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$1.50/FEBRUARY 7 - 13, 2011
INSIDE COULD THIS SPACE ... Banking on the future Apartments Many Northeast Ohio banks in 2010 reported less delinquent debt and set aside less to cover future loan losses. After negotiating the highest levels of debt they’ve may rise at seen in decades, institutions here and nationwide say they believe the worst is over. Read Michelle Park’s story on Page 3. Flats East Bank As project’s construction proceeds, developers mull reviving dormant residential component
By STAN BULLARD NASA Glenn [email protected] With construction workers laboring again on the 18-story Ernst & Young Office Tower at the Flats East Bank perplexed Neighborhood project in downtown Cleveland, steps are afoot that ... HOUSE APARTMENTS? further may change the riverfront amid budget district’s skyline. The Wolstein Group of Beach- wood and Fairmount Properties of quandary Cleveland are looking at how to revive the “neighborhood” part of what started out as a $500 million project before tough economic times Federal spending cuts forced developers to split the Flats East Bank into phases. could affect programs Adam Fishman, a Fairmount Properties principal, said last week By CHUCK SODER during an interview that efforts are [email protected] under way to rekindle plans for the- project’s residential component, The green space immediately west of So far, fiscal 2011 is not turning perhaps exclusively as apartments the planned hotel in the above render- out like Ramon Lugo III had hoped. rather than the mix of for-sale con- ing may house apartments rather than NASA Glenn Research Center this dominiums and rental units origi- for-sale condominiums. year had been expecting to get more nally envisioned. money and a leadership role in a The idea is so attractive that devel- INSIDE: Other stakeholders seek new NASA program aimed at devel- oper K&D Group has discussed cre- representation as development oping new technologies for deep ating the apartments with Wolstein proceeds. Page 4 space exploration. But those things Group and Fairmount, according to might not happen because of uncer- its CEO, Doug Price. K&D Group There’s no condo market in Cleve- tainty at the federal level, said Mr. built Stonebridge Apartments and land now.” Lugo, the center’s director. FILE PHOTOS/MARC GOLUB Condominiums in the Flats and the He should know. Mr. Price said Congress hasn’t approved the Development of the Flats East Bank project is under way. The plan originally called Residences at Six Six Eight at that ad- K&D sold just six condos last year at federal budget for fiscal 2011, which for a mix of condos and rental units, but developers, such as Doug Price of K&D dress on Euclid Avenue downtown. Stonebridge Plaza on the west bank began Oct. 1, 2010. That delay has Group — whose Stonebridge residential complex is shown directly above — said “We’ll see where it goes,” Mr. Price of the Flats. However, the company put new programs at NASA and other apartments may be a more lucrative and attractive option for the project. said of the talks. “It can’t be condos. See EAST BANK Page 4 agencies on hold. Plus, a strengthened push to cut federal spending could hurt NASA’s budget, which likely would hurt NASA Glenn, Mr. Lugo said. Any cuts also might hurt NASA Glenn’s Manufacturers adjust as raw materials prices rise chances of keeping its leadership role in the new Exploration Technology sion did — with rising prices for steels and special alloys that are weld go up in recent months. Development and Demonstration Relationships guide steel, plastic resins and other critical machined into precise parts for For instance, the price of copper, program, he said. raw materials. products including medical devices which is used in cables, has risen No decisions about NASA’s budget purchasing decisions “The last time we saw prices rise and military components. 41% in the last five months, said have been made yet. House Repub- like this was back in 2008,” said Companies such as Astro, as well Astro vice president Rich Peterson. licans have said they aim to cut By DAN SHINGLER Terry Brown, purchasing manager as countless other machine shops, And since July, the worldwide aver- spending within many federal agencies [email protected] for Astro Manufacturing and stamping plants and metal fabrica- age price for carbon steel has gone to 2008 levels or lower, though they Design in Willoughby, a custom tors across Northeast Ohio, have from about $732 a metric ton to likely would face opposition in the For area manufacturers, the recovery machine shop and specialty manu- seen the price of just about every- more than $800 today. See NASA Page 6 is beginning the same way the reces- facturer. Mr. Brown mostly buys thing they can cut, bend, shape and See STEEL Page 17
SPECIAL SECTION 06 6 HEALTH CARE
NEWSPAPER Northeast Ohio a mecca for patients seeking Entire contents © 2011
71486 01032 quality health care ■ Page 13 by Crain Communications Inc. Vol. 32, No. 6
0 PLUS: HEART HEALTH ■ TEAMING UP ■ & MORE 20110207-NEWS--2-NAT-CCI-CL_-- 2/4/2011 11:18 AM Page 1
2 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011 CRAIN’S FAMILYBUSINESS SECTION HEALTHY MARGINS About 1.3 million Ohioans do not have medical insurance — and Ohio is better Crain’s Cleveland Business for the also will be considered. off, relatively speaking, than the rest of the country, according to a new report second year will recognize some of The deadline is Feb. 21. You may by The Center for Community Solutions and the Mental Health Advocacy the region’s best-run, financially stable nominate family businesses by sending Coalition. Ohio’s percentage of uninsured is four percentage points below the family businesses. an e-mail nomination to editor Mark 700 W. St. Clair Ave., Suite 310, national average, and its share of people with private insurance is five Cleveland, OH 44113-1230 On April 4, we’ll profile three compa- Dodosh that should include the com- percentage points above the United States as a whole. Here’s how Ohio Phone: (216) 522-1383 nies each in three categories: second-, pany’s name, how many generations it residents’ health insurance status compares with people nationwide: Fax: (216) 694-4264 third- and fourth-generation or greater has been in business and an explana- www.crainscleveland.com businesses. We’re looking for compa- tion of no more than a single page as Health insurance status Ohio United States nies regarded as good employers and to why it should be recognized. Publisher/editorial director: that have earned the respect of their E-mails to [email protected] Brian D. Tucker ([email protected]) Private 59% 54% Editor: peers. Factors such as growth and a should say “Family Business” in the Mark Dodosh ([email protected]) company’s involvement in its community subject line. Medicare 14 12 Managing editor: Scott Suttell ([email protected]) Medicaid 13 16 Sections editor: REGULAR FEATURES Amy Ann Stoessel ([email protected]) Uninsured 13 17 Assistant editors: Joel Hammond ([email protected]) Big Issue...... 11 Letters...... 10 Other public 11 Sports Classified ...... 18 List: Largest hotels ...... 16 Kathy Carr ([email protected]) Editorial ...... 10 Tax Liens ...... 9 SOURCE: “BY THE NUMBERS: “DEVELOPING A COMMON UNDERSTANDING FOR THE FUTURE OF Marketing and food BEHAVIORAL CARE,” BY THE CENTER FOR COMMUNITY SOLUTIONS AND THE MENTAL HEALTH ADVOCACY Senior reporter: Going Places...... 12 Reporters’ Notebook ....19 COALITION 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 Anyone can keep your money active; Michelle Park ([email protected]) Finance Research editor: Deborah W. Hillyer ([email protected]) We keep your money proactive. Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks ([email protected]) Marketing/Events Coordinator: Jessica Snyder ([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]) 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) 1-877-824-9373 Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Great Treasury Management should be a 24/7/365 commitment. Mary Kay Crain: Treasurer William A. Morrow: At FirstMerit, we have specialized and seasoned Treasury Management Officers who will Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: help you get the most out of your money by sweeping it, moving it, adjusting it and simply Group vice president technology, circulation, manufacturing being proactive with it. We even have a dedicated Treasury Management Call Center. Paul Dalpiaz: Chief Information Officer Dave Kamis: Get FirstMerit and get more. More Bank For Your Business™ 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)
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FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 INSIGHT Wind tax credit extension cheers area suppliers But, they say, long-term assistance also is vital
By DAN SHINGLER happy Congress acted on at least [email protected] one helpful action before 2010 ended. “It’s a great thing,” said John The holiday season was a good Grabner, president of forged bolt one for Cleveland-area suppliers to maker Cardinal Fastener in Bedford the wind energy industry, as the Heights, of the December passage of sector got an important one-year a one-year extension of renewable extension of a federal tax credit that energy tax credits. wind backers say is crucial to creating “I met with (U.S. Treasury Secre- sustained growth. tary Timothy) Geithner and (Depart- The new year would be even ment of Energy Secretary Stephen) better, they note, if the wind industry Chu when this first came out in could receive some incentives or 2010, and we listened to guys who mandates that are long term in said they pulled all their projects nature, and therefore better able to out of South America and moved induce billion-dollar investments in them to the U.S. because of the tax projects that take years to pay off. credit,” Mr. Grabner said. Nonetheless, industry leaders are See CREDIT Page 7
THE WEEK IN QUOTES “We’ll see where it “Prices are moving, it By MICHELLE PARK goes. It can’t be almost seems weekly [email protected] condos. There’s no right now. It looks like BANKS DITCH anks have faced in recent times the condo market in a good sign for the highest levels of delinquent debt they’ve seen in decades, but it appears the worst Cleveland now.” economy, because BAD DEBT is over, which positions institutions to — Doug Price, CEO, K&D Group. Bfocus less on shoring up credit and more on material is moving Page One extending it. fast and furious.” During 2010, many banks in Northeast Ohio Restoring credit quality allows and nationwide reported less delinquent debt — Matt Hlavin, president, Thogus Products. Page One and set aside less per quarter to cover future them to extend more loans See DEBT Page 8
PERFORMANCE ART “These patients find “We actually are A look at area banks’ nonperforming loans and nonperforming assets as of Dec. 31, 2010: their way to Cleve- looking to improve Bank Total assets % of nonperforming loans % of nonperforming assets land. … Our process quality of care across PNC Financial Services $264.3B 3.6% 2.5% has focused on the the country. … Even unique physician though we’re com- Fifth Third Bank $111.0 4.9 3.9 and their area of petitors, we’re all KeyCorp $91.8 2.3 1.5 expertise.” kind of in this Huntington Bancshares $53.8 3.4 2.9 — Dr. Michael Nochomovitz, together.” president, University Hospitals FirstMerit Corp. $14.1 1.9 1.5 Physician Services. Page 13 — Dr. Joseph Cacchione, director of clinical integration, Median, top 50 banks $22.0 3.4 2.4 Cleveland Clinic’s Heart and SOURCE: PARAGON CAPITAL GROUP LLC, MAYFIELD HEIGHTS; DATA: SNL FINANCIAL Vascular Institute. Page 15
Cleveland railroad quietly, quickly moves on expansion projects
line railroad serving customers more attractive for shippers to From left, Company saw its chance along its track, which starts in move water-borne cargo onto a rail Douglas Fink, when bigger operators Cleveland and runs southeast line through the Port of Cleveland. Michael Kole through several suburbs. In addition, the 10-employee and William left behind short lines In just the last month, the 7-year- company on Thursday, Jan. 20, won Brown have old railroad took steps forward on approval from the Ohio Rail Devel- doubled Cleve- By JAY MILLER two expansions. opment Commission for a $170,000 land Commer- [email protected] First, it won approval Wednes- loan and grant package to improve cial Railroad’s day, Jan. 19, of a contract with the one of its lines in the eastern suburbs. operating What do railroad buffs nearing Cleveland-Cuyahoga County Port It plans to extend rail 2,300 feet to a revenue over retirement age do for a second act? If Authority. The railroad will run a pilot loading facility it will build that the past five they are William Brown, Douglas program beginning this spring to would serve four steel processors in years. Fink and Michael Kole, they start a operate a locomotive on the docks Bedford Heights. RUGGERO FATICA railroad. that will move loaded rail cars to the The company’s proposal to the The three men own — and some- tracks of long-distance, or Class I, rail development commission says times work as locomotive engineers freight rail haulers. the steel processors can save $3 to $5 for — Cleveland Commercial Rail- The Port Authority is building a ton if they can ship to a customer road Co., a young and growing short- new track on the docks to make it See RAILROAD Page 7 20110207-NEWS--4-NAT-CCI-CL_-- 2/4/2011 3:29 PM Page 1
4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011 Flats interests jockey for inclusion
By STAN BULLARD approaches of most neighborhood Alliance, was designed to get “every- [email protected] organizations. one in the room to talk” about the For example, Mr. Cimperman future of the Flats, Mr. Cimperman Renewed interest in real estate said, five pieces of legislation went said. He said others in the room development in Cleveland’s Flats is through Cleveland City Council on included two Flats Oxbow board occurring as a push is under way to one day last summer that dealt with members. insert another local development items from the Flats East Bank The session was to stress the value corporation into the role of the Flats mixed-use project to a loan for the of one voice, Mr. Cimperman said. He Oxbow Association, a stakeholder new home of the Cleveland Rowing said “the whole world” will be invited group that has represented interests Foundation. to a Feb. 22 planning session at Nau- of Flats businesses since 1976. “No one from Flats Oxbow was tica for ideas for improving the Flats. “There is $2 billion of investment there,” Mr. Cimperman said. “When Longtime Flats business and prop- set for the Flats. I’ll be damned if I’ll other (community development erty owner Mike Samsel attended the miss the chance to get this right,” corporations) have funds for a Jan. 31 session after he called for an said Cleveland City Councilman Joe storefront renovation project before invitation. Cimperman, referring to development council, they get three people to “I was suspicious,” Mr. Samsel said that includes the Flats East Bank City Hall.” of the session. “After listening to (Mr. Neighborhood, an aquarium at Nau- Efforts to reorganize representa- Cimperman) and the others, I decided tica and the planned Caesar’s Horse- tion in the Flats surfaced with a if they want to get the Flats going in shoe Casino at Tower City Center. meeting last Monday evening, Jan. 31, one direction, that’s OK by me.” “In 13 years as a councilman, one in the first-floor conference room of Less accommodating is Kyle Fries, thing that has frustrated me is the ka architecture in the Western Flats Oxbow chairman, who said Mr. ‘Us vs. Them’ philosophy in the Flats. Reserve Building, 1468 W. Ninth St. Cimperman has been looking for The ‘Us’ is always different but the Albert Ratner, co-chairman of ways not to fund the organization. ‘Them’ is constant,” Mr. Cimperman real estate giant Forest City Enter- “Other organizations have staffs. said, referring to Flats Oxbow. prises Inc., talked that evening to a We have two people,” Mr. Fries said. :+
>>TRAINING MATERIALS AND WORKSHOPS ENHANCE YOUR RETURN ON INTERN East Bank: Housing market may alter plans
continued from PAGE 1 of Flats East Bank were relegated to However, Mr. Fishman said he and got a full house when it opened the park-like green space status for an others are studying the feasibility of 232 rental units at its Residences at indeterminate future as a second constructing apartments because log on to www.neointern.net Six Six Eight last year. He said occu- phase of the project. they are desirable investments and to find your next intern pancy at K&D’s downtown rentals That decision left the developers easier to finance. has rebounded to 95% as the reces- plus state and local officials free to Cleveland City Councilman Joe sion has eased. focus on the office, hotel and retail Cimperman, whose Ward 13 includes Last year, the residential portions portions of the project. In so doing, most of the Flats, said city-approved they broke a development logjam plans speak to residential develop- created by the financial crisis and ment in general, not the type of ensuing recession. residences, and he supports either With a $270 million financing apartments or condos. package that closed late last year and “The key for me is having people included money from a staggering down there,” Mr. Cimperman said in 30 sources, construction work has an interview last Thursday, Feb. 3. begun on the office building, hotel and parking garages. A market tightens up Reviving the residential compo- Let’s roll nent of Flats East Bank as rentals Thank you The project’s restart also has set makes sense. Apartments regained the table for planning how to rede- luster as lagging home sales and epi-
velop the rest of the property near demic foreclosures reduced home With deepest gratitude we thank the following corporations and corporate the mouth of the Cuyahoga River. ownership rates. foundations who supported Y.O.U.’s mission with financial contributions of “Our charge from (Mr. Wolstein) is A report issued last week by the $2,500 or more in 2010. to start working on phase two imme- Marcus & Millichap real estate bro- diately” Mr. Fishman said, referring kerage on the apartment market in key to Scott Wolstein, executive chair- cities nationwide projects the Cleve- Aleris International, Inc. Jones Day man of publicly traded Developers land apartment market will tighten ArcelorMittal JPMorgan Chase Foundation Diversified Realty Corp. and a prin- as apartment vacancies will fall to 5.6% Benesch Friedlander Coplan Kaiser Permanente cipal of privately held Wolstein in 2011 from 6% at the end of 2010. Group, the project’s co-developer. However, Marcus & Millichap & Aronoff LLP KeyBank Mr. Wolstein is pursuing the project actually dropped Cleveland’s ranking Booz & Company Lincoln Electric Foundation with his mother, Iris Wolstein, in as a desirable place for new apart- memory of the late Bertram “Bart” ments to 40th out of the 44 markets it Calfee, Halter & Griswold, LLP Matco Tools Wolstein, their father and husband, follows from 32nd last year. One reason: Cleveland Clinic Medical Mutual of Ohio respectively. Affordable home prices are providing Deloitte LLP PNC Phase two of the project originally strong competition for apartments. was the key feature of Flats East The brokerage forecasts 80 new Dominion East Ohio Quicken Loans Bank; it was envisioned as multiple units will be added to the Cleveland Eaton Corporation RPM, Inc. residential buildings between the market this year compared with 290 office tower and riverfront. in 2010. The expected decline in Findley Davies, Inc. Swagelok Company The residential units were seen apartment construction reflects FirstMerit Bank, NA Thompson Hine mainly as for-sale condos to ride the difficulty some developers face in Forest City Enterprises, Inc. The TJX Foundation Inc. housing boom of the mid-2000s. obtaining attractive financing. ■ GrafTech International LTD Turner Construction Company
Huntington National Bank Zashin & Rich Co., LPA Volume 32, Number 3 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, Youth Opportunities Unlimited, a non-profit youth workforce development organization founded in OH 44113-1230. Copyright © 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, 1982, empowers youth to succeed in school, in the workplace, and in life by graduating high school and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s and preparing for a career. Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877- 824-9373.
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FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5 Parts shortage slows EcoBoost “This outside machining is killing Union boss says outsourcing ‘is killing Ford’ Ford. They can’t get cams, they can’t get rods — we need to bring this stuff By DAN SHINGLER chain and poor weather that hampered back in-house,” Mr. Gammella said. [email protected] some deliveries, Mr. Gammella said. Ford so far has announced no Mr. Gammella said he hopes Ford such plans, but Mr. Gammella said Ford’s Brook Park-made EcoBoost will address the problem not only by he hopes it’s something that will be engine might be going a little too fast working more closely with suppliers, discussed when his union’s contract is — it’s outpacing the ability of parts like it’s doing now, but also by renegotiated in September. suppliers to keep the automaker’s bringing some parts production On the bright side, Mr. Gammella production lines running. in-house. Over the past two decades, said the shutdowns are a sign of Both Ford and its major union at Ford and other U.S. automakers the popularity of the engine made at the engine plant, United Auto Workers have outsourced more of their parts the plant — a V-6 turbocharged engine, Local 1250, confirmed that the plant production. Mr. Gammella said that which Ford boasts can achieve V-6 has experienced slowdowns, including cost-cutting strategy now is ham- mileage while delivering power sim- United Auto at least two instances when the pering its production — especially in ilar to a V-8. The company has been Workers Local entire EcoBoost engine line was shut an era when Ford and its workers increasing the number of vehicles in 1250 president down and its workers were sent are focused on the quality of both which the engine is available, and Mike Gammella home. finished vehicles and the parts that added it as an option for its popular FILE PHOTO/ “Even this week it’s causing a go into them. F-150 pickup trucks in 2010. ■ MARC GOLUB problem,” said Local 1250 president Mike Gammella, speaking to Crain’s last Friday, Feb. 4. “The whole line’s been shut down a couple of times.” Ford spokeswoman Megan What- man said the plant did “have an engine parts shortage that temporarily reduced some EcoBoost production in January,” but that it continued to make other products during the affected periods. Mr. Gammella declined to say exactly how long the lines were down, but noted that all of the EcoBoost line’s 155 workers were sent home on at least two occasions. Workers still receive nearly all their pay in such a situation, though work stoppages brought on by parts shortages have had ramifications for Ford that extend beyond Brook Park. Ms. Whatman confirmed a parts shortage also resulted in the shut- down of Ford’s truck plant in Dear- born, Mich., after reports came out of Detroit that 3,000 workers had been sent home in that shutdown on Jan. 25. There are various reasons for the problems, including a tight supply
ON THE WEB Story from www.CrainsCleveland.com. Higbee Building mainstays will move to E. 4th It’s time for your business to Positively Cleveland and the Greater Cleveland Sports Commission will accomplish big things again. be moving to the southwest corner of Euclid Avenue and East Fourth Street. David Gilbert, who runs both organizations, said the nonprofit tourism organizations will take over the space that was used temporarily for “Bodies … The Exhibition,” the gallery that displayed plasticized and dismembered human bodies. Positively Cleveland, the region’s convention and visitors’ bureau, must move from the Now’s the time to reinvest in your business’ future. Higbee Building to make way for The last few years haven’t been easy. It’s been work just to maintain the business you’ve built. the temporary Horseshoe Casino Cleveland that will occupy four It’s time to get back to growing it. Whether that means buying new equipment, improving your floors in the former department working capital, or reinforcing your overall finances, Fifth Third Business Bankers can help you take store. It is leaving space at the corner of Ontario Street and action to get your business moving forward with confidence. Stop in your local Fifth Third Banking Public Square. The sports commission’s Center, call 1-866-534-7249, or visit 53.com, and let’s get your business moving. lease in the Terminal Tower expired at the end of 2010. The two organizations’ 50 Loans subject to credit review and approval. Fifth Third Bank, Member FDIC. Equal Housing Lender. employees will occupy 17,000 square feet in the Windsor Building, an apartment block. 20110207-NEWS--6-NAT-CCI-CL_-- 2/4/2011 1:42 PM Page 1
6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011
E!CLEVELAND Salt for Ice Control Every Thursday, Crain’s sends Venue: Beck Center for the Arts, American cast. Hallie Foote, the Bag and Bulk to more than 20,000 readers an Lakewood Tony-nominated actress and arts and leisure e-mail called When: Now through March 12 daughter of the late playwright, • Halite Big Savings on e!Cleveland. Why you might be interested:If has authorized the production, The e-mail highlights at least 10 you’re a believer in Northeast which is directed by Timothy • JiffyMelt Truckload Orders! events, and often more, that might Ohio’s arts scene. The Cleveland Douglas and is a co-production • Calcium Minimum Delivery = 1 Pallet be worth your time outside work. Artists Foundation, which preserves, with the Round House Theatre Chloride Forklift Delivery Available To sign up for this and all our researches, collects, exhibits, doc- near Washington, D.C. Veteran e-mails, visit www.CrainsCleveland uments and promotes significant actress Lizan Mitchell leads the John S. Grimm, Inc. 1-800-547-1538 .com and click the “Register for visual art from this region, is staging cast as widow Carrie Watts, who Crain’s alerts” icon at the top left its biennial celebration that cele- yearns to visit her childhood home Authorized Dealer of the home page. brates the patronage of local one last time but has to break free Here’s a taste of what makes it artists. For this exhibition, mem- from an ineffectual son and an into the e-mail: bers of the Cleveland overbearing daughter-in-law. Artists Foundation have On the web: www.Cleveland Beyond selected their favorite PlayHouse.com DISCOUNT CORPORATE MASTERCARD the sea Northeast Ohio works Save up to 20¢ per gallon at over Event: “The from their own collec- Life in the fast lane 40,000 gas stations nationwide. tions. They also share a Little Mermaid” Event: “Becky’s New Car” few words about what the art No fees. Venue: Studio One Theatre, Venue: Greystone Hall in Akron, means to them in comments that Monthly CASH rebate opportunity. Cleveland Play House across the street from the John S. are posted on the gallery walls. When: Now through Feb. 19 Knight Center There are no limitations on time Use for fuel only and/or for travel, entertainment Why you might be interested: If When: Thursday, Feb. 10, period, subject matter or medium, A preferred partner of & your accounts payable. you haven’t seen enough puppet- through Sunday, Feb. 27 so visitors will see a hugely diverse based entertainment lately. The Why you might be interested: If — and hugely impressive — CALL NOW 440-386-4085 Play House’s excellent Theatre you’d like your life to shift into a collection. www.momentumgroups.com for Children revisits the art of pup- new gear. In this Actor’s Summit On the web: www.Cleveland peteering with an imaginative play written by Steven Dietz, the Artists.org retelling of the Hans Christian An- lead character, Becky, is in a rut. dersen story in which a young girl A meaningful journey She has a dull job, a boring learns the beauty and power of her marriage and a 26-year-old son own voice. Put the fine Disney Event: “The Trip to Bountiful” who still lives at home. But things movie out of your mind and take Venue: The Cleveland Play House liven up when a widower million- the kids (it’s designed for grades When: Through Sunday, Feb. 27 aire mistakenly assumes that K-5) to this one-woman show starring Why you might be interested: If Becky is single and falls for her at Nina Domingue. Tickets start at $10. you’re looking for a fresh take on a first sight. Becky fails to correct the On the web: www.Cleveland modern classic. This marks the mistake, and she finds herself PlayHouse.com first time the Play House has pro- leading a double life. As in any duced a show by Academy Award farce, Actor’s Summit says, “her Close to their hearts and Pulitzer Prize-winning play- two lives collide and accelerate out Event: “Cleveland Collects: An wright Horton Foote, and it’s the of control.” Exhibition of Members’ Favorite world premiere of “The Trip to On the web: www.ActorsSum- Regional Artwork” Bountiful” featuring an African- mit.org
Thursday, February 17, 2011 NASA: 11:30 am Registration • 12 Noon Lunch & Program Contractors could suffer from cuts DR. STANTON L. DR. DEREK Moderated By continued from PAGE 1 into the center’s strengths. understood that cuts could hurt GERSON, MD RAGHAVAN, MD, PH.D. MONICA ROBBINS Democrat-controlled Senate. NASA’s The bill also allotted $250 million NASA Glenn contractors, though fiscal 2010 budget was $18.7 billion, of NASA’s budget to the new Explo- neither expected their own compa- up $1.4 billion from $17.3 billion ration Technology Development nies to be hurt much. One noted in 2008. And it was projected to and Demonstration program. NASA that the continuing resolution was increase in future years. Glenn had been assigned to lead preventing his company from win- If NASA’s budget is cut, there’s the program. The role would involve ning some new work for which it no telling which of the agency’s 10 doling out much of the money to had been preparing. centers would absorb the hit, but other centers, but it would create a An official from the union repre- Mr. Lugo said it is unlikely any handful of administrative jobs at senting NASA Glenn scientists and particular center would be spared. NASA Glenn, and NASA might allow engineers who left a phone mes- For more info: www.ExecutiveCaterers.com and click on Corporate Club or call 440.449.0700 Should that happen, NASA Glenn NASA Glenn to set aside a relatively sage last Thursday, Feb. 3, did not first would cut discretionary spending small amount of the money for return a follow-up phone message or and defer some purchases, but it in-house research, Mr. Lugo said. an e-mail. might need to cut staff, he said. Though the bill passed, the federal Because of the continuing reso- It’s a disappointing situation, Mr. government still hasn’t passed a lution, NASA Glenn is prevented Lugo said. “It looked like 2011 was budget for fiscal 2011. Since then, from working on other projects going to be our year,” he said. the entire government has been related to the new space explo- operating under a continuing reso- ration plan. In an effort to follow No fretting lution, which funds federal pro- the law without wasting time and THE STERLING BUILDING Last October, President Barack grams at the previous year’s levels money, Mr. Lugo said the center Obama signed the NASA Authoriza- until an official budget it passed. has tried to work on projects that 1255 Euclid Avenue, Cleveland, Ohio tion Act of 2010, a bill that scrapped So, the Exploration Technology could be used in whatever rocket the agency’s Constellation program, Development and Demonstration NASA ends up developing. $YDLODEOH)RU6DOH which aimed to build two new program has yet to begin. If NASA’s “It’s going to have a power sys- rockets in an effort to send astro- budget is cut, Mr. Lugo said NASA tem, it’s going to have a propulsion 6)%XLOGLQJ nauts to the moon by 2020 and then headquarters might take over the system, it’s going to have a commu- to Mars. The bill instead provided program to keep costs down. He nications structure,” Mr. Lugo said. 6)$YDLODEOH money to pay private companies to added, though, that he expects NASA Some members of Ohio’s con- develop rockets for low-Earth orbit, Glenn would win its share of assign- gressional delegation have told Mr. 3DUNLQJ6SDFH while NASA would develop a heavy- ments from that program even if the Lugo they don’t expect Congress to &RYHUHG6SDFHV lift rocket and generally focus more research center doesn’t manage it. reach an agreement on the fiscal on developing technology for deep “We can fret over what we don’t 2011 budget before the continuing *UHDW7HOHFRP%XLOGLQJ space exploration. The bill also have, or we can take advantage of resolution expires on March 4. 'DWD&HQWHU6SDFH included plans to send astronauts what we do have,” he said. That situation leads Mr. Lugo to to an asteroid by 2025 and to Mars think Congress might keep NASA at Holding pattern 6HFXULW\ by the mid-2030s. 2010 budget levels until fiscal 2012 The bill was opposed by several The bill passed in October begins in October, depriving the Thomas K. Gustafson members of Ohio’s congressional prevents NASA from laying off any agency of a slight budget increase it 216.861.5447 delegation, who said it provided too government employees for three was supposed to receive this year. [email protected] much money to private companies years, but the agency is allowed to He said Ohio’s delegation has and not enough for research con- cut private contractors, who make pushed to make sure NASA Glenn is- G. F. Coyle III, SIOR ducted by NASA. However, Mr. Lugo up roughly half of NASA Glenn’s n’t forgotten at the federal level. 216.861.5286 said the new plan’s focus on research work force of about 3,500. “They are making sure that NASA [email protected] Global commercial real estate expertise and technology development should Two private contractors who Glenn’s capabilities are going to be be good for NASA Glenn, playing declined to be identified said they used,” Mr. Lugo said. ■ 20110207-NEWS--7-NAT-CCI-CL_-- 2/4/2011 2:49 PM Page 1
FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7 Credit: Standard would Railroad: Number of cars moved rises
continued from PAGE 3 $473,841 in 2004. the absorption of what had been lead to more U.S. turbines through the new spur rather than the lines of federally owned Conrail putting the steel on a truck at their On the right track by Norfolk Southern and CSX in continued from PAGE 3 doubt,” Mr. Weston said. plants. The railroad’s proposal esti- Short-line railroads are taking 1999 — the major railroads chose to The credit, which functions as a But an RES would not solve mates the processors will generate advantage of the freight rail renais- dispose of their least profitable grant from the U.S. government, another problem, one that in the 29 rail cars a month of traffic for the sance of the last decade. Before the track. So, they divested or abandoned has been extended to include all wind eyes of Mr. Weston is more impor- railroad. recession, railroads were setting short stretches of rail that served and other renewable energy projects tant for the long-term success of The railroad has its admirers. cargo-hauling records. In 2007, the customers moving coils of steel, begun before the end of 2011. It U.S. wind industry suppliers. A stan- “You talk about a bootstrap oper- industry matched the record it set scrap metal or bulk commodities. provides developers a grant equal to dard by itself would not increase the ation, but they’ve done very well,” in 2006 for the number of ton-miles That change opened up oppor- up to 30% of their project costs and domestic content of wind turbines; said Stuart Nicholson, spokesman of freight it carried — 1.8 trillion tunities for short lines such as allows for the accelerated depreciation at present, about half the typical for the Ohio Rail Development ton-miles. Cleveland Commercial Railroad. of new equipment for tax purposes. wind turbine installed in the United Commission. “They’ve really revived A ton-mile is the movement of Indeed, Ohio has 36 short-line rail The day after the credit cleared its States is made overseas, according what was a moribund set of tracks.” one ton of freight one mile. The companies, according to Mr. final hurdle in the House of Repre- to Mr. Weston. Cleveland Commercial Railroad industry also was increasing its Nicholson. sentatives on Dec. 16, Denise Bode, Playing catch-up with China leases track owned by Wheeling & share of the freight traffic compared Mr. Brown said it is “more cost- CEO of the American Wind Energy Lake Erie Railway and Norfolk with trucking and other modes of efficient for (the major railroads) to Association, called it “a great holiday The problem isn’t just that Asia Southern Corp. One line runs from transportation. use a short line” than tie up their present for the 85,000 American and other developing markets have Solon, the other from nearby Glen- Mr. Brown and his partners own capital and highly paid labor workers in the wind energy industry.” cheaper labor— that’s only part of willow; they together account for 33 believe as the economy shakes off delivering directly to customers, She added, “Orders will be on the rise the reason that they can produce miles of track. The two lines join in its gloom, the business will continue Mr. Brown said. for new wind power, and investors wind turbine parts for less than a former Erie Lackawanna Railroad to grow. “The labor-intensive part of will put more capital into the U.S. some domestic manufacturers, Mr. yard owned by Norfolk Southern Freight that moves by rail spends railroading is the first mile and the economy.” Weston said. It’s also that they often near downtown Cleveland. most of its time on larger, or Class I, last mile,” he said. “We save the People such as Mr. Grabner say have better, more modern factories, Mr. Brown said the railroad has freight railroads such as Norfolk Class Ones insurance, fuel, crew; while the extension is great, the indus- especially in the wind industry. grown from one locomotive moving Southern and CSX Corp. Those we lease the locomotives.” try also needs long-term sustenance. While U.S. manufacturers are about 1,500 rail cars a year in its industry giants prefer to concen- Cleveland Commercial Railroad’s His view is important, because working with plants and machinery early years to four locomotives trate on their efficient mainlines customers include scrap metal not only does Mr. Grabner head one that sometimes are decades old, moving about 5,400 cars in 2010. that move rail cars long distances to dealers, a lubricant maker and the of Ohio’s most prominent small their Chinese competitors are working According to an annual report the large intermodal centers, where Nestle USA plant in Solon that manufacturers related to the wind with brand-new equipment — and company filed with the Public cargo, usually containers, is moved makes Stouffer’s and Lean Cuisine business, he’s a board member of the using not only cheaper labor, but Utilities Commission of Ohio, its from rail cars to trucks. frozen meals. American Wind Energy Association, less of it. China’s industrial base is operating revenue more than doubled Mr. Nicholson said as the Class I “We take (Nestlé) tomato paste the nation’s largest wind trade orga- almost all new growth, while much to $1.01 million in 2009 from railroads grew — in particular after and semolina (flour),” he said. ■ nization and lobbying group. (In case of the industrial base of the United you were wondering why a small States is aging. manufacturer in Bedford Heights “There aren’t as many people has the ears of policymakers such as working in a Chinese wind turbine Messrs. Geithner and Chu.) factory as there are in the typical U.S. Others agree, and Ms. Bode blamed factory,” Mr. Weston said, recalling the industry’s weak performance in his tour of Chinese factories in 2010. 2010 — when U.S. wind energy Overcoming that will be tough. installations dropped by about “No one I talk to in the wind half, to about 5,100 megawatts of industry wants protectionism, but new capacity — on the inability of there’s a growing sentiment that the investors to count on short-term or U.S. needs to develop a national on-again/off-again tax incentives. manufacturing strategy that will “Our industry continues to support domestic competitive- endure a boom-bust cycle because ness,” Mr. Weston said. of the lack of long-term, predictable Even what has been passed so far federal policies,” Ms. Bode said in in the way of legislative aid for wind announcing the tally for last year’s industry development has been a U.S. wind installations. tough sell, said U.S. Sen. Sherrod Brown, a Democrat from Avon. ‘It’s got legs’ “We had trouble getting (the 30% What Ms. Bode, Mr. Grabner and tax credits) even for one more year,” others in the industry want is some- Sen. Brown said in a recent interview. thing called a Renewable Energy Everyone wants to be ‘clean’ Standard (RES) — a piece of federal legislation that would mandate that President Obama, arguably renew- the United States get a certain, able energy’s most powerful sup- probably increasing percentage of porter to date, appears to be backing its energy from wind and other off on his exclusive support for a forms of renewable power. Renewable Energy Standard. President Barack Obama in 2009 In his Jan. 25 State of the Union proposed a federal RES of 25% by 2025, speech, Mr. Obama proposed a but the measure never took hold, to national Clean Energy Standard, the chagrin of wind energy developers. rather than the Renewable Energy “They were banking on an RES, Standard he supported in the past. and when it did not make it, they The difference is huge to many in pulled back,” Mr. Grabner said. the wind industry, because nuclear, He and other manufacturers will natural gas and even some coal- try again this year to push for such a fired generation projects could argue standard, beginning with an intensive for support as “clean energy” projects. lobbying effort in Washington, D.C., There may be some hope for at a Feb. 15 industry conference. additional help this year. Sen. “It’s got legs,” Mr. Grabner said Brown hopes to secure $5 billion in of the effort. “Polls show that 87% new federal tax credits for renew- of this country wants renewable able energy by getting Congress to electricity, even if it’s at a greater renew the 48C tax credit program. expense. … But it’s not going to Part of the American Recovery come without some effort.” and Reinvestment Act of 2009, the An RES would result in the 48C program provides tax credits installation of more wind turbines for manufacturers that provide the in the United States, said Ed Weston, wind and other renewable energy president of the Great Lakes Wind sectors with parts and supplies. That Network, a Cleveland-based group program was allotted $2.3 billion formed by manufacturing advocacy when it was put in place at the end of group Wire-Net that has grown to 2009, but quickly used up its funds. include more than 1,200 members Sen. Brown said he hopes Con- nationwide. Mr. Weston said a stan- gress will renew it, in an even larger dard also would yield more revenue form, this year. for suppliers like Cardinal. “I think I can get that as part of a “It would make the pie bigger, no bigger tax bill this year,” he said. ■ 20110207-NEWS--8-NAT-CCI-CL_-- 2/3/2011 3:36 PM Page 1
8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011 Debt: Local banks follow long road to upgrading quality continued from PAGE 3 the flow of credit should, too. of Paragon Capital Group LLC, “Unless you missed something, you shouldn’t be seeing loan losses — a sign they believe “That’s the key to banks being an investment banking firm in they’ve turned the corner. willing to make more loans,” said Mayfield Heights. a lot of new (problem loans) all the time.” Fourth-quarter reports in January Fred Cummings, president of Eliza- Cleveland-based KeyCorp, which – Jay Gould, investor relations director, Huntington Bancshares delivered word of more progress. beth Park Capital Management in reported a fourth-quarter profit of Two examples: KeyCorp and Beachwood. “To the extent that $279 million compared to a loss of repossessed properties. That action, been more uneven, Mr. Crowley said. Huntington Bancshares Inc. now they feel good about their current $265 million in the year-ago period, combined with a modestly improving Smaller banks do not have the have reported five consecutive portfolio, that’ll give them confi- noted that its nonperforming assets economy, resulted in lower nonper- same access to capital markets as quarters of declining nonperforming dence to make more loans.” stood at $1.3 billion as of Dec. 31 — forming loans and net charge-offs. larger banks and thus don’t have assets, which include delinquent, Plus, Mr. Cummings noted, the lowest they’d been since third FirstMerit Corp. in Akron reported the ability to raise large amounts of nonaccruing loans and repossessed banks likely will be more willing to quarter 2008. a fourth-quarter profit of $27 capital the way Huntington and property. Both banks also reduced consider acquisitions as they spend Key’s net loan charge-offs, or loan million, nearly double its profit in Fifth Third Bank of Cincinnati did their loan loss allowances every less on credit problems. losses, also dropped every quarter the year-ago quarter. However, its recently, Mr. Crowley explained. As quarter in 2010. last year. The patients stabilize nonperforming assets and loan a result, smaller banks may be less Improving credit quality drives Asked to identify the main driver losses rose for the second straight likely to sell assets and swallow losses up earnings for banks, many of Most of the nation’s top 50 banks of improvement, spokesman Bill quarter. The bank’s nonperforming to get nonperforming assets off the which have reported fourth-quarter have shown a decent progression in Murschel said Key was among assets and loan losses, though, books, particularly if they anticipate profits compared to year-earlier credit quality improvement, said the first to sell a large portfolio remain some of the lowest among the economy and real estate markets losses. And as credit quality improves, Charlie Crowley, managing director of problem real estate loans and its Midwestern peers, said Paul G. are improving. Greig, chairman, president and PVF Capital Corp., parent of Park CEO. View Federal Savings Bank in Solon, “Some of those who’ve reported announced a $3.7 million loss in its declines are coming from astro- fiscal second quarter that ended nomical levels,” said Mr. Greig, who Dec. 31, but said its nonperforming blamed the ongoing difficult econ- assets had decreased $11 million, omy for the increases to FirstMerit’s or 14%, to $67 million during the problem assets and losses. quarter. That’s the single biggest One bank that fits Mr. Greig’s quarterly decline in problem assets description is Columbus-based in five quarters, president and CEO Huntington, which said its nonper- Bob King said. forming assets posted a “huge He credited most of the improve- decline,” dropping nearly 60% to ment to the sale of residential and $844.8 million on Dec. 31, 2010, commercial real estate collateral in from an unprecedented $2 billion Northeast Ohio. on Dec. 31, 2009. “There are actually buyers out “You stop finding (problem loans) there,” Mr. King said. eventually,” explained Jay Gould, “Obviously, improved credit quality Huntington’s investor relations gets us one step closer to resolving director. “You’ve got your borrowers our regulatory issues,” Mr. King stabilized. The ones that have had the added, referring to a cease-and- most problems, you’ve addressed. desist order the institution received Unless you missed something, you in October 2009 from the Office of shouldn’t be seeing a lot of new Thrift Supervision. “I do believe that stuff all the time.” the very worst is behind us. By no means is it great, but it’s better than Upbeat about asset quality it was.” Huntington has seen increasing LNB Bancorp Inc., parent of upgrades of loans that previously Lorain National Bank, reported its were nonperforming, Mr. Gould nonperforming assets rose as of noted. Such upgrades are outpacing Dec. 31, 2010, to $44.9 million, or downgrades, added Daniel P. Walsh 3.9% of total assets, compared to Jr., president of the bank’s Greater $40.1 million, or 3.49% of total Cleveland region. assets, a year ago. However, it did “The most important takeaway is see improvement year-over-year in … macroeconomic conditions are its levels of past-due loans that are improving for our clients,” Mr. not yet 90 days past due. Walsh said. “As that list (of problems) While Middlefield Banc Corp., shrinks, it frees up a lot of parts parent of The Middlefield Banking of the bank to turn its attention Co., reported that its asset quality on new opportunities,” such as issues have stabilized, it noted it increasing lending, he said. had increased its provision for loan Mr. Murschel agreed that lower losses by 39% over 2009 levels to credit costs combined with stronger address potential credit quality capital, liquidity and reserves put issues. KeyBank in a position to lend to its Time for discipline clients, though he noted the bank’s lending activity ultimately will No one source is to blame exclu- depend on economic improvement sively for the credit quality issues that and loan demand. have plagued banks, Mr. Crowley Banks’ expectations for asset said. Some banks weren’t careful quality were “significantly more enough in lending. Some con- upbeat than in past years,” according sumers bit off more than they could to the Federal Reserve Board’s chew. Legislators wanted to see January 2011 Senior Loan Officer home ownership increased and Opinion Survey. The poll also encouraged Freddie Mac and Fannie revealed that banks expect improve- Mae to help make it happen, but ments in delinquency and charge- some of those new homeowners off rates in every major loan category couldn’t withstand a severe reces- this year. sion, Mr. Crowley said. GOOD HEALTH IS A GREAT BUSINESS MODEL. Ohio’s banks likely are rebounding So who’s to be credited for the more quickly than markets such as turnaround? Good health and a safe work environment are always good for business. Which California, Florida, Michigan and Bank management teams, Mr. Crowley noted, have been prudent is why we encourage the employers who choose us to implement programs Nevada that were harder hit by the recession and the housing bust, Mr. in their lending standards, and that increase physical activity and decrease daily stress in the workplace. Crowley said. regulators — though “sometimes Because keeping employees healthy and happy is not only good for your “In general, banks in this region they shoot too far” — are injecting have been doing just what they an appropriate amount of disci- bottom line, it’s good for theirs. Learn more at businessnet.kp.org. needed to do,” he said, citing their pline. In some cases, too, people are tightened underwriting and efforts catching up on their payments. to recoup delinquent debts. “It just “I think a lot of it is the normal takes time. It’s a long process.” functioning of the business cycle,” Mr. Crowley said. “It doesn’t neces- The worst is over sarily feel like an economic recovery, Progress at community banks has but things are getting better.” ■ 20110207-NEWS--9-NAT-CCI-CL_-- 2/3/2011 2:21 PM Page 1
FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
P.O. Box 14100, Cleveland ID: 34-1142864 Alsoussou & Sons Inc. ID: 20-5546327 Date filed: Jan. 11, 2011 TAX LIENS 1240 E. 55th St., Cleveland Date filed: Jan. 11, 2011 Type: Employer’s withholding ID: 34-1901453 The Internal Revenue Service filed tax Date filed: Jan. 7, 2011 Type: Employer’s withholding, Amount: $7,500 Date filed: Jan. 4, 2011 liens against the following businesses Type: Employer’s withholding unemployment Type: Employer’s withholding, in the Cuyahoga County Recorder’s Amount: $14,696 Amount: $9,321 Caito Brothers Co. Office. The IRS files a tax lien to 4000 Orange Ave., Cleveland corporate income protect the interests of the federal Elegant Interiors & Design Pioneer Environmental ID: 34-1151301 Amount: $6,585 government. The lien is a public notice 37177 Lake Shore Blvd., Eastlake Systems Inc. Date filed: Jan. 19, 2011 Harold Pollock LPA to creditors that the government has a ID: 34-1912978 20536 Krick Road, Walton Hills Type: Employer’s withholding 590 Harper Road, Suite 107 claim against a company’s property. Date filed: Jan. 3, 2011 ID: 06-1682390 Amount: $7,261 ID: 34-1530164 Liens reported here are $5,000 and Type: Failure to file complete return, Date filed: Jan. 3, 2011 Victoria Health Care Inc. Date filed: Jan. 11, 2011 higher. Dates listed are the dates the unemployment Type: Employer’s withholding 2560 Buckhurst Drive, Beachwood Type: Employer’s withholding documents were filed in the Amount: $13,840 Amount: $8,827 ID: 31-1702565 Amount: $6,132 Recorder’s Office. Clarkes Family Trucking Inc. Innovare Solutions LLC Date filed: Jan. 4, 2011 Abel Counseling LIENS FILED 5669 Columbiana Drive, Bedford 20820 Chagrin Blvd., Type: Unemployment ID: 20-2603805 Shaker Heights Amount: $7,220 & Associates Inc. 14100 Cedar Road, Suite 300, Baker Motors Towing Inc. Date filed: Jan. 11, 2011 ID: 16-1633182 Glass Block Headquarters Inc. University Heights 12214 Detroit Ave., Lakewood Type: Employer’s withholding, heavy Date filed: Jan. 11, 2011 673 Dover Center Road, Westlake ID: 34-1805036 ID: 20-5027878 highway vehicle use tax Type: Employer’s withholding ID: 03-0531238 Date filed: Jan. 11, 2011 Date filed: Jan. 19, 2011 Amount: $12,007 Amount: $7,790 Date filed: Jan. 4, 2011 Type: Employer’s withholding, Type: Employer’s withholding, Trifecta Cleveland III Inc. Thomas A. Rak Landscaping Inc. Type: Employer’s withholding unemployment unemployment T/A Cowboys 1773 Rauland Drive, Walton Hills Amount: $7,133 Amount: $5,581 Amount: $254,448 K Klass Masonry Inc. 15293 Sandalhaven Drive, Middleburg Heights ID: 34-0874223 Date filed: Jan. 28, 2011 Type: Employer’s withholding Amount: $135,870 Central Ohio Group Homes Inc. 2500 Country Club Blvd., Suite 255, North Olmsted ID: 20-0030020 Date filed: Jan. 11, 2011 BNY Mellon Wealth Management congratulates: Type: Unemployment Amount: $63,650 Simpsons EZ Enterprise Inc. Ronald Ambrogio 14218 Euclid Ave., East Cleveland ID: 34-1963963 Date filed: Jan. 11, 2011 on his recent appointment to Regional President — Ohio Type: Corporate income Amount: $56,265 Full Circle Check LLC 6887 Ridge Road, Parma ID: 26-2787010 and welcomes: Date filed: Jan. 3, 2011 Type: Employer’s withholding Amount: $27,825 Ron Ulle Euclid Foreign Motors Inc. 20020 Saint Clair Ave., Cleveland ID: 34-1087596 Team Leader and Senior Director — Portfolio Management Date filed: Jan. 13, 2011 Type: Employer’s withholding Amount: $26,338 Roth Sign Studios Inc. 26241 Cannon Road, Bedford Heights ID: 34-1378126 30195 Chagrin Boulevard Date filed: Jan. 11, 2011 Type: Employer’s withholding Amount: $20,940 Suite 350 West Lobecks Hot Rod Parts Inc. 560 Golden Oak Parkway, Cleveland Cleveland, OH 44124 ID: 34-1454604 Date filed: Jan. 28, 2011 Type: Employer’s withholding, 216-464-4244 unemployment Amount: $19,976 Alpha Tool & Mold Inc. 83 Alpha Park, Highland Heights ID: 34-1258012 Date filed: Jan. 7, 2011 Type: Employer’s withholding Amount: $19,604 Ohio Natural Stone LLC 760 W. Bagley Road, Berea ID: 30-0260193 Date filed: Jan. 3, 2011 Type: Employer’s withholding Amount: $18,785 Rockport Medical Center Inc. 3665 W. 117th St., Cleveland ID: 34-1206629 Investment Management t Wealth & Estate Planning t Private Banking t Family Office Services Date filed: Jan. 19, 2011 Type: Employer’s withholding Amount: $14,994 Haylo Manufacturing Co. bnymellonwealthmanagement.com ©2011 The Bank of New York Mellon Corporation. 5100 Richmond Road, Bedford Heights ID: 34-0905327 20110207-NEWS--10-NAT-CCI-CL_-- 2/3/2011 4:43 PM Page 1
10 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011
PUBLISHER/EDITORIAL DIRECTOR: Brian D.Tucker ([email protected]) EDITOR: Mark Dodosh ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Jump aboard ortheast Ohio? A cradle of entrepreneurial thought? Yes, and a program to which the region gave birth seven years ago to spur the development of new businesses now Nis serving as a model for other cities to follow. We’re speaking of JumpStart Inc., which civic organizations that included the Cleveland Founda- tion, the George W. Codrington Foundation and Cleveland Tomorrow (now the Greater Cleveland Partnership) helped get off the ground. Its mission was to assist early-stage businesses with advice and FROM THE PUBLISHER modest monetary investments in order to help build those ventures into job-creating machines. Its CEO from the System serves departing Sanders well beginning, Ray Leach, has gained a national he departure of former Cleve- announcement that he is among 25 being qualified for a monthly pension payment reputation for himself land public schools CEO Eugene considered for the presidency of Bowling of $15,000. That’s $180,000 a year at age 54. and his organization Sanders gets increasingly both- Green State University, his alma mater. Tell me that makes sense. I don’t care because of the role ersome as we get further from his In his press conference, and during how many years he spent in education, Tabrupt retirement. some interviews since, Dr. Sanders retiring at 54 with a pension that large JumpStart has played in encouraging angel I don’t meet many people who knew spoke of his desire to relax and ponder and then starting a second career, perhaps investors and venture Dr. Sanders — even a little — who didn’t the next stage of his life. He joked about as a highly paid college president, doesn’t respect and like him. He seemed being able to wear blue jeans for a while. seem right. capital firms to invest in engaged and involved, especially Then why ask for a contract Examples like his — and there are companies in Northeast in the six months or so since the BRIAN extension just a few months thousands upon thousands of “double Ohio. How? By putting ballyhooed announcement of TUCKER earlier? dippers” like him (assuming he works JumpStart’s money his radical “transformation plan” So in came Peter Raskind, again) — show just how messed up the where its mouth is and Leach for the school system. former National City Bank CEO public pension systems are, and how investing in the compa- In the middle of last year, Dr. who helped guide the Cleve- much they need to be changed, at every nies it talks up. Sanders asked the school board land-Cuyahoga County Port government level. Now, Mr. Leach is about to take on an even bigger and Mayor Frank Jackson (their Authority in the turbulent period We know that pension liabilities are a assignment while remaining in his position here. boss under state law) for a after the top exec there was massive problem for all governments As announced last week, the Obama administra- three-year extension of his fired. Again, Mr. Raskind will right now, and there will be increasing contract (at $263,000 per year work for the princely sum of $1, pressure for radical change. Perhaps Gene tion has selected JumpStart to create a nonprofit, plus generous benefits). The while a search committee Sanders saw that coming and really did called JumpStart America, that aims to raise $2 mayor and board agreed, only to have begins its work for the school system. decide to retire now. He will be among billion to fund programs that promote entrepre- Dr. Sanders jolt the community six months Then, as all this news is breaking all the other publicly paid employees neurship and innovation in other parts of the later with news of his retirement. around the schools comes a story last who do so, under the rationale that they’re country. Mr. Leach will be CEO of both JumpStarts. “Mystifying” is a common word I’ve week in The Plain Dealer that Dr. simply “doing what they’ve earned As JumpStart Inc. chief marketing officer Cathy heard from folks in business and civic Sanders also will receive $110,000 for under the contracts as they’re written.” Belk told Crain’s technology reporter Chuck Soder, leadership roles. A few probably used his accrued, unused vacation days. And Tell that to the parents of the Cleve- it’s unclear exactly how JumpStart America will less flattering terms, given the news that because of the way public contracts are land students who fear that theirs will be ■ work. However, Ms. Belk said it likely will draw surfaced just days after his retirement done and pensions are calculated, he the next school to close. inspiration from JumpStart Inc.’s “community advisors” division, which already is working with six other cities — Akron, Detroit, Fort Wayne and LETTERS Minneapolis-St. Paul, among them — to figure out how to spur entrepreneurship in their regions. Officials of JumpStart Inc. believe the new, Governmental organization behind times national nonprofit will help increase Northeast Ohio’s visibility among national foundations and ■ Our traditional way of organizing converge in regional marketplaces. governments and inefficient services policy makers. We suspect they’re correct, which government service delivery on national, That’s the actual metropolitan dynamic entangle us like a giant cobweb in Ohio. would be a big plus for a region that itself still is state and local levels is out of touch with most of us live in today. Now imagine if Because we haven’t changed, Ohio is a undergoing a transformation in how it thinks about how commerce, communications and geopolitical boundaries were reorga- government of 3,000 independent and itself and how it approaches economic develop- community have evolved. nized along government service lines that competing counties, cities, townships, ment. In fact, the new model of service seamlessly crossed district boundaries villages, and school districts. Yet 70% of delivery should reorganize along neigh- with efficiency and economy of scale. our people and their patents, and 80% of Northeast Ohio has yet to embrace the swash- borhood, regional and global levels; That would be reorganizing for our our State GDP and knowledge jobs, are buckling, risk-taking mentality of California’s that’s how business, the Internet and future success. located in our seven largest metropolitan Silicon Valley. Nonetheless, thanks to JumpStart human beings interact in the 21st century. Brian Tucker’s Jan. 24 commentary, regions of Ohio. and other people and organizations that have Why shouldn’t the way government serves “Eighty-eight counties just won’t cut it,” It’s time to stop tinkering with tepid, encouraged and invested in early-stage companies people begin shifting toward this new was on the money in highlighting the incremental approaches to regionalism. in our market, a greater entrepreneurial spirit exists model, too? problem of an anachronistic Ohio county It’s time we start designing a new model here today than it did a decade ago. Imagine how our community maps system, originally organized to accom- that competitively positions Ohio’s met- We may have a long way to go, but we’ve already would look if we revised our 200-year- modate people’s day trips by horse and ropolitan regions in the global economy. come a long way, baby — and the recognition old government service lines to reflect buggy from their homes to the county The clarion call comes from our popula- received by a group such as JumpStart affirms that the way we really live. The new maps seat. tion problem. would show clusters of neighborhood Aligning governments to those ancient Cleveland’s metro region is the 26th we’re on the right track. districts and innovation zones where maps leaves Ohioans with predictably most populous in the nation, but it’s also education, technology and social amenities ancient service models. Redundant See LETTERS Page 11 20110207-NEWS--11-NAT-CCI-CL_-- 2/3/2011 3:34 PM Page 1
FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 THE BIG ISSUE Investors watch Egypt’s The Cleveland Metropolitan School District is searching for a new CEO. Can anyone be successful in that job or are the district’s problems too daunting? impact on Middle East Oil prices could rise if unreast spreads
By JEFF BENJAMIN Saudi Arabia.” Investment News Ultimately, Ms. Zervos believes the risks of such a contagion are From a fixed-income perspective, minimal, which is why she has not the ongoing unrest in Egypt should adjusted her benchmark weightings not rattle investors, according to in Egypt. Sara Zervos, head of the global debt Indeed, she has begun increasing team at OppenheimerFunds. her weighting in dollar-denominated ROBERT STAIB KERMIT LIND GILBERT BLOMGREN BECKY GRIMM Ms. Zervos, who manages more Egyptian bonds. Cleveland Cleveland Heights Cleveland Strongsville than $13 billion in global fixed- In a research report issued last income assets, said her investment week, Ms. Zervos wrote that she Yes, I think someone can It (the solution) will come I don’t think they’re too big I would say in any situation, strategy has not materially changed expects there will be “noise sur- be successful in that from some group that to be solved. They’ve got if you have somebody since the political unrest began in rounding Egypt and the Middle East position. It’ll take someone includes the superintendent. to find the right person. new, it can make a Egypt more than a week ago. for days, if not weeks, and our base who can really confront all Just the superintendent difference. She did note, however, that she case is there will likely be some the vested interests. The alone is not going to be an will be paying close attention to the pressure on the exchange rate of the vendors and the unions. answer. way the Egyptian army handles the Egyptian pound, while sovereign protestors. yields on local debt are likely to be “The only way this can be a real fairly steady.” (investment) issue is if it spreads Meanwhile, the local equity ➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com. throughout the entire Middle East markets have been volatile. and causes oil prices to spike,” she The Egyptian equity markets, said. measured by the MSCI Egypt Index, Crude oil prices hovered around fell by more than 21% between Jan. $92 a barrel last week as Egypt’s 14 and Jan. 28. Public pensions tout recent improvements 30-year president Hosni Mubarak The S&P 500 fell by 1.3% over the announced that he would not seek same period. the fact sheet. re-election in September. But the fact that the S&P rallied Concerns mount over potential regulations Keith Brainard, the Georgetown, “Oil is everyone’s favorite indicator by more than 2% since Jan. 20, as Texas-based research director for of Middle East risk,” Ms. Zervos the protestors in Egypt started By TIMOTHY INKLEBARGER Council on Teacher Retirement and NASRA, said the decision to issue the said. clashing with the police, is evidence Pensions & Investments National Conference of State Legis- fact sheet was prompted by the Even though Egypt controls the that the global financial markets are latures — also notes that public increased attention paid to public Suez Canal, which is responsible for managing to keep the political A group of organizations repre- pension investment returns have pension plans and by proposals at 8% of global sea trade, the country’s unrest in context, according to Ms. senting state and local governments exceeded their assumptions over a the federal level to “require certain oil production is not the issue, Ms. Zervos. and public pension plans released a 25-year period — at 9.25% vs. the reporting among state and local Zervos said. In an attempt to “view Egypt fact sheet that it says aims to set the assumed 8%. It says state and local pension plans.” “Egypt is not a significant trading through the lens of the global record straight on the operations governments also have changed “We’re concerned about a one- partner of any major emerging landscape,” she pointed out that the and funding of public employee benefit levels, contribution rates size-fits-all approach to regulate, or developed country,” she said. country of 83 million, which gener- pensions. and made other adjustments to monitor or measure state and local “The potential impact of what’s ates $200 billion in gross domestic Released Feb. 1, the fact sheet notes help rebound from losses incurred pension plans,” he said. “Every one happening in Egypt is that it could product, represents 0.3% of global that state and local governments from the world financial crisis. of these plans is unique.” ■ lead to contagion in places like GDP. ■ have funded the majority of their “The great strides made in the pension costs and collectively hold ability of state and local govern- $2.7 trillion for current and future ment retirement systems to ensure retirees. that more than 20 million working The fact sheet — issued by 10 and retired public employees have organizations, including the National financial security in retirement have Association of State Retirement been achieved without federal Administrators (NASRA), National intervention,” the group states in
LETTERS MARCUS & MILLICHAP CLEVELAND PROUDLY continued from PAGE 10 hood districts, delivering services one of only three in the top 30 U.S. across metropolitan regions, and HONORS THE TOP PRODUCERS FOR 2010 metro areas losing population. And competing in the global marketplace. while Ohio is the nation’s seventh- There is a better way, and it’s the largest state, it ranks 47th in expected metro way. population growth. It’s clear that our old and inefficient way of Chris Ronayne delivering government resources is a President major contributor to our lack of University Circle Inc. competitiveness. Winning precedents for reorgani- Contract story on target zation exist in places like Oregon, Michael Barron Dan Burkons Jon McClellan Ben Baker Josh Wintermute where 40 years ago the state’s Repub- ■ Congratulations on a lucid and lican governor teamed with Port- accurate article in publishing “Kasich land’s Democratic mayor to develop push for contract rule changes faces a metropolitan strategy for growth, pitfalls” on Page 3 of your Jan. 30 National Coverage – Local Expertise forming a Metro Council of govern- issue. ment to guarantee it. The results I’ve been reading labor relations How Can We Support Your Strategy in 2011? speak volumes. In four decades newspaper articles for decades. This Portland has achieved 48% growth, and is the very first one I’ve read that Oregon’s population has exploded didn’t confuse arbitrators with To Access the Investment Market, Contact the Market Leader. by 83% in its regional centers where mediators, binding arbitration with development has been targeted. advisory arbitration, and/or media- Ohio’s seven major urban centers tion with meditation! Kudos. Michael L. Glass make it a perfect place to start incor- Vice President/Regional Manager porating a new way of governing Susan Grody Ruben Cleveland Office that embraces a neighborhood, Labor and employment arbitra- (216) 264-2000 regional, and global approach — tor/mediator targeting investment in neighbor- Cleveland 5005 Rockside Road, Suite 1100 WRITE TO US Cleveland, OH 44131 Send your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Offices Nationwide www.MarcusMillichap.com e-mail: [email protected] 20110207-NEWS--12-NAT-CCI-CL_-- 2/3/2011 2:19 PM Page 1
12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011
Schoeb to manager, accounting and GOING PLACES tax services. HEALTH CARE CASE WESTERN RESERVE FEDERAL RESERVE BANK OF CLAIMS RECOVERY FINANCIAL JOB CHANGES UNIVERSITY SCHOOL OF MEDICINE CLEVELAND: Office of Minority and SERVICES LLC: Anthony DiStaulo AND UNIVERSITY HOSPITALS Women Inclusion, Peggy Velimesis to assistant vice president, client ARCHITECTURE CASE MEDICAL CENTER: Dr. to director and Diana Starks to relations and marketing. THE AUSTIN CO.: Michael G. Clifford V. Harding to chair, assistant vice president, diversity COHEN & CO.: Kim Palmer and Pierce to president. Department of Pathology. officer. Paul Gregory to partners; Adam Abraham Batcho Harding CBLH DESIGN: Kevin Kantz, WESTFIELD BANK: Timothy E. Hill to principal; Matt Cunningham INSURANCE Adam O’Brien and Jeffrey Valus to Phillips to president; Kevin P. to senior manager; Bob Beatty to associates. Vonderau to chief lending officer. application solutions manager; MEDICAL MUTUAL OF OHIO: ULMER & BERNE LLP: Andrew G. Nicole Herman, Aly Cottam and Kevin Lauterjung to executive vice Fiorella to associate. CONSTRUCTION FINANCIAL SERVICE Matt Riccomini to managers; Jon president, managed care; Irene Dombrady, Jeremy Smith, Robert Koler to director of commercial MANUFACTURING PCS: Steve Abraham to estimator. APPLE GROWTH PARTNERS: Venables, Matt McCall, Lindsay sales, northeast region. RUHLIN CO.: Melissa Martie to Michael Markowski to principal, A. SCHULMAN INC.: Sanja Valentic Munaretto, Andrew Sturgill and marketing coordinator; Nassim Kanj health care services; Brett Mangon to manager of corporate marketing Katey Vanderwyst to senior to project engineer. to senior tax manager; Lindsay LEGAL and business development. accountants. Cooper to tax associate; Will FAUVER, KEYSE-WALKER & FINANCE Michael to senior tax associate; KPMG: Brian G. Greenberg to DONOVAN: Kristina M. King to NONPROFIT CHASE: John Batcho to middle Rebecca Miller to marketing coordi- director, advisory services. shareholder. BIG BROTHERS BIG SISTERS: Lois market division manager, Akron, nator; Brigitta Gut to bookkeeper. RETIREMENT SOLUTIONS: Kristine THOMPSON HINE LLP: Erin C. Pozega to Northeast Ohio regional Canton, Youngstown. BEST TAX + ACCOUNTING: John Charkosky to internship coordinator. Hewitt to associate. manager, Amachi Ohio program. HOSPICE OF THE WESTERN RESERVE: William E. Finn to CEO; David Simpson to CEO emeritus. JD BREAST CANCER FOUNDATION: JT Aguila to executive director. SERVICE FINDLEY DAVIES: Caroline Smith to associate attorney; Jill Leitner and Tara Morey to senior consultants. FLEET RESPONSE: Mike Bonacci Piling the family into the car and driving to midwest regional sales manager. to the Grand Canyon? Am I wrong to think NEWRY CORP.: Ted Evans Jr. to senior consultant. you’re supposed to relax on vacation? TECHNOLOGY OECONNECTION: Alice Lewis to manager, quality. UTILITY FIRSTENERGY CORP.: Dennis M. Chack to president, Ohio operations.
BOARDS FIRST TEE OF CLEVELAND: Mike deWindt Jr. (Gates Group Capital Partners) to chairman; Craig Donnan to chair-elect; Suzanne Day to secretary; Larry Cruise to treasurer. JD BREAST CANCER FOUNDATION: Karen Lippmann (Cuyahoga County Juvenile Court) to president; Erin Adams Armstrong to vice president; Hayley Williams to second vice president; Anne Curry-Smith to secretary; Mark Royle to treasurer. SHOES AND CLOTHES FOR KIDS: Terence J. Uhl (Landau Public Relations) to chair; Scott Simon to chair-elect; Allan C. Krulak to chair emeritus; vic gelb and Rockette L. Richardson to life directors; William R. Joseph to vice chair; Stephanie McHenry to secretary; A. Lamont Mackley to treasurer.
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FEBRUARY 7 - 13, 2011 CRAIN’S CLEVELAND BUSINESS 13
INSIDE
15 HOSPITAL SYSTEMS TEAM TO BOOST PATIENT CARE. HEALTH CARE A MEDICAL MECCA Area institutions benefit as reputation for quality care draws patients from beyond region’s borders
By AMY ANN STOESSEL and lodging expenses for the [email protected] patient and a companion. “If we had 10 people use the Clinic t’s been just about a year since in the first year, that would be a Mooresville, N.C.-based home win-win,” said Lowe’s spokeswoman improvement giant Lowe’s Karen Cobb of the company’s initial entered into a partnership with expectations. Ithe Cleveland Clinic allowing Chalk one up in the win category. employees and dependents enrolled Since the Cleveland Clinic in the company’s self-insured benefit became available last medical insurance plan to seek March 1, 29 Lowe’s employees cardiac care in Northeast Ohio. and dependents from across the The voluntary program covers country have had procedures all medical deductibles and co- performed in Northeast Ohio, Ms. insurance amounts as well as travel See MEDICAL Page 14
Out-of-state resident a case in point
Nelson Bobb (left) isn’t a fan of Cleve- graduate who for 26 years was the athletic land snow, but that hasn’t deterred him director at the University of North Carolina from traveling from his home in Greens- at Greensboro — came to Cleveland for a boro, N.C., to seek treatment for second opinion at the sugges- his diaphragm, which had tion of his sister, who lives in stopped functioning properly, the area with her husband. Mr. and a collapsed lung. Bobb’s sister has a nursing Under the care of Dr. Ray- background, and she has a mond Onders of University friend who works at UH. Hospitals Case Medical Center, “The way that I’ve been Mr. Bobb recently underwent handled, the whole professional minimally invasive surgery to approach to my needs is implant the same type of phenomenal,” he said. diaphragm pacing device, Today, Mr. Bobb isn’t only a pictured at right, used on the proponent of the health care he late Christopher Reeve. has received; the city itself has “This process has made a gained a fan. tremendous difference in my “Take away the winter … everyday life,” said Mr. Bobb of the device Cleveland is a nice city to visit,” said Mr. MARC GOLUB PHOTOS that now delivers electrical stimulation 14 Bobb, noting that he’s had a chance to take Nelson Bobb, of Greensboro, N.C., visited University Hospitals last week for a post-surgery checkup. Mr. times a minute to his diaphragm, ultimately in some of the local flavor with his brother- Bobb underwent surgery in December for an implantable diaphragm pacing device, which provides elec- aimed at improving his breathing. in-law, specifically sampling some of the trical stimulation to his diaphragm. Mr. Bobb — a Kent State University region’s eateries. — Amy Ann Stoessel
Providers aren’t missing a beat in building up cardiac care
BY JOEL HAMMOND Institute at University Hospitals. [email protected] Private physicians join ranks of larger hospitals amid industry changes “Cardiology’s golden age is gone with declining reimbursement. ardiac care is one of a hos- aiming to stay there, and others The latter group’s joining Akron practitioners; most famously, the Doctors are finding it increasingly pital’s most lucrative areas. are trying to keep pace? General represents a growing Arizona Heart Institute, founded difficult to compete.” And Northeast Ohio — MetroHealth Medical Center trend nationally, according to the 40 years ago by globally known Additionally, compliance with the with a myriad of care and Akron General Medical Center American College of Cardiology. cardiovascular surgeon Ed federal health care reform law that Coptions, including the No. 1 heart each recently hired six cardiolo- In a September survey, the college Diethrich, in August went bank- newly empowered House Republi- care center in the nation, and an gists, Metro from a variety of found 48% of cardiologists in pri- rupt, saddled with millions in cans want repealed also has played a aging population with a higher rate hospitals and medical schools and vate practices were considering or liabilities. role, the biggest part being known as of heart disease than the rest of the Akron General from the North already in the process of integrating “The private practitioner is “accountable care organizations.” nation — is ripe for the picking. Ohio Heart Center, a private cardi- with a hospital system. A decline becoming extinct,” said Daniel It’s a fancy way of saying hospitals, Is it any wonder, then, that the ology practice with seven locations in Medicare reimbursements has Simon, the director of the Harring- in order to cut costs for patients, region’s top dogs in cardiac care are in Northeast Ohio. put the squeeze on those private ton-McLaughlin Heart & Vascular See CARE Page 15 20110207-NEWS--14-NAT-CCI-CL_-- 2/3/2011 3:34 PM Page 1
14 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011 HEALTH CARE Medical: Savvy patients find their way to Northeast Ohio
continued from PAGE 13 “We are building an important On average, Dr. Weiner said 30% of Cobb said. new marketplace,” Mr. McMillan his patients are from outside of Of course, the Cleveland Clinic said. “People are increasingly Northeast Ohio, and 60% are from is not the only heath care institution comfortable with the idea that outside of Summa’s coverage area. in Northeast Ohio that’s caring for there are specialized centers of care.” While Dr. Weiner, who has been patients from outside the area. Both University Hospitals and in practice for 18 years, said the types In fact, more savvy patients, MetroHealth Medical Center agree of conditions that would necessi- increased access to information that having a certain reputation tate care from an orthopedic oncol- and specialized medicine all are and level of expertise can serve to ogist are not all that common, it still serving as drivers when it comes to attract patients from outside the does mean that he often is treating health care travel — and many area — whether it’s through physi- patients from outside of the area. working in the medical community cian referral or patient research. “Patients have to travel to get the say it’s a trend they expect will “Over the last few years … we care that they need,” he said. continue and grow. were fortunate enough to bring to Often referred to as “medical Cleveland a number of specialized ‘An advocate on your side’ tourism,” the phenomenon of physicians,” said Dr. Michael At the Cleveland Clinic, there is an people traveling for health care is Nochomovitz, president, University entire full-service department dedi- not a new one, but it is one that ap- Hospitals Physician Services. cated to helping out-of-area patients. pears to be gaining some traction, There are UH doctors known for Dr. Bill Ruschhaupt, chairman of according to some in Northeast a wide range of specialties, from MARC GOLUB the department known as Global Ohio. cochlear implants and cancer care Nelson Bobb, of Greensboro, N.C., receives a checkup for a procedure he had Patient Services, said patients were According to information from to hernia repair, just to name a few, in December at University Hospitals. Mr. Bobb underwent surgery for an im- seen last year at the Clinic from the Ohio Hospital Association, according to Dr. Nochomovitz. plantable diaphragm pacing device, which provides electrical stimulation to his every state and 135 countries (al- roughly 3.4% of U.S. patient visits to “It’s certainly part of our strategy diaphragm. though international patients make the large majority of Ohio hospitals to promote our physicians nation- up a small percentage of total pa- were by out-of-state residents in ally and internationally,” he said. Dr. Greg Nemunaitis, the hospital’s patient visits in 2010, 3,601 were tient volume). 2009. This compares to 3.1% in Dr. Mauricio Arruda, for one, director of spinal cord injury reha- from patients from outside of Ohio. Domestically, there were 40,000 2007 and 2008. was featured on “The Today Show” bilitation and director of the Spinal Within the state, 1,751 of 366,072 unique Clinic patients from “People tend to want the best for a novel procedure to treat atrial Cord Injury Model System. visits were from outside Akron outside Ohio last year, contribut- health care their money can buy,” fibrillation, for which patients have “It’s one thing to know you’re Children’s 25-county service area. ing to 25% of hospital discharges. said Tiffany Himmelreich, the traveled from Brazil and Canada good, but to have someone else say “The more informed consumers In 2003, 21% of discharges came association’s spokeswoman. and several other states. you’re good is even better,” he said. get the more I see them shopping from other states. “These patients find their way to for services,” Mr. Lyden said. The growth in the number of pa- Star performers Cleveland,” Dr. Nochomovitz said. Unique commodities Additionally, he said specialists, tients traveling to University Hospi- Indeed, Michael McMillan, “Our process has focused on the Shawn Lyden, executive vice such as those in cardiac care, tals for treatment even prompted Cleveland Clinic executive director unique physician and their area of president for Akron Children’s orthopedics and neonatal care, the formation of a concierge-type for market and network services, expertise.” Hospital, said while it is not neces- often are hard to come by in pedi- service to help coordinate visits. said the Clinic is in active and Similarly, MetroHealth Medical sarily part of his institution’s atric medicine. Patient concerns can range from broad-based discussions with Center has seen interest from out- strategic plan to market its services Similarly, Dr. Scott Weiner, lodging and travel issues to making about a dozen Fortune 50 and 100 of-area patients in part due to its outside the region, patients often chairman of the Department of sure a pet or child is accommodated companies for deals similar to that designation by the National Insti- are drawn to physicians with high Orthopaedics for Summa Health for while in Northeast Ohio. with Lowe’s. tute on Disability and Rehabilita- profiles or unique expertise. System’s St. Thomas and Akron “It really helps to ease anxiety … Additionally, the arrangement tion Research as one of 14 model According to patient demo- City Hospital, is one of about six in to know you have an advocate on with Lowe’s may be expanded to systems nationally for Spinal Cord graphic information provided by the state who practice the specialty your side,” said Erin Slay, patient include other specialties. Injury Rehabilitation, according to Akron Children’s, of 369,673 of orthopedic oncology. relations officer. ■
Clinic hotels cater to unique needs
For hoteliers Neville Erasmus and professional.” Michael Cooper, “Please come On the facility side, the InterConti- back again,” is not always an nental Suites Hotel, opened in appropriate statement to make 1999, is in the midst of a property- when guests are checking out. wide renovation, all planned for with 4455 Glenbrook Road-Willoughby,Ohio Mr. Erasmus is executive assis- the patient and their family in mind, (800) 331-7327 tant manager at the InterContinental Mr. Erasmus said. Suites Hotel while Mr. Cooper is From aromatherapy to color and Solutions for Your Medical Imaging Needs executive assistant manager, Inter- food choices to more practical Continental Hotel. Both properties amenities such as in-room freezers, are owned by the Cleveland Clinic attention was paid toward promoting and on the health care system’s a sense of wellness. The hotel even main campus in Cleveland. makes available specialized technol- “The guests here … their needs ogy aimed at reducing stress. are very different,” Mr. Erasmus “We’ve really thought of every said. “You have to be careful saying detail to really relax the guest and to someone, ‘Have a great day.’” make them feel comfortable,” Mr. Roughly 70% of the guests staying Erasmus said. at Mr. Erasmus’ property — and Comfort is especially important at 50% of those at Mr. Cooper’s prop- both properties since some guests erty — are patients of the Cleveland are long-term, ranging from two to Clinic or family members of patients, three months to longer than a year. for whom discounted rates are That also means going the extra available. mile for family members who might “You feel like you’re doing more be looking for ways occupy them- than what a normal hotelier would selves while away from home for do,” Mr. Cooper said. “You share in such an extended period of time. Alpha Imaging is the Midwest’s Premier Distributor of Medical Imaging Equipment the joy and sadness of life here.” “We have family members staying Our Product Line Includes Equipment Manufactured by: To that end, Mr. Cooper said it is here … and their whole lives have critical the right employees are hired been turned upside down,” Mr. Shimadzu Medical Systems ~ Hologic ~ Omega Medical Imaging — people who can be empathetic Cooper said. Neusoft Medical Systems~ Konica Minolta ~ Del Medical ~ Infinitt and sensitive to a variety of needs, Mr. Cooper said he only expects Canon Medical ~ Sapheneia ~ RiverRain including those that might occur with to see health care travel increase as www.alpha-imaging.com a patient pre- and post-operation. the economy improves. Celebrating Our 25th Year! Blood-borne pathogen education and “It’s really a new area for the ho- cultural sensitivity are top of mind. tel industry,” he said. “Medical “A lot of what we focus on is how tourism is a new part … I think it’s we train our team,” said Mr. Cooper. going to be very important.” “Our employees are very calm and — Amy Ann Stoessel 20110207-NEWS--15-NAT-CCI-CL_-- 2/4/2011 11:10 AM Page 1
FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 15 HEALTH CARE
Medicaid reimbursement climate have been significant drivers of such Institutions benefit from collaboration collaborations and partnerships, said Thomas Strauss, president and By TIMOTHY MAGAW position yourself as being able to entire community when that’s possi- “It’s really shown from a cost CEO of the Summa Health System. [email protected] credibly deliver the care,” said Bill ble,” Dr. Christopher said. standpoint, it’s cheaper to do it that Mr. Strauss noted that it’s Ryan, president and CEO of the way than to duplicate services,” become a necessity for health care he sheer number of North- Center for Health Affairs, an asso- Spreading the specialties according to Richard Hanson, pres- providers to come together and find east Ohio health care ciation representing local hospitals. Meanwhile, Dr. Christopher said ident of UH community hospitals how best to leverage their resources providers offers a fertile “From the perspective of the insti- it’s difficult for some hospitals to and ambulatory networks. and not duplicate services. ground for spirited compe- tution bringing care, it’s about recruit certain specialists, particu- As for the Clinic’s move to align Summa, for instance, tapped Ttition, but it also presents an extending market reach, increased larly in pediatrics, to create a robust its heart and vascular institute with Akron Children’s Hospital last fall opportunity for strategic collabo- market share and long-term network of providers. Systems such other hospitals, the strategy is to to maintain its special care nursery rations aimed at improving care in referrals.” as MetroHealth are branching out spread the Clinic’s expertise and at Summa’s Akron City Hospital. the region and beyond. Akron Children’s move to offer to tap into other health care ultimately improve patient out- MetroHealth recently affiliated Examples are strewn throughout its services in Cuyahoga County is providers’ resources to fill that void. comes across the country, according with a large independent physician the area’s medical landscape. part of a strategy of regional “There is a tremendous shortage to Dr. Joseph Cacchione, the collective — Premier Physicians Akron Children’s Hospital, for growth, according to Dr. Norm in subspecialty service providers,” director of clinical integration at Group — in Cuyahoga County. instance, announced in December Christopher, Akron Children’s Dr. Christopher said. “Regionalism the Heart and Vascular Institute. Dr. William Lewis, chairman of the it would provide pediatric care at chairman of the department of is evolving as a strategic response to The Clinic is paid for its services, market development campaign and the MetroHealth System starting pediatrics. The strategy, he noted, those shortages.” but the benefit for partnering insti- chief of clinical cardiology, said the this year. Also, the Cleveland Clinic’s is driven by health care providers Similarly, University Hospitals tutions is the ability to align with arrangement also allows Premier’s Heart and Vascular Institute has who want to increase the scope of offers several of its services at com- the Clinic’s brand and improve care. physicians to remain independent partnered with six hospitals in the services provided for children and munity-based hospitals. “We actually are looking to while allowing them to receive some country — most recently one in their families close to home. The health system recently improve quality of care across the services offered to those employed Kentucky — and more are in the Still, some patients with particu- announced that certified neonatal country,” Dr. Cacchione said. “Even directly with MetroHealth, such as pipeline. larly acute needs may need to nurse practitioners from Rainbow though we’re competitors, we’re all the electronic medical record system. The growing stream of partner- receive care at the Akron campus, Babies & Children’s Hospital will kind of in this together.” “I think that those types of rela- ships and affiliations between but the idea is to broaden Akron care for newborns with serious tionships will go on as long as health care groups allows Children’s Hospital into an medical issues at Parma Community Pinching the pennies they’re viable,” he said. “We want providers to capitalize on each accountable care organization — a General’s special care nursery. The stresses of health care reform to embrace that. That’s what other’s resources and gain access still-evolving component of the UH also has cancer centers located and the uncertain Medicare and accountable care is all about.” ■ to new revenue streams. Mean- federal health care reform law that at hospitals throughout the state, while, health care observers note aims to band together medical including Firelands Regional Medical that such collaborations are going providers and reward them with Center in Sandusky, Trumbull to continue to surface, especially financial incentives for providing Memorial Hospital in Warren and as the federal health care reform quality care at a controlled cost. Southwest General Health Center in law takes hold. “We want to be situated in a good Middleburg Heights, which are led by “From an institution receiving way going forward, and we want to clinical staff from UH’s Seidman BUSINESS the service, there’s that ability to improve health and wellness in the Cancer Center. . Private medical practice credit & special physician mortgage loan program* Care: Providers seek to improve expertise
continued from PAGE 13 The lucrative nature of heart care will add three more doctors in July. need to ensure every one of a also played a role, and Dr. Wright And keeping up with those two patient’s needs are met under one said the hospital is set up well to giants also has played a big role in roof, and more specialists can help meet accountable care mandates. recent hiring, B-W’s Mr. Campanella accomplish that. “We looked at it as, ‘How do we said. In addition to the lofty statuses “There’s a financial incentive for reinvigorate and reimagine what enjoyed by the Clinic and UH, providers to work together or our future will be in heart and vas- Summa Health System two years become part of the same organiza- cular?’” Dr. Wright said. “If we were ago scooped up a major Akron-area tion,” said Tom Campanella, the going to continue to make progress, cardiology practice. LIBERTY director of the health care MBA we needed a group of cardiologists “There are defensive and offen- LIBERTY program at Baldwin-Wallace College. that were dedicated to our facilities.” sive strategies at work,” he said. “The theory behind it is that health “Metro is competing against the BANK,BANK, N.A.N.A. care is fragmented, so they’ve tried to The whys Clinic and UH, and Akron General C MEMBER incent everyone to come together.” According to the Center for and Summa are competing. (Metro FDIC BEACHWOOD HQ Studying Health System Change’s and Akron General) want to protect 216.359.5500 Recent moves latest Cleveland Community report, the heart surgeries they perform Metro’s No. 1 priority, according the region’s heart disease rate is and referrals they get, and bring in Building our bank one quality relationship at a time. to Dr. David Rosenbaum, the director 5.3%, higher than the 4.1% in other new referrals.” ■ *CONTACT US FOR THE BEST & MOST CURRENT TERMS AVAILABLE, SUBJECT TO CREDIT APPROVAL.. of the hospital’s Heart and Vascular metro areas with more than 400,000 Research Center, is to intervene residents. As the area’s population much earlier in the heart care time- continues to age, the need for qual- line; in other words, to attack disease ity heart care, and plenty of it, only before it’s too late. will intensify. “We want to change the natural At UH, the heart and vascular de- evolution of the disease,” Dr. Rosen- partment has continued to grow Patient Satisfaction baum said. “The emphasis has been since Dr. Simon came to Cleveland on applying technologies to the very from Harvard Medical School in is one of our end stages of heart disease, but we 2006, when he found that the cardio- don’t do nearly a good enough job vascular operation at UH was prof- top priorities – more upstream in the process, where itable, but “not appropriately sized.” it will have more impact.” Since then, the division of cardio- Two of the new physicians spe- vascular medicine has grown from and our patients agree! cialize in electrophysiology, and Dr. 21 to 58 faculty members, and the Rosenbaum said Metro hopes to amount of committed National develop a heart failure program to Institutes of Health research grants How do we know? work in tandem with its robust has grown from about $2 million to We asked them, and they told us. team of arrhythmia specialists. $18 million, Dr. Simon said. Akron General’s move comes as All the while, the Cleveland Clinic We’re proud that our patients and their families the hospital’s cardiac center was continues to be the national leader in recognize our service and dedication, and we’ll “losing steam,” said Dr. Dennis heart care, according to U.S. News & continue to work to maintain and exceed their Wright, the executive medical World Report, which has named the director of the Heart and Vascular Clinic’s heart program No. 1 in the expectations. For more information about the service line for Akron General. So U.S. for 16 years running. VNA or for more comments from our patients, the hospital scooped up five physi- Dr. Steven Nissen, the chair of the go to www.VNAohio.org. cians who previously worked for department of cardiovascular the North Ohio Heart Center. The medicine at the Clinic, said the de- new physicians bring expertise in partment has grown continuously, £nÇÇ 96 ""ÊÊUÊÊ£nÇÇÈnÈÓÈ{ imaging, an area in which Dr. Wright most recently in imaging and electro- said Akron General previously lagged. physiology, the latter an area where it 20110207-NEWS--16-NAT-CCI-CL_-- 2/4/2011 11:11 AM Page 1
16 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011 LARGEST HOTELS
RANKED BY NUMBER OF GUEST ROOMS(1)
Number Number of Group Full-time Name of guest meeting Meeting space Corporate room rate employees Rank Address Phone/Web site rooms rooms (square feet) room rate ($) ($) (12-1-2010) Hotel owner General manager Kalahari Resort & Convention Center 1 7000 Kalahari Drive, Sandusky 44870 884 26 95,000 95-195 94-594 960 Todd Nelson Brian Shanle (877) 642-6847/www.kalahariresorts.com Hotel Breakers 2 One Cedar Point Drive, Sandusky 44870 650 3 2,898 NA 97-279 NA Cedar Fair LP Katie Wobser (419) 627-2106/www.cedarpoint.com Renaissance Cleveland Hotel 3 24 Public Square, Cleveland 44113 491 33 62,000 239 109-299 320 CTF Hotel Holdings Inc. Gary McGauley (216) 696-5600/www.renaissancecleveland.com Crowne Plaza Cleveland City Centre Hotel 4 777 St. Clair Ave. N.E., Cleveland 44114 472 20 28,000 89-109 79-129 NA Driftwood Hospitality Stephen Moran (216) 771-7600/www.hotelsdowntowncleveland.com Management LLC Hilton Cleveland East/Beachwood 5 3663 Park East Drive, Beachwood 44122 404 17 16,000 149-179 115-135 200 Twin Tier Hospitality LLC Ali Chiani (216) 464-5950/www.hiltonclevelandeastbeachwood.com Satish Duggal Cleveland Marriott Downtown at Key Center 6 127 Public Square, Cleveland 44114 400 16 17,000 179-269 99-199 NA Wells Real Estate Funds Bob Megazinni (216) 696-9200/www.clevelandmarriottdowntown.com Doubletree Hotel Cleveland Downtown/Lakeside 7 1111 Lakeside Ave. E., Cleveland 44114 379 10 10,347 119-189 79-179 118 The Hotel Group Leonard Clifton (216) 241-5100/www.doubletreecleveland.com Cleveland Airport Marriott 8 4277 W. 150 St., Cleveland 44135 372 16 15,500 149+ 109+ NA Thomas Point Ventures Rick Bertram (216) 252-5333/www.clevelandairportmarriott.com Holiday Inn Cleveland South/Independence 9 6001 Rockside Road, Independence 44131 364 18 18,100 130 85-99 NA Janus Hotels & Resorts Tom Moore (216) 524-8050/www.hiindependence.com Inc. Breakers Express 10 One Cedar Point Drive, Sandusky 44870 350 0 NA NA 89-199 NA Cedar Fair LP Mike Levy (419) 627-2106/www.cedarpoint.com Holiday Inn Strongsville 11 15471 Royalton Road, Strongsville 44136 303 10 12,500 139 79-99 125 Hospitality Ventures Joe Isernia (440) 238-8800/www.holidayinn.com/cle-strongsvil InterContinental Hotel & Conference Center 12 9801 Carnegie Ave., Cleveland 44106 299 13 35,000 NA NA NA Cleveland Clinic Campbell Black (216) 707-4100/www.intercontinentalcleveland.com Marriott Cleveland East 13 26300 Harvard Road, Warrensville Heights 44122 295 15 15,000 209 NA 70 Western and Southern Keith Shopnick (216) 378-9191/www.clevelandmarriotteast.com Insurance-Eagle Realty Hyatt Regency Cleveland at the Arcade 14 420 Superior Ave., Cleveland 44114 293 9 7,100 239 129-199 100 Cleveland Arcade LLC Robert Kallmeyer (216) 575-1234/www.cleveland.hyatt.com Akron City Centre Hotel 15 20 W. Mill St., Akron 44308 274 20 18,000 129 NA NA David and Ann Brennan Tom Finley (330) 384-1500/www.akroncitycentrehotel.com Embassy Suites Hotel Cleveland Rockside 16 5800 Rockside Woods Blvd., Independence 44131 271 13 17,500 159-209 129-169 NA AP/Aim Independence Kendall Clay (216) 986-9900/www.embassysuites-rockside.com Suites TRS LLC Holiday Inn Westlake 17 1100 Crocker Road, Westlake 44145 266 11 11,000 89-119 79-119 100 Twin Tier Hospitality Janet Remalius (440) 871-6000/http://www.ichotelsgroup.com/h/d/hi/1/en/hotel/clewl Embassy Suites Cleveland Downtown 18 1701 E. 12th St., Cleveland 44114 252 10 10,541 129-229 109-159 NA K & D Group Inc. Kenric Hall (216) 523-8000/www.clevelanddowntown.embassysuites.com Sheraton Cleveland Airport Hotel 19 5300 Riverside Drive, Cleveland 44135 242 14 20,000 179 NA 138 Oakbrook Hotels Marc Jacobs (216) 267-1500/www.sheraton.com/airportcleveland Hilton Garden Inn Cleveland Downtown 20 1100 Carnegie Ave., Cleveland 44115 240 14 20,000 159 99-149 100 Gateway Hospitality Group George M. Iannacone (216) 658-6400/www.clevelanddowntown.stayhgi.com Harvey Schach Sawmill Creek Resort & Conference Center 20 400 Sawmill Creek Drive, Huron 44839 240 25 50,000 85-165 105-195 NA Gregory Hill Gregory Hill (800) 729-6455/www.sawmillcreek.com Crowne Plaza Cleveland Airport 22 7230 Engle Road, Middleburg Heights 44130 238 14 16,000 109-149 79-149 90 Toledo Inns Inc. Kathy Jennings (440) 243-4040/www.crowneplaza.com/clevelandarpt Castaway Bay 23 2001 Cleveland Road, Sandusky 44870 237 8 7,691 99-259 99-259 NA Cedar Fair LP Tyler Adams (419) 627-2106/www.castawaybay.com Cleveland Clinic Guesthouse 24 9601 Euclid Ave., Cleveland 44106 232 0 0 NA NA NA Cleveland Clinic Campbell Black (216) 707-4200/www.hotels.clevelandclinic.com Days Inn & Suites Richfield 25 4742 Brecksville Road, Richfield 44286 216 6 30,000 79 72 NA Sandip Thakkar Sandip Thakkar (330) 659-6151/www.clevelandrichfieldhotels.com Embassy Suites Hotel Beachwood 25 3775 Park East Drive, Beachwood 44122 216 7 5,878 159-249 99-229 NA IA Urban Hotels Mark Herron (216) 765-8066/www.embassybeachwood.com Beachwood TRS LLC Ramada Plaza Cleveland East 27 28600 Ridgehills Drive, Wickliffe 44092 213 15 10,000 49-99 59-109 10 Inn at Wickliffe LLC Atul K. Patel (440) 585-0600/www.ramada.com Sheraton Suites Akron/Cuyahoga Falls Riverside Community 28 1989 Front St., Cuyahoga Falls 44221 209 14 23,000 189 99-149 NA Urban Redevelopment Robert Trammell (330) 929-3000/www.sheratonakron.com Corp. Ritz-Carlton, Cleveland 29 1515 W. Third St., Cleveland 44113 205 13 24,466 249-299 149-229 NA Forest City Enterprises Inc. Joseph Mattioli (216) 623-1300/www.ritzcarlton.com Wyndham Cleveland at PlayhouseSquare 29 1260 Euclid Ave., Cleveland 44115 205 9 13,079 119-205 89-169 60 PlayhouseSquare Brian Moloney (216) 615-7500/www.wyndhamcleveland.com 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. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) All information as of Dec. 1, 2010. 20110207-NEWS--17-NAT-CCI-CL_-- 2/4/2011 2:07 PM Page 1
FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 17 Steel: Fewer mills back online
continued from PAGE 1 and efficiency at its steel works in commodities as a hedge against Economists and those who advise Canton. It has announced $85 inflation can increase the prices manufacturers on price trends say million in new investments at its manufacturers pay, Mr. Stone said. Canton works since last August. steel and other metals are going to Working with the customer get more expensive still, even as But, as an indication of how long it mills and service centers already takes to add that capacity, the com- For manufacturers, they have give their customers notifications of pany has said some of those capital little choice but to pass on the price surcharges and price hikes. investments won’t be in place and increases to customers — or to swal- Several manufacturers shared running until 2013. low them in part or in full and see with Crain’s Cleveland Business It’s no different for the companies their profit margins erode. recent correspondences they had working in plastics, where prices Thogus has it easier than most received from their steel providers also are moving up within a system when it comes to passing along its informing them of price increases constrained by capacity issues. costs. Mr. Hlavin said the price of on steel from Timken Co., Nucor, “Prices are moving, it almost raw materials is decided largely by Republic Steel and Severstal — seems weekly right now,” said Matt his customers, who usually are companies that supply much of the Hlavin, president of Thogus Prod- specific about which plastic they stock for area machine shops. ucts, a plastic molder in Avon Lake. want in their Thogus-made parts. Manufacturers such as Astro say “It looks like a good sign for the But Thogus uses another strategy they stay in close communication economy, because material is moving as well, Mr. Hlavin said, by always with their customers, so they’re able fast and furious.” offering customers an alternative to resolve pricing issues. But raw Like those who work in metal, Mr. material, one that might be cheaper materials also represent a fairly Hlavin said he’s trying to manage or more quickly available. small portion of the overall cost of not only higher prices, but also Mr. Hlavin said whenever Thogus their goods — highly engineered, longer lead times. His customers gets a new contract or customer, one labor-intensive components, often specify the material he uses — and of the first things it does is assign its stuffed with expensive electronics. therefore the price they pay for it — own engineers to the project. Their but the lead times present a greater job, he said, is to determine what Relationship advice challenge, he said. alternative materials could be used Others have a more immediate Just as with steel, the plastic for a job in addition to the materials problem. For companies that make industry is affected by too little capac- the customer specifies. That way, he simple products, such as bolts, ity among suppliers of plastic resin said, both Thogus and its customers FILE PHOTO/JANINE BENTIVEGNA washers or stamped brackets, most to meet surges in demand quickly. have options if the original material Willoughby-based Astro Manufacturing & Design Corp. — where expeditor Mark of what they charge customers goes “The producers cut capacity” becomes expensive or difficult to McDougle works in this file photo — says it is able to resolve raw material pric- to pay for their raw materials. when the economy went in the tank, obtain. ■ ing issues by communicating regularly with its customers. At Master Products Co. in Cleve- Mr. Hlavin said — and so far, they’ve land, raw materials make up 80% to not ramped up production suffi- 90% of the total cost of the company’s ciently to meet resurgent demand. washers and other stamped prod- “It’s not like flicking a switch to ucts, said owner Jeff Walters. On the bring it back, so we were out to 16 supply side, he’s facing ongoing weeks on some lead times” for the price increases from steel mills that supplies Thogus needs for its own were slow to restart all their plants. production. On the sell side, he’s facing Big guys not exempt customers who are themselves con- stantly under price pressure. Building Even with their better bargaining good relationships with the service and buying power, public compa- centers that cut and sell him his nies also are feeling the effects of steel has allowed the company to rising raw material prices. cope, Mr. Walters said. In the most recent round of quar- “The price increases (Master terly earnings announcements, Products is seeing) are coming from local manufacturing giants such as the mills, not the processors,” Mr. Invacare Corp., Lubrizol Corp. and Walters said. “We are fortunate to PolyOne Corp. all have noted that have relationships with processors they’re contending with rising prices. that have helped ease the burden by PolyOne, a polymer producer, warning us of increases before they announced a 12% rise in fourth- happen and directing our purchase quarter revenues, but said only half decisions in light of this informa- that increase represented an actual tion.” increase in shipping volumes. The But Mr. Walters resents that so rest was due to price increases for often of late he has had to justify raw materials that ended up also price increases at the mills with his increasing the prices PolyOne own customers. In the end, Master charged for its products. Products and other companies say At Invacare, a maker of wheel- they must sell themselves over and chairs and home health products, over again to the same customers the company in announcing year- — once to get the initial business, end results last week said its sales and then repeatedly to keep it in the growth and interest savings this face of price increases that they year “will likely be partially offset by must explain. the potential for continued increases “It’s like selling for the enemy,” in freight and commodity costs, Mr. Walters said. particularly in aluminum and steel, which are already being incurred in Economics 101 2011.” Steel companies cite strong de- The Institute for Supply Manage- mand for their products as the rea- ment’s Prices Paid Index for January son for both longer lead times and lists 30 major commodities, from higher prices. steel and plastic to corn and nuts, But the lead times also are long, that increased in price over the manufacturers say, because too few month. Not a single item posted a steel mills have come back online in price decrease. Almost two-thirds the economic recovery so far. Cleve- of its membership, 64%, reported land’s ArcelorMittal mill was brought rising raw material costs for the back up in the fall of 2009, but it month, while only 1% said they’d largely supplies flat-rolled steel to seen a price drop. large stampers that make auto body Bill Stone, chief investment parts and large consumer appli- strategist of PNC Asset Manage- ances. Too few of the mills that pro- ment Group, said many factors are duce the type of steel that machin- driving up raw material prices, ists need have come back, though. including an increase in the mone- Timken doesn’t comment on tary supply and the effects of eco- specific pricing issues, but it says it’s nomic growth on basic supply and working hard to bring up capacity demand. Even investors buying up 20110207-NEWS--18-NAT-CCI-CL_-- 2/4/2011 11:11 AM Page 1
18 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 7 - 13, 2011
Contact: Genny Donley Copy Deadline: Wednesdays @ 2:00 p.m. Phone: (216) 771-5172 All Ads Pre-Paid: Check or Credit Card Fax: (216) 694-4264 E-mail: [email protected] REAL ESTATE AUCTIONS OFFICE SPACE For Sale PUBLIC AUCTION Tangletown/Beachcliff Rocky River By Order of Court of Common Pleas, Lucas County, Ohio Farmers & Merchants State Bank vs INDEPENDENCE CORPORATE CENTER Hare Krishna LLC, et al 7100 E. Pleasant Valley Rd. Case #CI200907238 Premium First Floor Space Available up to 5,500 contiguous sq. ft. 1704 Tollgate Drive, Maumee Ohio 43537 www.independencecorporatecenter.com Also FOR LEASE from 500-10,000 sq. ft. 440-333-0000x777 216-674-0525 Thurs., March 3, 2011 @ 12:00PM (Noon) DOWNTOWN OFFICES Bonus Perks Included for 2,000 s.f. + Tenants COMMERCIAL Perks included in rent: Free Conference Room (paid by Landlord)* SPACE DON’T 2-5 megs of internet bandwidth* Exterior Signage (Superior Building Only) 1 Storage room Free kitchen/breakroom (paid by Landlord) SUBURBAN MEDICAL FORGET: 3-9 early bird parking booklets @ In Office Safe $60/mo each* Other Amenities CENTER Crain’s Cleveland Business Smaller Offices and Suites Also Available 30,000 sqft, A-1 Condition on-line @ Great Location & Parking CrainsCleveland.com Superior Building City Club Building NOI 174k, Asking 1.55M 815 Superior Ave. 850 Euclid Ave. For all the latest business 440-899-7887 news...online Directions: Conant St. & I-80/90 (OH Tnpk) Exit 59 Just North of Contact: Abram Schwarz, Sales Manager * Based on square footage of leased space Owner Operated **Some restrictions apply Parking Garage Nearby Prudential Lucien & Assoc. Dussel Rd. 216-255-3913 or [email protected]
Situated in Tollgate Subd in City of Maumee, OH, 36,740 SqFt, 2-story Hotel w/150 rooms built 1987 on 2.6+/- Acres. Close to Shopping, Movie Cinemas, Walleye Fishing, Rec Parks, (Softball, Soccer) & variety of restaurants. 45 min South of Detroit & 60 min West of Cedar Point on Ohio 80/90 Tnpk. NEXT TO TOLEDO'S ONLY INDOOR WATER PARK, SPLASH BAY. Taxes are $17,980.28/half yr CLASSIFIED Call the Auction Co., for Appt. to view & more info. Look property over BUSINESS SERVICES & be prepared to bid. DON’T MISS THIS OPPORTUNITY!! Crain’s Executive Recruiter Terms: All bids begin at 2/3’s of the appraised value of $1,200,000; Opening bid will be $800,000. Successful Bidder will deposit 10% Landerhaven FLYNN Down Day of Sale by Cash or Cashier’s Check. Purchaser shall pay When You Need the Balance of the Purchase Price by Cash, Cashier’s Check, ENVIRONMENTAL Certified Funds and/or Wire Transfer within 30 days. 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FEBRUARY 7 - 13, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19 THEINSIDER REPORTERS’ NOTEBOOK THEWEEK BEHIND THE NEWS WITH CRAIN’S WRITERS MedCity Media trims an initial $40,000 private investment in late Columbus.” JANUARY 31 - FEBRUARY 6 2008 made by Mr. Seper and Ms. Vanac. It could be that, or that the Indians don’t the management fat They received that money as part of a buyout value Columbus. The big casino: If all goes as planned, Cleve- ■ One of MedCity Media’s co-founders left package from their former employer, The Or, it could be that the Indians on March land will have the first casino in Ohio in early her position in December as vice president Plain Dealer. 30 are playing an exhibition game in Columbus 2012 when the Cleveland Horseshoe Casino of operations with the Cleveland-based “We wouldn’t be where we are today against the minor league Clippers, two days opens its temporary, $350 million first phase in health care news provider to help the com- without Mary,” Mr. Seper said. “She’s very before the Tribe’s home opener against the the Higbee Building at Tower City Center. That pany cut costs while it continues to grow. talented. Her track record speaks for itself.” White Sox. Even better: The Dispatch reported money is in addition to the $600 million invest- Mary Vanac said she remains a MedCity MedCity Media creates content not only on the exhibition game in October. The pa- ment planned for the Media investor but now is looking into other for its own web site but also for other publi- per’s archives search must have been down. permanent casino south entrepreneurial opportunities beyond the cations. The company has more than 30 The Indians, of course, value Columbus of Tower City. Cleve- media world. clients who pay for content. — Kathy Ames Carr enough to have agreed in September 2008 to land Cavaliers owner “We were growing quickly but one of the most logical organizational affili- Dan Gilbert and Gary were too executive heavy,” she Or maybe the GPS ations in professional sports, after the Loveman, president said. “So to save costs and pre- parent club’s Class AAA affiliate played in and CEO of Caesar’s serve investments, my position went haywire Buffalo for 14 seasons. — Joel Hammond Entertainment Corp. — was eliminated, and some of the ■ The Cleveland Indians take a ton the leaders of a joint functions, like accounting, were of abuse, but this one may take the Give Cardinal credit — venture called Rock outsourced.” cake. Ohio Caesars LLC — Chris Seper, MedCity Media’s The Columbus Dispatch on Jan. 31 it’s ready to lend unveiled the four-floor, president and other co-founder, ran a scathing column taking the ■ Even as some banks finally begin 300,000-square-foot said Ms. Vanac’s departure was team to task for skipping the state channeling more resources to increase their gambling hall at a news an internal decision. capital on its annual winter caravan. loans to business, one local credit union conference Thursday. “You’re going to see some- “We were balancing our budget, looked at (Read the column at http://tinyurl.com plans to begin business lending March 1. thing very spectacular,” Mr. Gilbert said. He said our staff of eight full-time people and saw /4n7nso3.) Though the new business line has been the temporary casino will create 2,000 tempo- three managers,” he said, speaking also of The Indians hit four cities — Beachwood, planned since roughly August, the president rary construction jobs and 1,600 full-time jobs. Amanda Todorovich, vice president of busi- North Olmsted, Akron and Strongsville — in and CEO of Mentor-based Cardinal Com- ness development and marketing. “It was a four days, with the racing hot dogs, Slider munity Credit Union noted the 2011 start Downtown shuffle: New office building mutual decision.” and selected players and team personalities. date is great timing. moves are in the cards for the Council of Smaller The decision came around the timing of But not Columbus, and column author Bob “You don’t want to wait till 2012 because Enterprises, the Greater Cleveland Partnership JumpStart Inc.’s announcement that it Hunter was none too happy about it, offering the need exists today,” Christine Blake said. and Liggett Stashower, with each shuffling their would invest $250,000 in the startup as eight sarcastic bullet points in an attempt to In response to demand from some of its office locations to make way for downtown’s MedCity Media continues to expand into explain why. They included this never- 17,000 members, the credit union decided planned casino. GCP and COSE are moving their other markets, including the Raleigh- heard-this-one-before gem: last year it would offer lines of credit to busi- 100 employees from the Higbee Building at Pub- Durham area in North Carolina. The com- “The Indians can’t afford the bus trip to nesses and small business and commercial lic Square to the LS Brand Building at 1240 pany already covers health care news in the Columbus. The way this team has jettisoned loans, Ms. Blake said. The CEO noted that Huron Road, which is the home of branding Cleveland and Minneapolis regions. veteran players and their salaries, it should there could be a need to add staff in a year agency Liggett. The two organizations will occupy The startup to date has received about have the money to finance the construction or two depending on how the business of- 50,000 square feet on the first four floors of the $500,000 in grants and investments, including of a bullet train between Cleveland and ferings grow. — Michelle Park building. Liggett, which now occupies the first three floors of the LS Brand Building, will move to a fourth-floor space of 39,000 square feet in MILESTONE BEST OF THE BLOGS the nearby Hanna Building at month’s end. Excerpts from recent blog entries Nutrisystem — or a local heart surgeon — Buyer’s market: VWR International LLC, a on CrainsCleveland.com. because the club’s newest food additions company in Radnor, Pa., that provides laboratory are ridiculously unhealthy,” according to a supplies and services, bought Amresco Inc., a Faith in the Fed as regulator? post on the site. company in Solon that makes and supplies bio- COMPANY: McKinney Advertising A ‘quaint’ idea, Rokakis says The Aeros already offer the “3 Dog Night,” chemicals and reagents for use by customers in & Public Relations, Concord a 3,300-calorie treat featuring a “hot dog molecular biology, biotechnology and other ■ Fortune highlighted a telling Cleveland stuffed inside a bratwurst, stuffed inside a research specialties. VWR did not disclose a Township anecdote from the Financial Crisis Inquiry kielbasa, topped with sauerkraut and purchase price for Amresco, which was founded THE OCCASION: Its 75th anniversary Commission’s 662-page report that under- mustard, and served on a hoagie.” The team in 1976 and employs 235. Amresco will be a scores the Federal Reserve’s lax approach to is about to add the “Nice 2 Meat You” burger, subsidiary of VWR, and CEO David Camiener McKinney Advertising & Public Relations is regulation in the past decade. which consists of a 1¼-pound hamburger, will remain in his position. kicking off its 75th year with a new name in a The report names former Federal Reserve stuffed with a ½-pound hot dog and ¼ new location. chief Alan Greenspan and pound of bacon, cheese Time to sell: TransDigm Group Inc. entered The firm founded in current Chairman Ben and onions. into a definitive agreement to sell its fastener 1936 by Harris D. McKin- Bernanke “as two of the “If the team continues businesses to Alcoa Inc. for about $240 million. ney now is known formally main enablers of the credit to offer fare this filled with The fastener business was acquired last December as McKinney-Cerne Inc., bubble that led to the 2008 calories, fat and sodium as part of TransDigm’s $1.27 billion deal to buy reflecting its long tenure collapse,” Fortune said. (let’s add cruelty), the en- McKechnie Aerospace. The business is made up under the headship of Mr. Greenspan, commit- trances to the friendly of Valley-Todeco Inc., located in Sylmar, Calif., president and CEO Judy ted to the cause of dereg- confines of Canal Park and Linread Ltd. in the United Kingdom. The Cerne. Ms. Cerne joined ulation, “simply refused AKRON AEROS may need to be widened,” business makes fasteners, fastening systems and McKinney in 1985 when to enforce regulations that The Nice 2 Meat You burger. Yum! the web site noted. bearings for commercial, military and general Cerne the agency was in the could have prevented some “Somewhere the Ameri- aviation aircraft. Hanna building in down- of the worst subprime lending abuses can Heart Association frowns in disbelief town Cleveland. It later moved to the Terminal during the bubble, the panel said,” according and disappointment while a factory farmer End of the line: Premier Manufacturing Tower and after 15 years moved to the to Fortune. grins ear to ear.” Corp. of Cleveland, a supplier of fabricated wire Penton Media Building. Ms. Cerne and her The magazine cited as typical the experience products for the HVAC industry, plans to shut its husband, agency chairman Roger Cerne, of former Cuyahoga County treasurer Jim headquarters and plant at 12117 Bennington MOCA Cleveland building has bought the Cleveland operation of McKinney Rokakis, who warned a Fed governor in Ave., resulting in the loss of 100 jobs. Tony Bur- a cool (and Koolhaas) look in 1997, incorporating the business as 2001 about the wave of easy money-fueled dock, general manager of the Cleveland plant, McKinney-Cerne Inc. However, until now, it house-flipping that was endangering the area. ■ The Wall Street Journal’s Ideas Market wrote in a notice to the state that layoffs will had not changed its identity publicly. “I naively believed they’d go back and tell blog mentioned the Museum of Contempo- begin March 28 and will be completed within six “While we thought about dropping the Mr. Greenspan and presto, we’d have some rary Art Cleveland in a post on the wide- to nine months. Eighty-four of the 100 workers McKinney from our new agency name, we new rules,” Mr. Rokakis told the commis- ranging influence of architect Rem Koolhaas. are represented by Local 48U of the United thought better of it as the name McKinney sion. “I thought it would result in action The blog picked up on a story in Metropolis Steelworkers Union. and its heritage means a great deal to me being taken. It was kind of quaint.” magazine that said Mr. Koolhaas and his California dreaming: Forest City Enterprises personally,” Ms. Cerne said. Office for Metropolitan Architecture (OMA) Inc. sold its 50% share of the Met Lofts apart- The firm also has moved out of Cleveland The ‘Man vs. Food’ guy are the forces behind some of the most ment complex in Los Angeles to the California to new offices on Auburn Road in Concord should make a trip to Akron striking structures built in recent years. Public Employees Retirement System. The Township in Lake County. Ms. Cerne said the MOCA Cleveland, for instance, “is moving transaction valued the 264-unit complex at $74 location provides easy access to Interstate ■ We should expect no less from a vegetar- ahead with construction of a striking new million. Forest City expects to net $13.2 million 90 and state Route 44. ian web site, but ThisDishIsVegetarian.com building, which features triangular facades from the sale. Forest City developed the eight- is pretty disgusted by the menu at Akron that, from certain angles, allow luminescent story loft apartment in 2005. Send information about significant corporate Aeros games. peeks at the museum’s interior,” the anniversaries to managing editor Scott Suttell “Apparently the Double-A affiliate of Journal blog noted. It’s the handiwork of at [email protected]. the Cleveland Indians is in cahoots with Foreign Office Architects, an OMA offshoot. 20110207-NEWS--20-NAT-CCI-CL_-- 2/4/2011 2:50 PM Page 1