20100412-NEWS--1-NAT-CCI-CL_-- 4/9/2010 3:10 PM Page 1

Vol. 31, No. 15 $1.50/APRIL 12 - 18, 2010

Health care STREET EATS providers plan New generation of food carts rolls into Cleveland as city clears path for mobile vendors to operate for transition By JAY MILLER Hospitals, other practices mull operational [email protected] changes as reform implications take hold ave you ever been walking By SHANNON MORTLAND standards. around at lunch time and had a [email protected] “Obviously this bill is going to hankering for Himalayan rice have a major impact on all facets of Although the crowds of newly the hospital,” said Heidi Gartland, and seared tuna? Or maybe insured patients aren’t coming the vice president for government Ha plate of dim sum? Or maybe a simple through the doors just yet, local relations at University Hospitals. vegetarian soup? health care providers are wondering “We’re definitely preparing our- how they will handle the onslaught selves to decipher which programs Well, you may be able to sample those of patients, as well as a multitude of we’re going to participate in.” varied cuisines and more beginning this other changes that are coming as a One of the biggest concerns for result of the health care reform bill. hospitals is the decrease in reim- summer on the streets of Cleveland. Among the issues providers are bursement from Medicare and Cleveland City Council passed legislation grappling with are how changes in Medicaid, said John Corlett, vice last month that clears the way for a new the Medicare and Medicaid payment president of government relations structures will affect them, how they and community affairs for the generation of curbside food vendors. In a will provide enough community MetroHealth System. See FOOD Page 13 benefit to maintain their tax-exempt Hospitals with a large proportion status and how they can reduce of uncompensated care now receive costs while preserving high quality See REFORM Page 21 Lenders more amenable to altering manufacturer loans Banks don’t want to be stuck with ‘illiquid’ assets

By DAN SHINGLER faced with the prospect of either rene- [email protected] gotiating a loan or taking ownership of assets destined to be sold at a loss, There’s never a good time to many banks are more willing to work default on your bank loan, but for with borrowers than they might be in many manufacturers now might be a better economic times. better time than most when it comes “The logic is obvious … you’re to convincing a lender to renegotiate dealing with a bank that doesn’t terms on loans teetering on default. want to own the property,” said That’s because the assets a bank Jean Robertson, chair of the busi- would seize in a foreclosure — namely ness restructuring and bankruptcy a manufacturer’s plant and equip- practice at Cleveland’s Calfee ment — aren’t easily sold in today’s Halter & Griswold law firm. depressed market. So, experts say, See LOANS Page 9 INSIDE Watch for this new banking technology Some banks such as PNC, Key, Fifth Third and Huntington are using drive- through video screens to improve the customer service experience. The setups eliminate the need for a window at the teller lines and enable the banks to have more flexibility with interior design. Read Arielle Kass’ story on Page 5.

SPECIAL SECTION 15 6 SMALL BUSINESS

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2 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 COMING NEXT WEEK IT ADDS UP Americans spent nearly $140 billion on out-of-pocket health care Young and just scraping by expenditures in 2008, according to data released in March by the U.S. Bureau of Labor Statistics. That’s a lot of money, especially Recent college graduates are being forced 700 W. St. Clair Ave., Suite 310, given that the total excludes health insurance premiums, nursing Cleveland, OH 44113-1230 to consider all avenues — including the home care and nonprescription drugs, among a few other smaller Phone: (216) 522-1383 dreaded living at home with mom and dad categories. Here’s how the out-of-pocket expenses broke down: Fax: (216) 694-4264 — to save money as they attempt to www.crainscleveland.com continue education or land better Category Expenditure Publisher/editorial director: Brian D. Tucker ([email protected]) employment. Prescription drugs $42.9 billion Editor: Mark Dodosh ([email protected]) Dental services $30.7 billion Managing editor: Scott Suttell ([email protected]) REGULAR FEATURES Physicians’ services $21.9 billion Sections editor: Amy Ann Stoessel ([email protected]) Hospital care $21.1 billion Assistant editors: 30 and Counting...... 10 List: Largest money Joel Hammond ([email protected]) Bright Spots ...... 7 managers ...... 20-21 Other professional services $11.2 billion Sports Kathy Carr ([email protected]) Classified ...... 22 Reporters’ Notebook...... 23 Medical suppliers $10.5 billion Marketing and food Senior reporter: Editorial ...... 10 The Week ...... 23 Stan Bullard ([email protected]) Going Places ...... 14 What’s New...... 23 SOURCE: BUREAU OF LABOR STATISTICS; WWW.BLS.GOV Real estate and construction Reporters: Shannon Mortland ([email protected]) Health care and education Jay Miller ([email protected]) Government Chuck Soder ([email protected]) Technology Dan Shingler ([email protected]) Manufacturing Arielle Kass ([email protected]) Finance and legal Research editor: Deborah W. Hillyer ([email protected]) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks ([email protected]) Marketing coordinator: Laura Franks ([email protected]) Advertising sales director: Mike Malley ([email protected]) Account executives: Adam Mandell ([email protected]) Dirk Kruger ([email protected]) Nicole Mastrangelo ([email protected]) Dawn Donegan ([email protected]) Business development manager & classified advertising: Genny Donley ([email protected]) Office coordinator: Toni Coleman ([email protected]) Production manager: Craig L. Mackey ([email protected]) Production assistant/video editor: Steven Bennett ([email protected]) Graphic designer: Kristen Wilson ([email protected]) Billing: Susan Jaranowski, 313-446-6024 ([email protected]) Credit: Todd Masura, 313-446-6097 ([email protected]) Circulation manager: Erin Miller ([email protected]) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-888-909-9111

Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year, $59; 2 years, $102. Outside of Ohio: 1 year, $102; 2 years, $180. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation De- partment, Crain’s Cleveland Business, 1155 Gratiot Av- enue, Detroit, Michigan 48207-2912. 1-888-909-9111 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136

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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 Commercial loan delinquency issue lingers

INSIDE: Delinquency data show politan statistical area stood 2009 figure was much worse Lenders write down more of portfolios, improvement in fourth quarter, but not at 5.7% of total commercial than the 2.6% delinquency year-over-year. Page 12 real estate loans outstanding. rate at the end of 2008. The file foreclosures to preserve asset values That number was down Akron MSA covers Summit from a 6.7% delinquency and Portage counties. By STAN BULLARD mine treasures from the sour loans Mr. Jablonski has yet to latch on to rate as of last Sept. 30, but On a nationwide basis, [email protected] and distressed properties banks are any deals, though recent figures was still well above the the commercial loan delin- unloading as they look to clean up indicate lenders still have plenty of 3.4% delinquency rate at quency rate had climbed to Mark Jablonski is prospecting for their balance sheets. bad debt and properties to ditch. year-end 2008. Jablonski 5.1% at the end of 2009 bargains. “If you were on the sidelines in According to the latest data from Likewise, in the Akron from 4.6% as of Sept. 30 A former commercial loan officer the boom or have access to capital, real estate consulting firm Foresight MSA, the delinquent rate on com- and 2.7% as of Dec. 31, 2008. at a bank and real estate analyst for you are in the driver’s seat,” said the Analytics, commercial real estate mercial mortgages had edged down The dips in delinquency rates in an accounting firm, Mr. Jablonski president of Centermark Develop- loan delinquencies as of Dec. 31 in to 4.5% by Dec. 31 from 5.3% as of the fourth quarter in the Cleveland now is a developer who hopes to ment LLC of Cleveland. the Cleveland-Elyria-Mentor metro- last Sept. 30. However, the year-end See DELINQUENCY Page 12 THE WEEK IN QUOTES INSIGHT “Obviously this bill is going to have a major impact on all facets of the hospital.We’re definitely preparing ourselves to decipher which programs we’re going to participate in.” — Heidi Gartland, vice president for government relations at University Hospitals. Page One

“After talking with some bankers who are active in lending to AN EMPTY FEELING manufacturers, it does The Indians’ season-ticket sales have declined dramatically for 2010. appear that some

banks are exercising a Will the fans come back if the team reverses its current ‘down cycle’? ED WOLFSTEIN/ICON SMI bit of flexibility in how they are dealing By JOEL HAMMOND the Texas Rangers — have sold a tandem’s matchup in Game 1 of with their current [email protected] staggeringly low 8,000 full-season last year’s World Series — and Vic- ticket equivalents, meaning a com- tor Martinez, and a fan perception troubled loans. ... This rom 2000 to 2009, the Cleve- bination of 81-, 20-, 12- and six- that owner Larry Dolan won’t is not something that land Indians won, on average, game plans. invest in the team’s major league three fewer games per sea- The Phillies, meanwhile, won the payroll. The Indians’ payroll, is going to be widely son than the Philadelphia World Series in 2008 and lost to the according to a USA Today database, FPhillies. Yankees in the series last year, and stands at $61.2 million. advertised.” Unfortunately for the Indians, have the season-ticket base to show Now, the question is whether the — Daniel Berry, CEO of Cleve- they were the wrong games: another for it: Philadelphia earlier this fans who have left the club — the land manufacturing advocacy win in 2005 would have brought spring cut off season ticket sales at Indians sold 15,000 full-season group Magnet. Page One another playoff appearance, another 28,750. Citizens Bank Park, which equivalents in 2008, after 2007’s in 2007 would have meant another opened in 2004, holds 43,500. success — will return when and if World Series berth. The Indians’ sales figures reflect the “cycle,” as team officials refer to “These big chain Instead, the Indians — who open an unprecedented level of fan anger it, swings back upward. operations were the home portion of their 2010 sched- after recent trades of players such “They believe that, as a small- ule today at Progressive Field against as CC Sabathia, Cliff Lee — and that See INDIANS Page 13 coming in and taking over our market.” — Douglas Katz, president of the Cleveland Independents and chef/owner of Fire on Shaker State tech initiatives all effective, though reasons vary Square. Page 15 Third Frontier’s goals similar to Pennsylvania, Michigan, Georgia programs INSIDE: How lean budgets are tightening funding for technology. “We stayed aggressive. By CHUCK SODER The Ohio Third Frontier Project which will end in 2012 unless voters Page 11 We didn’t get defen- [email protected] has a lot in common with programs approve a $700 million, five-year created by other states aiming to extension on the May ballot — isn’t Cleveland State University study sive and pull back.We It’s applauded by politicians and build high-tech economies of their the only game in town, it’s a commissioned by regional technology have been really business leaders from across the own. program the state can brag about, advocacy group NorTech. state. It has pumped hundreds of That’s not necessarily bad, said Mr. Berglund, who used to serve “That, to me, was a very powerful marketing hard, millions of dollars into university though. All four of the states listed as director of Ohio’s Thomas Edison statistic,” he said. research and companies developing above have effective programs, Program, an older state program that The various state programs are primarily to protect new products. Though it has faced according to Dan Berglund, president promotes high-tech research and by no means identical, however. our turf among budget cuts, it’s considered key to of the State Science & Technology development. He noted how Though generally similar, they all building a high-tech economy in: Institute, which is based in Wester- employment in Ohio’s high-tech have their own ways of doing things. clients in health care.” a) Ohio; b) Pennsylvania; c) ville, Ohio, but works to shape tech- industries grew 4% between 2004 Cornerstone in the Keystone State — Larry Fischer, a co-founding Michigan; d) Georgia; or e) all of the nology-based economic develop- and 2008, while employment in principal of Perspectus Architec- above. ment programs across the nation. other industries fell slightly over the Pennsylvania started pumping ture in Cleveland. Page 15 Here’s a hint: Pick “e.” Though the Third Frontier — same period, citing statistics from a See TECH Page 11 20100412-NEWS--4-NAT-CCI-CL_-- 4/9/2010 3:34 PM Page 1

4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 Port Authority reorients itself

the Cuyahoga River to keep the ship- Cleveland-Cuyahoga agency shelves bolder ping channel open. A Port Authority study later determined that the East plans while setting more conservative goals 55th Street location would be a better and less costly location for a new port. By JAY MILLER Authority will recount its efforts at Current Mayor Frank Jackson has [email protected] setting short-term goals and reducing embraced the East 55th plan, which expenses, which include cutting staff was recommended by the Port Five months after the ouster of its and dropping plans to fill in a boat slip Authority’s board. president, the Cleveland-Cuyahoga to more easily accommodate container In an e-mail exchange late last County Port Authority is setting new, ships. week with Crain’s, the mayor said his scaled-back — but still controversial It also says a new authority director views have not changed. — goals for the agency that runs the will be named in May. After a new boss “Right now, the port has the capacity docks on Lake Erie and plays a major is in place, Mr. Raskind said, the Port for its development plan and current role in the county’s economic devel- Authority will hire a director of port operations,” he said. “However opment. maritime operations, a business devel- if we are looking to the future, we A chastened board of directors opment executive to drum up cargo must create additional capacity for and an interim president have business and a government relations economic development and maritime backed away from the bolder ideas and communications director, which opportunities — if we are to become authored by former president Adam would restore three of eight employees truly competitive in the global market- Wasserman. Under his leadership who were either laid off or have place.” the Port Authority had set in motion resigned since Mr. Wasserman’s John Baker, secretary-treasurer of Now Offering an MBA a $500 million, 20-year plan to vacate departure. Local 1317 of the International Long- the waterfront east of the mouth of The report also says the agency is shoremen’s Association, has been a the Cuyahoga River, moving the Port moving forward on a three- to five- critic of the Port Authority’s lack of ef- Why an MBA from Ursuline? Designed for the of Cleveland docks east to new land year plan to redevelop 30 acres of fort to attract new cargo business. Mr. working professional, Ursuline’s MBA program th along the lake at East 55 Street. dock land, a significant portion of Baker, whose union members make offers courses that meet once a week for five The Port Authority also has aban- the 100 acres the Port of Cleveland their living loading and unloading to six weeks and some that are entirely online. doned a $10 million reconfiguration currently occupies and was planned ships, believes the Port Authority’s Choose from four dynamic concentrations of the existing docks that Mr. as an urban neighborhood with new shipping business has been neglected developed in response to employment trends: Wasserman believed would attract streets, homes, offices and shops. and the authority should concentrate Marketing and Communications, Health container ships, which are vessels Mr. Raskind also told Crain’s first on building the cargo flow. Services, Entrepreneurial and Ethical Leadership, carrying containers that are un- Cleveland Business that the agency “They’re not doing anything,” he Financial Planning and Accounting. Prospective loaded and easily attached to trucks. will be continuing to rebuild its de- said. “There is cargo out there” that students are evaluated not only on undergradu- It was opposition to those sweeping velopment finance business as the should be coming to Cleveland. ate GPA, but also on related work experience. plans that led to Mr. Wasserman’s economy recovers. In recognition of strong academic achievement, resignation in November of last year Dredging up trouble Ursuline will waive the GMAT requirement. Charting a new course after less than two years on the job. Perhaps the biggest hurdle facing For more information or to schedule an appointment “We’re in a mode of back to basics, Until the current change in direc- the Port Authority is deciding on a new contact Ursuline’s Office of Graduate Admission at first things first,” said Peter Raskind, tion, the Port Authority had been dredge disposal site, an imperative 440 646 8119 or [email protected] the former chairman of National City following a plan to redevelop the entire regardless of whether it becomes the Corp. who signed on as a $1-a-year 100 acres over 20 years as the docks site of new docks, and finding a way to interim president of the Port Authority moved in stages to East 55th Street. pay for it. after Mr. Wasserman’s abrupt depar- Opposition to that plan came from The cost of dredging has long ursuline.edu ture. “I’m confident our appetite won’t several fronts, including from Port been covered in its entirety by 1 888 URSULINE be bigger than our stomach.” Authority board members who were the federal government. That will In a report to the community to concerned the agency couldn’t afford change when the current disposal be released later this week, the Port the cost of a rapidly growing staff and site, near Burke Lakefront Airport, is wasn’t finding sources of funding filled and a new location is selected. quickly enough for its ambitious plans. A change in federal law will require The Port Authority’s move to East the local community — not necessarily 55th Street also was opposed by boaters the Port Authority — to pay for 25% of who saw the plan as costing them a the disposal cost of dredging work that CLEVELAND FOUNDATION lakefront marina and from a variety of will be done by the U.S. Army Corps of other opponents. Engineers. Most of the policy decisions the Port When the Army Corps approved the Authority was implementing, however, plan to use the East 55th Street location were made elsewhere, and the agency as a 20-year disposal site, it estimated still must grapple with solving the the cost to be at least $238 million. On an If you want to be remembered, problems those decisions created. annual basis that is more than the Port In 2004, while Jane Campbell was Authority’s current operating budget. do something memorable mayor, the city of Cleveland adopted “It’s our role and responsibility to a Waterfront District Plan. That plan take the lead on behalf of the commu- included transforming the land nity,” Mr. Raskind said. “But it’s going Congratulations, Bob! occupied by the Port of Cleveland to be a community effort to pay for it. into an urban neighborhood. “It’s probably a good bet it will turn In the original waterfront plan, the out to be a combination of solutions Named the 2010 Distinguished Grantmaker, docks would have moved to an island ranging from user fees, possibly a tax a most prestigious national honor north of the break wall built with soil levy or other possibilities (including ■ awarded by the Council on Foundations. regularly dredged from the bottom of state or federal funding).” Your dedicated service for 28 years COMING UP to the Cleveland Foundation Crain’s is seeking [email protected]. and the people we serve potential profilees for The nomination should will long be remembered. its Women of Note be no more than one section, which will run in the July 19 page. Please put “Women of Note” issue. in the subject line. To submit a nomination, use the Nominations via regular mail can online nomination form at our web be sent to Mr. Dodosh at 700 W. St. site, www.CrainsCleveland.com. Clair Ave., suite 310, Cleveland, You also may send a nomination to 44113. The deadline is 5 p.m. this Robert E. Eckardt editor Mark Dodosh via e-mail at Tuesday, April 13. Senior Vice President for Programs and Evaluation

Volume 31, Number 15 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for com- bined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, 216.861.3810 and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s www.clevelandfoundation.org Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. (888)909- 9111.

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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5 Drive-through video screens allow banks flexibility in setup

Cost savings is also a big part of Perks include savings, improved customer service the reason Huntington is interested in using Teller TV, as the bank calls By ARIELLE KASS ington’s senior vice president of it, more frequently. The equipment [email protected] retail and small business banking in costs about $15,000, Mr. Soroka said, Northeast Ohio. “If it wasn’t a better but can save the bank upwards of Customers who are drive-through customer experience, I doubt this $150,000 in design costs per branch. banking savvy may be spotting would have happened.” That’s because the elimination of something other than a teller Indeed, Huntington has decided that drive-through window means window with an intercom system at to put the technology into all its Vicki Matthews, a that the same internal layout can be some local branches. new branches. While it has no team leader at a used from one branch to the next. PNC, Key, Fifth Third and Hunt- immediate plans for construction in Huntington Bank There is no longer a need to redesign ington banks all are using video Northeast Ohio, Mr. Soroka said branch in Avon, a space based on where a teller line screens in some locations. The there already are about a dozen communicates would be. setups, which have the feel of video tellers in the Cleveland area; with a customer. Mr. Soroka said the video tellers computer webcams, eliminate the half are in new buildings and half ARIELLE KASS also allow for more flexibility both need for a window at the teller lines, were retrofit to equip branches that internally and externally. Drive- let the banks put drive-throughs in weren’t able to have drive-throughs presses a button. Tellers, who still soon changed her mind. through lanes now can be placed on locations they might not otherwise in the past. are located in each branch, are “It seems to be easier to see any of the three sides of a building be able to and allow them to alerted to the fact that someone is in people and talk to them,” she said. that don’t have the front door and rearrange their branches’ interiors. Solving a layout problem a drive-through lane either because “It’s a more personal experience. in-branch break rooms and bath- Both Key and PNC said they have Kurt Raicevich, senior vice presi- they can hear a car approach, in the They can see my face.” rooms can be placed behind the video tellers in their footprints, but dent and retail executive for Fifth older lanes, or because a vehicle’s At normal windows, she said, the teller station. In the past, that was could not give details as to how Third in Northeastern Ohio, said presence is announced, as in newer distance of the drive-through and where the drive-through window many branches had the technology, the bank has 25 such video tellers ones. the glare often prevented customers was. where they were or why those loca- across the footprint, including two Tellers can see a broad swath of from knowing who they were This leads to a brighter, airier tions were chosen. U.S. Bank has in this area. But he said they are the customer’s car, including the talking to until they recognized her layout with more windows over the one video teller, at a location in used primarily because of physical passenger seat, and have the ability voice. rest of the branch, Mr. Soroka said. Minneapolis. limitations at the buildings where to adjust a camera. Passengers see Mr. Soroka said he could not The technology has been used in The technology puts video they are found and are not some- the teller’s face. think of any drawbacks to the Huntington branches for nearly a screens next to the pneumatic tubes thing that would be broadly used at Mr. Raicevich, at Fifth Third, said system, calling the video tellers decade, he said, but getting it into in which customers are used to local branches. customers seem to enjoy the expe- “another piece of technology more branches has been a slow seeing their cash come shooting “I don’t know if it’s going to rience of the video tellers. improving people’s lives.” Both he evolution as the technology has down. Proponents of the technology become the future,” he said. “It’s very fun, it’s very interactive, and Mr. Raicevich said they had improved. say it is a more personable approach In both branches here, the tech- it promotes a lot of conversation,” seen no technological problems “If it’s a sketchy picture, it’s not a to drive-though banking, as the nology has been in place for more he said. “People ask, ‘Are you really with the equipment. good customer experience,” he said. teller and the customer are better than two years, Mr. Raicevich said. in there?’ … It’s a pretty fun experi- “The customer has a much better able to see each other due to the He said the decision was made to A conversation starter ence. Even (tellers) enjoy it.” view of you,” Mr. Soroka said. “The proximity of the screen. use the technology because the cost Vicki Matthews, a teller and team key is a better customer experience “You feel closer to the teller than to renovate the buildings to add a The newer branches have video leader at a Huntington branch in because they’re looking at that if you’re looking 40 feet away at the traditional drive-through would tellers that show ads related to the Avon, said at first, she didn’t think teller like you and I are sitting there window,” said Rob Soroka, Hunt- have been significantly higher. bank or its products until a customer she would like the technology. She talking.” ■ 20100412-NEWS--6-NAT-CCI-CL_-- 4/9/2010 11:43 AM Page 1

6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010

:+<+,5( Ohio Savings: Back and better New parent’s boss says former AmTrust “(New York Community Bank is) a strong, ,17(516" has ability to hire, bring on more deposits profitable bank that has been acquisitive over the >> By ARIELLE KASS when it was one of the top five FILL YOUR TALENT PIPELINE [email protected] banks by market share in the region, years.” with a market share of more than – Charlie Crowley, managing >>WORK WITH POTENTIAL HIRES Ohio Savings Bank is back, and 7%. By 2009, it had fallen to seventh director of investment banking in Joseph Ficalora — chairman, presi- and 4.43% of all deposits in the area. Cleveland, Stifel Nicolaus & Co. >> dent and CEO of its new parent He said he plans to expand the INCREASE ACCEPTANCE company, New York Community bank’s hours and is looking at the for Stifel Nicolaus & Co., called the OF JOB OFFERS AND RETENTION Bancorp — said he expects it to be possibility of adding in-store banking news “terrific.” reborn better than ever. to some area grocery stores. “It’s very good news for the >> While some branches still may Those kinds of moves could help community,” he said. “They are a GAIN AFFORDABLE, INNOVATIVE INPUT temporarily bear the AmTrust put it on the radar of people who are strong, profitable bank that has been name, which was adopted in 2007 reconsidering their banking options acquisitive over the years. … They’re after the bank expanded into Arizona in the midst of a tumultuous market. certainly in a position to consider and Florida, the headquarters “Those kinds of things are some other transactions.” visit www.neointern.net building in Cleveland again says coming,” he said. “The bank is He said the lower cost of employ- to find your next intern Ohio Savings Bank, though now poised to improve its services, its ment and office space likely made with an NYCB by its side. hours and its systems. When you having some of those jobs in Cleve- And Mr. Ficalora said because the have massive change in any market, land a good financial choice for the bank had been downsizing for some people rethink their choices.” company. And added growth could learn. earn. intern. time, it has the capacity to bring on Mr. Ficalora said the bank never lead to more operations support jobs more deposits and will hire the plans the size of its franchise in a at the bank. employees it needs to re-establish particular area and has no plans to But Gerard Cassidy, managing Ohio Savings. There are currently 60 build new branches, but would con- director of bank equity research at job openings in the company, sider adding to the local footprint if RBC Capital Markets in Maine, including 48 in Ohio. the opportunity arose. called the decisions — including the Some of that hiring already has He said while NYCB bid on a change to Ohio Savings, which he taken place, with 43 new branch number of FDIC-assisted transac- praised — the equivalent of putting employees brought on since New tions before winning AmTrust, its a new coat of paint on a dilapidated York Community Bank took over first, this bank is the one it had set building. AmTrust in a Dec. 4 transaction its sights on early. “They have to give it a lot of tender assisted by the Federal Deposit “We believe this deal is the best loving care to get it growing again,” Insurance Corp. Mr. Ficalora said deal,” he said, noting that NYCB bid he said. “As long as the economy is the bank already has seen an increase more aggressively for AmTrust than growing, they should have some in deposits since the acquisition. it had for other banks. success. If the economy continues to Travis Lan, an associate analyst He said he was aware of how long stumble, to continue to grow deposits Achieve. with Stifel Nicolaus & Co. in New the bank had been downsizing and will be more challenging” if people Jersey, said he was not surprised to the opportunities that were present need to move away to find jobs. TIM DEGEETER learn that deposits had grown after as a result of that. He said, though, that NYCB’s STATE REPRESENTATIVE seeing a 97% retention rate following Mr. Ficalora also said NYCB’s focus on community banking could CLASS OF ‘97 NYCB’s entrance into the market. systems operations outside of the pay dividends as the bank continues Learn how our alumni engage at: He called the change to the Ohio metropolitan New York area will be to look for ways to increase deposits www.csuohio.edu/alumni Savings name a good thing, as did in Ohio. While there are no new jobs in this area. “They have a good shot several other analysts. But Mr. Lan related to that, he said the systems at improving,” he said. said of AmTrust Bank’s footprint, are being upgraded and all of Mr. Cassidy called the potential Ohio would likely be the last priority, NYCB’s customer service will be for expansion of NYCB’s footprint a behind Arizona and Florida. He did taken care of in this area as well. real plus for the Cleveland area. note, though, that he already has The systems operations capacity Mr. Ficalora also said he intends seen more interest in Ohio than would include disaster recovery, to continue the AmTrust Mortgage what he and other analysts might which now is being done in New Co., and thus far has. He is looking at have expected. York, one county over from NYCB’s how the bank’s signature loan Already, NYCB has added another Westbury headquarters. program, multifamily mortgage six branches to its Arizona footprint As the bank makes more acquisi- loans, may work in this area. with the March 26 acquisition of tions outside of New York, their He said even though NYCB sought Desert Hills Bank in Phoenix. operations will continue to be handled out AmTrust specifically, he’s been out of Cleveland. Change is coming more than satisfied with how things are going thus far. Mr. Ficalora spelled out plans for Mixed reviews “It’s been very positive,” he bringing Ohio Savings back to the Charlie Crowley, managing director said. “It’s pleasantly better than I ■ Jones Lang LaSalle is pleased deposit capacity it had in the past, of investment banking in Cleveland expected.” to announce Cleveland’s newest team members Companies rethink suspended 401(k) matches

By JERRY GEISEL The likelihood of employers rein- In a Securities and Exchange Business Insurance stating matching contributions, Commission filing last week, though, varies significantly by Rancho Cordova, Calif.-based Gen- Amid signs of an economic company size. For example, among Corp said it will restore its 401(k) recovery, many employers that employers with at least 5,000 plan match for nonunion employees suspended or reduced their employees, 70% either have restored at the same rate prior to its Jan. 15, 401(k) matching contributions are or intend to restore the match 2009, suspension. The match will rethinking those moves. within the next 12 months, nearly be restored in July. A survey released last week by double the 36% of employers with Prior to the suspension, GenCorp Boston-based mutual fund provider 500 or fewer employees that either matched 100% of employees’ salary Brian Conroy Scott Pick Jon Vanderplough Sr. V. President Sr. V. President V. President and 401(k) plan administrator have restored matching contribu- deferrals up to the first 3% of pay [email protected] [email protected] [email protected] Fidelity Investments found that tions or plan to do so. and 50% of deferrals on the next 3% 44% of employers that suspended The results are based on a survey of pay. their matching contributions last this month of 293 Fidelity clients However, GenCorp now will year either have reinstated or intend that suspended or reduced their make matching contributions in For real estate services: to reinstate the match during the 401(k) matching contributions last cash. It had matched contributions Robert J. Roe next 12 months. year. with company stock, which a Managing Director “As the economy begins to Last week, for example, defense GenCorp spokeswoman previously ■ + 1 216 861 7171 improve, employers large and small and aerospace company GenCorp said was diluting the stock’s value. are bringing back their 401(k) Inc. said it is reinstating its 401(k) matching programs,” said James M. plan matching contribution, the Jerry Geisel is editor-at-large at www.us.joneslanglasalle.com/cleveland MacDonald, president of Fidelity latest in a growing number of Business Insurance, a sister publi- © 2010 Jones Lang LaSalle IP, Inc. All rights reserved. unit Workplace Investing, in a employers that have done so or will cation of Crain’s Cleveland Busi- statement. be doing the same. ness.

4_6_2010_Conroy_Pick_Vanderplough_4x5 Ad Grid (2).indd 1 4/6/2010 8:59:24 AM 20100412-NEWS--7-NAT-CCI-CL_-- 4/9/2010 11:44 AM Page 1

APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7 BRIGHT SPOTS Bay nature center aims to boost endowment, expand Bright Spots is an occasional fea- ture in Crain’s. To submit informa- about Lake Erie, which is within tion, e-mail managing editor Scott $8M fundraising goal would allow facility to add to its popular programs walking distance of the center. Suttell at [email protected]. She is working with the Ohio State ■ TES Engineering, a mechanical, By SHANNON MORTLAND She previously was the division Timko said. University Extension office located electrical and plumbing engineering [email protected] development director for the Trust The plan is to expand the existing at the center to create these programs consulting firm in Westlake, said for Public Land, a nonprofit that 22,000-square-foot center by 20%, under the Ohio Sea Grant College it was awarded a $130,000 Nestled in the Cleveland helps preserve land for public use or 4,400 square feet, to add class- Program, which is a federal program contract by Cleveland Metroparks in Bay Village, the Lake and conservation. room space for more programs, she that is run by OSU Extension. Public Power to Erie Nature & Science Center is “I’m not eager to make a lot of said. The center already has raised Tory Gabriel, the fisheries program perform energy audits hoping to boost its presence and changes to our programs because $3.2 million, but ground will not be coordinator and director of the Ohio for selected non-res- programs to attract more visitors. people love them,” she said. “Some broken until fundraising is com- Sea Grant program for the OSU idential customers The 60-year-old center, which is of (the campaign goals) would be plete, she said. Extension office, said he already teach- in a new program not owned by the Metroparks, is in expanding what we already do.” Though the current programs are es children about Lake Erie but he will designed to reduce the quiet phase of an $8 million The center has free admission popular with the center’s 180,000 help Ms. Timko develop programming electricity usage. fundraising campaign that aims to and provides more than 100 nature annual visitors, Ms. Timko said she to teach adults about the lake. The one-year contract triple its $2 million endowment to and science programs for people is talking to the public to determine “We want to get people hands-on will provide the audits for about $6 million and raise $4 million for of all ages, though the preschool what programming they would like and interested and make them 26 commercial properties. The capital improvements, said Cather- programs are most popular because in the future. The list is never ending, understand that the lake is important properties Cleveland Public Power ine Timko, who became executive children can touch the animals but she said she would like to create to them,” he said. “A lot of people ■ is including in the audit have director of the center in January. while learning about them, Ms. more programs to teach people don’t understand why yet.” higher-than-average power usage. “We’re proud to be part of this major step by CPP to foster energy conservation,” said Lawrence M. Thomas, president of TES. ■ Excite IT Partners LLC, a provider of information technol- ogy staffing services, has opened an Independence office at 6100 Rockside Woods Blvd., Suite 435. 'REATåTHINGSåHAPPENåWHENåå “We are pleased to offer employers throughout Northeast Ohio a highly responsive, cost-effective YOUåMEETåATåAå&AIRMONT means of attracting well-qualified information technology profes- For more than a century, Fairmont Hotels & Resorts has brought people sionals,” said Stephen Putt, who face to face for legendary meetings in unforgettable settings. Whether heads the Independence office. you’re looking to make history or simply to offer your clients an unrivaled Excite IT Partners, which is based in Towson, Md., offers experience, trust Fairmont to deliver seamless service, state-of-the-art information technology staff on a meeting spaces and top value—making your work that much easier. temporary, temp-to-perm and permanent placement basis. &ORåMOREåINFORMATION åPLEASEåCONTACTåYOURå'LOBALå3ALESå2EPRESENTATIVE åCALLåå ■ Insivia, a strategic marketing ååå åE MAILåMEET FAIRMONTCOMåORåVISITåFAIRMONTMEETINGSCOM agency in Cleveland, reports that it has gained several new clients and has expanded its staff and services. Among the new clients are Positively Cleveland and the Cleveland Clinic’s Global Car- diovascular Innovation Center Incubator Program. Chris Schmitt, chief strategist for the company, said new services at the firm go beyond traditional marketing and include online video, social media and mobile application development. Clients that recently took advantage of those services are the Cleveland Clinic, Microsoft, and the Greater Cleveland Sports Hall of Fame. The company expanded its staff to nine employees from five in the last half of 2009. Insivia plans to hire three more full-time staff before the summer begins. over a century of legendary meetings ■ “And the Winner Is…,” a locally produced feature film from Cleveland natives Christina Grozik and Paul Shaia that was shot around Ohio and stars regional actors — plus Jerry Springer! — has secured a national DVD release. The film’s distribution deal is with Anthem Pictures, based in Los Angeles. The distributor will re- lease the DVD in the United States and Canada on April 20. Netflix has announced it will offer the DVD to subscribers, also on April 20. The feature-length “And the Winner Is…” was shot in eight World War II Conferences Drafting the United Nations John Lennon and Yoko Ono’s G7 International Economic Ohio towns, including Cleveland, of the Allies at Fairmont Le Charter at The Fairmont Bed-in for Peace at Fairmont Summit at Fairmont Avon and Elyria. The filmmakers Château Frontenac, Québec, San Francisco, 1945 The Queen Elizabeth, Le Château Montebello, say more than 75 Ohio actors and 1943–1944 Montréal, 1969 Québec, 1981 crew members worked on the film. “And The Winner Is…” drama- Photo: Fairmont Battery Wharf, Boston tizes a small town’s decision to elect its next mayor through a beauty pageant-style event. 20100412-NEWS--8-NAT-CCI-CL_-- 4/9/2010 2:00 PM Page 1

8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 Workplace medical clinics gain popularity States face trouble By JEREMY SMERD based clinic, and the next year clinics with the thinking that as more Workforce Management acquired two of the largest work- employers used high-deductible site clinic companies in the country, health plans, more employees would as pension funds Last fall in New York, as employers CHD Meridian Healthcare and be interested in low-cost alternatives sought to inoculate workers against Whole Health Management. Today, for basic health care such as flu shots. swine flu, employees of Bloomberg, Walgreens is the largest provider of But growth in retail clinics has Random House and Sony Corp. who work-site medical care, with more stagnated. MinuteClinic closed 122 threaten coffers were at risk simply could walk down than 375 Take Care Health clinics. clinics last year, says Tom Charland, the hall, roll their sleeves up and get a Analysts say the move makes CEO of Merchant Medicine, in By BARRY B. BURR Just to pay the pension benefits for shot. sense. Shoreview, Minn., which tracks the Pensions & Investments only the first year after the pension While these companies each had Walgreens can steer employers to industry. fund is depleted, Oklahoma in 2018 a medical clinic in the workplace, its mail-order pharmacy, while The percentage of employers State pension funds in Oklahoma would have to have $2.6 billion from they also shared a common health patients can access its chain of 7,000 providing on-site health clinics, and Louisiana could face a “day of the state’s general revenue, which clinic provider: Take Care Health retail drugstores. More than 350 meanwhile, increased tenfold from reckoning” in 2017, when they run would amount to an estimated 31% Systems, a subsidiary of Deerfield, Walgreens stores contain a Take Care 1% in 2008 to 10% in 2009. out of assets and have to rely on state of the state’s 2008 tax revenue, Mr. Ill.-based Walgreens. Health retail clinic that offers care for Now, CVS says it plans to change general revenues to pay pension Rauh wrote. According to records from the New minor medical conditions such as its approach to work-site wellness. benefits, new research shows. Colorado would have to draw $5.6 York City Department of Health and earaches, sinus problems and the flu. “Our main focus in the past has Illinois, New Jersey and Con- billion from state general revenue, Mental Hygiene, nearly 50 employer- Walgreens further solidified its been on retail, but we are interested necticut could follow in 2018. equivalent to 59% of the state’s 2008 based medical clinics received the New York presence in February by in corporate opportunities that are a California could completely tax revenue, in 2022, the first year swine flu vaccine from the city. Take acquiring the city’s largest drug- good fit for our model of providing deplete its pension assets in 2026 after it runs out of pension assets. Care operated at least 20 of those store chain in a $1.075 billion deal excellent, convenient and low-cost and Texas in 2029. clinics at employers that included that will expand the network of care,” said Andrew Sussman, presi- In fact, no state system would be No transfers Morgan Stanley, Goldman Sachs and pharmacies available to clients of dent of MinuteClinic and senior vice sustainable beyond 2042, according Mr. Rauh, in response to a ques- the state-run Metro North Railroad. Take Care clinics. There are 257 president/associate chief medical to an article by Joshua R. Rauh, an tion, said he realizes even if a state has The wide presence of Take Care’s Duane Reade pharmacies in the officer of CVS Caremark, in an e-mail associate professor of finance, Kellogg more than one retirement system, the clinics among employers in New city, compared with 70 Walgreens interview. School of Management at North- “assets of one fund cannot be used to York shows how Walgreens has in the entire metropolitan area. Clinics make good business western University. pay liabilities of another. But if fund 1 aggressively tapped into the growing Walgreens rival CVS Caremark sense for diversified health care The best-positioned state in Mr. is about to run out and fund 2 has market for work-site medical clinics has not followed Walgreens into the companies, says Brian Klepper, a Rauh’s rankings is Utah, whose another couple years, it seems likely as part of its effort to rebrand itself as work-site medical clinic market, health care analyst based in Atlantic pension assets wouldn’t be all gone that the state will just throw all its a health and wellness company. focusing instead on retail clinics. Beach, Florida, and an adviser to until 2042. Utah is followed by contributions at fund 1 in those final In 2007, Walgreens bought Take Several years ago, pharmacies WeCareTLC, an on-site clinic firm Delaware, 2040; South Dakota, 2035; years.” Care Health Systems, then a retail- embraced retail clinics over work-site based in Lake Mary, Fla. ■ New York, 2034; North Dakota, 2034; “If we are going to keep providing and Florida, 2033. generous pensions to state workers, Mr. Rauh combined the pension taxes will have to rise dramatically systems in each state to arrive at his in the near future to pay for them,” conclusions. (His research excluded Mr. Rauh wrote in the article. North Carolina because of a lack of “Alternatively, public employee Unforgettable Meetings, Conferences data.) He assumed the states would benefits could be limited to the extent earn 8% on their investments and possible under the law, and other & Special Events for 5 to 500! contribute to their pension plans the spending could be cut. The most present value of any newly accrued equitable solution is probably one in benefits. In addition, he discounted which both taxpayers and public the system’s pension liabilities by the employees share in the pain to some I A History of Generous I 1,700 acres of year-round risk-free Treasury rate, an approach extent. One thing is for certain: to Hospitality recreation that raises total liabilities, instead of continue ignoring the problem until 72 holes of golf, specialty shops, gardens, a applying the common public-plan states run bankrupt is not in anyone’s More than a hundred years ago, Earl W. actuarial practice of using the expected interest.” Oglebay established a tradition of generous zoo, tennis, museums, fishing & more. rate of investment return. Keith Brainard, the research director States could face a catastrophic of the National Association of State hospitality at his summer estate. Today, shock to their revenue needs by Retirement Administrators, who is Oglebay Resort continues that tradition with I Delicious Dining Options having to move to a pay-as-you-go based in Georgetown, Texas, said in outstanding overnight accommodations, From cookouts to gourmet. . .served in system when their retirement systems response to the study: “His calcula- run out of pension assets, Mr. Rauh tion is a bit alarmist.” exceptional amenities and an experienced staff. beautiful banquet rooms or catered outside. wrote. Once their pension funds run Mr. Rauh’s use of the Treasury rate out, the retirement system generally to discount liabilities “isn’t in confor- I would have to draw a large propor- mance with the (Government Wilson Lodge...Transformed! tion of state general revenue every Accounting Standards Board) and Wilson Lodge at Oglebay recently added 59 year, based on 2008 tax revenue. actuarial practice,” Mr. Brainard said. Among the worst, if Ohio’s pension His method raises significantly premium rooms and suites, and the West Spa. funds run dry in 2023, it will face $19.1 the liabilities and “has the effect of This new level of guest comfort, combined with billion of benefit payments just in speeding up the demise,” Mr. our 22,000 sq. ft. of state-of-the-art meeting 2024, money that would come out of Brainard added. state general revenue, Mr. Rauh “I think he is being overly bearish space, will make your next meeting an Resort & Conference Center wrote. with regard to the calculation of liabil- unforgettable event. That amounts to more than 72% ities.” Wheeling, West Virginia of the $26.4 billion in tax revenue Some public retirement systems Phone: 800-972-1991 collected in 2008. have problems, Mr. Brainard I Premium Cottages & Estate Email:[email protected] For Illinois, having to pay $14.5 acknowledged. “A number of plans Houses www.oglebay-resort.com billion in pension benefits out of need to make adjustments to either general revenue in 2019 would their benefits or their financial Private locations & deluxe accommodations... amount to 46% of $31.9 billion in arrangements in order to restore their perfect for executive retreats & golf outings. Just 3 hours from Cleveland! 2008 tax revenue. sustainability,” he said, noting For Louisiana, the corresponding Virginia, Utah, New Jersey, Illinois, figure is a smaller but still worrisome Alabama and Colorado have done so 28% for 2018, he wrote. or are considering doing so. ■

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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9

MANUFACTURERS, LENDERS WORKING IT OUT

Manufacturing industry observers year have 90 days to turn in year- say lenders these days are more end financial statements. willing to modify loan terms. ■ Lenders still holding their own: ■ Reasons: Lenders don’t want to Financial institutions don’t want to be strapped with a manufacturer’s issue more loans or extend lines plant or equipment, which are risky of credit with current or new assets to hold in today’s market customers. because they are hard to sell. ■ Quotable: “They’ll say, ‘Let’s ■ The time is now: Now is when reduce our future exposure by more banks are being hit with cutting off the debt.’” requests to renegotiate because — Ken Latz, turnaround companies operating on a calendar consultant, Conway MacKenzie Inc. Loans: Banks uneasy about extending credit

continued from PAGE 1 there is no demand and little “For them, it’s the lesser of two financing to buy them. evils to negotiate,” said Ms. Robertson, But it’s not all good news for who noted that most manufacturing distressed borrowers. While banks assets are “essentially illiquid.” don’t want to take on assets they Ken Latz, a turnaround consul- can’t sell, they also don’t want to tant with Michigan-based Conway make more loans upon which they MacKenzie Inc., agrees. Mr. Latz won’t collect — and that includes came to Cleveland at the end of last not only loans to new customers, year to establish a local presence but existing lines of credit with the for his firm, which has about 70 customers they already have, Mr. other professionals working on Latz said. turnaround situations, mostly at “They’ll say, ‘Let’s reduce our automotive-related companies. future exposure by cutting off the Mr. Latz often is brought in by a debt,’” he said. lender trying to make the most of a That response puts many troubled loan in order to provide borrowers in a bind, Mr. Latz said, help to a manufacturer struggling to because they often rely on lines of make payments. A turnaround of credit to buy inventory, or even to the bank’s client could mean that make payroll. But banks, already the client either becomes profitable saddled with bad loans, do not want with new terms on its loan or is to throw good money after bad by acquired. The last outcome the investing in a company that can bank wants to see, Mr. Latz said, is only make payroll by borrowing a repossession and subsequent sale more money, say those working of the client company’s assets at a with both borrowers and lenders loss in today’s environment. alike. Many times, Mr. Latz said, he is Representatives of Cleveland’s hired by a company because its two largest lenders, KeyBank and lender has stipulated that he or PNC Bank, both declined to discuss some other turnaround expert be the matter but said they treat each brought in, both to help the company’s borrower as a separate case. management and to keep the bank abreast of the company’s ongoing Keep it quiet situation. Banks are trying to be Some who work on behalf of flexible, but also want to watch the manufacturers said they see the situation closely. phenomenon as well, including “They’re not foreclosing on Daniel Berry, CEO of the Cleveland companies as much as you might manufacturing advocacy group, think, given the perceived distress” Magnet. It’s no surprise to him, of the economy and financial markets, though, that banks aren’t advertising Mr. Latz said. “They’re looking at their leniency. the liquidation recoveries in this “After talking with some bankers market and seeing how bad they are.” who are active in lending to manu- facturers, it does appear that some The time is right banks are exercising a bit of flexibility Now, early in the year, is a time in how they are dealing with their when many banks are being hit with current troubled loans,” Mr. Berry requests to renegotiate — or when said in an e-mail discussion. “How- they find out the true condition of a ever,” he added, “this is not some- troubled borrower. That’s because thing that is going to be widely companies operating on a calendar advertised.” year have 90 days to turn in year- Mr. Berry also echoed the banks’ end financial statements to their view that each loan is considered lenders, said William Beaufait, a individually. shareholder at the Cleveland “In the event the quality of a loan accounting firm Maloney + Novotny to a manufacturer begins to deteri- who specializes in working with orate, a specific workout plan is manufacturing firms. developed and an analysis of collat- “Many companies are working eral would be conducted as part of with their banks to restructure their the process,” Mr. Berry wrote. “In loans, which would include changing the case of manufacturing equip- loan amortizations, discounting, ment, an outside appraisal would changing or adding collateral typically be ordered based on an and/or guarantees,” Mr. Beaufait ‘orderly liquidation’ value.” said in e-mail correspondence on From that point on, Mr. Berry and the issue. others say, banks are working to “Waivers of loan covenant viola- minimize their losses on each loan. tions are at an all-time high,” he That still may mean a foreclosure added, because banks don’t want to and sale of assets — but the attrac- take over businesses they don’t tiveness of that option is minimized know how to run, nor do they want when sale prices for those assets are to try to sell them in a market where low. ■ 20100412-NEWS--10-NAT-CCI-CL_-- 4/8/2010 3:56 PM Page 1

10 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010

PUBLISHER/EDITORIAL DIRECTOR: Brian D.Tucker ([email protected]) EDITOR: Mark Dodosh ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Priority 1 oters often say they want lawmakers of the two major political parties to work more closely together to produce sensible legisla- tion that improves the quality of their lives. ThatV seemingly simple goal often proves exceedingly difficult to achieve, so we should applaud any effort where bipartisan cooperation leads to good policy. Issue 1, the statewide measure on the May 4 primary ballot that will renew the Ohio Third Frontier technology-focused economic development program, is just such an effort, and it deserves voter FROM THE PUBLISHER support. The current funding mechanism for the Third Frontier, which voters approved in 2005, expires in It’s about time to hit NE Ohio links 2012. Passage of Issue 1 will authorize $700 million in bonds to extend funding through at least 2016. he weekend has passed, the meant to him and his pals that golf trumped by a far more forthright, candid The extension is critical if Ohio is to continue its green jacket has been slipped season was upon them. appearance last week in the press room onto a worthy golfer’s shoulders And so it seems here in Northeast at the Masters. momentum in building an economy that looks to (presumably) and the golf season Ohio, when you’re as apt to have a fire in And then along came the starkly filmed, the state’s future rather than its past. T— in the minds of us Northerners — now the fireplace as sun on the links when dramatic Nike commercial that showed The Third Frontier program has done an excep- can begin in earnest. you’re watching the Masters. But regard- Tiger staring into the camera as the tionally good job at its primary goal: making targeted I say “presumably” because I wrote less, that telecast always stirs the senses, words of his late father spoke of the need state investments in promising technologies, this as the Masters golf tournament just and perhaps even more so this year with to learn from life’s challenges. Contrast research and entrepreneurs. Northeast Ohio, in began. I had no idea who would the Tiger Woods drama. that with the televised, eloquent statements particular, has benefited from the program because win, how Tiger would do, or BRIAN The world’s best golfer, from Masters chairman Billy Payne about of the strength of this region’s biotech, health care whether nature will cooperate TUCKER who’s chasing a son of Ohio to Tiger’s actions and potential for the future. and higher education sectors, as well as the efforts and the event will crown its become the sport’s most deco- It was a whirlwind, and it stirred up of groups such as BioEnterprise Inc. and NorTech. champion on schedule. But I do rated champion, chose the nearly as many opinions as there are golf know that warmer tempera- genteel grounds of the Augusta fans out there. As I drove to the office Since its inception, the Third Frontier has helped tures are on their way and the National Golf Club and its Thursday morning, I was intrigued by a launch nearly 600 new companies. It helped create weekend warriors will be revered invitational tourna- caller to a satellite radio talk show who 55,000 jobs as of Dec. 31, 2009, according to Ohio champing at the bit to hit their ment as his first competition said he and his wife watched the Nike Third Frontier Commission statistics that are based favorite course (despite whatever after six months away and a commercial for the first time the night on a formula created by consulting firm SRI Inter- mud, bumpy greens or chilly life-altering string of adultery before. He said that after the short spot national of Menlo Park, Calif. Despite the awful temps get in the way). claims followed by a stretch in ended, his wife hesitated and then said, economy of the last couple years, Third Frontier- I listened as Padraig Harrington, the rehab. “He’s making some good lemonade.” aided ventures are holding up well; the SRI formula reigning best Irish golfer, explained to a What has happened since Tiger’s If Tiger finishes in the top 10, it will indicated the program had helped to create 41,000 television interviewer how he felt about fateful Thanksgiving night car accident only add to his legacy as a golfer. Seeing the Masters as he was growing up, and it has captivated the golf world and con- him sign a few autographs and interact- jobs as of December 2008. was very familiar. He said that watching sumed the more salacious media outlets. ing with the crowds a bit more was a Those are numbers that Democrats and Republi- the Masters, which was one of the few His appearance at a televised news con- heartening first step. I hope that doesn’t cans can agree look very good in our growth-hungry golf tournaments they could depend on ference to apologize to his family and fans disappear when he regains his domi- state. Indeed, the Third Frontier — the most signifi- seeing on Irish television in the 1980s, drew the world’s attention, only to be nance on the golf course. ■ cant positive legacy of former Gov. Bob Taft, a Republican — today enjoys the support of current Gov. Ted Strickland and his Republican challenger, AND COUNTING ... John Kasich. Vast majorities of Democrats and Republicans in the Ohio General Assembly support What was your favorite movie or TV show filmed or set in Cleveland during the last 30 it, too, as do most agricultural, business, labor and years? higher education organizations. Given that level of political support and the evidence of results from the Third Frontier, it’s tempting to think Issue 1 is a slam dunk. Don’t fall into that trap. In 2005, the Third Frontier program passed by Crain’s Cleveland Business is celebrating its 30th year only a 53% to 47% margin. When the campaign to as Northeast Ohio’s premier support Issue 1 kicked off in February, officials cited source of business news with an Ohio Business Roundtable survey conducted in a special double issue, which summer 2009 that found only 16% of voters were will feature profiles of the 30 familiar with the program. We hope the campaign most influential Clevelanders. conducted so far this year emphasizing Third Fron- As part of the celebration, tier-aided job gains has raised awareness of Issue 1, we also are reflecting on the ROSANNE UDIVICH MICHELLE MANDATO but many citizens likely will enter the voting booth most memorable events of ROCHELLE THORNTON with little knowledge of the program’s success. the past three decades with Cleveland Seven Hills Cleveland We encourage members of the business commu- weekly polls — some of which “Antoine Fisher.” That movie was “The Deer Hunter.” It was a “A Christmas Story.” can be found in this space nity to use the three weeks that remain until the just great. In the end, he turned good movie. — trivia questions, online that person all the way around. election to talk up Issue 1 to their friends, co-work- content and video interviews. ers and business partners. Our economic future will You can get in on the fun look significantly better with its passage. by visiting CrainsCleveland .com/30thanniversary. 20100412-NEWS--11-NAT-CCI-CL_-- 4/8/2010 2:53 PM Page 1

APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 Tech: Renewal may bring Ohio national benefits Tired of Being Screwed? continued from PAGE 3 money into high-tech research in Tight state budgets attack technology Then stop hiring fly-by-night “roofing contractors” whose 1982, when it founded the Ben only office address is wherever their pick-up truck happens Franklin Technology Partnership. ■ The collaboration, which consists of In Ohio … Technology Investment Office fell to be parked at the time! four regional organizations that The state legislature cut annual from $80 million in fiscal year 2009 The no-insurance, irresponsible operators are driving the few general revenue funding for the to $43 million in fiscal 2010, which assist and invest in startups, helped remaining honest roofing contractors out of business. Unless inspire the design of the Third Fron- Third Frontier from $17 million to includes $13 million of the $40 tier’s Entrepreneurial Signature Pro- about $3.5 million when it approved million the office will receive from the consumer gets wiser, ultimately there will be no one gram, which funds similar groups its biennial budget last summer. On $650 million in bonds the state responsible left! We are looking for a few wise consumers. top of that, it cut roughly $130 issued in 2008 for a larger energy throughout the state. If you fit the bill, call Both Ohio and Pennsylvania have million that the program was program. other technology programs that put supposed to get for the state’s Michigan originally planned to money into investment funds that settlement with the major tobacco use $1 billion in tobacco settlement 216•881•1999 commit to financing companies in companies. However, the program money to cover half the cost of its www.careyroofing.com st their respective states as well as pro- still has money from both the $500 $2 billion 21 Century Jobs Fund CAREY founded in 1946 grams that help universities develop million bond issue passed in 2005 initiative. The state used it to pay Roofing Corp. MEMBER: National Roofing Contractors Association and commercialize new technologies. as well as the Wright Capital Fund, for a total of $400 million in tech- They aren’t so similar, however, which is financed by the state’s nology investments during 2006 when it comes to how they are funded, capital appropriations bill. Those and 2007, but since then the state said NorTech president Rebecca funding sources will allow the Third has not lived up to promises to Bagley, who used to serve as deputy Frontier program to invest at least provide $75 million annually from secretary for Pennsylvania’s Tech- $144 million in fiscal years 2010 the settlement fund. Those alloca- nology Investment Office. and 2011, though the 2011 figure tions totaled $53 million in 2009 Pennsylvania’s program gets all could drop if the state cuts funding and $28.5 million in 2010. of its money from the state’s general in its capital appropriations bill. Georgia’s allocations to the fund budget. That has hurt the Georgia Research Alliance fell from ■ program in recent years, Ms. Bagley In other states … about $30 million annually to about noted, as tight budgets have pushed Pennsylvania’s allocations to its $20 million for fiscal 2011. Pennsylvania legislators to cut the Technology Investment Office’s budget to about $35 million in fiscal target technology companies. of time. He noted that Ohio formed year 2010, down from $80 million in Taking equity allows the state to its Thomas Edison Program to fiscal 2009. get a monetary payback in addition provide product commercialization 6 PACKS Though budget cuts in Ohio to creating jobs, Mr. Staebler said. services to various high-tech indus- reduced the overall size of the 10- Being able to show that a program tries back in the 1980s. year Third Frontier program to about made money also makes justifying To illustrate the benefits of $1.4 billion from $1.6 billion, the its existence easier, he added. ON SALE NOW sustained investing, Mr. Sider, of program was buoyed by a $500 It’s still too early to say if the Pennsylvania’s technology office, million bond issue voters passed in investments will be profitable, but a pointed to oral fluid collection 2005. If voters approve the $700 mil- previous state program that invested device maker OraSure Technologies of Buy a 6 Pack, get a FREE ticket lion renewal this May, the program $11 million in six private investment Bethlehem, Penn. The company went would be able to continue investing funds already has paid for itself and public in 2000 and employs nearly 300. about $140 million per year for the should make another $12 million at Plus, its founder used the money he to any game against the YANKEES next five years, allowing Ohio to fill least, Mr. Staebler said. made for a new venture capital fund. the void as other states cut their “When you’re dealing with for- “Right now we’re starting to see programs, Ms. Bagley said. profit companies, I think it’s better the self-sustaining activity that was 216.420.HITS “We could really catapult ourselves to make investments than grants,” starting in the mid ’80s or early ’90s,” into a leadership position,” she said. he said. he said. ■ But the funding could disappear if Even so, Mr. Staebler said he is a Ohio voters, who according to polls fan of the Third Frontier, as are others know little about the Third Frontier who run tech economic development program, reject the bond issue. By programs in other states. contrast, Pennsylvania’s programs “I certainly have heard people have always gotten some level of from other places speak highly of the state support, said John Sider, who program,” he said. replaced Ms. Bagley as deputy secre- A different approach tary in July 2009. “We’ve not had to over and over Of the three programs profiled again make a case for why these here, the Georgia Research Alliance things should exist,” he said. probably has the least in common with the Third Frontier. Though the And to our north … Third Frontier includes the Ohio Michigan increased its focus on Research Scholars Program and other technology-based economic devel- university-focused initiatives, Georgia’s opment 10 years ago, but it turned program started 20 years ago specif- up the volume in 2006 when it ically to recruit university scientists st EXECUTIVE formed the 21 Century Jobs Fund. who conduct research in areas with The initiative was designed to invest commercial potential. $2 billion into Michigan’s technology Since then, however, it has put economy over 10 years. more money toward entrepreneurial That dollar figure is bigger than projects, just as Ohio and Michigan the amount the Third Frontier is have in recent years, said alliance MBA investing, but Ohio shouldn’t be too CEO Mike Cassidy. The alliance in worried about getting left in the 2002 formed an organization called dust. For one, the $2 billion figure VentureLab that has provided 165 includes a few programs that are grants and loans to universities and EMBA OPEN HOUSE comparable to Ohio programs that companies developing marketable – fall outside of the Third Frontier’s technologies, and in January 2008 it TUESDAY, APRIL 20TH, 2010 6:00 8:00PM umbrella, such as a state tax credit to formed GRA Venture Fund LLC, which weatherhead.case.edu/emba/openhouse promote investments in high-tech has raised $20 million that will be companies. Plus, the state hasn’t used to invest in companies created been giving the fund as much money through VentureLab grants. as originally promised, said Ned A clear need drove the alliance to Staebler, vice president of capital create the venture fund in the face of access and business acceleration budget cuts, Mr. Cassidy said. He with the Michigan Economic Devel- described how a huge increase in opment Corp. university invention disclosures in Like the Third Frontier, the 21st Cen- the 1990s didn’t translate into an tury Jobs Fund invests in university increase in new companies. research and product commercializa- Though different, Ohio’s technology RANKED 16TH NATIONALLY BY BUSINESSWEEK tion. However, instead of just giving programs share one important grants, the Michigan fund uses some similarity with Georgia’s, according of its money to make investments in to Mr. Cassidy: They both are making companies or investment firms that steady investments over a long period 20100412-NEWS--12-NAT-CCI-CL_-- 4/8/2010 3:22 PM Page 1

12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 Auto execs shy about yearlong numbers Incentives, fleet sales have led to respectable “It’s not a great recovery. Mission Baseball! It’s a ‘blah’ sort of early numbers, but they may not be sustainable recovery.” Insightful legal solutions that help By DAVE GUILFORD million to 11.7 million. – Nariman Behravesh, economist, IHS Global Insight our clients find time to play ball Automotive News Mercedes has shed the excess inventory it had a year ago, Mr. Lieb NEW YORK — Perhaps it was the said. “Our dealer network is healthier, “That has really inflated the retail near-biblical rains that pummeled mainly because there has been a market,” Mr. Krafcik said. “A question, New York auto show press days, but reduction in expenses, and we are I think, a lot of us are asking is: Is that industry executives here were reluc- spending significantly less on a sustainable retail pace for the rest tant to predict a significant sales incentives,” Mr. Lieb said. “There is of the year? Personally, I don’t think revival this year. a strength in the market, which so.” That was before March sales allows us to pull back (on incen- Most executives said their compa- came in at a seasonally adjusted tives), and we’re more healthy.” nies would prefer to avoid high annual rate of 11.7 million. Sales for Mr. Lieb’s archrival, BMW of incentives, particularly after last the month finished a respectable North America CEO Jim O’Donnell, year’s drastic production cuts. Fred 24% above last year’s anemic totals was less cheery, terming the recovery Diaz, CEO of Chrysler’s Ram brand, but were a bit below analysts’ “very mild.” He said January and said Chrysler Group has no intention expectations. February sales were disappointing, of reverting to past ways of overpro- Ernst Lieb, CEO of Mercedes- adding that housing and commer- ducing, then piling on incentives. Benz USA, had one of the rosiest cial real estate remain problems. “We’re a disciplined organization assessments. BMW sees the total market up that will not go back to that, and we The attorneys at McDonald Hopkins are “Last year the stars were out of 10% this year, Mr. O’Donnell said, did not waver one bit,” Mr. Diaz on a mission to solve the business and legal issues sync,” Mr. Lieb told Automotive “unless Toyota goes very wild with said. News, a sister publication of Crain’s incentives. If you spend money, But that resolve will be tested if, as that interfere with your work-life balance. Cleveland Business. “It seems things sometimes you get results.” several observers predict, the indus- are getting more aligned.” Several other executives said try and the overall economy face a U.S. light-vehicle sales in 2009 incentives remain a key variable slow climb out of the depths of 2009. Attorneys on a Mission® plummeted to 10.4 million. Most after Toyota’s push to rebound Economist Nariman Behravesh of forecasts for this year call for an from its recall crisis. IHS Global Insight predicts sluggish Your mission is our mission. We never lose sight of it. increase. J.D. Power and Associates John Krafcik, CEO of Hyundai growth for the economy. recently raised its forecast to 11.7 Motor America, said high fleet sales “It’s not a great recovery,” the million units, while General Motors and, especially, high incentives economist said. “It’s a ‘blah’ sort of Co. has predicted sales of 11.2 have propped up sales. recovery.” ■

A business advisory and advocacy law firm 600 Superior Avenue, East, Suite 2100, Cleveland, OH 44114 216.348.5400 Delinquency: Only time will heal lending market Carl J. Grassi Shawn M. Riley President Cleveland Managing Member continued from PAGE 3 “It just means it’s someone else’s Capital Bank, said improvement in and Akron markets may seem encour- problem,” Mr. Anderson said. “It’s the commercial lending market only Chicago • Cleveland • Columbus • Detroit • West Palm Beach aging, said Matthew Anderson, Fore- still a defaulted mortgage. It’s just will come with time and a recovery sight Analytics managing director. But, on someone else’s balance sheet or in the economy. www.mcdonaldhopkins.com as Mr. Anderson noted, “It doesn’t has been written down to whatever “Delinquency rates are a funny mean the (delinquency) problem the bank received for it.” Foresight thing,” Mr. Randall said. “A bank has gone away. bases the report on federal regulators’ might find a loan delinquent reports of calls to banks on the because a building has lost value; an status of loans and covers loans appraisal done in 2005 is less than more than 90 days past due. one done in 2009 in the recession. Among the 100 largest metro No one expects values to come areas Foresight tracks, the commer- rocketing back. In our own portfolio, cial mortgage delinquency rate as of we are seeing stability.” Dec. 31 in Jacksonville, Fla., topped There even are signs of a slight the nation at 8.5% followed by easing in the availability of bank Charlotte, N.C., at 7.4% The Cleve- credit. Mr. Randall said his bank land MSA ranks 27th nationally and recently had a prospective customer Akron’s ranked 63rd in terms of come back with a loan offer from a delinquency percentages. competitor who had been out of the Carl Dyczek, a lawyer at Walter & commercial property market. Haverfield LLP in Cleveland who Likewise, Mr. Dyczek said he frequently represents lenders in real recently completed legal work on a estate matters, said banks “had to new commercial loan a bank was really write down a lot of loans” for issuing to rehabilitate a building. delinquency rates to drop so much “It’s the first new loan I’ve so quickly. worked on in six months,” he said. At the same time, Mr. Dyczek However, Foresight’s Mr. Anderson said, he is seeing the filing of more said even with improved delinquency foreclosures on commercial and rates here it is too soon to look for a residential properties as “banks try big resumption in lending, especially to preserve asset values, although with delinquency rates still high and there are lots of absolute bottom worsening nationwide. fishers out there” waiting for troubled “We won’t see new lending until properties to become available. joblessness goes down and the Andrew Randall, the Cleveland- economy recovers,” Mr. Anderson based Ohio president of TriState said. ■ UP AND DOWN Data compiled by Foresight Analytics show the commercial loan delinquency rate in Akron and Cleveland still are well above fourth-quarter numbers from prior years. Metro area 2009 2008 2007 2006 2005 Akron 4.5% 2.6 1.6 1.5 1.3 Cincinnati 5.8 2.7 1.9 1.6 1.4 Cleveland 5.7 3.5 2.2 1.6 1.3 Columbus 5.6 3.0 2.6 1.5 1.3 Detroit 5.5 2.9 1.7 1.5 1.0 Pittsburgh 6.6 3.4 2.3 1.7 1.7 U.S. total 5.1 2.7 1.6 1.1 1.1 20100412-NEWS--13-NAT-CCI-CL_-- 4/8/2010 2:52 PM Page 1

APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 13 Food: Carts may compete with eateries

continued from PAGE 1 Chris Hodgson is jumping the gun sit-down restaurants. pilot program, the city’s economic on the formal city program. Antici- The city’s call for proposals says development and parks and recre- pating that he will be accepted into the goals of the program are to ation departments are selecting the pilot program, the culinary school provide broader all-day food options vendors, offering help with meeting alum who has worked in restaurants for workers and visitors, promote city health and safety requirements in Cleveland and New York expects to small business growth and increase and even making available small have his food truck, Dim and Den the availability of healthy and locally loans to launch the businesses. Sum, outside University Hospitals produced food products. Conces- So far, four vendors have been Case Medical Center in University sionaires may be able to operate approved, and Kevin Schmotzer, the Circle and open for lunch by May 1. more than one stand. economic development depart- He is planning to move the operation ment’s executive for small business downtown in the evenings. Rules of engagement development, hopes to have 10 mer- He described the food as “soul The authorizing legislation includes chants operating by June. He said the food with an Asian flair.” strict requirements for operators businesses — carts or trucks special- including health, safety and design ly designed for food service — will be Mobile feasts nationwide standards and a permitting process clustered at a few key locations, in- Gourmet food carts are increasing that gives the city considerable cluding the northeast quadrant of the lunch and even dinner options in control over the vendors’ operations. Public Square, Key Plaza at Play- cities across the country, including Vendors must have a permit from house Square and around Case West- Austin, Texas, Chicago, Portland, the city parks department to operate ern Reserve University. Ore., and San Francisco. Nation’s in specific locations with specific The new food stands would sup- Restaurant News reported in a menus — Mr. Schmotzer said the city plement 80 hot dog carts that now front-page story on the movement is favoring applicants who plan to use cover the city, Mr. Schmotzer said. last month, noting the 45-member locally grown foods. The health per- Elvis O. Serrano is planning to Southern California Mobile Food mit allows more on-site preparation operate a truck he’s calling Grand Vendors Association estimates Los than currently allowed under the law River Grille and he hopes to be located Angeles has at least 63 different food that regulates hot dog carts, but it around Case Western Reserve. truck concepts and that one truck, requires a permanent commissary for “It’s been a dream of mine since selling Korean barbecue, grosses $2 the preparation and storage of food. I was 9 years old to own my own million a year. To compensate for all the permit restaurant,” the former wine sales One reason the carts are a story for requirements, the city’s economic rep said. “We’re going to be some- Nation’s Restaurant News is that development department is offering thing different.” established restaurants are objecting $5,000 loans to qualifying operators Mr. Serrano said his menu will to the new competition. Because of and has set up a pool of money with feature bison and venison sausages their lower-cost business model and, Charter One Bank to pay artists a he’s calling “Mountain Man” sand- in some cases, government subsidies, stipend to design graphics for the wiches, a chicken ginger soup and the restaurateurs see the food trucks carts and trucks. The vendors will not the Himalayan rice and tuna dish. as unfair competition. pay rent to the city. The food truck will complement Matty Lucarelli, executive director Once the pilot program is under a delicatessen of the same name of the Cleveland Area Restaurant way, the city will analyze the vendor that Mr. Serrano plans to open later Association, said she was unfamiliar operations to see if the program can this month on Lorain Road near with the city’s program and couldn’t be expanded. “We’d like to grow this Kamm’s Corners. comment on its potential impact on next year,” Mr. Schmotzer said. ■

Indians: Team understanding of fans’ skepticism continued from PAGE 3 stretch was 79 wins in 1997. Larry Dolan and other team brass market team, their strategy has to John Fisher, the Arizona Diamond- are understanding of fans’ views be cyclical,” said noted sports econ- backs’ vice president of ticket sales, and their wait-and-see attitude, omist Andrew Zimbalist, a professor would not reveal the team’s overall and expect a comeback when the .BSDI

 at Smith College in Northampton, number, but he said the team’s team improves. He also said the Mass., who has authored 19 books, season ticket base is down only 10% elder Mr. Dolan remains committed including a handful on baseball. over 2009 after a 92-loss season. to the team and as passionate as ever, “When they’re on the down part of The Indians’ base has declined by and will continue to authorize the    the cycle, it doesn’t make sense for nearly one-third, from 11,700 in moves his management team them to spend big, because if they 2009. (Calls to the Nationals and recommends, even if it means do, they won’t be able to spend Marlins, other Indians peers in pay- further deficit spending.   
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PG League Central rival Minnesota — “Success there helps in a lot of “Part of me wants the Indians to opening new Target Field this places — selling sponsorships, cost do well so attendance increases, season — like Philadelphia cut off projections and elsewhere,” said which means a better team,” Mr. season ticket sales at 24,000. White Sox chief marketing office Vaughan said. “But at the same The Twins and Phillies clearly are Brooks Boyer. Will fans come back? time, they’re saying, ‘When the fans special cases, but looking at teams “Fans (in Cleveland) might say that come, we’ll pay.’ A restaurant doesn’t closer to the Indians in payroll and they’re never coming back, but if say, ‘We’ll serve crappy food and success doesn’t exactly pretty up the product gets better, they will.” when we have a full restaurant, Cleveland’s numbers. The Texas we’ll serve filet.’” Rangers — with two winning sea- Back home Mr. Zimbalist said the Dolans’ sons since 2000 — are at 10,000 full- Indians vice president of public decision to publicly announce their 1SJDF

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$PSQ season equivalents, according to a trades, team president Paul Dolan’s “They need fans to begin every report last week in The Pittsburgh news conference days later year with hope, but when you Post-Gazette. But that’s not very addressing the team’s losses and announce you’re in a down cycle, good company: The Pirates haven’t the Sabathia-Lee Game 1 World that might not do it. You don’t see had a winning season since 1992, a Series matchup combined to infu- Toyota say, ‘We’ve had this brake record for the four major sports; riate many Tribe backers. problem, so don’t buy our cars for This announcement appears as a matter of record only. their best season in that 17-year But, Mr. DiBiasio said, owner three years.’” ■ 20100412-NEWS--14-NAT-CCI-CL_-- 4/8/2010 2:38 PM Page 1

14 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010

manager; Jason Holm to web devel- GOING PLACES oper; John Hochberg to assistant interactive project manager. JOB CHANGES FINANCIAL SERVICE MITCHELL ALLEN: Kelly Bowman ARCHITECTURE 212 CAPITAL GROUP: Bob Bajic to public relations specialist. to financial adviser. RADIUS ADVERTISING: Lori R. BRAUN & STEIDL ARCHITECTS: Marefka to account supervisor. Rachel Hersh Schwarz to director BRUNER-COX LLP: Catherine B. of business development. Berni to tax manager; Anna M. Berni Capaldi Frank Berick Bowman Tocci Capaldi to tax director; Carla T. MEDIA EDUCATION Frank to general services manager. manager of customer relations and L. Wallace to manager, global GIE MEDIA: Pat Jones to publisher appeals. treasury; Marvin Muhumuza to and editorial director, Golf Course SOUTH EUCLID-LYNDHURST CHRYSALIS VENTURES: Wendy information technology auditor. Industry. SCHOOL DISTRICT: Kristen Jarchow to director of business development in Cleveland. LEGAL Romito to coordinator of media and MARKETING community relations. THE RIVERSIDE CO.: Eric Keen to BENESCH: Deviani M. Kuhar NONPROFIT vice president; Ryan Richards to and Richard A. Plewacki to BROWNFLYNN AND BROWNFLYNN PAX: PEACE FOR ANIMALS: FINANCE senior associate; Dan Haynes to partners. LEARNING: Jennifer Klie to director Barbara Morin to event sales; Bill associate. of operations. Taylor to researcher. HUNTINGTON NATIONAL BANK: MANUFACTURING Elizabeth Victor to vice president, DIX & EATON: Robert G. Berick to treasury management team leader; INSURANCE NORTH COAST CONTAINER senior managing director. REAL ESTATE Maureen Shildwachter to vice KAISER PERMANENTE OHIO: CORP.: Don Kish to vice president, HITCHCOCK FLEMING & ASSOCIATES GUARDIAN TITLE & GUARANTY president, treasury management; Rita Pamela A. Hara to vice president of chief financial officer. INC.: Geoff Crowe to designer; AGENCY INC.: Valerie Tocci to Patel to business banking specialist. quality; Phyllis A. Tennant to RPM INTERNATIONAL INC.: Terri Jason Craig to interactive project sales manager. RETAIL MAURICES: Kristy Wilkinson to store manager.

SERVICE CENVEO INC.: Jeffrey Ritter to THE VALUE OF INDEPENDENCE IN regional sales representative. - HUMAN ARC: Paula Wagner to CUSTOMER FOCUSED BANKING. senior sales executive. THE KEYSTONE PEER REVIEW ORGANIZATION INC.: Linda Stokes to director, health science research; Joseph Woodside to director, health In today’s world, there is one fundamental communities we serve. informatics and business intelligence. and meaningful difference among banks. Because we are independent, we are free SAFEGUARD BACKGROUND SCREENING LLC: Bruce Sundman It’s not size, or number of branches, or product to make choices that protect the interests of our to director of sales; Lana Iklodi to operations support specialist. mix. This difference runs much deeper. customers. Wehave chosen to be strongly SAFEGUARD PROPERTIES: Kellie It centers on where a customer ranks in the capitalized to give our depositors security well Chambers to director, property preservation operations; Kathy hierarchy of importance to the bank. beyond FDIC insurance. Cogan to director, REO client account management; Palmer DePetro to You have only to follow the We will not be pushed, director, REO regional coordinators and customer service; Jennifer recent financial headlines to see prodded, or pulled into Jozity to director, inspections depart- ment; Amy Nauer to director, REO what can happen when financial actions that are operations; Nancy Runyon to director, institutions lose focus on their detrimental to our vendor management. customers, and turn their customers. For example, TECHNOLOGY MCPC INC.: Jamie O’Brien to inside attention to shareholders. we have never issued a Cisco account manager; Susan T he simple fact is that a sub-prime loan. Murtaugh to customer service manager; Robert Lapmarado to stock-based bank is beholden This philosophy government business leader; Dominic Del Balso to director of engineering; to the shareholder first, and permeates throughout our Rick Bishop to senior account manager; Tom Dannery to network the customer second. It is subject entire organization. And since engineer. to the ebb and flow of stock price. we are the region’s largest MODIS CLEVELAND: Brad Friedel to business development manager. It is not completely free to act solely mutual bank that is on behalf of the customer. It is, rather, independent of Wall Street, our BOARDS FRIENDS OF WESTLAKE PORTER motivated by gain on behalf of shareholders. sense of responsibility, civic pride and PUBLIC LIBRARY: Jennifer Cirin- This is the very reason why Dollar Bank customer commitment will only strengthen in cione to president; Cathy Schultz to vice president; Dr. Richard Hong to has remained steadfastly independent of Wall the future. If all of this sounds unusual, it is. treasurer; Carol Welo to recording secretary; Karen Alfred to corre- Street since 1855. And since our beginning To us, banking has never been, and sponding secretary. as a mutual bank, we have celebrated our never will be, about shareholder needs. THE HOUSING RESEARCH & ADVOCACY CENTER: Patricia independence with an ongoing mission: To us banking will continue to be about Burgess to president; Carelton Moore to vice president; Kathy To focus solely on our customer and the customer needs. Period. Kazol to treasurer; Harold Williams to secretary. PAX: PEACE FOR ANIMALS: Sandy McNally to president.

RETIREMENT ROCKY RIVER PUBLIC LIBRARY: John Lonsak, after 6 years of service.

Equal Housing Lender. Member FDIC. Copyright © 2010, Dollar Bank, Federal Savings Bank. Inquiries: 1-800-242-BANK BUS242_10 Send information for Going Places to [email protected]. 20100412-NEWS--15-NAT-CCI-CL_-- 4/8/2010 2:36 PM Page 1

APRIL 12-18, 2010 CRAIN’S CLEVELAND BUSINESS 15

INSIDE 16 TAX TIPS: COURT RULING AT ODDS WITH IRS OVER FICA. SMALL BUSINESS Small firms cautiously bolstering staff sizes Businesses seek to grow, still guarded on economy

By STAN BULLARD [email protected]

he job-creation engine of the U.S. economy known as small business may be slowly picking up speed in TNortheast Ohio. That is the view that emerges from multiple Northeast Ohio- based small businesses that are adding jobs this spring or added them over the last year. Despite being in the hard-hit architecture profession, Larry Fischer, a co-founding principal of Perspectus Architecture in Cleve- land, said the firm took a Warren Buffett approach to the downturn: A GOOD BUY “We stayed aggressive. We didn’t get defensive and pull back. We have been really marketing hard, Community programs aim to bag residents’ dollars primarily to protect our turf among clients in health care.” by providing incentives, touting benefits of local shops As a result, Perspectus more than held its own the past two years, boosting its staff by two to 25, and it is interviewing to fill another job, in By SHANNON MORTLAND part to help design a campus for a [email protected] U.S. Customs leadership academy in Harpers Ferry, W. Va. s chain restaurants began popping Indications are that Perspectus is not alone, and small business as a up on street corners across North- sector may start to resume its role of east Ohio at a faster pace, local job creator, helping to nibble away at high unemployment numbers. restaurateurs knew they had to Pittsburgh-based PNC Bank’s springA into action if they were going to spring 2010 economic outlook found compete. that 19% of the small and mid-sized Ohio firms it surveyed expect to hire “These big chain operations were coming full-time employees in the next 12 in and taking over our market” with more months. That is far different than a year ago, when just 8% planned to locations and marketing dollars, said hire. PNC said firms in its survey Douglas Katz, president of the Cleveland generally have a more positive Independents and chef/owner of Fire on outlook, though they remain worried about the overall economy. Shaker Square. “Survival was our focus,” he added. “We Playing offense were thinking, in two or three years, we Maintaining a strong marketing thrust through the downturn appears might not be here.” central to many firms that already are See LOCAL Page 17 adding staff. Jason Therrien, presi- dent of thunder::tech in Cleveland, said the 25-person integrated digital marketing agency recently added two people and is interviewing a third. It will not fill a fourth job because the firm only can accommodate so many new hires at one time. “It’s a good problem to have,” Mr. Therrien said, which he credits to “reaching out to clients twice as much (through marketing) in 2008 and 2009 and helped them with financing.” Even though things got tight in that period, Mr. Therrien See HIRE Page 16 20100412-NEWS--16-NAT-CCI-CL_-- 4/8/2010 2:37 PM Page 1

16 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 SMALL BUSINESS Hire: Innovation, new product Severance pay taxes in question development spur firms’ growth made to its former employees, Michigan court ruling CARLGRASSI some of which were lump sum continued from PAGE 15 and recruiting firm, said he’s getting payments and none of which were took the approach that the firm more inquiries about hiring, which at odds with IRS over linked to state unemployment could maintain the status quo for a he views as an indication that more compensation, were not subject to month or two at a time and made it firms are gearing up to add staff. FICA requirements FICA taxes. In effect, this district through the worst of the recession. court decision disagrees with the “You can’t do that for years at a Looking into the crystal ball he challenges in today’s IRS’s position, and it also contra- time. And you can’t do it if you But that does not mean making business environment have dicts the position taken by at least want to grow a business and sell it the decision to hire or call the forced many companies to one other federal district court. in six months, but we’re in it for economy’s direction is easy. downsize their work forces. TAX TIPS The district court decided that the long haul,” Mr. Therrien said. “We worry as much about hiring TSuch downsizing often results in severance payments were not subject He credited that perspective, of now that we are 25 as when we were severance payments to terminated In addition to this basic defini- to FICA taxes for several reasons. keeping track of “the little things” three people and hiring our fourth employees. tion, the income tax withholding First, in amending the income to tide through bad times until person,” Perspectus Architecture’s While it is clear that such sever- statute provides that certain types tax withholding statute to include things recover, to growing up in a Mr. Fischer said. “We always think of ance pay is subject to income tax of payments, including any SUBs, the Senate recognized in its home where he watched both his the families that people have and withholding, in February a federal “supplemental unemployment committee report that without this parents operate businesses. don’t want to hire for a particular district court in Michigan decided compensation benefit,” or SUB, amendment to the statute, SUB Some companies are positioned (assignment).” At Perspectus, a key that such severance pay is not subject are to be treated as if they are “a payments were not subject to to grow because of new product indicator of the need to hire is when to Federal Insurance Contributions payment of wages by an employer income tax withholding because lines or directions. the firm starts having employees Act (FICA) taxes, which include Social for a payroll period.” they do not constitute wages or That was the case for Adam Fried, work more overtime than it believes Security and Medicare taxes. A SUB is defined as “amounts remuneration for services. CEO of Akron-based Simply Canvas, generates a good work-life balance. While this decision has generated which are paid to any employees, Second, the income tax with- which started out providing canvas Mr. Therrien said the key is for a significant amount of attention, pursuant to a plan to which the holding statute states that SUBs are digital prints for photographers. small companies to have “innova- employers should be cautioned employer is a party, because of an to be treated as if they are wages. It “We looked for other products we tion as part of their DNA.” One thing that this decision clearly does not employee’s involuntary separation can be inferred from that state- could sell them” when the downturn that will be different, he said, is that reflect the view of the IRS, and the from employment (whether or not ment, according to the court, that hit, Mr. Fried said. “Our customers his firm will no longer hire in antici- IRS is likely to challenge any such separation is temporary), SUBs are not wages; otherwise they are very particular. They love our pation of gaining work; that went attempt to exempt severance resulting directly from a reduction in already would be subject to income canvas prints. We figured we could away with the recession. Likewise, payments from FICA taxes until force, the discontinuance of a plan or tax withholding. sell them five times as many (less he and other small business owners Congress, or perhaps the Supreme operation or other similar conditions.” Third, the district court noted that expensive) paper prints.” estimate the economy will improve, Court, addresses this issue. In its most recent guidance, the the purpose of the FICA statute was That paid off in increased sales to but will grow slower than before. It is clear that Congress intended a IRS determined that the definition to provide for a social welfare benefit. the extent that 10 of Simply Canvas’s Herb Wainer, CEO of Warrensville uniform definition of “wages” for of SUB pay for income tax with- The district court concluded that 40 employees were added in the new Heights-based Horizons Inc., which purposes of income tax withholding holding purposes is not applicable “where severance payments are paper-print unit last year. makes specialized labels for manu- and FICA taxes, but there has been for FICA purposes. intended to serve the same purpose as He expects to need another 10 factured products, said his firm has some question about whether Con- Instead, SUB pay is defined by Social Security benefits, i.e., support employees this year, but may hire added four to its 140-person staff be- gress intended to include severance the administrative pronounce- for workers in lieu of a lost ability to more part-timers and college cause it remains focused on growth pay in “wages” for both income tax ments published by the IRS. The earn wages, the collection of social students because he worries about through developing new products — withholding and FICA tax purposes. IRS has determined that, in order benefit taxes on the wage-replace- how much health insurance will even in downturns. In general, the term “wages” for SUB pay to be exempt from ment benefits makes little sense.” cost under health care reform. “The when (you hire) has little to means all remuneration for employ- FICA tax, it must be linked to the This decision may prompt other Kenyon Mau, a principal of Cleve- do with the economy,” he said. “The ment, including the cash value of all receipt of state unemployment employers to seek refunds of FICA land-based Human Capital Advi- when has to do with people who remuneration, including benefits, compensation and must not be taxes paid on severance benefits. sors, a human resources consulting plan for the future.” ■ paid in any medium other than cash. received as a lump sum payment. This may lead to decisions by the Until the decision of the federal federal appeals courts, the Supreme district court in Michigan, employers Court or even actions by Congress. who reduced their work forces and If the reasoning of the district provided their laid-off workers with court in Quality becomes the rule, severance payments were in most then employers and terminated cases required to withhold income employees will save a significant taxes and FICA taxes from such amount of tax. payment. Until then, it is likely that the IRS The district court’s decision in will be challenging any claims that U.S. Quality Shares Inc. came to a severance payments are exempt different conclusion. from FICA taxes. ■ In the Quality case, the district court determined that the sever- Mr. Grassi is a member and presi- Cedar Point is the perfect place for a company outing! It’s ance payments that the company dent of McDonald Hopkins LLC. affordable, and easy to plan too. We do all the work for you. 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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 17 SMALL BUSINESS Local: NORTHEAST OHIO REGIONAL SEWER DISTRICT Programs boost economy SMALL BUSINESS continued from PAGE 15 card to local neighborhood associa- The result was Cleveland Inde- “The more you put into it, tions, apartment complexes and ENTERPRISE PROGRAM pendents, a 7-year-old grassroots the more you get out of it.” libraries, and at local events, he group of local restaurant owners said. who are sharing ideas on how to – Dan Roman About 7,000 free consumer cards manage and improve their eateries director, I Buy NEO have been handed out so far and while also offering incentives to get 200 local businesses have joined patrons through the doors. will be modified in August so the Beanstalk, Mr. Starr said. The The Cleveland Independents is nonusage fees are not assessed to program is rolled out by neighbor- just one of the area programs that the card unless it is dormant for 12 hood or suburb and only after a urge people to spend their money consecutive months. The penalty significant number of businesses in in locally owned stores. Among the fee then will be $2.50 per month, that area agree to offer discounts to others are I Buy NEO and the she said. people carrying the card and to Hudson Gift Card program; though Since the program was created, promote the Beanstalk and fellow some programs have had a slow cities from all over the country have businesses, he said. start, others already have seen posi- called for advice on creating similar “It’s been overwhelmingly positive,” tive outcomes. buy-local initiatives, Ms. Konefal Mr. Starr said. “(The participating I Buy NEO’s director Dan Roman said. businesses) have a vested interest in said buy-local initiatives are Meanwhile, the 3-year-old I Buy the program themselves.” becoming increasingly popular. In NEO incentive program — which A similar effort is taking shape a recent survey of 483 members of consists mostly of businesses in with the Toledo Choose Local Here’s the sign the Council of Smaller Enterprises, Cuyahoga County — is being program, in which businesses get 81% said promoting a business as tweaked to appeal to larger audi- varying levels of marketing support you’re looking for. locally owned is valuable, and 74% ences. from the organization based on the said the buy-local message is a Initially launched by COSE as an amount of money they pay to join, better way to sustain the local online directory of local small busi- said John DuVall, president of economy than trying to drum up nesses, the group introduced a Toledo Choose Local. new customers. community card nearly two years Details are still being ironed out We’re expanding our small-business Indeed, Jonathon Sawyer, chef ago as a way to provide rebates for on a consumer card to be sold for opportunities to provide economic benefits for and owner of the Greenhouse people who shopped locally, said $10 to $20 that provides monthly Tavern on East Fourth Street down- Mr. Roman, the program’s director. discounts at participating businesses, the region and help local companies grow! town, said he joined the Cleveland About 11,000 cards were sold by he said. Independents shortly after opening local nonprofits — usually for $10 Mr. DuVall said he and his fellow If your company is a small construction or his restaurant in April 2009 because — and the nonprofit kept a portion small business owners realized they engineering company or a provider of goods or many of his favorite restaurants of the proceeds, he said. had to do something before Toledo professional services, we invite you to apply for already were members. As part of the program, consumers was “overrun by WalMart and He said events organized by the had to provide bank account infor- Applebee’s.” our SBE program. group such as Restaurant Week, mation to I Buy NEO in order to Though buy-local programs can during which participating local receive rebates. However, consumers be beneficial, local businesses will restaurants offer three-course thought that was a cumbersome have to make some effort as well to meals for $30, have been a boon to process and didn’t want to part ensure their success, I Buy NEO’s APPLY & LEARN MORE at neorsd.org/sbe his business. with their bank information, so the Mr. Roman said. “It brings in people you wouldn’t program is being revamped, Mr. “The more you put into it, the normally get to your restaurant,” Roman said. more you get out of it,” Mr. Roman Mr. Sawyer said. Mr. Roman said I Buy NEO is said. ■ trying to figure out how businesses can Hitting close to home help each other within the program The Cleveland Independents try and how nonprofits can continue to to set themselves apart from chain participate. A better idea of how restaurants by working with local the program will be redesigned is farmers to create dishes featuring expected by the end of April. locally grown items, such as straw- In the meantime, I Buy NEO still Partnering For Success as your berries or corn when in season, Mr. is urging its 300 business members Katz said. He said the results have to give discounts to those carrying Trusted Business Advisors been favorable, with patrons telling the card. him they want to support local Buying local — elsewhere businesses. Roetzel & Andress’ entrepreneurial business The Hudson Area Chamber of Across the state, buy-local culture drives our attorneys to thoroughly Commerce & Tourism Bureau also ventures are being created to help understand our clients’ businesses, embrace has found that people want to businesses hold on to as many local support its businesses. The cham- dollars as possible. their goals and craft innovative solutions ber created the Hudson Gift Card In Columbus, the Small Business to achieve those goals. seven years ago, allowing people to Beanstalk, a for-profit venture put up to $500 on a card and spend launched last September, created a With over 130 years of experience, we partner it at more than 70 local businesses, buy-local service that promotes said Carolyn Konefal, president of local businesses and provides with our clients to serve as their trusted the chamber. The card is swiped incentives to get people to shop business advisors to provide accurate and just like a credit card, she said. locally, said Wolf Starr, founder of valuable legal counsel to a diverse regional Last year, the chamber sold the Small Business Beanstalk. about $55,000 in gift cards, mostly Under the program, local busi- and international client base. around the holidays and from nesses pay $500 per year to belong Mother’s Day to the end of the to the Beanstalk, he said. In return, school year, she said. The program the Beanstalk promotes a consumer

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18 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 SMALL BUSINESS Akron entrepreneurs’ group forms Social media invaluable

By AMY ANN STOESSEL Christy Motley, the owner of Ms. Beller said the Founder’s Café tool for job recruiting [email protected] Akron-based Christ’eas Bakery, has had more than 500 people participated in the first meeting of attend sessions over two years. mall businesses can face orrine Beller enthusiastically the Entrepreneur’s Idea Exchange. Ms. Beller said in working to get challenges in hiring because JASONTHERRIEN talks about the importance Ms. Motley’s business specializes partners and volunteers to assist in they don’t always have a of initiatives to in full-service catering, her recent effort, she found that dedicated recruiter or the help Northeast with a focus on boxed people were very receptive to the Sbudget to support high-cost recruiting COhio’s entrepreneurs. lunches and baked goods, idea of the Entrepreneur’s Idea methods, such as reviewing thou- “The entrepreneurial in particular those that are Exchange. sands of résumés or supporting job world in Northeast Ohio is sugar-free and that use “People were very excited,” she postings on large career sites. highly connected,” said natural, organic products. said. “They could see the advan- Social media is a powerful and Ms. Beller, who is the Ms. Motley has been in tages to the area with just a little bit cost-effective tool for small busi- director of outreach for business since 2006, previ- of work.” ness recruiting. It allows a company ADVISER the University of Akron’s ously having worked as a Ms. Beller stressed that the to share their job openings with a College of Business Beller deputy registrar for the Entrepreneur’s Idea Exchange is large network, “meet” candidates of active users, there are some Administration. city of Akron. “Of course, not intended to be a networking with whom they might not other- challenges to recruiting using large And as organizer of the newly I want to grow,” said Ms. Motley of group. Rather, it’s a forum in which wise come in contact and find out if online networks. Last year we created Akron-based Entrepre- her current status, noting that in to get feedback and advice: “This is a potential hire is a good match for received more than 1,000 résumés, neur’s Idea Exchange, Ms. Beller is particular she’s hoping to find a strictly to get business ideas off the an organization. despite being a company with a 20- doing her part to help broaden permanent location for her ground,” she said. There are a variety of social member team. Social media and the those connections and add to that business. As for the goal of the Entrepre- networks, including LinkedIn, ease of submitting a résumé online network. “Sitting in that group gave me a neur’s Idea Exchange: “The bigger Facebook, Twitter and a company’s open your company up to a wide “In a poor economy more people lot more different ways of think- picture is to have more businesses blog, that allow a company to network, which can be both exciting want their own business … they ing,” Ms. Motley said. “I walked off the ground … and bring more communicate with potential hires. and overwhelming. want to be able to control their own away with so much.” jobs to Northeast Ohio.” With more than 80% of Americans To match the right hire to your destiny,” Ms. Beller said. Specifically, Ms. Motley said The next meeting is scheduled using social media sites monthly, company, you need to clearly iden- The Entrepreneur’s Idea Exchange those in her discussion group — for 6 p.m. to 8 p.m. May 20 at the according to research, your ideal tify the position you are searching is for any person with a business with whom she has stayed in College of Business Administration candidate quickly can be found. for and outline core competencies idea, at any level of development. contact — suggested that she on the University of Akron campus ■ The power of posting: When for the candidate in your postings Meetings are two hours, and consider working with more insti- (across from St. Bernard’s Church). thunder::tech has a job opening, we and messages. discussions are informal, facilitated tutions and that she consider The meetings will be held every use our online properties to publicize ■ Improve the interview and by seasoned entrepreneurs and seeking government contracts. other month. positions. We share a link to our web hiring process: Social networking professionals in a small-group “I think everyone walked away There is a $15 fee to attend the site, along with succinct messages on allows you to enhance and expedite setting. with something,” she said. “Knowl- sessions — “it ensures this is a serious our company blog and Facebook, the interviewing and hiring stages of The first meeting for the organi- edge is power.” event,” Ms. Beller said — and the Twitter and LinkedIn accounts. Since recruiting. By researching and getting zation was held in March, with 71 For Ms. Beller’s part, it is not cost includes parking, food and these sites are maintained regularly, to know candidates before they come people in attendance. surprising that she looked to bring beverage. we have strong existing networks of into your office, you can effectively Participants were divided into such an organization and structure Advanced registration is engaged users. These users share and screen candidates or learn about groups of about nine and given a to the Akron area. required and can be done at the provide links to our job postings with behaviors or personalities that may chance to discuss their business She was part of a group of Harvard organization’s web site at their network. be a red flag for your company. concepts and solicit advice on Business School grads who helped http://ohioideaexchange.com, Social networking is just like “Googling” a candidate to discover everything from whether there is a launch the Cleveland-based although some walk-ins may be personal networking — you must be their digital footprint now is a market for their idea to what need it Founder’s Café, which also aims to accepted depending on space visible and approachable. By regularly common practice. With the expanded could fill. help get ideas to the startup phase. availability. ■ participating in social networks, you search features in social media sites, will develop an online network with a smart hiring manager will go an interest in your company, which beyond a simple Google search and will create a receptive audience for search on Twitter, LinkedIn, your hiring announcements. Technorati and Facebook. ■ Share your message with When you are researching a interested candidates: In addition candidate online, don’t immediately to posting your hiring announce- judge them on one photo or post, ments on a Twitter account or but look for patterns. Facebook fan page, look for industry ■ Recruit online for profitable or specialty groups within these hires: The rise of social media’s networks and post to those pages’ popularity for job hiring is influ- message boards and forums. enced by the challenging economic On Twitter, a common practice is climate, the mainstream adoption to use a hashtag. A hashtag, which is of social networking and its use for Give us a call. made up of the “#” symbol and a key- professional contacts. Together, we can maximize word or phrase, provides a way for Recruiting efforts can be stream- Twitter users to share information lined by expanding your online your output in a single bound. and track conversations. By adding a network and thoroughly researching hashtag, you will enable interested a hire. Don’t be afraid to use social With Cox Business’ advanced products, users to find your message and they media to find a new team member you get invincible service and substantial in turn can share it with others. Some who is passionate, an active online support in a powerful combination of trust, sample recruitment hashtags in- participant and knowledgeable. clude: #tweetmyjobs, #jobs, #career, Ultimately, this will benefit your loyalty and excellence. And having a #jobseekers and #hiring. company with a hire who is posi- dedicated partner means more time – You can also pair two hashtags, tioned for long-term success. ■ and profit – to look after your business. such as #jobs and #cleveland in the same post to target your information. Mr. Therrien is president of the ■ Be clear and concise in your Cleveland integrated marketing message: Despite the high number agency, thunder::tech.

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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19 SMALL BUSINESS

to one’s home, but it also is available Gallery in Mayfield Heights will double Chuck Wien, president of Marshall IN BRIEF in long-term care or rehabilitation facili- the size of its showroom to 17,000 Carpet One. ties, during a short-term hospital stay square feet later this month with a Cleveland architect firm tance globally, HSB — which recently or for any other situation that may be move to Eastgate Shopping Center ■ LOOKIN’ GOOD: Studio V Salon builds overseas presence opened an office in Phoenix — plans required. at SOM Center & Spa has opened at the Akron to expand relationships with builders, Kemper and Mayfield General Health and Wellness HSB Architects working on LEED developers and consultants who seek Home Care, a roads. Center on Medina Road in Akron. certification with firm in Germany to leverage LEED’s global brand. wholly owned The move to The location is a sister business to Cleveland-based HSB Architects + “Certainly HSB has broad experience entity of The 1451 SOM VCS Salon & Spa, located in Medina. Engineers, which specializes in Lead- LEED-certifying client projects here in Kemper Co., Center Road It is owned by Lucy Mahoney and ership in Environmental Energy and the U.S. But we also possess a great specializes in combines daughters Coleen Morlock and Design, or LEED, implementation, has understanding of how to apply this stan- caring for people Marshall Carpet Mary Kay Hallas. finalized an agreement with a company dard to overseas markets, and specific with diagnoses of One and Marshall Studio V is a full-service salon and in Germany to assist in several over- building types within those markets,” Alzheimer’s or Rug Gallery, spa, providing a complete array of seas projects. HSB will be working with HSB’s Robert Bajko said. other disorders which are services including therapeutic the facilities management firm resulting in currently in sepa- massage and reflexology, as well as Alpha Group EE to help LEED- ■ NEW SERVICES: The Kemper Co. memory impairments. rate buildings on Mayfield Road. complete skin, body and hair care. certify buildings nearing completion in now is offering specialized home care, “While the housing market is ailing, Hours are 9 a.m. to 8 p.m. Tuesday Germany and Hungary. providing personalized companion and ■ GAINING FLOOR SPACE: people are deciding to fix up their through Thursday; 9 a.m. to 5 p.m. As LEED continues to gain accep- caregiving services. Care is not limited Marshall Carpet One & Rug homes, instead of moving,” said Friday; and 9 a.m. to 4 p.m. Saturday. GRAND OPENINGS A SECOND OPINION SAVED US ADKINS BORLING LLC 801 E. Washington St., Suite 225 Medina 44256 www.adkinsborling.com * Adkins Borling is an independent insurance and risk consulting agency led by insurance veterans David Adkins and David Borling. The firm specializes in working with individuals and families; nonprofit organizations; and small business owners. Mr. Adkins’ background includes experience at Key and National City banks, while Mr. Borling previously has worked at Bank One and Huntington National Bank. 330-952-0312 [email protected] TIMES ARE TOUGH, BUT WE’RE STILL GOING, and a Citizens Bank Second Opinion helped us get there. After THEBARKEY.COM examining every aspect of our business, a Citizens Banker found ways we could save more money, be more P.O. Box 16041 efficient – for our business and personal accounts. Cleveland 44116 www.thebarkey.com Make time to meet with a Citizens Banker. To schedule your Citizens Bank Second Opinion, CALL 800-946-2264 TheBarKey.com is an online-based soft- or go online to CITIZENSBANKING.COM/OPINION. ware that allows law students studying for the bar exam to take practice and simulation exams. The multistate bar exam preparation software costs $299 for up to six months (the subscription expires at midnight the day of the multi- state bar examination), and it allows students to efficiently track their perfor- mance and tailor their study efforts. TheBarKey.com was created by a small group of attorneys who were directly involved with preparing summer associ- ates for the bar exam at their respective firms. The president of TheBarKey.com, Dean Venizelos, is a graduate of Case Western Reserve School of Law and Weatherhead School of Management. 888-531-1881 [email protected]; [email protected]; [email protected];

CRUISIN’ 50’S DINER 8807 Mentor Ave. Mentor 44060 Cruisin’ 50’s Diner is a 1950s-themed family-owned restaurant led by siblings George, Pete and Diane Foradis. The eatery is open seven days a week from 7 a.m. to 10 p.m., serving breakfast, lunch and dinner. Specialties include milkshakes and burgers, as well as omelets and French toast for breakfast. 440-255-1950

To submit a new business, contact * Results may vary depending on your business situation. sections editor Amy Ann Stoessel at [email protected] or call 216- 771-5155 with questions. 20100412-NEWS--20-NAT-CCI-CL_-- 4/8/2010 2:39 PM Page 1

20 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 MONEY MANAGERS RANKED BY ASSETS UNDER MANAGEMENT LOCALLY

Total assets under local management with discretion (millions) Minimum Company Total number individual Portfolio Address Dec. 31, Dec. 31, % of local account analysts Compensation for Chief investment Top local executive Rank Phone/Web site 2009 2008 change accounts (thousands) on staff services officer Title Victory Capital Management Inc. 1 127 Public Square, Cleveland 44114 $48,009.0 $46,555.0 3.1% 649 $10,000.0 67 Percentage of assets Greg River Robert L. Wagner (216) 689-4400/www.victoryconnect.com under management Craig Ruch president, CEO Boyd Watterson Asset Management LLC Fee only, percentage of Brian L. Gevry, CEO, CIO 2 1801 E. Ninth St., Suite 1400, Cleveland 44114 $3,053.7 $2,163.2 41.2% 320 $250.0 6 assets under Brian L. Gevry Timothy M. Hyland (216) 771-3450/www.boydwatterson.com management Clyde E. Bartter sr. exec. vice president FirstMerit Bank NA Kenneth A. Dorsett 3 106 S. Main St., Akron 44308 $2,483.0 $2,280.0 8.9% 3,600 $250.0 14 Percentage of assets Robert M. Leggett exec. vp, Wealth (888) 384-6388/www.firstmerit.com under management Management Services Ancora Advisors LLC 4 2000 Auburn Drive, Suite 300, Cleveland 44122 $2,470.9 $1,946.7 26.9% 1,123 $20.0 7 Fee only Denis J. Amato Frederick D. DiSanto (216) 825-4000/www.ancora.ws CEO Glenmede Trust Co. Fee based on assets Frank I. Harding 5 25825 Science Park Drive, Ste. 110, Beachwood 44122 $2,255.7 $2,046.7 10.2% 1,650 $3,000.0 12 under management and Gordon B. Fowler managing director, (216) 378-2900/www.glenmede.com strategies employed first vice president Fifth Third Asset Management Inc. Peter Klein 6 600 Superior Ave. East, Cleveland 44144 $2,217.2 $2,151.7 3.0% 377 $100.0 13 Percentage of assets E. Keith Wirtz Mark Koenig (800) 786-8651/www.ftam.com under management managing directors Lincoln Financial Advisors/Sagemark Consulting(1) 7 28601 Chagrin Blvd., Suite 300, Cleveland 44122 $1,927.7 $1,736.6 11.0% 4,105 NA NA Fee and commission Tim Johnson John DiMonda (216) 765-7400/www.lfa-sagemark.com Ben Huddle managing director BNY Mellon Wealth Management 8 30195 Chagrin Blvd., Suite 350W, Cleveland 44124 $1,791.0 $1,550.0 15.5% 2,057 $2,000.0 9 Percentage of assets Leo P. Grohowski William G. Caster (216) 464-4244/www.bnymellonwealthmanagement.com under management regional president Cedar Brook Financial Partners 9 5885 Landerbrook Drive, Suite 200, Cleveland 44124 $1,720.0 $1,800.0 -4.4% NA $0.0 5 Negotiated Azim Nakhooda Michael Perlmuter (440) 683-9200/www.cedarbrookfinancial.com managing principal Skylight Financial Group 10 1660 W. Second St., Suite 850, Cleveland 44113 $1,306.8 $1,226.5 6.5% 5,000 $0.0 5 Fee and commission Steve Thompson Paul Fox (216) 621-5680/www.skylightfinancialgroup.com president, CEO Huntington National Bank Chris Cwiklinski 11 917 Euclid Ave., Cleveland 44115 $1,300.0 $1,300.0 0.0% 1,200 $300.0 NA Percentage of assets Randy Bateman vice president, (800) 480-2265/www.huntington.com under management portfolio manager Fee only based on MAI Wealth Advisors LLC assets under 12 1360 E. Ninth St., Suite 1100, Cleveland 44114 $1,285.3 $1,050.8 22.3% 328 $500.0 8 management or set fee Gerald H. Gray Richard J. Buoncore (216) 920-4800/www.maiwealth.com for non-investment managing partner services

Wasmer, Schroeder & Co. John S. Majoros III Percentage of assets Thomas N. Richmond Jr. 13 1111 Superior Ave., Suite 965, Cleveland 44114 $1,050.6 $720.9 45.7% 279 $1,000.0 3 under management Michael J. Schroeder principals, managing (216) 622-0000/www.wasmerschroeder.com directors Oak Associates Ltd. 14 3875 Embassy Pkwy., Akron 44333 $960.0 $750.0 28.0% NA NA 3 Percentage of assets James D. Oelschlager James D. Oelschlager (330) 668-1234/www.oakfunds.com under management president, CIO Northern Trust 15 200 Public Square, Suite 1950, Cleveland 44114 $881.1 $718.0 22.7% 828 $1,000.0 4 Percentage of assets Mary Lynn Laughlin Michael A. Cogan (216) 357-2400/www.northerntrust.com under management Douglas Y. Wang president, CEO, Ohio NCA Financial Planners 16 6095 Parkland Blvd., Suite 210, Cleveland 44124 $822.6 $504.9 62.9% 1,250 $250.0 NA Percentage Dennis P. Lehman Kevin H. Myeroff (440) 473-1115/www.ncafinancial.com president, CEO Rehmann Financial(2) 17 1340 Depot St., Suite 205, Rocky River 44116 $675.0 $379.4 77.9% 2,000 $250.0 12 Fee or commission Jeffrey Phillips Joseph P. Heider (440) 356-4520/www.rehmannfinancial.com principal Stratos Wealth Partners Fee, commission, % of 18 30575 Bainbridge Road, Suite 100, Solon 44139 $650.0 NA NA 10,900 $0.0 1 assets under Dan Jacoby Jeffrey Concepcion (866) 553-9882/www.stratoswealthpartners.com management president, CEO Fairway Wealth Management LLC(3) Fee only, based on 19 6393 Oak Tree Blvd., Suite 108, Independence 44131-6958 $575.0 $460.0 25.0% 98 $2,000.0 4 assets or scope of Mark S. Weiskind Daniel R. Gaugler (216) 573-7200/www.fairwaywealth.com services CEO, managing director Carver Financial Services Inc. 20 7473 Center St., Mentor 44060 $570.2 $460.1 23.9% 2,400 $250.0 5 Fee and commissions NA Randy Carver (440) 974-0808/www.bullmkt.com president Goode Investment Management Inc. 21 50 Public Square, Suite 1700, Cleveland 44113 $471.8 $438.6 7.6% 14 $0.0 2 Percentage of assets Bruce T. Goode Bruce T. Goode (216) 771-9000/www.goodeinvestment.com under management president Beacon Financial Partners LLC 22 25800 Science Park, Suite 200, Beachwood 44122 $420.0 $368.0 14.1% 2,020 NA 3 Fee and commission Dale Rubin Gregory G. Randall (216) 910-1850/www.beaconplanners.com managing partner 212 Capital Group(4) 23 22901 Millcreek Blvd., Suite 360, Highland Hills 44122 $390.0 $312.0 25.0% ___ $1.0 1 Compensation for all Curt Lindsay Curt Lindsay (216) 595-0123/www.212capitalgroup.com services managing partner North Point Portfolio Managers Corp. 24 5910 Landerbrook Drive, Ste. 160, Mayfield Hts. 44124 $373.9 $296.6 26.1% 193 $500.0 3 Percentage of assets Diane M. Stack Ronald J. Lang (440) 720-1100/http://nppmcorp.com under management president, secretary Winslow Asset Management Inc. Gerald W. Goldberg 25 3333 Richmond Road, Suite 180, Beachwood 44122 $360.0 $280.0 28.6% 104 $1,000.0 4 Percentage of assets Gerald W. Goldberg chairman, CIO (216) 360-4700/www.winslowasset.com under management Kara H. Lewis, president Inverness Holdings LLC 26 One Chagrin Highlands, Suite 440, Beachwood 44122 $350.0 $250.0 40.0% 200 $500.0 7 Fee and commission Jeffrey van Fossen Richard Renner (216) 839-5130/www.invernesswealth.com principal Spero-Smith Investment Advisers Inc. Fee only and percentage 27 3601 Green Road, Suite 102, Beachwood 44122 $326.0 $281.2 16.0% 270 $500.0 5 of assets under Mimi Lord Robert C. Smith (216) 464-6266/www.sperosmith.com management president, CEO RAV Financial Services LLC 28 2000 Auburn Drive, Suite 310, Beachwood 44122 $309.0 $274.0 12.8% 366 $500.0 3 Fee only David M. Taucher Robert A. Valente (216) 831-4900/www.ravfinancial.com president Sequoia Financial Group LLC Percentage of assets 29 121 S. Main St., Suite 300, Akron 44314 $291.8 $244.8 19.2% 1,494 $0.0 1 under management, fee Thomas A. Haught Thomas A. Haught (330) 375-9480/www.sequoia-financial.com and commision president Gratry & Co. Jerome R. Gratry Jerome R. Gratry 30 20600 Chagrin Blvd., Suite 320, Shaker Heights 44122 $275.1 $143.0 92.4% 521 $0.0 NA Fee only Mark A. Anderson president, (216) 283-8423/www.gratry.com Gregory A. Tropf managing director 20100412-NEWS--21-NAT-CCI-CL_-- 4/9/2010 11:44 AM Page 1

APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 21 MONEY MANAGERS RANKED BY ASSETS UNDER MANAGEMENT LOCALLY

Total assets under local management with discretion (millions) Minimum Company Total number individual Portfolio Address Dec. 31, Dec. 31, % of local account analysts Compensation for Chief investment Top local executive Rank Phone/Web site 2009 2008 change accounts (thousands) on staff services officer Title Cornerstone Capital Advisors 31 1507 Boettler Road, Suite G, Uniontown 44685 $264.3 $297.0 -11.0% 843 $100.0 2 Fee only Mario C. Giganti Mark W. Fearigo (330) 896-6250/www.ccadvisors.com principal Proper Analysis 32 3201 Enterprise Pkwy., Suite 320, Beachwood 44122 $246.7 $191.6 28.8% 257 $250.0 NA Fee only NA Anne P. Ogan (216) 595-3842/www.properanalysis.com president HW Financial Advisors 33 23240 Chagrin Blvd., Cleveland 44122 $224.0 $195.0 14.9% 453 NA 5 Percentage of assets Stephen L. Rudolph Stephen L. Rudolph (216) 378-7296/www.hwfa.com under management CIO First Fiduciary Investment Counsel 34 6100 Oak Tree Blvd., Cleveland 44131 $219.9 $195.4 12.5% 275 $250.0 4 Percentage of assets NA Mary F. Anderson (216) 643-9100/www.firstfiduciary.com under management president Carnegie Investment Counsel 35 25550 Chagrin Boulevard, Suite 101, Beachwood 44122 $213.0 $194.0 9.8% 258 $250.0 5 Fee only Richard L. Alt Gary P. Wagner, COO (216) 367-4114/www.carnegie-capital.com Richard L. Alt, CIO CBiz Financial Solutions Inc. Fee, commission and 36 6050 Oak Tree Blvd. S., Suite 500, Independence 44131 $210.8 $165.6 27.3% 141 $1,000.0 3 percentage of assets Brett D'Arcy Luke F. Baum (216) 447-9000/www.cbizwealth.com under management president Scott Snow (financial advisors) LLC 37 24601 Center Ridge Road, Suite 175, Westlake 44145 $210.0 $196.0 7.1% 49 $1,000.0 2 Fee only Scott P. Snow Scott P. Snow (440) 871-7669/www.s2fa.com managing director Private Harbour Investment Management & Counsel 38 29525 Chagrin Blvd., Pepper Pike 44122 $200.5 $181.0 10.8% 189 $1,000.0 3 Percentage of assets James A. Blue Geofrey J. Greenleaf (216) 292-5700/http://privateharbour.com under management CEO The Mutual Fund Store Brian Fowles 39 36040 Detroit Road, Suite E, Avon 44011 $186.0 $124.6 49.3% 2,379 $50.0 NA Fee only Adam Bold managing partner, senior (440) 934-6565/http://mutualfundstore.com investment advisor

Tower Wealth Management William R. Anderson Percentage of assets Ensign J. Cowell Ensign J. Cowell 40 20600 Chagrin Boulevard, Ste. 803, Shaker Hts. 44122 $173.1 $139.2 24.3% 100 $500.0 4 under management S. Sterling McMillan managing principal (216) 295-2400/www.towerwealthmanagement.com William G Batcheller MGO Investment Advisors Inc. 41 1301 E. Ninth St., Suite 1400, Cleveland 44114 $163.3 $103.3 58.1% 1,736 $20.0 3 Percentage of assets Michael Bradford Michael Bradford Moskal (216) 771-4242/www.mgo-inc.com under management Moskal director of Investments Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these RESEARCHED BY Deborah W. Hillyer listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com/section/crains-lists. (1) Minimum account size is at the discretion of the representative. (2) Rehmann Financial entered into mergers with Dawson Wealth Management, Cotter Advisory Group and Pension Builders & Consultants. (3) Reported assets include non-discretionary and discretionary accounts. (4) Formerly Brennan Financial Group.

Reform: Providers must rethink delivery of care ON THE WEB Story from www.CrainsCleveland.com. continued from PAGE 1 aid rates from 2013 to 2015 to entice health of those seniors. A yet-unde- conduct community needs assess- an extra payment from Medicaid them to take on more Medicaid termined portion of the money saved ments, provide emergency care Ad outfit Brokaw that enables them to cover some of patients, Ms. Gartland said. Medicaid by Medicare under this program will regardless of the patient’s ability to the costs incurred by caring for the reimbursement rates historically be shared with the participating pay, and will not be allowed to and chain link up uninsured. For MetroHealth, that have been lower than Medicare providers, Ms. Leopard said. charge the uninsured more than payment amounted to $36.4 million reimbursement rates, but the two “The government is saying, ‘If they charge insured patients. Brokaw Inc. in Cleveland last year, Mr. Corlett said. will be equal during that two-year you guys are able to get together Many local hospitals claim they has been named advertising However, that payment will begin span, she said. and manage care successfully, we already provide free or reduced agency of record for to be phased out for all hospitals in UH is trying to direct more new are going to share rewards with prices for care to people who earn up quick-service Italian restaurant 2013 in expectation of the number of doctors to the primary care field by you,’” she said. “They’ve never to 400% of the federal poverty level, chain Fazoli’s, which just uninsured dropping dramatically, he informing medical residents that, done that before.” which is $10,991 for one person and launched a new prototype said. That’s one year before 32 mil- under the reform bill, the federal Ms. Leopard expects the provision $22,025 for a family of four. restaurant and menu. lion more Americans will be covered government has promised to forgive to boost cooperation among hospi- Those financial assistance pro- Following an agency review, the under Medicaid or the state insur- more medical school loans if a student tals and private practice doctors. grams must be maintained, in addi- 250-unit Fazoli’s, which is based ance exchanges, which will be pursues primary care in medically- Thomas Selden, president and tion to restrained billing and collec- in Lexington, Ky., “determined designed to provide affordable insur- underserved areas, she said. CEO of Southwest General Medical tion policies, which also will need to Brokaw Inc. could best capture the ance coverage. A Work Force Commission also Center, said there currently are no be disclosed to the public, Ms. Leop- brand’s revitalized direction,” the Gary Robinson, vice president of was created under the reform bill accountable care organizations in ard said. company said in a news release. government and community affairs to monitor the need for nurses, Northeast Ohio but, like Southwest “You do have to tell folks what Billings were not disclosed. at Lake Health, said he worries the doctors and medical personnel and General, most local hospitals likely the collection practices of the “We are very excited about our additional payment from Medicaid to determine how to solve those are considering them. Southwest hospital are before you send them new partnership,” said Cathy Hull, will expire before more of the unin- problems, Ms. Gartland said. General has a large enough senior to collections,” Ms. Gartland said. chief marketing officer for Fazoli’s, sured become covered under various “I’m sure you’re going to see addi- population on its own to partici- Though providers will have to in a statement. “Brokaw’s reputa- health insurance programs. tional dollars for nurse practitioners pate in the program, he said. implement new policies and proce- tion for brand positioning and As the government continues to and physician assistants,” which are The government will implement a dures, the reform bill likely will creative strategies is renowned. detail the new mandates under the in short supply, she added. “The number of initiatives designed to have a positive effect on them, Lake The agency’s strength in these reform bill, hospitals are looking for country is going to be faced with a stem rising health care costs, among Health’s Mr. Robinson said. areas, as well as its personality, ways to handle more patients with an shortage of health care professionals.” them are freezing or reducing “The (providers) that respond and aligns well with Fazoli’s current already-existing shortage of primary Consequently, Congress is urging Medicare reimbursement rates and make changes like working more and emerging needs.” care doctors. providers to better manage the cutting payments to hospitals with closely with physicians and embrace Fazoli’s said Brokaw “has MetroHealth in 2008 launched a health of senior citizens so they won’t higher patient readmission rates or prevention and wellness, I think they established itself as an award- program to steer more uninsured need as much care. The reform bill hospital-acquired illnesses such as could weather this,” he said. winning center for original, patients to primary care physicians, established a program for account- pneumonia, Ms. Leopard said. However, the reform bill won’t strategically driven creative for but Mr. Corlett said access will able care organizations, which are “All of these changes are intended come without challenges to clients such as vitaminwater remain an issue. providers that band together to share to decrease the Medicare budget,” providers, especially as reimburse- global, Bruegger’s Bagels and “There is probably a lot of pent - Medicare cost savings, said Amy she said. “Essentially what they’re ment rates are cut. Mr. Selden said Cleveland Hopkins International up demand out there,” he said. “We Leopard, head of the health care saying is, ‘You have to invest in a new he expects the reform bill overall to Airport.” are likely to see an influx of patients group at Cleveland law firm Walter & delivery system.’” reduce Southwest General’s average Tim Brokaw, managing partner into the system.” Haverfield LLP. As the amount of uncompensated reimbursement by 2% a year. at Brokaw, said in a statement Under the provision, groups of care dwindles due to fewer people “We have to find ways to deliver that Fazoli’s “has tremendous Managing care and its costs providers who care for at least 5,000 being uninsured, providers also quality care for a lower cost,” he growth potential” and that “the The federal government hopes to seniors combined can begin con- must demonstrate their community said. “We need to be innovative, timing is right to help take this solve that issue temporarily by paying tracting with Medicare in 2012 for at benefit contribution to retain their creative and smart about the way unique brand to the next level.” primary care doctors higher Medic- least three years to manage the tax-exempt status. They will have to we re-engineer care today.” ■ 20100412-NEWS--22-NAT-CCI-CL_-- 4/9/2010 10:40 AM Page 1

22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 12-18, 2010 Experts alert employers to hidden costs in dropping health coverage By JERRY GEISEL Employers that take that route coverage than they do under their dent of broker IMA of Colorado Inc. Since family premiums already Business Insurance would have to pay a $2,000 per employer’s plan. in Denver. “We are counseling against often exceed $15,000 a year, upper employee penalty to the federal But the perception that every any knee-jerk reactions.” middle-income and upper-income Employers viewing the enactment government starting in 2014. But employer will come out ahead There are several reasons why a employees would effectively have a of health care reform legislation with health insurance costs averaging financially by dumping their health plan termination would not be huge reduction in compensation if as an opportunity to drop health about $9,000 per employee, the savings care plan differs from reality, cost-effective for employers, with their employers terminated cover- coverage and escape a huge finan- from the elimination of coverage experts say. the most significant being the cost age and employees had to pay for cial burden may want to rethink would dwarf the penalties paid. “When we have drawn up models, that employers likely would incur their own coverage. that idea, experts say. Some employees also could the vast majority of employers by increasing salaries of employees To make up for that huge loss of The hidden costs of dropping benefit from health care plan ter- would pay more” compared with not eligible for premium subsidies compensation, employers wishing their health care plans could far minations. Lower-paid employees maintaining their plans, said Dave and those whose subsidies would to retain workers would have to outweigh the fine that employers would be entitled to federal health Osterndorf, senior health and group be far less than their current share bump up salaries, which would would face for not offering health insurance premium subsidies to benefits actuary in the Milwaukee of the group premium. increase employers’ share of FICA care coverage, they say. buy coverage through state insurance office of Towers Watson & Co. Under the new law, employees taxes. ■ At first blush, though, the financial exchanges that the reform law “There may be scenarios where with adjusted gross family incomes advantages for an employer that authorized and are to be set up by plan terminations may make exceeding $88,000 would not be (Jerry Geisel is editor-at-large at terminates its health insurance 2014. Those subsidies could result economic sense, but they would be eligible for a federal subsidy and Business Insurance, a sister publica- plans are compelling. in some employees paying less for rare,” said Marcia Benshoof, presi- would have to pay the full premium. tion of Crain’s Cleveland Business.)

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APRIL 12-18, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 23 THEINSIDER REPORTERS’ NOTEBOOK THEWEEK BEHIND THE NEWS WITH CRAIN’S WRITERS RTA may have a future last week announced of bigger crowds, both drivers and fans. That APRIL 5 - 11 his purchase of the includes grading work on the track and in the futures business former Painesville improvements to fencing, concession areas The big story: Cedar Fair Entertainment Co. ■ The profits aren’t enough to allow it Speedway, a 0.2-mile and the bathrooms. and the private equity firm Apollo Global to restore any lost service, but since track in Painesville “The wives already are saying, ‘You had Management called off their merger. As a result, the beginning of 2010, the Greater Cleve- Township. me at fixing the restrooms,’” Mr. McCartney Cedar Fair said it will pay Apollo $6.5 million to land Regional Transit Authority has been The track will get a said. — Joel Hammond reimburse it for expenses related to the transaction, making money in the futures market. boost from becoming which was announced last year, but had faced For the first three months of 2010, only the third track in It’s all opposition from Cedar Fair unitholders. “The the transit agency has made Ohio to be sanctioned Greek to us board has heard from Cedar Fair unitholders, $542,815.19 selling heating oil futures, by NASCAR, which and it is apparent that the merger transaction the agency’s board learned last week. offers benefits such ■ Two Kent State University professors have does not have the required level of investor sup- RTA began purchasing the futures as name recognition been tapped to help teach American port,” Cedar Fair CEO Dick Kinzel said. Cedar last year as a way to control its diesel (which Mr. McCart- children uncommon foreign languages. Fair has been under pressure to continue making fuel costs, said Gale Fisk, RTA’s director ney said will help him Uma Krishnan, who teaches Hindi, and payments on its debt and in March informed of management and budget, after it PHOTO PROVIDED market the track) and Fetna Mikati, who teaches Arabic, were two unitholders that if the company’s performance could no longer get long-term, fixed- NASCAR representative increased prize money of eight people chosen by the National did not improve, it could violate loan covenants. price diesel fuel contracts. There is no Robert Duvall (left) con- and insurance for Foreign Language Center at the University futures market for diesel fuel so the gratulates Andy McCart- drivers that will draw of Maryland to participate in its STARTALK Nice save: Steris Corp. has saved its flagship agency instead buys heating oil futures ney, the new owner of the bigger names and program. product. The Mentor sterilization products contracts. Lake County Speedway, at better drivers. Colum- Under that program, the professors company received the U.S. Food and Drug That market, Mr. Fisk said, moves a news conference last bus Motor Speedway appear in online videos to guide lessons to Administration’s approval in tandem with diesel fuel costs. So week. and Kil-Kare Raceway teach these languages. to sell a product designed when RTA has to pay more for diesel in Xenia, a Dayton In her video, Ms. Krishnan uses the Hindi to replace its popular fuel, the prices of its heating oil futures rise suburb, are the other two Ohio NASCAR- language, culture and information to System 1 processor, which and the agency can sell them at a profit. sanctioned tracks. explain the Nehru dynasty and the idea of is used to clean endo- In February, RTA announced budget and A Bowden team leader and a long-time multigenerational families. Ms. Mikati scopes and other medical service cuts that would reduce its 2010 driver at Painesville Speedway, Randy teaches Arabic through a conversation equipment. The FDA’s operating expenses to cover an anticipated Holbrooks will run the operations, while Mr. between two people whose native tongue is announcement of clear- $12 million shortfall in transit sales tax McCartney already has overhauled the Arabic. ance for the Steris System 1E Liquid Chemical revenue. — Jay Miller track’s marketing by unveiling a redesigned The STARTALK Classroom Video Sterilant Processing System was a big win for web site at www.lakecountyspeedway.com Collection is available to teachers at the company. The federal agency on Dec. 3 ordered New Lake County Speedway and employing social media to get the word www.startalk.umd.edu/teacher-development all health care facilities that use the device to owner is off to a fast start out. Mr. McCartney said there had been /videos. replace it with an FDA-approved alternative. little advertising done previously. Among the other language professionals ■ Never heard of the Lake County Speed- Mr. McCartney, who said very few infra- selected for the videos are professors Settling down: Six public education institu- way? Andy McCartney wants to change that. structure improvements had been made from the University of Pennsylvania and tions in Northeast Ohio will receive funds from Mr. McCartney, who runs machining recently, already has made around $100,000 San Diego State University. — Shannon the state of Ohio’s settlement of a lawsuit with shop Bowden Manufacturing in Willoughby, in improvements to the track in anticipation Mortland American International Group. Ohio Attorney General Richard Cordray said AIG agreed to pay $9 million to settle the lawsuit, filed in 2007, WHAT’S NEW BEST OF THE BLOGS which alleged violations of the state’s antitrust laws. In the settlement, 26 public entities Excerpts from blog entries Bicycle magazine says throughout the state — including the Cleveland on CrainsCleveland.com. Municipal Schools, Cleveland State University, Cleveland’s on a roll Kent State University, the Northeastern Ohio Watch out, Jay-Z. Finance pro ■ Bicycling offered its list of the 50 most Universities Colleges of Medicine and Pharmacy, Kenneth-R is about to blow up bike-friendly cities in the country, and the University of Akron and Youngstown State there’s good momentum for Cleveland. ■ Universities — will receive reimbursements. Mr. COMPANY: The next YouTube superstar might turn The city’s ranking, No. 39, doesn’t look all Cordray said AIG, the world’s largest insurance US Endoscopy, out to be … Cleveland financial adviser that impressive, but Bicycling puts Cleve- company, is alleged to have conspired with Mentor Kenneth Robinson? land in a subcategory of five cities showing insurance broker Marsh & McLennan and other The Wall Street Journal gave Mr. Robinson the most improvement of late. insurers “to eliminate competition in the com- PRODUCT: Entrada a boost last week with a blog post that Here’s how Bicycling describes what’s mercial casualty insurance industry.” colonic overtube called attention to his rap video — yes, you happening here: “A new trail just beyond the read that right, his rap video — titled “It city’s southern border runs all the way to Upon further review: A Strongsville com- Won’t Go to Zero.” Akron — 110 miles in all,” the magazine pany that was expected to move its corporate US Endoscopy, which designs and makes He told The Journal that he thought a gastrointestinal endoscopy products, says said. “Plans call for a web of trails to un- headquarters to Aviation High School on Cleve- music video would be a more effective way spool east and west as well. To get tourists land’s lakefront has reconsidered its decision. the new Entrada colonic overtube offers to teach investors about future economic greater control during a colonoscopy in in the act, the city launched a bike-rental “We have decided that the former Aviation High downturns than a more traditional approach. program last summer — part of a goal to ex- School location is not the best fit for our organi- patients with difficult anatomy, particularly a condition known as tortuous sigmoid looping. pand into an indoor parking garage with zation’s needs and goals at this time, and are showers, changing rooms and lockers.” considering other options,” said Beth Stec, director Patients with difficult anatomy “often of corporate communications and human resources present challenges for clinicians during The economy’s still down, and at MCPc Inc. She said the computer technology colonoscopy procedures,” says Gulam Khan, reseller would not discuss its plans for a move the company’s co-chairman and CEO. “If an wage garnishments are up any further but noted, “We are making every ‘N’ loop forms during colonoscopy, then the ■ An April 1 New York Times piece looked effort to keep MCPc in Northeast Ohio.” scope can be difficult to advance, causing at the rise of wage garnishments, a growing much time delay, frustration and patient dis- problem in Cleveland. Power up: A FirstEnergy Corp. subsidiary is comfort.” “One of the worst economic downturns of beginning to sell electric power to residential Once the loop is reduced, he says, the modern history has produced a big increase customers outside the company’s traditional Entrada overtube “can prevent the reforma- The five-minute musical montage in the number of delinquent borrowers, and Northern Ohio service area. Cincinnati-area tion of sigmoid loops and enable clinicians to features the bespectacled Mr. Robinson creditors are suing them by the millions,” customers now served by Duke Energy Corp. effectively advance the endoscope with wearing a gold dollar-sign medallion over The Times reported. “Most consumers never who sign up for service from FirstEnergy Solu- improved control.” his blue button-down shirt and yellow tie. offer a defense, and creditors win their law- tions can purchase power through December The company says the Entrada overtube He turns some mean phrases, including suits without having to offer proof of the 2012 for 10% cheaper than Duke’s “price to features a flexible design to form a smooth this one on the need to diversify your stock debts, much less justify to a judge interest compare.” The “price to compare,” which appears transition between the overtube and a range holdings: charges and penalties they often tack on.” on electric bills, is the price for power generation of colonoscopes. The device also has a “A good way to do this, in my professional After winning, creditors can secure a and several related charges that can fluctuate hydrophilic coating for ease of insertion and view, court order to seize part of the debtor’s monthly. The incumbent utility, in this case scope movement. is with mutual funds, which have gotten paycheck or the funds in a bank account, a Duke Energy, will continue to provide power For information, visit www.usendoscopy the clue, procedure called garnishment. No national distribution and billing to FirstEnergy Solutions .com. that if you track a broad index it’s harder statistics are kept, The Times reported, “but power purchasers. to go wrong, the pay seizures are rising fast in some Send new product information to managing the S&P 500s, they should be pretty areas — up 121% in the Phoenix area since To keep up with Northeast Ohio business news as editor Scott Suttell at [email protected]. strong.” 2005, and 55% in the Atlanta area since it happens, visit www.CrainsCleveland.com. It you’re curious, the video is at 2004. In Cleveland, garnishments jumped http://tinyurl.com/y5udwoe. 30% between 2008 and 2009 alone.” 20100412-NEWS--24-NAT-CCI-CL_-- 4/8/2010 2:40 PM Page 1

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