20120806-NEWS--1-NAT-CCI-CL_-- 8/3/2012 3:52 PM Page 1 VOL. 33, NO. 30 $2.00/AUGUST 6 - 12, 2012 BROWNS SALE ANALYSIS: WHAT MOTIVATED RANDY LERNER? Offices at Burke first in plan for lakefront Geis Cos. will lease 20 acres, talk with tenant By STAN BULLARD [email protected] An office campus is in the works to become the first project out of the starting blocks in Mayor Frank Jack- son’s plans to make lakefront devel- opment a reality near Cleveland’s central business district. Geis Cos. of Streetsboro, a suburban contractor and developer that has developed a strong taste for city projects the last few years, is pursuing a plan to gain control of parts of Burke Lakefront Airport’s parking lot and western lakefront edge near the USS Cod submarine museum. Geis would use the land for an office building, and perhaps more con- struction in the future, near North DAVID RICHARD/ASSOCIATED PRESS Coast Harbor. Outgoing Cleveland Browns owner Randy Lerner (left) converses with president Mike Holmgren at practice in Berea on July 28, after news of a potential sale leaked. The Jackson administration this Wednesday, Aug. 8, will submit to Cleveland City Council legislation See BURKE Page 4 Tax, liquidity concerns play role INSIDE By JOEL HAMMOND mier League, the top soccer league Aug. 2, and that now faces a vote of Uncertainty over [email protected] in the world — it simply could be NFL owners. Retail center that Mr. Lerner never felt connected However, tax and estate planning redos popular capital gains rate, Randy Lerner might have been to the Browns after inheriting the considerations likely played a big Owners of older sick of the Cleveland Browns’ poor team from his late father, Al, in 2002. role in the decision, local invest- retail centers across potential for hefty on-field performance and fans’ crit- As is his way, Mr. Lerner may ment advisers and tax lawyers say. Northeast Ohio are icism of him. never say publicly what led him to In the Browns and Villa, Mr. investing in fixups in estate tax factor in Or, as suggested last week by his sell the Browns to Tennessee busi- Lerner owns two pricey assets; hopes of drawing new top executive at Aston Villa — Mr. nessman Jimmy Haslam III in a Forbes valued the Browns at $977 tenants. PAGE 3 Lerner’s team in the English Pre- deal they reached last Thursday, See BROWNS Page 25 Accrediting body again issues show-cause order for Chancellor U. By TIMOTHY MAGAW Citing concerns with Chancellor’s itation could be a crippling blow February 2010 with a similar show- found that things in its view aren’t [email protected] leadership, financial health and the to Chancellor, as its students no cause order, but the university going swimmingly at Chancellor, quality of its academic programs, longer would be eligible for federal learned in March 2011 it would though university president Robert For the second time in the last the Higher Learning Commission financial aid. That outcome would remain accredited after a year-long Daugherty suggests otherwise. Mr. three years, Chancellor University in Chicago — the university’s cut off a critical revenue stream for review process. Three months later, Daugherty contends the latest is at risk of losing its accreditation, accrediting body — issued a “show- the institution. Chancellor moved from Cleveland’s show-cause order is a criticism of which if yanked could jeopardize cause” order in late June demanding The Higher Learning Commis- Midtown area to an office park in the for-profit education business in the future of the small, for-profit Chancellor prove it deserved con- sion slammed Chancellor, formerly Seven Hills off Rockside Road. general rather than an indictment college in Seven Hills. tinued accreditation. Losing accred- known as Myers University, in Now, the accrediting agency has See CHANCELLOR Page 26 30 7 NEWSPAPER World 74470 83781 see page 9 0 Trade Conference 20120806-NEWS--2-NAT-CCI-CL_-- 8/3/2012 4:49 PM Page 1 20120806-NEWS--3-NAT-CCI-CL_-- 8/3/2012 12:53 PM Page 1 AUGUST 6 - 12, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 At-home nat gas fuel race pits big vs. little sell for $500 or less. The goal “An ARPA-E grant is Grant helps Eaton join fray, but well-known Dan Moore has head start is to bring out a working an enormously significant prototype that can be award. It’s very hard to get. By DAN SHINGLER into commercial success. Agency-Energy — mercifully best moved into manufacturing ... This is huge for us,” Mr. [email protected] It’s Eaton Corp. vs. Dan T. Moore known as ARPA-E — to develop an by the end of 2015. Herbst said. in the race to turn American homes inexpensive filling system that con- “The key reason that Mr. Moore agrees on that We might learn soon which is into natural gas filling stations, and sumers could hang on their garage ARPA-E came out with point. better at bringing innovation to folks in the natural gas industry are walls and use to refuel vehicles that this solicitation and this “We applied for that as market — a large international cor- cheering them on, even though they run on natural gas. program is really so they Moore well, but didn’t get it,” he poration with more resources at its might not care who wins. Under terms of the grant, Eaton can push widespread deploy- said, informed of Eaton’s disposal than some nations, or a Eaton is the new entry, announcing will use $3.4 million from ARPA-E ment of natural gas for passenger initiative while Mr. Moore was successful entrepreneur with a July 20 that it had won a coveted and $800,000 of its own research- cars in the U.S.,” said Eaton vice navigating a motorcycle from Su- nimble and adept organization and a grant from the U.S. Department of and-development money to develop president for government programs, dan to Egypt on one of his annual track record of turning imagination Energy’s Advanced Research Projects a home refueling station that can Chris Herbst. See FUEL Page 9 THE WEEK INSIGHT IN QUOTES “If buyers know your Investing family has been left with a pile of crap to clean in private up, you’re not going to get what it’s worth.” equity, with — Joseph G. Corsaro, Corsaro & Associates law firm in Westlake. Page One more perks “Every member of the Fund sponsors courting leadership team ... those with piles of cash would swear in a By MICHELLE PARK court of law, on the [email protected] Bible and the U.S. These are opportune times to be Constitution that this holding the cash that private equity institution is signifi- funds want. Most private equity fund sponsors cantly better than it that are out raising money this year CHUCK SODER know it’s an investor’s market. Just was when it (last) got A 275-seat Quaker Steak & Lube soon will open at the reimagined Lakewood Plaza. ask John M. Saada, a partner at Jones off show-cause.” Day who advises on private equity matters. — Robert Daugherty, president, Chancellor University. Page One “Most sponsors realize that it’s more important to get a fund closed SPICING UP SHOPPING than to argue with their investors,” “Last year,we were Mr. Saada said. New, existing owners of Northeast Ohio’s older retail centers Investors, or limited partners, are still kind of in growth receiving a greater share of the fees work to make them more alluring for customers that portfolio companies pay to fund mode. This year, it’s a sponsors, and they’re demanding — often successfully — that sponsors little more stagnant.” By STAN BULLARD delay collecting any profit as port- — William Gaskin, president of [email protected] the Precision Metalforming Associ- folio companies are sold until investors ation. Page 7 are paid back their investments. t Garfield Mall, its new According to Preqin, a provider owner, Glimcher Group of information for the alternative “The attorney won’t assets business, more than 1,870 of Pittsburgh, plans to private equity funds are seeking cap- pick up the phone dress up its façades, ital worldwide. Industry experts say addA new signs and rename it a combination of more funds pursuing and make the obnox- capital and fewer investors willing to ious collections phone Garfield Commons in a quest for put their money into them has led to tenants to cure a 16% vacancy friendlier terms for investors. call. … What’s impor- “When everyone’s pockets were rate at the 38-year-old shopping STEPHEN HERRON lined with cash … then Blackstone tant for them is man- Garfield Mall in Garfield Heights center. (the private equity behemoth) didn’t aging that relationship.” Garfield Heights Mayor Vic empty movie theater that closed really have to listen” to investors’ — Sam Shipley, chief information desires, said Tim Milanich, director officer, Ulmer & Berne. Page 9 Collova is overjoyed. He was 15 years ago.” of private investments for Case happy when a court-appointed What’s happening at Garfield Western Reserve University’s Office of Investments. Mall reflects a low-key revival in “In choosing to stay receiver repaved the pock- “In the past, they’d say, ‘Well, we marked parking lot while the Northeast Ohio’s shopping center have six people behind you that will behind when the property at 12532 Rockside Road trade. New owners, sometimes take” an investment on our terms, Mr. Milanich said.