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In Construction, Boom and Bust INSIDE 20111205-NEWS--1-NAT-CCI-CL_-- 12/2/2011 4:37 PM Page 1 $2.00/DECEMBER 5 - 11, 2011 INSIDE In construction, boom and bust Akron General does well in wellness construction trades experiencing a Some find work plentiful on local projects; others look elsewhere boom time along with the cadre of The health system is partnering national and local subcontractors with a nearby developer to replicate its successful health and wellness By STAN BULLARD since 2006, there is more work than unit apartment building to a condo- that employ those workers. Yet centers. PAGE 5 [email protected] the 892 members of Ironworkers minium hotel in San Lorenzo, Calif. other contractors are searching for Local 17 can handle, said Timothy “I’m doing it to keep the guys work, with some hitting the road to ALSO INSIDE: As steel thrusts skyward at con- McCarthy, business manager of the busy,” vice president Doug Leohr find it. ■ Downtown struction megaprojects in down- union local that serves Northeast said in explaining Pride One’s The push from the megaprojects Cleveland’s town Cleveland such as the Medical Ohio. cross-country stretch. is giving the building business in the Embassy Suites Mart and Convention Center and Meanwhile, headed out of town Welcome to the two sides of Cleveland area a much-needed hotel is in foreclosure. PAGE 4 Ernst & Young Tower, ironworkers for work is Pride One Construction Northeast Ohio’s construction mar- boost, but the picture is incomplete. ■ Electronic recycling is big are coming here for jobs from Los Inc. of Medina, which plans to ket. The state’s October jobs report shows business for Cleveland company. Angeles, Las Vegas and Buffalo. provide construction management Multimillion-dollar projects in regional employment is languishing PAGE 9 That’s because, for the first time services for the conversion of a 12- downtown Cleveland have several See CONSTRUCTION Page 7 Oil, gas reps warn Ohio to TROUBLE IN MLB limit taxes TALENT SEARCH Big bonuses for top young players have been the on industry ammo of choice for small-market baseball teams. Revenue forecast rosy; New rules eliminate that weapon from the arsenal. future worries drillers By JOEL HAMMOND [email protected] By DAN SHINGLER [email protected] ong removed from the glory days of the mid- and late ’90s, the Cleveland Indians Ohio’s burgeoning oil and gas in recent years have made building their business should add tons of money farm system the heart of their strategy for to state and local tax coffers in the Lbuilding a successful franchise. coming years. But industry repre- Major League Baseball’s new collective sentatives caution public officials bargaining agreement, though, stands not to squeeze the golden goose too to make the strategy — also ANALYSIS hard with taxes unless the state employed by other small-market wants to risk seeing investment in teams — a lot tougher to pull off. their business go elsewhere. The new deal, introduced before Thanksgiving, “If you do that, you’ll see capital will penalize teams that spend more on draft start to drift away,” said Jerry James, choices than MLB-recommended bonus alloca- president of Artex Oil Co. in Marietta tions that vary based on records from the prior and current president of the Ohio Oil year. They’ll be dinged in the wallet, but most and Gas Association. importantly for the Indians and others, they’ll The association recently analyzed also lose draft picks. how drilling and exploration in the Because small-market teams traditionally Utica shale beds, which lie beneath See INDIANS Page 8 the eastern half of Ohio, will impact the state in taxes. It estimates the industry likely will generate $1.05 billion in additional annual tax rev- WATCH YOUR WALLET enue by 2015. That money would Major League Baseball now will over: 75% tax and a loss of a first- come in the form of commercial penalize teams for spending round pick activity taxes, income taxes and sales over draft bonus allocations, at ■ Between 10.1% and 15%: taxes — paid by companies in related times severely. The details: 100% tax and the loss of first- and industries, too — as well as so-called ■ Up to 5% over the recom- second-round picks “severance taxes” collected specifi- mendation: 75% tax ■ Over 15%: 100% and the loss cally on oil and gas taken from the ■ Between 5.1% and 10% of two first-round picks state. See TAXES Page 20 SPECIAL SECTION 49 6 LEGAL AFFAIRS NEWSPAPER Take a tour of a Cleveland law firm’s new digs, at Entire contents © 2011 74470 01032 the former East Ohio Gas building ■ Page 13 by Crain Communications Inc. Vol. 32, No. 49 0 PLUS: MANAGING PARTNERS’ EXPANDING ROLES ■ & MORE 20111205-NEWS--2-NAT-CCI-CL_-- 12/2/2011 10:11 AM Page 1 2 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM DECEMBER 5 - 11, 2011 ‘WHO TO WATCH’ CORRECTION LEADERS OF THE PACK Only 19 of Ohio’s 88 counties had October unemployment rates below ■ A Nov. 21 Forty Under 40 story had NOMINATIONS 8%, and five of them are in Northeast Ohio. Geauga County had the the wrong high school for Greater Cleve- state’s lowest jobless rate, at 5.4%. There are 21 counties with jobless We’re looking for technology up-and- land Automobile Dealers’ Association rates above 10% and a total of 42 where the rate exceeds the state comers for “Who to Watch: Technolo- president Lou Vitantonio. He attended 700 W. St. Clair Ave., Suite 310, average of 9%. Here’s how all seven counties of Northeast Ohio stack Cleveland, OH 44113-1230 gy,” slated for publication Jan. 16. Walsh Jesuit High School. Also, the up against their counterparts: Phone: (216) 522-1383 If you think you know who will be association has 250 members when Fax: (216) 694-4264 among those leading the Northeast counted as individual dealerships, as County Oct. unemployment Statewide rank www.crainscleveland.com Ohio tech scene of the future, drop an opposed to individual owners who can email to sections editor Amy Ann own more than one dealership. Geauga 5.4% 1 Publisher/editorial director: Stoessel, [email protected], or call Brian D. Tucker ([email protected]) Editor: 216-771-5155. Please send in your Lake 5.9 3 (tied) REGULAR FEATURES Mark Dodosh ([email protected]) suggestions by Friday, Dec. 16. Medina 5.9 3 (tied) Managing editor: There are no hard and fast requirements Classified ........................22 Scott Suttell ([email protected]) for this section, other than the candi- Editorial ..........................10 Cuyahoga 7.4 11 Sections editor: date needs to exhibit the kind of poten- Amy Ann Stoessel ([email protected]) Portage 7.9 18 tial that makes him or her someone to Going Places ..................12 Assistant editors: watch in the field of technology. Letters ......................11-12 Summit 8.1 21 Joel Hammond ([email protected]) Mark your calendars for future sec- List: Largest office Sports tions: “Who to Watch: Finance” (April Lorain 8.5 32 Kathy Carr ([email protected]) 23); “Who to Watch: Health Care” (July leases ........................19 Marketing and food 16); and “Who to Watch: Law” (Nov. 26). Reporters’ Notebook ......23 SOURCE: OHIO DEPARTMENT OF JOB AND FAMILY SERVICES Senior reporter: Stan Bullard ([email protected]) Real estate and construction Reporters: Jay Miller ([email protected]) Government Chuck Soder ([email protected]) Technology Dan Shingler ([email protected]) Manufacturing Tim Magaw ([email protected]) Health care & education Michelle Park ([email protected]) Finance Research editor: Deborah W. Hillyer ([email protected]) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks ([email protected]) Marketing/Events Coordinator: Jessica Snyder ([email protected]) Online payroll Advertising sales director: Mike Malley ([email protected]) Account executives: Adam Mandell ([email protected]) that’s easy on Nicole Mastrangelo ([email protected]) Dawn Donegan ([email protected]) Office coordinator: Toni Coleman ([email protected]) your time Web/Print production director: Craig L. 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