to put me in the game. They won’t People you know, who know you; people grow. owned enterprises, or MBEs. leave me on the bench. with whom you’ve made connections. ■ The unemployment rate — Ohio and national — is His advice centered on building rela- “But you have to have the skills.” And people who know you can meet under 6%. tionships through the National Minority Next, he said, identify the types of their needs because you know their Supplier Development Council, an orga- businesses with which you want to work. needs. ■ Although it may at first seem like bad news, work- nization that connects minority-owned Develop a relationship that involves a bit Because you listened. ers are quitting their jobs at the highest rate since 2008. It’s a sign the workforce is beginning to feel more confident about finding new and better jobs. TALK ON THE WEB ■ Instead of an Ebola outbreak in the U.S., we’ve had only two contracted-inside-the-U.S. cases, with both Re: Invacare founder an effort to re-invigorate the commitment enough business to stay in business. victims now healthy. Mal Mixon to retire to regional economic development. That is VERY sad since everyone knows It’s time for Northeast Ohio’s business that once you start with them it is very ■ Housing prices are on the rebound. He’s truly one of the good guys of leaders to redouble efforts and commit- easy to get more and more and more in Cleveland. ■ Inflation remains in check. ments to the region’s future as more debt to them and never get out. Thank you, Mr. Mixon, for all that you than just the sum of the parts. — Adam Brot ■ Violent crime rates are down again and have fallen have done for our city and the surround- — Lev Gonick for every year since at least 1994. ing communities. Your leadership is an There is an obvious need for short example for us all. — John Park term lending to high-risk consumers, so ■ There are roughly 600 days until the 2016 RNC Re: Cleveland Clinic’s second face transplant surgery if you have found a way to provide loans Convention. Re: Regional council banks at a lower interest rate, you will weed out ■ Development everywhere, including the Public on NE Ohio’s potential I didn’t participate in any part of this, the poor performers. yet somehow I still feel so proud that the There is no need for legislation — just Square renovation, a pedestrian bridge to the When we in Northeast Ohio truly un- Clinic has built the team that can actual- innovation!! — Jwil lakefront, Flats East Bank Phase II, Hilton derstand that Cleveland’s real competi- ly accomplish such a magnificent feat Convention Center, Drury Plaza Hotel, CSU’s Center tion is Canton, China, and not Canton here in Cleveland. We’d have to shut down all access to for Innovation in Health Professions, Rivergate Park and Akron (and of course visa versa) I get more pleasure from knowing this credit for the people that use these loans and so much more. then, and only then can we really expect than Cory Kluber, Brian Hoyer and LBJ in order to shut down payday lenders. to develop a game plan and drive an in- could bring. This is important. Instead we should try working to cre- ■ Snow? Sure we get it, but not Buffalo-sized. termediary organization to help us win — Robert Chalfant ate good-paying jobs to reduce demand. ■ And of course, friends, family, colleagues, trusted at regional economic development. And while we’re at it, stop giving tax business relationships … and a young professional The hyper-connected and globally Re: Why is payday lending breaks to employers that pay their competitive world that we live in has no from Akron named Mr. James. still so strong in Ohio? employees so little that they need a safe- use for our rear-view mirror parochialism. ty net of welfare and payday loans to There is nothing wrong with a re-set and I am just astonished that they have survive. — Nadia 20141124-NEWS--11-NAT-CCI-CL_-- 11/20/2014 3:09 PM Page 1

NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 PERSONAL VIEW AVAILABLE FOR SALE OR LEASE 33,000 SF Industrial Building Cleveland neighborhoods are 3325 St. Clair Ave., Cleveland, OH 44114 at the core of real estate revival By JOEL RATNER

The city of Cleveland and the entire Northeast Ohio region continue to enjoy the local, regional and national news that touts the city’s successes.

Ratner is president and CEO of • 33,000 SF Total Area • Bay Size 44’ x 90’ Cleveland Neighborhood Progress, a community development nonprofit. • 3,000 SF Office Area • Drive-in can be created • 1,700 SF Mezzanine • 15,000 SF to 33,000 SF Available • 1.39 Acres • 240V/400 AMP/3-Phase Power For the residents of Cleveland, now is an especially exciting time. • 7 Docks • 17’ Clear Height From the planned lakefront devel- David R. Stover, SIOR opment and Public Square makeover to ongoing redevelop- 216.839.2012 ment of many of our neighbor- HannaChartwell.com hoods, we are experiencing a revi- talization that has been years in the making. One headline that you may have STAN BULLARD missed is this: Three Cleveland Tremont North — a four-townhouse development — is among Tremont’s notable neighborhoods are leading the re- recent real estate developments. gion’s residential real estate market rebound. According to real estate welcome more residents into our investments, strong partnerships, firm Keller Williams, Detroit Shore- city. dedicated stakeholders and passion- way, Ohio City and Tremont are At Cleveland Neighborhood ate residents allowed this to happen. home to the hottest real estate mar- Progress, we work with community Those same currents of change are kets. The study compared more partners to create neighborhoods in place in many other Cleveland than 50 communities in six coun- of choice and opportunity. A foun- neighborhoods. And a robust num- ties, and the communities were dational part of this is sustaining a ber of public and private partners ranked according to increases in healthy and affordable housing are in line to create and sustain more average home sales prices and the stock. complete neighborhoods in the re- length of time units spent on the While the Near West Side neigh- gion’s urban core. market. The Keller Williams study borhoods have been acknowledged We understand that many North- compared sales statistics in July for recent success, we will not ig- east Ohio residents purposefully 2013 to July 2014. nore ongoing challenges. Cuyahoga chose to move away from the city This news confirms what is ap- County is still plagued with thou- over the course of the past 50 years. parent to even the casual observer. sands of vacant and abandoned But just as challenges take time to Cleveland’s neighborhoods are in properties and distressed property develop, so do successes. ST. AUGUSTINE HUNGER CENTER the midst of a rebirth. Young pro- values, as foreclosures have deeply The momentum is now in place fessionals, millennials and empty impacted some parts of the city and and the headline has been written. Help us restock the pantry at St. Augustine Roman Catholic Church Wednesday, November 26. nesters are very interested in living many suburbs. This has shifted What was once thought of as un- and Hunger Center on in the city. They have filled our nearly $45 million in real property thinkable is now a reality: Cleve- You don’t even have to get out of your vehicle, downtown units and are taking root taxes to the county’s more affluent land’s neighborhoods are leading volunteers will be on hand to unload any items in many of our neighborhoods. communities. the real estate rebound. Cleveland you wish to contribute. Donations are accepted Even young families, once a non- This trend, however, is reversible continues to be one of the best year round, so if you plan to come another day, starter in this conversation, are as long as existing and new resi- places to call home in Northeast please call ahead. St. Augustine is located at choosing to locate — or stay — in dents opt to invest where it matters Ohio and the nation. 2486 on W.14th St. in Tremont. Cleveland and enjoy the diverse of- most. We invite you to discover our fering of higher performing urban Detroit Shoreway, Ohio City and neighborhoods. ELK & ELK CO., LTD. elkandelk.com/restockthepantry schools. Demand for city living is Tremont were not always “hot” mar- Who knows, you may just be the growing, and we are prepared to kets. Community visioning, strategic next person to move in.

LETTER TO THE EDITOR City needs to invest in flights, too

Crain’s recent article on Datatrak If the city is prepared to spend up International Inc. noted that Data- WRITE TO US to $800,000 a month underwriting a trak is aiming its future growth at Send your letters to: Elizabeth container ship service to Europe, Chicago because of that city’s “ease McIntyre, editor, Crain’s Cleveland perhaps the next project should be of global access.” Business, 700 W. St. Clair Ave., Suite an air route to a European hub. It This points out again the impor- 310, Cleveland, OH 44113-1230 wouldn’t cost nearly as much. tance of international air service if Email: [email protected] Raleigh, for example, has recently Cleveland is to remain competitive offered any willing airline $2.5 mil- as a corporate headquarters loca- lion a year for a route to Paris or tion. Cities comparable to Cleve- “buy” international flights either Frankfurt. land, such as Baltimore, Pittsburgh through sales guarantees, promo- Robert Salmon and Raleigh, do not hesitate to tion or direct subsidy. Chevy Chase, Md.

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TWITTER: @CrainsCleveland; FACEBOOK: Facebook.com/CrainsCleveland LINKEDIN: linkedin.com/company/crain’s-cleveland-business; INSTAGRAM: instagram.com/crainscleveland DAILY E-NEWSLETTERS: CrainsCleveland.com/register Look for Crain’s new Weekly Report webcast, which will hit your inbox on Sunday morning. To sign up, go to: crainscleveland.com/register. 20141124-NEWS--12-NAT-CCI-CL_-- 11/20/2014 3:46 PM Page 1

12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014

GOING PLACES Send information for Going Places to [email protected] JOB CHANGES ARCHITECTURE STANTEC: Jennifer Storey and Bob Seaman to senior architects; Marc Beljan to architectural BIM modeler; Elaine Gleason to interior Kluchin Scipione Sittema Cook designer. Storey Seaman Gleason Wilson

BIOTECHNOLOGY OXYRASE INC.; Casey Zace to president; James C. Copeland to chief technology officer and chairman.

DISTRIBUTION MAROON GROUP: Brian Wilson Ettorre Fegen Hamilton Trebilcock Green Andriamasilalao Stoner O’Neil to chief financial officer. INSURANCE LESBIAN GAY BISEXUAL to help desk technicians; Tom O’Neil FINANCIAL SERVICE TRANSGENDER COMMUNITY to support systems administrator. BRUNSWICK COS.: Rachel Wein- BOBER MARKEY FEDOROVICH: CENTER OF GREATER berg to vice president; Elizabeth Keith Libman, Alan Goldstine and CLEVELAND: Craig Hoffman Fulk to account executive; Susan Tod Wagner to partners. to development associate; Jenn BOARDS Horner to marketing manager; Ettorre to office manager. ENCORE WEALTH PLANNING: Taylor Mclaughlin to executive Richard A. Kluchin to president; MUSIC SETTLEMENT: Maura L. assistant; Rachel Deuring to REAL ESTATE Victoria McWilliams to office account coordinator. Hughes (Calfee, Halter & Griswold manager. Hughes Heitlinger KOWIT & CO. REAL ESTATE LLP) to chair; Karen Heitlinger GROUP: Sue Fegen to office GRANT THORNTON LLP: Gino LEGAL (Music Settlement) to chair, Center LANDMARK PLASTIC CORP.: leasing agent. Scipione to audit partner; Rich for Early Childhood. BENESCH: Nora Cook to staff Steven P. Merzweiler to president Sittema to business advisory attorney. and chief operating officer. services principal. TECHNOLOGY MCDONALD HOPKINS: Ukeme BLUEBRIDGE: Stephen Hamilton AWARDS ST. CLAIR ADVISORS: Craig A. Awakessien Jeter to associate. NONPROFIT to senior account executive. Steinbrink to partner. COMMUNITY ASSESSMENT MANUFACTURING MCPC: Alyssa Trebilcock to well- AKRON CLEVELAND WESTERN RESERVE PARTNERS: & TREATMENT SERVICES: Lou ness and onboarding coordinator; ASSOCIATION OF REALTORS: Margaret E. Graham, Kevin M. DIEBOLD INC.: Henry Orphys to LaMarca to clinical services Jordan Green to operations service Cyndi Kane (Re/Max Crossroads Harper and Gregory D. Waller vice president, tax; David Kuhl to director; Kayla O’Malley to pro- center analyst; Tantely Properties) received the Realtor of to senior analysts. vice president, treasury. gram manager. Andriamasilalao and Dan Stoner the Year Award. 20141124-NEWS--13-NAT-CCI-CL_-- 11/20/2014 3:10 PM Page 1

NOVEMBER 24 - 30, 2014 CRAIN’S CLEVELAND BUSINESS 13 SMALL BUSINESS There’s a market for everything In two years, the self-funded, profitable Cleveland Flea has become quite a gathering place for eager entrepreneurs

By KATHY AMES CARR [email protected]

Artists and food entrepreneurs ex- cel at making things. They don’t always make a lot of money at it, especially when trying to weave their business into something on their own. Enter the Cleveland Flea, a monthly urban pop-up event and business incubator for Cleveland- area creatives. Each month between April and November, thousands of shoppers descend upon the whimsical out- door event, seeking anything from vintage clothing and knickknacks that could’ve been plucked from grandma’s attic to handmade jewel- ry or upcycled home furnishings. The Flea itself is a macrocosm of the businesses it nurtures, facing the same financial and operational issues that affect startups before their ventures — if they are lucky enough — take off. About to enter its third year of operation, the for-profit venture is completely self-funded and profitable, said founder Stephanie Shel- don, although at this point she’s still reinvesting all profits back into the operation. “We have a very lean, bootstrap operational approach,” Sheldon said. Sheldon co-operates the Flea with one paid staffer and freelance pho- KATHERINE CASE tographer Suzanne Price, who does The Cleveland Flea is a popular attraction even on dreary October days. all the photography for the Flea’s website, social media and monthly newsletters. Nuts and bolts Artists inspired by flea markets in “These are grassroots operations Flea vendors pay $75 for each “We hit hard last year with photo These portable flea markets have other cities secured a city permit to with varying business models,” Per- free Flea event, or they can buy a shoots. Branding is so integral to been surfacing in urban parking operate their own, whether as a for- rine said. reduced season pass at the begin- this,” Sheldon said. “Last year was garages, lots and weathered indus- profit or nonprofit entity, said The Cleveland Flea operates un- ning of the year, which ensures a about finding our voice, understand- trial buildings throughout the Unit- William Perrine, an associate lec- der Sheldon’s branding firm Indie spot at each of the regularly sched- ing who we are and building a com- ed States since the recession, when turer in fashion merchandising at Foundry, which consults with star- uled markets. munity. This year was about scaling creative entrepreneurs gained a Kent State University’s Fashion tups — many of which are Flea ven- Overhead is kept at a minimum, up.” foothold in the marketplace. School. dors — on building their businesses. See MARKET, page 15 Aurora company provides power backup at flip of switch

By SHARON SCHNALL “Anything more than two to four tinel Data Center. “The (LayerZero) switch is very [email protected] milliseconds (1/250th of a second) MORE INSIDE LayerZero lists Sentinel, along sophisticated electronically, going is unacceptable.” A Q&A with LayerZero co-founders with Eaton Corp., Intel Corp., Visa, back and forth (between power Pieces of equipment that process Two to four milliseconds is Milind Bhanoo and James M. Galm. Texas Instruments Inc., IBM and sources) without creating prob- information and transactions are roughly the amount of time it takes Page 14 Bank of America N.A., as longtime lems,” Blank said. He added, “They the operational lifelines of most a static transfer switch to shift a customers. have found a way to avoid crises.” businesses. But they depend on a power load from a primary source switch. First, there’s the size: It’s If LayerZero’s products are intel- continuous power to an alternative source when pow- housed in a 6-foot-wide, 3-foot- Helping divert disaster ligent and complex, so too are Lay- stream — any brief er cannot be provided by the pri- deep, 6.5-foot-tall steel cabinet. erZero’s founders. Although the 2ND and unwanted loss of mary source, Hines said. Then there’s the weight: approxi- The static transfer switch — from two attended Case Western Reserve power can threaten And that’s where LayerZero Pow- mately 4,300 pounds for a typical low-cost offerings to the more in- University in the 1980s, they first STAGE those lifelines. er Systems Inc. comes in. static transfer switch configuration. telligent costlier components like became acquainted as employees “If you lose power The Aurora company designs Lastly, the switch is a self-con- those offered by LayerZero — is of Cyberex, a company once locat- for a second, equipment is shut and manufactures power-switch- tained router of electrical current. “very much in demand in industry ed in Mentor that designed and down,” said Paul G. Hines, vice ing, distribution and monitoring “Using no moving parts, it can today,” said Gary Blank, president manufactured solid state electrical president of data center operations products for mission critical appli- switch enough power to run a of the Institute of Electrical and power conversion equipment. and engineering for Sentinel Data cations. It was founded in 2001 by dozen suburban homes, within Electronics Engineers-USA. Based Galm, whose three degrees, up Center, a New York City company James M. Galm, vice president and 1/250th of a second, and without in Washington, D.C., IEEE-USA through a doctorate, are in electri- that designs, builds, owns and op- chief technical officer, and Milind making a sound,” Galm said. promotes the careers and public cal engineering and applied erates co-location (long-term Bhanoo, president. “We’ve got about 30 static trans- policy interests of more than physics, was vice president of tech- leased) data centers for Fortune 50 To be clear, the static transfer fer switches of theirs installed and 200,000 engineering, computing nology; Bhanoo, also possessing and Fortune 1000 companies. switch is not a wall-mounted light more on order,” said Hines of Sen- and technology professionals. See SWITCH, page 14 20141124-NEWS--14-NAT-CCI-CL_-- 11/20/2014 3:11 PM Page 1

14 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014

TAX TIPS PETER A. DEMARCO Q & A: LAYERZERO CO-FOUNDERS How do you define a startup business? Small biz owners get needed clarity Milind Bhanoo: Can-do attitude. Starving for funds. Lack of sleep. Endless worries. A relentless pursuit of Just a year into some new regula- ing the depreciation expense. excellence. An uncompromising pursuit of standards. tions on tangible property, the In- That prompted the IRS recently to ternal Revenue Service has recog- permit “partial dispositions” under Are you a startup now? nized the need for some adjustment the new regulations. Under a partial James M. Galm: We don’t feel like a startup. We that can be important to some small disposition, when the company puts have our own building. We have our own factory. We’re business owners. a new roof on its five-year old build- completely vertically integrated. We have a base of Bhanoo ing, it can go back to its original de- The IRS spent more than 10 years customers with whom we have been doing repeat trying to write the new regulations preciation schedule and accelerate business for many years. We are not living hand to to address longstanding problems into the current tax year all the un- mouth. Our planning horizon is now significantly longer in determining when tangible prop- recognized depreciation that would than when we were a startup. erty should be expensed immedi- be associated with the original roof. ately and reduced from the current If the value of the roof as a sepa- What does it mean to take a company year’s taxable income compared rate component of the $1 million with when it needed to be capital- building could be estimated at to the next level? ized and depreciated over time. Be- $50,000, that’s a dramatic accelera- Bhanoo: It’s to have stable processes. You are able fore the new regulations, the rules tion of depreciation only five years to plan … and you are able to execute the plan. … DeMarco is vice president and Galm in place had accumulated over gen- into a 39-year schedule. The equa- That’s what changed, moving from a startup environ- director of tax services for the erations of pronouncements and tion isn’t quite that simple, as the ment. The startup people are basically firefighters. regional accounting and business case law that became difficult for value of the roof as a component Where we are today is planning, setting up processes so people can know consulting firm of Meaden & Moore, everyone to follow. must be clearly established in order where they are in the company. It’s a people and organization change. It’s The new tangible property regu- headquartered in Cleveland. to determine the amount of unrec- the communication of that change, the willingness to change, the lations provide new rules for when ognized depreciation. acceptance of that change. — Sharon Schnall property should be deductible be- and begins a 39-year depreciation The partial disposition could ap- cause it is only meant to maintain schedule for the entire building. ply to any number of capitalized im- or restore property to its proper That 39-year schedule applies to all provements, such as a new HVAC working order, compared with the individual components of the system in building, a new engine in when property should be capital- building. Five years later, the com- a truck, or a major new component SWITCH ized because it prolongs life, in- pany replaces the roof, a capitalized on a piece of industrial machinery. continued from page 13 creases value or adapts property to improvement that must be depreci- Small business owners would be a different use. The new rules focus ated over 39 years as well. wise to review their historic fixed as- three degrees, including electrical on breaking an asset like a building The tax effect here is that the set schedules and look for retire- engineering and applied physics; into components and then focusing company is now carrying two differ- ments that are still being capitalized systems and control engineering; on the extent to which components ent depreciation cycles on the roof, to see if they might qualify for these and a master of business administra- are being improved or simply re- a single component of the building. new partial dispositions. tion, was vice president of sales and paired. The first cycle began when the com- The recently issued guidance from marketing. The new rules have provided the pany bought the building, and the IRS allows a business to apply the They worked together for eight needed clarity on when a particular second one begins when the com- partial disposition rules to replace- years. Two weeks after quitting their expense is deductible or must be pany replaces the roof. ments that occurred in years prior to jobs, they formed LayerZero. capitalized. Now the IRS is extend- Imagine how this could play out 2012 and claim the unrecognized de- Launching this company, at the end ing to taxpayers some leniency un- for the company over the 39 years preciation on its 2014 tax return. Pre- of the dot-com bust, had obvious der the new rules to accelerate de- following the purchase of the build- viously, the IRS only permitted the risks, but offered opportunity. preciation when they’ve made new ing, with each new improvement new rules to apply if the replace- “Since many potential customers replacements or repairs to old cap- beginning a new, independent 39- were not making capital expansions, ments occurred during 2012 and SHARON SCHNALL italized items. year depreciation schedule. That’s a we knew that our competitors would 2013 with the additional deprecia- Each LayerZero wire harness Perhaps the easiest way to ex- great deal of capitalized expense be scaling back and conserving cash tion deduction being claimed on the connects devices in one part of the plain is through an example. Con- hung up in separate depreciation by limiting new product develop- 2013 tax return. product with devices located in a sider what happens when a compa- schedules that dramatically extend ment,” Galm said. “This gave us the Where taxpayers identify retire- different area of the product. ny buys a building for $1 million the tax benefit of eventually deduct- ments that might qualify for a partial opportunity to leapfrog what others disposition, then comes the cost- were doing, so that when the busi- benefit analysis to determine if the ness cycle returned to center, we had reached the manufacturing ca- disposition is worth pursuing. If a de- would be ahead of our competition.” pacity limit with that partner. preciation cycle is nearly complete on “It was a seismic event for us,” he a smaller-ticket item, the incremental Ready for the rainy day said. “We talked and said, ‘Let’s ag- tax benefit of claiming a partial dispo- gressively set aside funds. The rainy sition may not be worth the work that The strategy worked: Average an- day is here.’ Literally, in a year we will go into documenting it. nual gross sales, for the past four were there.” The new IRS guidance provides a years, including 2014, are estimated In 2012, using personal funds, potentially meaningful tax benefit to at just over $16 million. Until 2012, Galm and Bhanoo purchased a small business owners who have all employees worked from their 45,000-square-foot building, former- kept up their property and would homes. A manufacturing partner, in ly owned by Swagelok Co. The two welcome some acceleration of old Tulsa, Okla., produced LayerZero’s own the building and are LayerZe- depreciation. products. By 2011, Bhanoo said, they ro’s majority owners. Three associates round out the owner roster, and employees total 33. It’s clear the two founders admire and respect one another. “Jim is the engineer’s engineer,” Bhanoo said. “There is no problem he cannot solve, if you give him the right tools and the time to solve it.” “Milind, he is far, far better equipped than I am to handle sales, management, finances. He has been the prime person behind that side,” Galm said. Those are critical skills, given that purchasing a switch and associated & Sell components is a complex and costly process typically transacted by like- minded personnel with similarly ex- tensive engineering and design know-how. EVERYTHING! Driven by customers’ project- based needs, the average sale is $300,000 to $600,000. Product offer- T Tools ings are priced from approximately $7,000 to $420,000, depending on customization and complexity. Ful- fillment ranges from four to 16 weeks. HGR Industrial Surplus, 20001 Euclid Ave., Euclid (216) 200-4110 “It’s a very sophisticated sale. We have to sell up and down the line of www.hgrinc.com the process,” Bhanoo said. 20141124-NEWS--15-NAT-CCI-CL_-- 11/20/2014 3:11 PM Page 1

NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 15 ADVISER LAURA SHERIDAN MARKET continued from page 13 Michael Fleming, executive direc- Rebranding is more with little to no rental fees, since tor of St. Clair Superior Development most of the markets occupy parking Corp., said the Flea has been a cata- lots or underutilized buildings in lyst for pumping residential and and around the diverse and historic commercial interest into that area. than spicing things up St. Clair Superior neighborhood. “There’s a lot of nostalgia here, Monthly “event infrastructure” but not a lot of development,” he Evolve or become extinct. When expenses total about $3,000 — or said. “Now there’s activity and inter- Darwin realized this phenomenon about one-third of the overall est. The Flea has been a huge mar- back in 1859, he had no idea that it $9,000 in monthly gross revenue keting piece for the neighborhood, applied to brands as well as plant generated from the Flea. Holiday and as a result, quite a few small and animal species. Flea expenses are double, at about businesses, like Ohio City Soda, have Savvy marketers know that to $6,000. Those costs cover security, moved in. Existing businesses like thrive they have to evolve. Unfortu- portable toilets, facility rental fees, Shelli’s, this adorable little diner on nately, all too often a company marketing, signage and liability in- St. Clair, are busier, too.” thinks rebranding is the answer to surance. Before it became self-funded, the its problems, and it fails. Why? The Flea does not retain any por- Flea in 2013 was a recipient of Rebranding is not a facelift. It’s a tion of the vendor sales, said Shel- $27,000 through St. Clair Superior lot more than a revamped logo or ad don, noting that she does not re- Development Corp., which received SUZANNE PRICE grants from the Charter One Growing campaign. quire vendors to report their Flea Stephanie Sheldon It’s about inspiring employees, sales. However, anonymous Communities and Dominion Foun- customers and investors to see the monthly surveys reveal that total taining licenses and permits. dation. The neighborhood group that company in a new light. gross vendor sales range from Telling the artists’ stories through year had a total project budget of Rebranding is not something you $100,000 to $200,000, she said. visuals and narrative, both online $130,000 for its Retail Ready Program, do because you want to, it’s some- and through monthly newsletters, which included public art, marketing thing you do because your business became key to growing awareness and small grants for retail operations Investment materializes or customers demand it. Sheridan is president of Viva La about the event, Sheldon said. such as the Flea. Rebranding is the right solution Brand, a Cleveland-based marketing Sheldon formed the Flea in early Vendor and consumer interest when consumers no longer view a strategy and ad agency search firm. 2013 after observing the need for snowballed. Needing her space brand as special. It may also apply shared selling space among cre- Its first event — a mini-flea held in Now, Sheldon is scouting perma- when an organization has new the brand today. atives and food entrepreneurs, February 2013 at the Kurentovanje nent headquarters and restaurant products, is expanding into new P&G bought the brand in 1990 while fulfilling consumer demand Slovenian Festival — drew 40 ven- space in St. Clair-Superior, Ohio markets or begins marketing to a when it was known mostly for its for a more authentic and locally cu- dors and 1,500 shoppers. It capped its City, Slavic Village and MidTown. new target audience. highly fragrant aftershave and gray- rated shopping experience. first year with a two-day Holiday Flea Her vision calls for membership- Rebranding demands exception- ing customer base. When body A former architect, she recognized at the Slovenian National Home that based food vendors to operate out al commitment, creativity and re- wash was introduced in 2003, the an opportunity for an urban flea swelled in size to about 90 vendors of a shared kitchen, similar to the sources. It’s more than just a form product category took off, but so did market to reinvigorate struggling and 10,000 shoppers. concept behind the MidTown- of “marketing,” it’s a cultural shift its competitors’ sales. neighborhoods rich with history but Average attendance in 2014 dou- based food incubator, Cleveland that requires the support of the en- P&G strategically repositioned scant on economic activity. bled the holiday market, with about Culinary Launch and Kitchen. tire organization. the brand and adapted the product “The Flea is about activating 20,000 shoppers connecting with Plans call for additional staff, as mix to jumpstart sales. It moved its neighborhoods and spaces,” Shel- 140 vendors, Sheldon said. About ■ Case study No. 1: Rebranding focus to younger men and dramati- don said. “The Flea is not a fine art 250 more vendors consume a wait- the Flea integrates more workshops for relevance cally upended its message. fair or a craft fair. We want to be ing list. and academic programming into its calendar while maintaining its From 2007 to 2012, RadioShack’s Enter former NFL practice-squad seen as a community-building Similar traffic was expected at monthly schedule of popups in restock lost more than 95% of its val- player Isaiah Mustafa, who starred event and a neighborhood place- this past weekend’s Holiday Flea emerging neighborhoods. ue. Customers stopped coming to in Old Spice’s 2010 ad sensation maker.” Nov. 21-23, staged over 24,000 “We want to create depth, and their stores. In 2012, the board fired that launched on YouTube before She perused Craigslist for poten- square feet at 6555 Carnegie in grow vertically within the neighbor- the company’s CEO and replaced the Super Bowl. By the Monday af- tial vendors, attended craft fairs Cleveland’s MidTown neighborhoods we’re a part of,” Sheldon said. many senior executives. To survive, ter the Super Bowl, the first day the and familiarized herself with ob- hood. RadioShack had to reconnect with ad was broadcast, views had already its customers. climbed to 250,000. Check it out They learned from research that now and you may help the brand hit customers either loved them or hat- the 50 million-view mark. The fun ed them. The haters didn’t like Ra- continues across social nets, includ- dioShack’s focus on smart phones, ing Facebook, where fans’ likes sur- which they saw as a shift from being pass 2.7 million. the place where they got to play P&G didn’t play with the logo or with weird computers, cool robot packaging but rather shifted its fo- kits and random electronic circuit- cus to a younger demographic and ry to a second-rate phone outlet developed advertising that connect- store. Listening to their haters un- ed on an emotional level. And it covered insights that led to a com- worked. Today, Old Spice is any- pany-defining rebrand. thing but stale. Same logo, totally RadioShack’s rebranding in- new brand strategy. volves investing heavily in the re- design of its 8,000 retail locations. ■ Case study No. 3: Rebranding It’s marrying the RadioShack of the for differentiation ’80s, where tinkerers and electronic In the late ’90s, Target was viewed enthusiasts gathered, with the so- as just another low-end discount re- phisticated experiential store design tailer along with Walmart and that today’s consumers expect. Kmart. While its iconic bull’s-eye Stores appeal to consumers’ need and vibrant red were widely recog- for a place to experience the prod- nized, consumers lacked a reason to ucts they want to purchase before pick Target over its competitors. actually buying them. Target astutely rebranded to offer “Let’s play.” RadioShack’s new more than just big brands with low tagline expresses its goal for the re- prices. brand — become a destination for What didn’t change was their play. logo and value pricing. What did change was the addition of partner- ■ Case study No. 2: Rebranding ships with high-profile designers for vibrancy and sassy, trendy advertising. There was nothing magical about Today, Target is the upscale dis- Old Spice. It was your grandfather’s count retailer. The brand’s chichi aftershave. Now, it’s a viral sensa- faux French nickname, “Tar’zhay,” tion. is a sure sign of the success of the The first Old Spice product, Early rebrand. American Old Spice for women, was All three companies went all in introduced in 1937. Old Spice for on their rebrands because that’s men quickly followed in 1938. The what it takes. products were developed around a How’s your brand? colonial theme complete with sail- Is it relevant? Vibrant? Differenti- ing ships and red product packages ated? that continue to be associated with Is it time for a rebrand? 20141124-NEWS--16-NAT-CCI-CL_-- 11/21/2014 1:12 PM Page 1

16 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014 DIGS continued from page 5 and still have room to add staff, Big- “We love this location.” gar said. – Jeff Cristal Asked what name and sign will go executive managing director, on the new, consolidated office, NGKF,on US Bank Centre Biggar said that will be disclosed later. The companies have maintained million visitors per year, it’s a phe- operations under their prior names nomenal location,” Farro said of the until the new one is developed. hub of restored theaters, restau- Geoff Coyle, managing partner of rants and apartments. O-M, called the move “a great op- The Howard Hanna commercial portunity for us. It will allow every- brokerage’s gain is a loss to the thing to come together. It will be a Cleveland office of the NGKF bro- great launching pad for the new kerage. NGKF is US Bank Centre’s company.” second floor and, through prior in- With the assignment, O-M will carnations, has handled leasing and gain about 50,000 square feet of management of the building since empty space to lease, Biggar said. its doors opened. When US Bank Centre went in Jeff Cristal, an NGKF executive under its original name, Renais- managing director who heads its of- sance at PlayhouseSquare, in 1991, fice unit, said he understands own- it was the first new office building ership wanted to make a change constructed in the theater district in and was thankful for the opportuni- 60 years. ty to represent the building, which Farro, CEO of Cleveland-based is 92% leased. Premier Development Partners, Cristal said the firm “will do for said that when he and the late Bart ourselves what we do for our Wolstein developed the building clients” in determining if it will re- they viewed PlayhouseSquare as a main in the building or move else- resurgent part of downtown. where. One thing is for certain, he STAN BULLARD “Now, with all the theaters and a added: “We love this location.” US Bank Centre, then Renaissance at PlayhouseSquare, opened in 1991. LARGEST SAVINGS INSTITUTIONS

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NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 17 DEMAND The Pointe continued from page 1 consumption and equipment or- and, though she declined to share said he has seen a 10% increase in automotive and agriculture. The ders in September. specifics, Lewis expects sales to be orders after the traditional summer employee-owned company, which Pat McGibbon, vice president of flat in 2014. slowdown ended in August or Sep- at Gateway has about 100 workers, also pro- strategic analytics of the associa- Even though Jeffrey Frantz, sales tember. The diamond cutting tool- vides contract machining services. tion, said those types of expendi- manager for Ohio Broach & Ma- maker has a large customer in min- Beattie said the company sees tures are good indicators of the out- chine Co. in Willoughby, said ma- ing that has been pretty soft, but its strength in the industry both look of the industry. Cutting tools chine sales fell a bit in 2014, he has customers in aerospace, automo- is sold for domestically and internationally, wear out, so they’re an accurate re- high hopes for 2015. In just the last tive and appliances have been though he would not disclose sales. flection of short-term industrial ac- few weeks, he said, the company busy, he said. “Our order book for 2015 is very tivity. And companies aren’t going has seen an increase in machine in- Schumann estimated the 33-em- $5.2 million strong going into the year,” he said. to make big capital investments un- quiries. ployee company’s sales were up 5% Willie Eichele, president of less they have a strong outlook to He hopes the company will be in 2013 from 2012. He expects a STAN BULLARD Motch & Eichele LLC in Cuyahoga support that kind of spending, he able to increase its sales from about low- to mid-single digit percentage [email protected] Falls, said he’s seeing particular said. $6.5 million this year to $7 million increase this year and more of the strength in Ohio, which he attribut- in 2015. Ohio Broach encompasses same in 2015. The company does- The Pointe at Gateway, a mixed- es to a more favorable business cli- all aspects of the broaching busi- n’t share specific sales, but Schu- use project that helped pioneer re- mate created by Gov. John Kasich. “Our order book for 2015 ness, which is a process similar to mann said it is more than $5 mil- development in Historic Gateway Motch & Eichele is a machine tool is very strong going into milling, Frantz said. It makes lion. Neighborhood near Quicken Loan distributor serving a variety of in- the year.” broach machines and tooling, Matt Schron, general manager at Arena and Progressive Field, has dustries including automotive, sharpens and repairs parts and JIS, a division of Jergens Inc. in changed hands. – Bill Beattie medical and aerospace. does some contract broaching. Cleveland, said there has been sus- Middleburg Heights-based in- president, Bardons & Oliver About 70% to 80% of Motch & Although machine sales have tained growth in the 55-employee vestor group Huron Pointe LLC on Eichele’s customers are in Ohio, been lackluster this year, tooling industrial supply distribution divi- Wednesday, Nov. 19, paid $5.2 mil- Eichele said. And many of those Manufacturing technology or- sales have been a different story. sion he oversees. lion to Pointe at Gateway LLC for the customers have been seeking ad- ders hit $647.6 million in Septem- “The tooling has really bounced The division includes a full line of retail, office and apartment complex. vanced technology like automation ber — a 77.3% increase from Au- back,” Frantz said. He noted the cutting tools and MRO supplies for Pointe at Gateway was formed by solutions or robotics in recent gust and a 61.4% increase from year had started strong and fell off customers in industries ranging brothers Jerry and Laurence years. There’s a lot of money on the September 2013. McGibbon said a bit in the summer before picking from aerospace to oil and gas to Schmelzer to convert a family- sidelines, Eichele said, and compa- sales at the well-attended Interna- back up in September. general job shops. owned office building to apartments nies are looking to invest for the fu- tional Manufacturing Technology “Across the board, we’re seeing in 1996. ture. Show it runs were very strong. Sep- most people are busy,” Schron said. The project included updating Across the board, 2014 has been tember’s numbers put 2014 up Getting busy He has noticed increased activi- three adjoining buildings they ac- stronger than 2013, he said, though 5.2% from 2013, and McGibbon Cutting tools have a more sea- ty in the oil and gas industry, as well quired to create a project of scale. he’s not seeing the huge numbers said he thinks the strong orders are sonal cycle, said McGibbon of the as in the aircraft industry. Overall, The property includes buildings some national organizations are an indication manufacturing will Association for Manufacturing he’s hearing that customers are that are between the two-story trian- citing. Eichele declined to share continue to do well into 2015. Technology. There’s usually a dip seeing 4% to 6% growth and are gular, shaped building housing the employee numbers or specific an- And while not everyone has been in the summer, but if everything’s projecting the same in 2015. Winking Lizard at 811 Huron Road nual revenue, but he said the com- seeing increased orders, there are going well, that picks back up from Schron said the privately owned and the eight-floor Finance Building pany’s sales this year are up about signs of optimism in many corners September to December. company doesn’t share annual at 740 Prospect Ave. The complex 15% from 2013. The forecast going of the industry. The most recent numbers from sales, but his division has seen has street frontage on both Huron forward looks good for machine Sue Lewis, marketing manager the association and the U.S. Cutting record sales for each of the past and Prospect. tool consumption, he said. for Combi Packaging Solutions LLC Tool Institute, released Nov. 12, four months. The growth has been Pointe at Gateway originally in Canton, said that while sales are show national consumption of cut- sustained this year instead of fol- housed 42 apartments, but only five down about 2% year-over-year for Tool time ting tools increased 4.6% to $176.5 lowing spikes and drops in activity, rentals remain, as 37 suites were sold the custom packaging equipment million in September from August. Schron said. He thinks customers as condominiums since 2004. Earlier this month, the McLean, maker, customers are spending That’s up 7.7% from September are more attuned to what their The project has some growth po- Va.-based Association for Manufac- more on sophisticated automation 2013. needs are. tential, as about 24,000 square feet of turing Technology reported nation- equipment. The company had Tom Schumann, president of E. “They’re not overbuilding for the retail space is available, the online wide increases in both cutting tool record sales for the past four years, C. Kitzel & Sons Inc. in Cleveland, future,” he said. realty data service CoStar reports.

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18 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM NOVEMBER 24 - 30, 2014 MASK continued from page 5 miere develop intensity. York, now has the backing of one of new products Most light therapy devices sold the biggest health care companies and hire six or for home use look like wands. Tap- on the planet. seven more peo- per said the mask form is better be- Johnson & Johnson Develop- ple. The compa- cause it applies the light more ment Corp., the company’s venture ny employs 12 evenly across the user’s entire face, capital subsidiary, invests in young today, including and it’s easier to use. You put it on companies that provide “strategic five in Oakwood like a pair of glasses and turn it on. growth options” for the broader Village. Tapper The light, which includes no ultra- corporation, according to its web- A few of La Lu- violet rays, shines for 15 minutes site. miere’s top executives work from and then shuts off. Johnson & Johnson — which its local office, which handles in- Each illuMask can be used 30 sometimes will go on to buy star- voicing, shipping, supply chain is- times — once for every dollar you tups that receive investments — ac- sues and other back office func- spend on it. Then a controller at- tively tries to help them succeed by tions. The New York office focuses tached to the device shuts it down giving them access to its internal more on product design. The permanently. The company could experts. masks are made in the same Chi- program the controller to keep run- CONTRIBUTED PHOTO The ability to get access to ex- nese factory that made the Spin ning, but then it would have to La Lumiere is perts who’ve worked for skin care Pop. charge more for the mask, Tapper “monetizing brands such as Neutrogena and Tapper now lives in Philadelphia, said. light energy” Clean & Clear helped push La Lu- but the Northeast Ohio native “We’re monetizing light energy,” with products miere to accept the offer from the racked up many of his early suc- he said. such as its New Jersey-based company, Tap- cesses and built many local busi- Almost all of the 60 people who anti-acne mask per said, adding that La Lumiere ness relationships while living here. helped La Lumiere test its proto- also received offers from “some He used to work alongside his step- type showed improvement within major private equity firms.” father, John Osher, who founded four weeks. Mass appeal the market,” according to Klein, chief investment officer for SWaN & “They have some of the smartest Cap Toys Inc. That local company The company paid Dr. Z. Paul Officials from Johnson & John- Legend. scientists and R&D personnel and was acquired in 1993 — the same Lorenc to conduct the study; the son weren’t available to talk about Most of the hit products Tapper marketing personnel out there,” he year it introduced the Spin Pop — New York-based plastic surgeon is why they think the illuMask could has worked on over the years have said. now the company’s chief medical by Russ Berrie & Co. The New Jer- be a winner. had price tags below $10. and scientific officer. The Florida sey-based novelty products com- However, Todd Klein said the So Klein figured La Lumiere Novelty act pany later sold the unit to Hasbro. plastic surgeon who came up with strength of La Lumiere’s team is could sell the illuMask at a low the idea for the mask, Dr. David what drove SWaN & Legend Ven- price compared to the competition. La Lumiere previously spent al- Shuter, also serves as a medical ad- ture Partners to back the company. Frankenstein for the win Online searches show a few com- most nothing on marketing, but the viser. Last year, La Lumiere raised peting products in the $50 to $80 $20 million investment will allow it Light therapy isn’t new. Derma- After the study, some people did- more than $4 million in an invest- range, but some are well over $100. to jumpstart that effort. So don’t be tologists already use light to treat n’t want to give the prototype back, ment round led by the Leesburg, As a rule, Tapper doesn’t develop surprised if you start seeing TV acne and wrinkles. La Lumiere uses Tapper said. And it was ugly — he Va.-based firm. pricy products. commercials that urge you to pick the same wavelengths of light — called it “the Frankenstein model.” Tapper and his team had “a his- “My relationships are at Walmart up the phone and place an order. red and infrared for wrinkles, blue “That’s when you know you have tory of delivering consumer prod- and Target,” he said. “We want to The money also will help La Lu- and red for acne — but at a lower a winner,” he said. ucts at price points that expanded sell to the masses.” REAL ESTATE CLASSIFIED Phone: (216) 522-1383 Fax: (216) 694-4264 Copy Deadline: Wednesdays @ 2:00 p.m. Contact: Denise Donaldson E-mail: [email protected] All Ads Pre-Paid: Check or Credit Card

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NOVEMBER 24 - 30, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19 REPORTERS’ NOTEBOOK THE WEEK BEHIND THE NEWS WITH CRAIN’S WRITERS To their credit, students to successfully manage their lives by making “will be the replenishment of aging fleets, a NOVEMBER 17 - 23 responsible choices.” recovering nonresidential construction take on branch duties — Jeremy Nobile market, and increased investment in civil In an effort to promote skills like smart and energy infrastructure,” according to the The big story: Cleveland in 2015 will become spending, informed use of credit, and the The gears of industry report. the first U.S. city to offer commercial Internet benefits of regular saving and investing, — Scott Suttell service at 100 gigabits per second. Nonprofit Notre Dame-Cathedral Latin School in are moving more smoothly broadband provider OneCommunity plans to Chardon has launched a student-run credit The U.S. manufacturing sector has Hyatt Place sale price is make the ultra-fast Internet service available union branch in conjunction with Mentor’s reached its highest rate of growth in more along Euclid Avenue’s Health-Tech Corridor, Cardinal Credit Union. than four years, according to “Shifting into a ‘very encouraging’ sign which stretches from PlayhouseSquare to Uni- The new branch, ran on campus entirely High Gear,” a report released by Cleveland- for the hotel market versity Circle. The hope is that the service will at- by students under Cardinal’s supervision, based investment bank Brown Gibbons The Hyatt Place hotel in Independence tract startups and technology companies to the will serve as the centerpiece of a new finan- Lang & Co. city. One-hundred gigabits per second is 300 cial literacy education program at the was sold last Wednesday, Nov. 19, for a times faster than the average download speed of school. The project is the collaborative SEE FOR YOURSELF healthy $13.8 million, according to a deed typical residential Internet service. brainchild of Cardinal CEO Christine Blake filed in Cuyahoga County. and students of the ND-CL Business Club. To read the manufacturing report released The closing was part of the previously an- Bloom is off: Cliffs Natural Resources Inc. “The timing could not be better,” Blake by Brown Gibbons Lang & Co., go to: nounced purchase by an affiliate of Lones- said it’s “pursuing exit options” for its eastern said. “Students who are exposed to financial tinyurl.com/qjqas3a tar Funds, a Dallas-based private equity Canadian iron ore operations that “may result in education in preparation for college are bet- fund, of a portfolio of 38 hotels from affili- the closure” of the company’s Bloom Lake mine. ter prepared for life outside of the class- The report notes that according to the Oc- ates of Chicago-based Hyatt Hotels Corp. “Despite the continued interest of the prospec- room. Learning how to manage their fi- tober Purchasing Managers Index, the man- The 127-suite hotel was valued at $8 mil- tive equity partners in Bloom Lake and in its high nances early on is a critical part of their ufacturing sector has expanded for 17 con- lion for property tax purposes by Cuyahoga quality ore, the potential investment is not long-term success.” secutive months, and the overall economy County. The six-story hotel was built as an achievable within a time frame acceptable to Blake said the program benefits students has grown for 65 straight months. Amerisuites at a project cost of $6 million in Cliffs,” said Lourenco Goncalves, Cliffs’ CEO. by providing an opportunity to learn real- An expanding U.S. manufacturing sector 1995, according to a Crain’s Cleveland Busi- Cliffs said the investment was estimated to cost world skills, while the school gets a boost in “is spurring investment in capital equip- ness story on the project. Hyatt later re- $1.2 billion. If Bloom Lake closes, he said, “the meeting state standards without additional ment and benefiting suppliers of industrial flagged it as a Hyatt Place as it developed the estimated closure costs are expected to be in the training or resources. It’s also intended to components, with manufacturers of gearing suite chain under its own name. range of $650 million to $700 million in the next help address the rising rates of student-loan and power transmission products and sys- David Sangree, president of the Lake- five years.” defaults and students amassing crippling tems attracting increased investment,” wood-based Hotel & Leisure Advisors con- credit card debt. Students will receive Brown Gibbons said. sultancy, said the sale price is “very encour- They’re not on board: Associated Estates hands-on, money-management lessons It said merger-and-acquisition activity “is aging” and shows area hotels are gaining in Realty Corp. said assertions by Land and Build- both in the classroom and as part of the on the rise as participants look to move up value. ings, a Stamford, Conn.-based investment firm branch experience. the value chain to capture margin, seeking Hyatt announced the agreement Sept. 8 that intends to nominate a slate of directors to “Our community benefits when we can acquisitions to expand product range and to sell the portfolio for a total of $590 mil- replace the AEC board, are “unfounded and mis- foster a new generation of savvy, money- deliver broader capabilities, build scale, and lion. The hotels will continue to operate un- leading,” and the Richmond Heights-based smart savers,” Blake said. “They’ll not only gain access to new customers and high- der their existing Hyatt Place or Hyatt House apartment owner intends to continue on its cur- reap the benefits of smart money-manage- growth end markets.” flags through franchises, Hyatt said. rent path. On Nov. 17, Land and Buildings issued ment, but through the process, they’ll learn Key drivers of future equipment demand — Stan Bullard a filing with the Securities and Exchange Com- mission stating that it wants to replace the AEC board as a result of “material underperformance and shareholder value destruction.” SPOTLIGHT BEST OF THE BLOGS At Summa’s summit: RECIPIENT: I. Richmond Excerpts from recent blog entries on Keeping it real Summa Health System Nettey, Ph.D., associate CrainsCleveland.com. LeBron James visited Fenway Park re- named Dr. Thomas Malone, dean at Kent State cently for an “idea exchange” with busi- its current chief operating of- University’s College A lot to like ness leaders at the home of the Boston ficer, as its next president and of Applied Engineering, Cleveland is doing a better job than Red Sox. CEO. Malone will take over Sustainability most cities at figuring out new, more pro- The Associated Press reported that Jan. 1 for Thomas Strauss, and Technology ductive uses for abandoned lots and James “said his goal is to remain authen- who has led the Akron-based homes, according to CNNMoney.com. tic, whether it’s in his business relation- Malone health system for 15 years. HONOR: The University Aviation “In and around Cleveland, nearly 6,000 ships or his interactions with fans.” He Upon his retirement, Strauss Association’s William A. Wheatley Award foreclosed and abandoned homes are be- won’t endorse a product unless he likes it, will continue to work with Summa Foundation, ing destroyed in an effort to save neigh- and he won’t speak out on an issue unless the health system’s fundraising arm. Since join- Nettey, a resident of Stow, is the first borhoods from blight, crime and sinking he means it, the AP said. ing the health system in 2013 as president of African-American to receive the award, which home prices,” the website said. “Instead of “The people, the consumer, they know Summa’s Akron City and St. Thomas hospitals, is presented annually to a professional educa- trying to rebuild on these properties, how- what’s real and what’s fake,” James said. Malone has taken on increasing responsibilities. tor who is active in the University Aviation As- ever, the city has been turning the empty “You cannot shortcut, you cannot cheat, Last May, for instance, responsibility for clinical sociation, has at least 10 years of experience in lots into parks, greenhouses, even vine- because they will know.” operations was shifted from the CEO suite to the aviation education profession and has yards.” Malone’s purview. made outstanding contributions to aerospace Frank Ford, a policy adviser for the non- education. profit Thriving Communities Institute of ‘Crisis’ averted Bank on her: The Greater Cleveland Food The association said Nettey was selected be- Cleveland, told CNNMoney.com, “For the We know Cleveland is an affordable Bank tapped Kristin Warzocha, a 14-year veter- cause of his work at Kent State and on aviation larger body — the neighborhood — to sur- place to buy a home. It turns out Cleve- an of the organization, as its next president and committees at the National Research Council vive, you have to remove those cancer land and Akron also are among the best CEO. Warzocha, who most recently served as and the Transportation Research Board of the cells.” cities for renters. vice president of external affairs, succeeds Anne National Academy of Sciences in Washington, During the housing bust, the website re- MarketWatch.com reported that re- Goodman, who left the organization in August to D.C. The award also recognizes his work as the ported, “Ford worked at a community re- searchers from Rent.com analyzed the take over Saint Luke’s Foundation. Warzocha former director of the Airway Science Program development group that renovated 50 site’s median rents and the median house- managed the food bank’s capital campaign, at Texas Southern University. foreclosed homes in Cleveland for hold and vacancy income in 75 metropol- which raised more than $10 million for a new Under his leadership, the Kent State aero- $180,000 each. They sold the rehabbed itan areas provided by the U.S. Census Bu- food distribution center. She also was a key nautics program became the first Aviation Ac- homes for about $90,000 apiece, taking a reau. Ohio has three of the 10 most member of the management team that helped creditation Board International-accredited $90,000 hit on each. If they had spent that affordable cities for renters, according to facilitate the food bank’s mergers with Food Res- aviation program and Federal Aviation Admin- money to demolish nine or 10 foreclosed Rent.com. cue of Northeast Ohio and the Greater Cleve- istration-approved Air Traffic Collegiate Train- homes instead and turned the land into Topping the list is Dayton, with median land Committee on Hunger. ing Initiative program in Ohio. green space, it would have had an imme- rent of $565. The city’s rental vacancy rate, Nettey taught his first course in aviation 31 diate beneficial impact.” though, is on the high side, at 16.5%. Medical marvel: Cleveland Clinic an- years ago at the University of Louisiana; he has CNNMoney.com also shared with a na- Akron was eighth on the list, with median nounced last week that in September, a team of been at Kent State since 2001. In addition to tional audience the story of entrepreneur rent of $667 and a more understandable its surgeons performed the health system’s sec- being an associate dean at Kent State, Nettey is Mansfield Frazier, whose Chateau Hough rental vacancy rate of 10%. At No. 10 was ond face transplant surgery — a 24.5-hour pro- a volunteer professor of the Aerospace Senior vineyard is at East 66th Street and Hough Cleveland, with median rent of $868 and a cedure on a middle-aged man who suffered se- Seminar course for graduating seniors in aero- Avenue, on a three-quarter acre lot where rental vacancy rate of 10.1%. vere facial trauma and other complications from nautics. He served as the senior academic pro- a 30-unit apartment building once stood. These data points arrive at a time when a car accident. The surgery, which involved nine gram director of the aeronautics program for In 2010, the story noted, the Cuyahoga “rents are on the rise nationwide,” Mar- surgeons and multiple specialists, replaced seven years. County Land Bank said it would give Fra- ketWatch.com said, having risen 6.2% in about 90% of the patient’s face. It included the In a news release from Kent State, Nettey zier the land if he could make a go of the October from the like month last year. Jed transplantation of about two-thirds of the scalp, said he developed an interest in aeronautics as vineyard within five years. Chateau Hough Kolko, chief economist for Trulia, told the the forehead, upper and lower eyelids, eye sock- a child, when his father would take him to the “produced its first wines last year and Fra- website that we’re in a “rental crisis” and ets and nose. airport on late-Saturday afternoons to watch zier expects to produce about 1,000 bottles said it will continue to worsen until there’s airplanes take off and land. of the 2014 vintage.” more apartment construction. 20141124-NEWS--20-NAT-CCI-CL_-- 11/20/2014 11:27 AM Page 1

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