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www.crainscleveland.com Vol. 28, No. 4/$1.50 JANUARY 29 - FEBRUARY 4, 2007 LATENEWS GOING TO SCHOOL ■ BALDWIN-WALLACE DOWNTOWN SKYSCRAPER PRESIDENT LOOKS TO SELLATHON GAINS STEAM DISTINGUISH ■ KBS Realty Advisors, a real estate investment and asset SCHOOL management firm in Newport FROM ITS Beach, Calif., has put Eaton Center COMPETITION. in downtown Cleveland up for sale with Granite Partners of New York PAGE 6 and the Cleveland office of CB Richard Ellis, and likely will market the Penton Media Building by year-end. That’s the word from Chuck Lindwall, KBS regional vice president, who said the company Desirable follows a strategy of holding assets a set period and exceeded it in both cases because the investors it represented liked the properties. KBS bought 28-story Dalad plot Eaton Center in 1997 and 21-story Penton, its first foray into down- town Cleveland, in 1996. It’s a rosier market to sell into than a on the block few years ago, but Mr. Lindwall noted, “We didn’t know that then.” — Stan Bullard 72 acres at Interstates 480, 77 part of GLASTIC SOLD TO Viny brothers’ reshuffling of interests GERMAN CONCERN By STAN BULLARD ■ Glastic Corp. in South Euclid has [email protected] been sold by the Crawford Group LLC of Naples, Fla., to Rochling More than 70 acres of Northeast Ohio’s highest- Engineering Plastics KG of Haren, profile commercial land are among the assets Dalad Germany. Terms weren’t Group is offering for sale in a reshuffling of ownership disclosed. Glastic spokeswoman interests among the three Viny brothers who control the Karen Lange said none of the 160 JANINE BENTIVEGNA real estate concern in Independence. workers at the company’s plant on Oliver “Pudge” Henkel Jr. is heading the effort by the Cleveland Clinic’s government and Offered with a listing at Colliers Ostendorf-Morris Co. Glenridge Road will be affected. community relations office to redevelop the neighborhood around the hospital. is 72 acres towering fort-like over the southeast corner of Glastic produces thermal insulation the I-77 and I-480 interchange, which stretches along materials for the electronics and Rockside Woods Boulevard near Rockside Road. telecommunications industries. Also on the block are the Gold Building, a three-story, — David Bennett OUTWARD BOUND 35,000-square-foot building at 6200 Rockside Woods Blvd.; another 16 acres on Brecksville Road; and, in TOWER CITY GAP TO BE Clinic teams with Fairfax group to rejuvenate surrounding area adjoining Valley View, four industrial buildings and 72 FILLED BY FOREVER 21 acres of residential-zoned land on Hathaway Road. Neil Viny, Dalad Group managing partner and for years ■ The Gap store at Tower City By SHANNON MORTLAND order to make it more attractive to busi- the point man for the family’s realty business, said he and Center will close when its lease [email protected] nesses, potential residents and visitors. The his brothers are “all 50ish and are going in different direc- expires at the end of January and outreach initiative is being undertaken by tions.” He described the division of interests as “garden will be replaced in spring by the uch of the neighborhood sur- the Clinic’s government and community variety” estate planning. Mr. Viny will continue to focus on first Cleveland-area location of rounding the Cleveland Clinic is relations office, which now is headed by real estate, as evidenced by the investor group he led that clothing chain Forever 21. The badly in need of surgery to repair noted attorney Oliver “Pudge” Henkel Jr. recently bought five office buildings in Brecksville. Los Angeles-based retailer will take its boarded-up buildings and “We wanted to bring heightened attention Mr. Viny’s brother Steven runs the Norton Environ- possession of the 6,600-square- Mcrumbling housing — and the hospital to the community in which we live and mental landfill and waste management concern. His foot space Feb. 1. Underground system is ready to take an active hand in work,” said Mr. Henkel, who was a partner at brother Joseph is a lawyer who lives in southeast Ohio. Station, another national chain mending it. Cleveland law firm Thompson Hine LLP Chris Smythe, president of Smythe Property Advisors clothing store, also is set for a The Clinic is pairing up with the non- before joining the Clinic last August. “We of Cleveland, returned calls placed to Steven and Joseph spring opening in the former profit Fairfax Renaissance Development want to change the complexion from being Viny to ask about the realignment of family assets. Limited space. Corp. and government entities in an effort seen as an institution that looks inward to “It was very complicated, very methodical and definitely — John Booth to restore the old Fairfax neighborhood in See CLINIC Page 24 See DALAD Page 7 GCP ON BOARD WITH DIESEL EMISSION PUSH ■ The Greater Cleveland Partner- ship has taken the “clean diesel” Stage set for nursery’s sale in Willowbend soap opera pledge. Cleveland’s chamber of commerce group was one of 32 By SHAWN A. TURNER “If I have to cut grass to take care of him, I will.” disappointing for us.” Mr. Amos said Midwest public organizations and [email protected] he’s concerned that the 334 acres for private companies that agreed last – Cheri Hall, woman who allegedly has carried on a long affair with David sale might be bought by a housing week to work to reduce diesel The bizarre tale of Willowbend Brewster, owner of the embattled Willowbend Nursery in Perry developer who would destroy Perry’s emissions from older diesel Nursery Inc. could be coming to an quiet, rural atmosphere. engines operating in their regions. end. protection from creditors. Mr. Stark close to happening. A sale to an unrelated buyer would Northeast Ohio must reduce the Or not. declined further comment, citing “There are multiple bids right end the Brewster family’s ownership soot and smog in the air to avoid David T. Stark, a vice president with advice from attorneys, and he did not now,” said Ms. Wright, who noted of the nursery, which dates to 1897 sanctions from the U.S. Environ- Stark & Stark Consulting in Painesville say whether his firm was working that her brother, Dana Brewster, is when it was founded by Emory mental Protection Agency when who has worked with Willowbend in with Willowbend at present. interested in the business. Merton Brewster. The events leading new standards go into effect in the past, said the nursery in Perry is in Just how far along those talks are Perry Township trustee Rick Amos, to Willowbend’s downfall are the 2009. Diesel engines are a prime talks with an out-of-state buyer who is open to question. Rachel Wright, the former chief financial officer stuff from which soap operas are source of these pollutants. wants to acquire the assets of the the 30-year-old daughter of current of Lake County Nursery, another made: marital infidelity, a nasty — Jay Miller troubled business, which last Septem- Willowbend owner David Brewster, nursery in Perry, said a deal with an divorce, family in-fighting, and ber filed for Chapter 11 bankruptcy said she doesn’t believe a sale is out-of-state buyer “would be very See OPERA Page 11
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Commercial & Industrial Real Estate The national economy is After a redo of the Lockheed humming along, but readers of 700 W. St. Clair Ave., Suite 310, CrainsCleveland.com don’t see Cleveland, OH 44113-1230 Martin Aircraft Braking much improvement locally. Phone: (216) 522-1383 Systems complex in Akron, In our unscientific online poll last Fax: (216) 694-4264 Chris Semarjian (right) week, just 32.4% of 182 respon- www.crainscleveland.com dents said Northeast Ohio’s and partner Stuart Lichter economy was improving. Nearly Publisher/editorial director: Brian D. Tucker ([email protected]) turn their attention to the 43% said it was getting worse, Editor: Mark Dodosh shuttered Ford plant while 24.7% said it was stagnant. ([email protected]) in Lorain. Those results aren’t particularly Managing editor: Scott Suttell MARC GOLUB encouraging, but they aren’t all ([email protected]) that surprising, either. Sections editor: Amy Ann Stoessel REGULAR FEATURES The Federal Reserve Board’s ([email protected]) Design editor: Kristen Miller Jan. 17 “Beige Book” report noted ([email protected]) Classified ...... 22-23 List: Airlines ...... 25 that the Cleveland district saw Senior reporter: Stan Bullard Editorial ...... 10 Stocks...... 26 “softening activity” since the last ([email protected]) quarterly report. Reporters: Going Places ...... 14 Tax Liens...... 12 David Bennett ([email protected]) Shannon Mortland ([email protected]) Jay MIller ([email protected]) John Booth ([email protected]) Shawn A. Turner ([email protected]) Chuck Soder ([email protected]) Designer/reporter: Joel Hammond ([email protected]) Research editor: Deborah W. Hillyer ([email protected]) Cartoonist/illustrator: Rich Williams
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JANUARY 29-FEBRUARY 4, 2007 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 Mayor’s plan could boost city’s appeal Cultivating capital improvements may draw ANALYSIS tion added a second document — a Mr. Roman said. capital improvements plan. Its 84 A first since 1991 has a roadmap to recover from its pages detail specific projects and more biz, young professionals to Cleveland doldrums. costs, as well as how and tentatively At his press conference, Mayor The plan also gives the Jackson when those dreams will be fulfilled. Jackson described dozens of projects, By JAY MILLER businesses and people to the city. administration a sharper focus, “I see the creation of (the capital small and large, all designed to [email protected] The long-awaited plan described especially for those who have won- plan) as something that is vital to a make Cleveland “a city of choice” by the mayor last Monday during a dered where the first-term mayor city that doesn’t have excess (finan- — a phrase he’s used regularly The $1.6 billion recovery strategy press conference won’t turn the was leading the city. cial) resources,” said Joe Roman, since becoming mayor. unwrapped last week by Cleveland city around quickly. But the admin- Previous administrations have president of the Greater Cleveland Though the City Charter requires Mayor Frank Jackson has the istration hopes the two documents completed strategic plans, the Partnership business advocacy group. that there be a capital plan that is potential to be a powerful selling tool that comprise the plan will show glossy books of dreams. This effort “It acknowledges that real updated annually, Cleveland’s last for economic development officers wary business operators and has one of those, too. change requires a long-term invest- such plan was issued in 1991. and real estate brokers wooing young professionals that Cleveland However, the Jackson administra- ment plan, and that’s what this is,” See PLAN Page 24
INSIGHT Property owner puts “We spent two, three, four years building web sites and servicing web sites that never generated any revenue for us. historic athletic club We’re now starting to get the payday.” – Scott Durham (below), chief executive officer, HKM Direct Market Communications home up for grabs
By JAY MILLER failures,” said Robert Munson, [email protected] whose family operates Munson Group. “The building lost a couple As the Cleveland Athletic Club tenants and the club’s catering struggles to recover from a year that business was affected by the included a drop in membership and appearance at the front of the build- other hardships, the owner of the ing — there were three or four club’s historic Euclid Avenue home generators stationed in front of the is looking to sell. building (for months).” The Munson Group, which owns Power cables were cut during the 15-story building housing the work under the sidewalk, leaving Cleveland Athletic Club and managed the building without power for the club until late last year, is shop- several days until portable genera- ping the 96-year-old property at tors could be brought in. Under- 1148 Euclid Ave., where the club has ground work also damaged the a long-term lease on the top 10 building’s elevator mechanisms, floors. leaving the elevators serving the five Some of the most visible prob- non-club floors out of service for lems for the club and the building nearly a year, said Tony Viola, pres- have been the result of road work ident of Realty Corp. of America and on Euclid Avenue for the Greater the building’s leasing agent. Cleveland Regional Transit Authority’s The result for the club has been a new Silver Line bus/rapid transit, a drop in membership and in its project that is expected to continue catering business, as well as finan- into next year. cial problems, Mr. Munson said. “The problems the club and the “Membership is declining, but building were trying to deal with we’re steady,” said club president were magnified by the construction See CLUB Page 24 JASON MILLER THE WEEK IN QUOTES “We want to change “We still have a little PRESSED FOR TIME the complexion from bit of apprehension being seen as an in our client base to Digital technology takes away the need for giant institution that looks accept alternative machinery, gives local printers more flexibility inward to one that forms of media, even By JOHN BOOTH A few mouse clicks in Illinois can queue [email protected] instinctively looks though we can prove up a printing job in Cleveland. outward.” the audience is there.” hugging, bus-length presses and Over the last five years, HKM Direct — Oliver “Pudge” Henkel Jr., — Dan Karp, senior vice Market Communications has pumped $2 head of the Cleveland Clinic’s president/creative director, the packed warehouses of their government and community Wyse Advertising. Page 8 output still have a place in the million to $3 million into personnel, research, relations office. Page One custom printing industry. But web design and software development to Clocal printers say more of their future lies handle the shift in printing practices at its “I think it’s difficult to “The control is a little in the world of print-on-demand, with its headquarters on Cass Avenue between th th reach a mass amount more on the vendor’s digital presses, smaller print runs and West 54 and West 58 streets in Cleveland. of people with e-vites. side now as to what increased flexibility. That price tag doesn’t include several new For one, you’re going they’re willing to give Today’s digital presses hardly bear a digital presses, which can cost between to have to have in freebies. … It’s resemblance to their plate-run predeces- $300,000 and $500,000 each. sors. They’re about the size of a minivan The change has been a gradual one, everyone’s e-mail supply and demand, according to HKM’s chief executive officer, addresses.” and demand is up.” with their insides hidden behind sleek panels, and with computer keyboards and Scott Durham. — Columbus Woodruff, owner — Mary Vlahos, convention and president, Hotcards.com sales manager for the Canton/ flat-panel monitors attached to one side. See PRESSED Page 23 Inc. Page 15 Stark County Convention & Visitors’ Bureau. Page 20 CCLB 01-29-07 A 4 CCLB 1/26/2007 1:28 PM Page 1
4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 29-FEBRUARY 4, 2007 Streetsboro defense supplier snags $25M military contract last month created a two-person call Robert King, president day-to-day management of providing Cascade Distributing expects to triple sales center in its building on state Route aircraft tires at various military bases 43 in Streetsboro in anticipation of and owner of Cascade instead of the government, said Jack as the gov’t taps it to provide oil, lubricants the EMall award. Distributing, said as Hooper, a Defense Logistics Agency As a result of the new work, Mr. the tempo of the war spokesman at Fort Belvoir, Va. By DAVID BENNETT ment of Defense vendors that partic- King expects sales to triple this year “If you have a single manager, it’s [email protected] ipate on DOD EMall, a web-based, to $12 million, and Cascade this year escalates, nimble easier to determine if your stockage e-commerce portal operated by the plans to double its eight-person work suppliers that can deliver adequately meets demand,” said As the Pentagon looks to more U.S. Defense Logistics Agency. The force. fast, both on the ground Mr. Hooper, who noted that his private companies to deliver beans, portal allows authorized military and There are about 2,500 EMall agency soon will announce a larger bullets and the latest hardware to the government customers to shop for vendors for 25,000 customers, a good and online, are finding military contract for land vehicle military, one Streetsboro defense logistical items from government and ratio for small suppliers such as themselves leading the tires. supplier is gearing up for its impend- commercial vendors. Cascade that make the cut, Mr. King Michelin’s deal stipulates that ing growth. Cascade deals primarily with said. Securing the EMall contract was pack. 40% of the value of the aircraft tire Cascade Distributing Inc. last week lubricants and oils — from trans- a year-long process that included fill- contract in 2007 — $56 million — received a five-year, $25 million con- mission fluid for Humvees to gear ing out many forms and submitting a als to the Army, Marines and Navy will be set aside for small business tract to provide oils, lubricants and box oil for various military heli- detailed business plan. was a key factor as well. He said the subcontractors of Michelin, Mr. others parts to the military. It also copters. Robert King, president and Mr. King said Cascade’s nine-year faster pace of battle has created a Hooper said. Because Cascade joined an exclusive club of Depart- owner of Cascade, said the company track record with supplying materi- greater need for replacement parts Distributing already handles Miche- and other service items to be deliv- lin product for most of the military ered quickly, and any delays can branch services, Mr. King estimates prove detrimental to rapid unit his company may be in line for as deployments. much as 20% of that set-aside, or For instance, the company about $11 million. recently was contacted by officials Cascade currently leases space in at Fort Bragg, N.C., to supply parts a 60,000-square-foot building in Cultivate Your Knowledge. in anticipation of the call-up of Macedonia, where it takes bulk additional troops from the 82nd lubricant shipments from rail cars, Attend the Weatherhead Breakfast Series. Airborne Division, which has packages them in drums and canis- earned its reputation as a rapid ters, then ships them to military deployment unit. installations. “Because of that, we take our busi- Mr. King said the company is ness very serious,” Mr. King said. looking to buy a comparable 60,000- square-foot building close to a DATE AND TIME: Efficiency experts railroad spur. Cascade has not yet The military is trying to become a determined what it might do with Monday, February 5, 2007 model of efficiency, just like many its 40,000-square-foot Streetsboro 8:00 – 9:30 a.m. civilian businesses. And that spells building that’s home to the call opportunity for companies large center. and small in the private sector. Mr. King said as the tempo of the LOCATION: As part of its privatization effort, war escalates, nimble suppliers that George S. Dively Building the Defense Logistics Agency at the can deliver fast, both on the ground beginning of January signed a $368 and online, are finding themselves 11240 Bellflower Road million contract for aviation tires with leading the pack. (on the Case Campus) Michelin Aircraft Tire Co. For the first “The landscape is changing,” he time, Michelin will be involved in the said. ■
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