crain's cleveland business

By JOEL [email protected]

You probably know the name,but perhaps not the face. Ormore accurately,the faces.

In these parts, DavidDeming is best known aspresident of the Cleve-land Institute of Art, hisalma mater, a role heheld for 12 years beforeretiring in 2010.

But sculpting is hispassion, and he’s devel-oped a reputation as oneof the nation’s best. Anddespite an already-robustpresence in NortheastOhio, his work is about togain even more local exposure.

Mr. Deming, whose pieces appear

$2.00/APRIL 16 - 22, 2012

Entire contents © 2012 by Crain Communications Inc.

Vol. 33, No. 16

07447083781

716 SPECIAL SECTION

GAME ON!When the Horseshoe CasinoCleveland opens, what canwe expect? ■■ 5

NEW

SPAP

ER

Mild temps force somebusinesses to adjust

The sun’s been out more thanusual in Northeast Ohio, and

nurseries, golf courses andother companies have hadto adapt. PAGE 3

ALSO:

■ Case Western ReserveUniversity researchers move

closer to a clinical trial for theirAlzheimer’s drug. PAGE 3

INSIDEPermits for drilling down going upState busy as interest in shale deposits, their ‘wet gas’ at fever pitchBy DAN [email protected]

The nice thing about the oil and gasbusiness is that it announces bothits presence and its future activity,thanks to a process that requires astate permit for all new wells.

Even nicer, for Ohio at least, isthat permitting activity indicates a

busy year ahead as drillers beginramping up their request to sinkhorizontal fracking wells in the state’sUtica shale region, while moving innew drilling rigs to act on approvedpermits.

It’s all because drillers are flockingto the Utica shale and its so-called“wet gas,” which includes not justnatural gas but also butane, ethane

and other liquids valuable as ingre-dients in petrochemicals.

“This year, in the Utica shale, weare going to drill approximately 150wells, and the majority of those willbe in the wet gas window,” said MattSheppard, senior director of corpo-rate development for Oklahoma-based Chesapeake Energy Corp.

Nearly all of the shale under the

eastern half of Ohio is the Utica shale,and it contains the “wet gas” thatChesapeake and other drillers seek.They are already filing their paperworkto get it too, which is resulting in theOhio Department of Natural Resourcesissuing more permits for the mile-deep fracking wells that are provingsuccessful at extracting natural gas,oil and other liquids from Ohio’sshale deposits.

See PERMITS Page 21

See PRICES Page 20

See FACES Page 20

Prices rise at industrialfirms withfear easingBy GINGER [email protected]

The Distribution and StorageGroup of Chart Industries Inc. is going boldly where it hasn’t gone infour years. Starting May 1, the makerof equipment for the production andstorage of hydrocarbon and industrialgases plans to raise the base prices ofits products by as much as 5% — itsfirst such increase since 2008.

Eric Burkland, president of theOhio Manufacturers’ Association,said manufacturing “is rocking androlling” right now. However, manu-facturers as a whole aren’t raisingprices regularly for their products,partly out of fear they’ll jeopardizethe sales gains they’ve achieved in arecovering economy.

But that situation may be changing,if local companies such as Chart Industries are any indication.

Ned Hill, dean of the Levin Collegeof Urban Affairs at Cleveland StateUniversity, said the telltale sign ofsustained improvement in the man-ufacturing sector will be if enactedprice increases stick.

“Within the manufacturing sectoritself, companies have had their pricesat the absolute floor just to keepsome volume going through theirplants. Margins have been squeezednow for close to three years,” Dr. Hillsaid. “We’ve seen in the past as theeconomy started to recover somescattered attempts to increase

MARC GOLUB

Sculptor David Deming’s bronze version of Ricky Williams — pictured at right— now is on display at Darrell K. Royal-Texas Memorial Stadium in Austin, Texas.Mr. Deming still has the clay version of Ricky at his Lakewood studio.

PUTTINGFACES WITH

NAMESFormer art institute director David Deming

expands his sculpting presence here, nationally

ON THE WEB: Watch as David Deming describes the process of creating a 1,200-pound bronze Ricky Williams. www.CrainsCleveland.com/Ricky

20120416-NEWS--1-NAT-CCI-CL_-- 4/13/2012 2:44 PM Page 1

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By CHUCK [email protected]

Bexarotene works like a charm in mice, but can it reverse Alzheimer’s in humans?

Gary Landreth and Paige Cramer aim to find out: The two researchers and their employer, Case Western Reserve University, have founded a company calledReXceptor Inc., which is working to figure out whetherthe cancer drug has potential to become an Alzheimer’sdrug.

They’re in the process of raising money to finance aphase I clinical trial designed to show how the drug affects healthy people. If that small study goes well, larger studies testing the drug in Alzheimer’s patientswill follow.

There’s no guarantee the drug willmake it through clinical trials, Dr.Landreth said, noting that manydrugs that work well in mice fail inhumans.

But it does work really, really wellin mice.

After four years of testingbexarotene on hundreds of mice thatwere genetically engineered to developa condition similar to Alzheimer’s,Drs. Landreth and Cramer havefound the drug almost immediatelytriggers their bodies to ramp up production of a key protein calledapolipoprotein E, or ApoE.

That protein helps the brain get ridof beta-amyloid protein fragments,which build up in the brains ofAlzheimer’s patients, who can’t pro-duce enough ApoE.

“If you had more of these garbage disposal units …things should get faster and you should get smarter,” Dr.Landreth said.

And that’s what happened in the mice. The level ofsoluble beta-amyloid in their brains dropped 25% 24hours after they received the drug, and the level of beta-amyloid plaques in their brains fell by 75% after threedays.

Plus, the mice over time started showing improvedbrain function. They built nests again. They more easilyfound their way through mazes. They even got theirsense of smell back.

After Dr. Cramer ran the first test four years ago, Dr.Landreth didn’t believe the results.

“I thought she’d screwed up,” he said.

Cramer

APRIL 16 - 22, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“Within the manufac-turing sector itself,companies have hadtheir prices at the absolute floor just tokeep some volume going through theirplants.”— Ned Hill, dean of the LevinCollege of Urban Affairs at Cleve-land State University. Page One

MCKINLEY WILEY

Gale’s Garden Center manager Tom Krupa says the nursery has had to adjust to mild tempera-tures in various ways, including hiring seasonal workers earlier.

Marketingagenciesfind powerin numbersRecent mergers reflectgrowing movement to‘integrated’ formulaBy JOEL [email protected]

It’s not so special to be special any more, at least when it comes toCleveland’s marketing business.

Recent mergers and one high-profile closing among Cleveland’stop marketing agencies show thatintegration is the way of the present,and may very well be a part of the future, too.

Marcus Thomas, a 120-employeefirm in Warrensville Heights, mergedwith 17-employee DigiKnow, a digitalmarketing specialist, last October. InFebruary, Cleveland-based AdComGroup merged with Warehouse Dis-trict neighbor and public relationsspecialist LandauPR, which employs17.

Meanwhile, Liggett Stashower,one of Cleveland’s best-known marketing companies, filed forChapter 7 bankruptcy liquidation inFebruary.

Members of those companies andother industry observers say the recent activity is a result of a pushaway from specialty companies,which gained prominence a decadeago. The end result, in the words of King Hill, formerly president atDigiKnow and now a senior vicepresident and digital strategist atMarcus Thomas, is a more “holistic”approach; in other words, more resources at a single firm to betterdeliver on clients’ needs.

“There’s knowing the technologyand knowing how people use it,which we (knew),” Mr. Hill said. “Butthere’s also the need to know something about branding and otheraspects, and having the capacity andthe depth of skills to do that wassomething we were lacking.”

DigiKnow specialized in web devel-opment and digital marketing prod-ucts. Its employees now are dispatchedmore widely within Marcus Thomas

See MARKETING Page 11

Next up forCWRU docs’Alzheimer’sdrug: trials Tests show that bexarotene canreverse similar disease in mice

See DRUG Page 20

Landreth

REGULARFEATURESBig Issue ....................4Best of the Blogs.......23Classified..................22Editorial......................4From the Publisher......4Going Places ............13Personal View .............5Reporters’ Notebook .23Tax Liens ..................12The Week .................23What’s New ...............23

WEATHER’SA PLEASURE

Customers arrive earlier at area’s warmth-dependent businesses

By GINGER [email protected]

In his 36 years in the nursery busi-ness, Tom Krupa never has seena March — or a winter — like theones just past.

But Mr. Krupa, manager at Gale’sGarden Center in Willoughby Hills,isn’t complaining.

“This is wonderful. This is fabulous,”Mr. Krupa said. “I wish we could have

every March like this.” At his store, mild temperatures

brought customers in two weeks earlier than usual looking to buy lawnfertilizer, grass seed, and trees andshrubs, giving the store an unexpectedadvance on the spring season.

In his opinion, the store’s 15% to20% jump in sales from a typical Marchwas “all weather, weather, weather.”

Gale’s also had to begin hiring itsSee WEATHER Page 14

“The driving force behind all of this wasto provide a homebase for when ouralumni come backand to get prospectivestudents here and keepthem downtown.”— Gene Finn, vice president for advancement at Kent StateUniversity. Page 7

“If you’re the onlygame in town, you’vegot a better ability todraw people fromthat market. ...You canbe ... a mediocre prop-erty and still do well.”— Bill Eadington, director of the Institute for the Study ofGambling and Commercial Gaming at the University of Nevada, Reno. Page 15

“When you start seeingall those people walking around onthe street, you can seeboutique retailerswho can make it thatcouldn’t when carszoomed by.”— Matt Cullen, president andchief operating officer of Horse-shoe Casino Cleveland partnerRock Gaming LLC. Page 17


Gov. John Kasich, who doesn’tneed to be reminded to speakup, should pay close attentionto the latest study of the use of

tax incentives as an economic develop-ment tool and recall a promise he’smade to his citizens.

Gov. Kasich, who surely cannot be putinto any predictable politicalmold (witness his support ofMayor Jackson’s school reformplan), surprised people whenhe vowed that his JobsOhio teamwould examine tax breaks givento companies to make certainthat the businesses actually cre-ate the jobs they promise.

If they didn’t, the governorsaid, he’d claw back the money,and that was music to my ears.Tax packages make me crazy because itseems that communities and states aresimply giving away money they can’t afford. But nobody knows how to stop itbecause no state wants to be the first toturn away a business that’s danglinghundreds of good-paying jobs as a prize.

So last week, the respected Pew Research

Center issued a report analyzing howstates use tax incentives and whetherthey are effective tools for economic development. Overall, the conclusionwasn’t good, as the researchers deter-mined that “no state ensures that policy-makers rely on good evidence aboutwhether these investments deliver a

strong return.”The Pew folks credited

Ohio for starting to scrutinizewhether these deductions, exemptions, tax credits and thelike are the best and most cost-effective way to rev up the stateeconomy, but urged the state todig deeper and determine if theinvestment was worth theprice.

Ohio finished sort of in themiddle of the study, which did creditstate officials for improving the trackingof money spent on incentives. The Kasichadministration and JobsOhio officialssay that will get better in the future, andthey should be encouraged to monitorand challenge these giveaways; I lookforward to the first time state officials

actually take back Ohio’s money from a business that fails to deliver thepromised new jobs.

****WITH OBAMACARE front and center

in the public debate, it will be interestingto hear what the panelists say at ourGeneral Counsel summit this week at LaCentre in Westlake. It seems that thescramble is on at every business to getready for the Affordable Care Act, eventhough the law’s very future is in thehands of the Supreme Court.

And speaking of the high court, we decided in a recent poll on CrainsCleveland.com to ask our visitors whatthey thought the justices should do intheir ruling, which is expected in June.The majority (57.4%) said the courtshould throw out the law entirely, and29.6% said the law should be kept in itsentirety. The remaining 13% said the courtshould force Congress to modify the law.

Visit our website, vote in the currentpoll, and you’ll be able to see the resultsof a lot of fascinating polls over the pastfew weeks. I’ll bet you’ll be surprised atsome of the opinions expressed. ■

44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 16 - 22, 2012

Big moneyN

ature abhors a vacuum. So, apparently, docasino operators, who eagerly are lining upto fill the geographic voids in Ohio wherefull-service casinos will not be operating.

Franklin County Common Pleas Court JudgeTimothy Horton can stop them. Our hope is that hedoes, although a peculiar yet powerful array offorces is telling him he should not.

Ohio voters in November 2009 gave their nod ofapproval to full-service casinos in Cleveland,Cincinnati, Columbus and Toledo. For the pro-casino interests, led by Cleveland Cavaliers majorityowner Dan Gilbert and Penn National Gaming Inc.,it was a case of good timing. They made the persua-sive case during a recession-battered economy thatthe casinos held the prospects of good-paying construction jobs while they were built, and good-paying service jobs once the casinos were open.

Now, like a salesman who has managed to get hisfoot in the door, gaming interests want to fling theentryway wide open by installing thousands ofvideo lottery terminals — aka slot machines — atOhio’s seven horse race tracks. And the state, hungry for its cut of revenue from the slots, is tryingto help them seal the deal — a situation that has putOhio Attorney General Mike DeWine, a social con-servative, in an interesting position.

As the state’s legal advocate, Mr. DeWine is seeking to dismiss a lawsuit by the Ohio Roundtablethat challenges the Ohio Lottery Commission’s rightto license the operation of the video lottery terminals,or VLTs, at the race tracks. The roundtable is a con-servative public policy group that contends in itslawsuit that Ohio voters did not envision authorizingslots-type gambling when they OK’d the establish-ment of the Ohio Lottery nearly 40 years ago.

Despite the Roundtable’s lawsuit, which is inJudge Horton’s court, gambling interests are workingon alliances that would allow them to cash in on theopportunity to reap big money from the video slots.

For example, Hard Rock International, owner ofthe Hard Rock restaurant, hotel and casino chain,said two weeks ago that it’s planning a $275 million“gaming and entertainment facility” at NorthfieldPark race track in Northfield. Hard Rock said it hasformed a partnership with Brock Milstein, owner ofthe harness track, to develop the project, providedthere’s what it called “a successful resolution” of theVLT lawsuit.

Other gaming interests also are jockeying for position to set up “racinos,” as the combined racetracks and slot parlors are called, in locations awayfrom the full-service casinos. Penn National, forone, plans to move its Beulah Park race track fromGrove City, near Columbus, to Austintown, which is near Youngstown, and its Raceway Park fromToledo to Dayton.

Voters didn’t authorize this proliferation of gamingwhen they said yes to the four casinos, which likelywill produce diminished economic benefits for theirrespective cities if racinos are allowed to pop upacross Ohio. Judge Horton should give voters thechance to have their say on the expansion of the lottery to include VLTs by finding in favor of theOhio Roundtable in its lawsuit.

FROM THE PUBLISHER

BRIANTUCKER

Hop on those who abuse tax breaks

PUBLISHER/EDITORIAL DIRECTOR:Brian D.Tucker ([email protected])

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

DEBBIE FELLERMadison It will be awesome. Anythingthat brings people downtownwill be a good thing. A lot ofpeople don’t know about all therestaurants and the number ofpeople living in downtownCleveland now.

➤➤➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.

THE BIG ISSUE

RANDY MCGHEE WilloughbyI think it will be good. DanGilbert can’t keep all the moneyto himself. There will be themoney he pays for taxes andwhat people pay for entertain-ment that will put money intothe system.

BRIAN BLOOMRocky RiverI think it’s going to be prettygood. It’s going to attract a lotmore people to Cleveland andcould become an economic engine for the city. ... I do haveconcerns about gambling andthe bad habits it brings.

STUART GARSON Moreland HillsI think it will have a positive effect. Now we’ve got to getthe convention business. It willhelp sell the convention centerbecause it will give people onemore thing to do while theyare here.

Would you bet that Cleveland’s casino will have a more positive or more negative impact on the city and its people?

20120416-NEWS--4-NAT-CCI-CL_-- 4/13/2012 10:01 AM Page 1

By RICHARD HERMAN and ROBERTO TORRES

The mayor of Baltimore recently announced plansto attract 10,000 new fami-lies to her city in the next 10

years. Mayor Stephanie Rawlings-Blake told members of Baltimore’sLatino community that they arecritical to this new initiative to reversepopulation decline and grow theeconomy.

Philadelphia Mayor Michael Nutterhas waged a similar repopulationstrategy, aggressively targeting im-migrants, and with profound effect.

Thanks to newly arrived cultures,Philadelphia added population lastdecade for the first time in 60 years.

The strategy of attracting immi-grants to repopulate and revitalizea city is not new. Former ClevelandMayor Jane Campbell once vowedto push the city’s population backover 500,000, in part, by welcomingimmigrant families and immigrantentrepreneurs. Most of the civicleadership ignored her idea, and

Cleveland’s population plummetedto 397,000 by 2010, the second-largest decline of any major Americancity not hit by a hurricane.

In the recent past, Cleveland MayorFrank Jackson and Cuyahoga CountyExecutive Ed FitzGerald have expressed support for welcomingimmigrants, but they apparentlyhave delegated that task to GlobalCleveland, which does not seem tobe doing the job.

Global Cleveland recently openedits offices on Euclid Avenue nearPublic Square to much fanfare.Those of us who worked for years tocreate an international welcomecenter are so far unimpressed.

Instead of throwing out a welcomemat to immigrants and refugeesand branding Cleveland an immi-grant-friendly city, the staff at theWelcome Hub talk about attracting“newcomers” and “boomerangers,”especially those who can work inthe region’s medical and biotech-nology fields.

We need everyone we can get,

Mr. Herman is a Cleveland immigration lawyer and a former board member of Global Cleveland. Mr. Torres is a former economic development director for the cityof Canton and is president of T & R Group LLC, a consulting firm that specializes inLatino and international business development.


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PERSONAL VIEW

Cleveland must be better at attracting immigrants

See VIEW Page 6



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certainly, but focusing on a highlyeducated few is not the answer. Thistimid approach does little to attractthe kinds of numbers Clevelandneeds just to sustain itself, let alonerepopulate and soar.

Contrast that effort with what ishappening in Dayton and Detroit,where civic initiatives invite a newgeneration of immigrants to buyand renovate abandoned homes,build neighborhoods, launch busi-nesses and join the mosaic.

Global Detroit was, in fact, devel-oped in part by Clevelanders who couldn’t find support in Cleve-land.

The Detroit initiative, led by SteveTobocman, former majority leaderof the Michigan House of Represen-tatives, has sparked widespread interest in the power of immigrants.Detroit Mayor Dave Bing plans tolaunch soon an Office of ImmigrantAffairs. The Republican governor ofMichigan, Rick Snyder, now likes to refer to himself as the “most pro-immigrant governor in thecountry.” He recently launched astatewide initiative, Global Michigan.

Dayton Mayor Gary Leitzell likesto go on national television and saythat he looks at immigrants and seesa path to a more entrepreneurial,global and diverse future. He is fondof quoting studies saying that immi-grants are twice as likely to start abusiness as native-born Americans.

Curiously, Global Cleveland’sleaders rarely use the “I” word todescribe their plans and programs.

This omission is shocking. GlobalCleveland grew out of a grassrootsmovement to revitalize Cleveland bywelcoming immigrants and refugees.The founders were inspired by theWelcoming Center for New Penn-sylvanians, which helped revivePhiladelphia, and a 2010 plan crafted by the Jewish Federation ofCleveland that is bluntly titled,“Cleveland Needs More Immi-grants: Why and How to WelcomeMore Foreign-Born Residents.”

Now we are at an inflection point.We hope Global Cleveland can recapture the community-drivenconversation focused on creatingan immigrant-friendly city. To dothis, it will need an urban revitaliza-tion strategy, as well as an appeal toLatinos, the most powerful demo-graphic force in America today.

We should welcome all immi-grants, even those who don’t haveadvanced degrees. Most of our ancestors arrived in America withonly grit and determination. Manyof them started businesses andraised children who accomplishedgreat things. We should keep this inmind, as we prepare to demolishthousands of abandoned but inhab-itable homes that could houseCleveland’s new immigrant familiesand taxpayers, but instead seemslated to become urban farms. ■

continued from PAGE 5

View: Group losing immigrant focus

WRITE TO USSend your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W.St. Clair Ave., Suite 310, Cleveland, OH 44113-1230e-mail: [email protected]

Dan Gilbert’s entre-preneurship accelera-tor, Bizdom Cleveland,has announced its first class of sixstartups that it will help launch.

Bizdom invests up to $25,000 ineach of the businesses. After threemonths, they will be given the oppor-tunity to pitch to other investors.

They are BigRiver, which helpsnonprofits raise money through

relationship-based online giving; BOOM,

which uses social media to help residential property managers communicate with and retain tenants;InStoreFinance, which helps retailerswith an in-store, consumer creditprogram for hard-to-finance cus-tomers; Urban Matrix, which providesindoor, digital “billboards” to retailers;

SafeCare, which helps health carefacilities with background checks of job candidates; and On DemandInterpretation Services, which pro-vides qualified interpreters whospeak 170 languages for remoteteleconferencing for courts and otherjudicial programs.

Mr. Gilbert, majority owner of theCleveland Cavaliers, started the program in Detroit in 2007.

Bizdom Cleveland accelerator chooses first startup classON THE WEB Story from www.CrainsCleveland.com.

Local execs back Romney, MandelObama ignored as earlycontributions from area’stop leaders go to GOPcandidates, committeesBy TIMOTHY [email protected]

Though it’s early in the 2012 elec-tion cycle, the top executives ofNortheast Ohio’s public companiesappear to be lining up behind theRepublican Party’s standard-bearers,at least with their checkbooks.

According to Crain’s research ofFederal Election Commission filings,the top executives at Northeast Ohio’spublic companies contributed acombined $38,250 to the campaignof Josh Mandel, the Republican statetreasurer who wants to unseat De-mocratic U.S. Sen. Sherrod Brown.

Sen. Brown’s campaign brought in$23,000 from local executives.

The same pool of executives contributed $20,051 to formerMassachusetts Gov. Mitt Romney,the presumptive Republican presi-dential nominee. As of last week,none had contributed to PresidentBarack Obama’s campaign.

“The pattern doesn’t surpriseme,” said John Green, a campaignfinance expert and director of theRay C. Bliss Institute of Applied Politics at the University of Akron.“(Former) Gov. Romney has goodconnections with the business com-munity.”

Crain’s research looked at dona-tions to presidential and Ohio senatorial candidates, major politicalparties and their respective con-gressional and senatorial campaigncommittees.

The three largest donors — EatonCorp. chairman and CEO Alexander

“Sandy” Cutler, FirstEnergy Corp.president and CEO Anthony Alex-ander and Timken Co. president andCEO James Griffith — all declinedthrough their company spokespeo-ple to comment on their donations.

FirstEnergy’s Mr. Alexander con-tributed $2,500 to Sen. Brown,$30,800 to the Republican NationalCommittee, $20,000 to the NationalRepublican Senatorial Committeeand $5,000 to the National Republi-can Congressional Committee.

Eaton’s Mr. Cutler contributed$2,500 to Mr. Romney, $5,000 to Mr.Mandel, $20,800 to the RepublicanNational Committee, $30,400 to theNational Republican SenatorialCommittee and $1,500 to the OhioRepublican Party.

Timken’s Mr. Griffith contributed$2,500 to Mr. Mandel, $30,800 to theNational Republican CongressionalCommittee and $9,200 to the OhioRepublican Party. ■



Universities turn eye toward hospitality with hotel plansKent, Akron, CSU see facilities as way to increase revenues

CRAIN’S FILE PHOTO

The University of Akron is considering turning some student housing at the Quaker Square complex back into hotel rooms. Seen here in 2005, the QuakerSquare hotel had carried the Crowne Plaza brand.

By TIMOTHY [email protected]

Northeast Ohio’s public universitiesare checking into the hotel business.

While each hotel differs in size andscope, Cleveland State University,the University of Akron and KentState University all have invested intheir own projects. Such moves, university officials said, are intendedto inject more revenue into their coffers and to help them serve thethousands of visitors funneling throughtheir campuses each year.

“The driving force behind all ofthis was to provide a home base forwhen our alumni come back and toget prospective students here andkeep them downtown,” said GeneFinn, Kent State’s vice president foradvancement and executive directorof the university’s foundation. Thelatter is financing a $15.4 million, 95-room hotel and conference center indowntown Kent.

The prospect of universities build-ing their own hotels or acquiring onesnear campus — as the University ofAkron did in 2007 — is by no means anew phenomenon. Miami Universityin Oxford has operated since the early1980s the Marcum conference centerand hotel, which brings in more than

$2 million in revenue each year.Still, Mark Woodworth, president

of Atlanta-based PKF HospitalityResearch, said there “definitelyseems to be over the last few yearsan elevated level of interest for col-leges and universities to have theirown facility on or near campus.”

UA ups the anteThe University of Akron rattled

Northeast Ohio’s hospitality arenawhen it bought for $22.7 million thetowering Quaker Square complex indowntown Akron’s central businessdistrict on South Broadway Street.At present, 65 rooms in the iconic

grain silos are devoted to hotelspace, with 135 others reserved forstudent housing.

But with a $35 million, 520-bedresidence hall expected to open thisfall, University of Akron officials are“seriously exploring” the idea ofconverting some of the studentrooms in Quaker Square back to hotel space, said Ted Curtis, theschool’s vice president for capitalplanning and facilities.

Mr. Curtis said the university mayincrease the number of hotel roomsto about 100 or 110 — a move thatwould generate more revenue forthe school. The 65-room hotel oper-

ation generated about $1.1 millionin gross revenue over the university’slast fiscal year, which ended June 30.

Also, the added rooms would allow the university’s hotel to fran-chise with a major hotel operator,such as a Hilton or Marriott. Theprospect of teaming up with a national brand would bring in morecustomers and heighten the hotel’sprofile, Mr. Curtis said.

“What that does is get you intotheir national and even internationalreservation systems, which is a big item,” he said. “It also gets youinto their points systems, which isanother big item.”

The boutique approachSlated to open in spring 2013,

Kent State’s boutique hotel at theintersection of Haymaker Parkwayand Depeyster Street in Kent wouldbe the only hotel within walking distance of the university. As such,Mr. Finn said Kent State’s founda-tion chose not to franchise with ahotel operator because it would “cutsignificantly” in the hotel’s revenues.

“We wanted to make sure thebranding was closely tied to the uni-versity, and it said ‘Kent State is whythe hotel exists,’” Mr. Finn said.

Aside from serving the university’sguests, Mr. Finn said Kent State’shotel also is expected to be a learningspace for students, particularly forstudents enrolled in its hospitalitymanagement degree program.

Likewise, Mr. Finn expects the300-seat conference center to be a

revenue generator because twocorporations — Davey Tree ExpertCo. of Kent and Ametek Technical &Industrial Products Co. of Berwyn,Pa. — will have offices housed at theFairmount Properties developmentacross the street.

“We’ll be marketing this muchwider than just the university,” Mr.Finn said. “This is a 300-seat capacityballroom and conference center. Itshould be a pretty user-friendly space.”

Rather than build a new hotel like Kent State, Cleveland State is exploring the idea of hiring a developerto sublease the roughly 100-year-oldMather Mansion it owns on EuclidAvenue and convert it into a boutiquehotel at a cost of about $10 million,according to Jack Boyle, ClevelandState’s retired vice president for finance who is steering the project.

Mr. Boyle said the structure, whichwas acquired by Cleveland State inthe late 1960s, could house 25 to 30hotel rooms. If an addition was added,as some developers have proposed,it could house 50 to 60 rooms. Mr.Boyle expects the university willpick a developer by May, and a hotelcould be open within the next twoyears if all goes according to plan.

“We feel this is the most efficientway to turn it into a useful project thatbenefits us from the standpoint thatsomeone else would be paying forthis, and it’d be an amenity importantto the university,” he said. “Having aguest location for visiting scholarsand speakers and parents is some-thing that we see as a positive.” ■



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Teachers union makes nice, but has reform reservationsUnion leader Quolkesays he’ll support cityplan, remains upsetabout GCP’s presenceBy JAY [email protected]

David Quolke has traveled a longway in recent weeks in his relation-ship with Cleveland Mayor FrankJackson and Eric Gordon, CEO of the Cleveland Metropolitan SchoolDistrict. However, the president ofthe Cleveland Teachers Union hasn’tbeen thrilled about the journey he’sshared with the Greater ClevelandPartnership.

Two months ago, Mr. Quolke wrotein his blog to the union’s membersthat the Cleveland school reformplan that Mayor Jackson and Mr.Gordon presented to him Feb. 6 “isnot a plan to educate children inCleveland; rather this is a plan toblame unions and fire teachers.”

By last Thursday, though, as hestood with the two men at ClevelandCity Hall to announce the warringsides had reached a compromise on

the reform plan, he wasmore conciliatory. He agreedto support the plan andlobby state legislators for itspassage, even though, hesaid, “This agreement is farfrom perfect.”

Earlier in the week, Mr.Quolke said he expected hisrift with the mayor wouldbe healed.

“We’re two strong-willed individ-uals,” he said. “I look out in mymind for what’s best for my membersand Cleveland’s kids, and I think themayor has the same attitude.”

With the teachers union leaderthrowing in with his former adver-saries across the bargaining table,the legislation needed to implementthe reform plan could wind its waysuccessfully through the GeneralAssembly this spring and summer.

But Mr. Quolke isn’t embracingthe local business community soquickly.

No ‘Kumbaya’ moment yetEven after the April 12 news con-

ference at City Hall, Mr. Quolkesounded reluctant about working inColumbus alongside lobbyists fromthe Greater Cleveland Partnership,the regional chamber of commerce

group that helped draft theplan.

“No, I don’t think this iswhere we do ‘Kumbaya’and go down (to Columbus)together,” he said whenasked his view of GCP.“Kumbaya” is a refrainfrom a traditional Africanfolk song that became pop-

ular in the 1960s as a peace move-ment anthem.

Last Monday, April 9, during aninterview with Crain’s, Mr. Quolkeclearly was displeased that GCP,and not the teachers union, was theparty at the table helping MayorJackson and Mr. Gordon craft whatis called the Cleveland Transforma-tion Plan.

“I think (GCP’s) role has beencounterproductive,” Mr. Quolkesaid. “I think it’s added to the divi-siveness that we’ve seen, as op-posed to pulling people together.

“It added fuel to the fire of thisanti-teacher sentiment that we’veseen grow,” said Mr. Quolke, whowas elected president of the 6,000-member union in 2008. Mr. Quolkehad been a teacher of visually im-paired students at several districtschools.

GCP president Joe Roman defended

the process.“To bring the teachers union in at

the beginning, I don’t think therewould be an agreement,” he said afterthe Thursday press conference. “Ithink you needed a starting pointthat put a package together that addresses quality (education) as thedriving force in the package, andthat would have been harder to doin a bigger group.”

Asked if he thought the businesscommunity and the teachers unioncan work together to get the legisla-tion passed, Mr. Roman said, “Ihope so.”

Fresh Start a nonstarterMayor Jackson considers passage

of the enabling state legislation ascritical to his plan to ask Clevelandvoters in November for an increasedtax levy to dig the district out of alooming $65 million budget deficit.Without that levy, the mayor believesthe school district will be throwninto state receivership. The legisla-tion and the reform plan it supportsare designed in part to show votersthat the district has a plan to improve the quality of education inthe district and to get out of the aca-demic doldrums.

The reform plan would allow thedistrict more leeway in how it eval-uates and assigns teachers, movingaway from seniority as the key factorin those decisions. The plan alsoadopts what is called a “portfolioapproach” to school management,giving principals greater responsi-bility over budgeting and hiring.

In addition, it opens the door tosharing property tax money withnew, high-quality, privately runcharter schools.

None of those provisions weregreeted warmly by the teachersunion, and both sides have com-promised on several key points.

Mr. Quolke still questions thewisdom of allowing charter schoolsto use the district’s property tax rev-enue. But the most onerous sectionof the plan to the teachers unionwas called “Fresh Start,” a provisionthat would have started the nextround of teacher contract negotia-tions in 2013 with a blank sheet ofpaper.

Mr. Quolke was adamant that theteachers weren’t going to tear uptheir existing contract and startfresh. He acknowledged that the existing, 304-page contract is cum-bersome, but argued that it is a reflection of a lack of trust that hasexisted between the union and thedistrict for decades.

“To me the really fresh start isn’tthe physical ripping up of a contractand getting down to one page,” hesaid. “To me, ‘fresh start’ is, as a city,how do we move forward in thisprocess of collaboration?”

Mayor Jackson agreed to forgothe Fresh Start provision.

Ready to rollMr. Quolke also was critical of

one of the plan’s elements, theCleveland Transformation Alliance,which gives the private sector a keyrole in evaluating those charterschools that seek financial supportfrom the district’s tax levy.

Mayor Jackson and Mr. Gordonhave described the alliance as apublic-private watchdog over charterschools. GCP’s Mr. Roman said it is“a place where the business com-munity and others can directly engage” with the school district.

That section eventually was accepted by the teachers, modifiedonly slightly to make the work of thealliance more publicly transparent.

With a united front, substitutelegislation to clear the way for thereform plan will be introduced inthe General Assembly. It will replaceplaceholding legislation introducedApril 4 by state Sens. Nina Turner of Cleveland and Peggy Lehner ofKettering.

Companion legislation was intro-duced at the same time in the OhioHouse by Reps. Sandra Williams ofCleveland and Ron Amstutz ofWooster. Democrats Turner andWilliams and Republican Amstutzwere at Cleveland City Hall lastThursday to lend their support tothe compromise legislation.

Mr. Quolke acknowledged lastweek that he expects to work inColumbus alongside business lob-byists to pass the legislation.

“I think going forward they canplay a big role,” he said. ■

Quolke

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St. Louis travel firm buysTwinsburg event planner

Ganley Auto relocates HQemployees to BrecksvilleBy STAN [email protected]

Ganley Auto Group has moved itsheadquarters to a building it boughtin Brecksville from its longtime Lake-wood home, which now is destinedto become a Family Dollar store.

Joseph S. Fornal, Ganley chief financial officer, said the auto chainmoved 25 employees, most from itsformer Lakewood location, to thenew office at 8748 Brecksville Road.

Among the reasons for the moveis that Ganley wanted a more central location, the Ganley familylives in Brecksville, and the businesswould occupy less space than in itsformer Lakewood location. The Lake-wood headquarters, Ganley’s busi-ness home since the late 1970s, wasat two dealerships the company hadclosed in 2009. Ganley operates 28auto franchises in northern Ohio.

Relationships also fostered thisreal estate deal. When Rachel Torchia,

owner of Gateway Title & Associatesof Brecksville, went to Mercedes-Benz of Akron to see about a new car,longtime acquaintance Ken Ganley,president of Ganley Auto Group,said she also had something hewanted — her building.

Mrs. Torchia said she has reacheda point in life where she wanted toshed the real estate, so she sold theproperty, which her husband willcontinue to manage. Gateway Titlewill remain a tenant in the building,she said.

Ganley, through Ganley Real Estate Co., paid $900,000 March 30for the Brecksville building. It soldits former headquarters buildingand adjoining land at 13215 DetroitAve. to Lakewood-FDBTS LLC thesame day for $550,000, according toCuyahoga County land records.

Dru Siley, Lakewood planning anddevelopment director, said the cityhas approved plans for constructionof a Family Dollar store on the site. ■

Natural gas price drop sparks BHPshipping container, he said, makingthem somewhat portable and fairlyeasy to install even in a small footprint.

Mr. Blair has not been marketingthe systems primarily because of thelow cost of gas — that’s just been arecent bonus, he said. The real sellingpoint is that the systems are reliableand efficient. While generating elec-tricity, the systems also can producehot or cold air using heat exchangers,which adds to their efficiency andcan be important to installationswith large computer systems that require cool environments, he said.

“We can cut the energy a call center uses by 50%,” Mr. Blair said.

Nonstop actionBut lately, at least, some customers

have been using the systems to cap-italize on the low price of natural gas.That includes Dominion East Ohio,which runs its jet engines full time toproduce electricity for its operationson East 55th Street. A single, one-mega-watt unit provides power for a 120,000-square-foot building that housesmore than 200 employees, said Do-minion’s facility supervisor, Joe Staff.

“Our operation is the corporateside of the gas business and we haveseveral functions where we can’t losepower, and we have a call center andwe can’t drop calls,” said Mr. Staff.

With gas prices so low, Dominionhas been using the system not as abackup, but as its main power supply, with the regular electric gridnow serving as the backup, Mr. Staffsaid. The jet engines have been run-ning nonstop almost since they wereinstalled last July, with no problems todate, he added.

That’s good news for BHP, as wellas its parent, Toledo-based GEMInc., a construction company thatpurchased BHP in 2009 because itwanted to integrate the systems withsome of its existing clients and withnew construction projects, said GEMpresident Hussien Shousher.

A good idea, now betterBoth GEM and BHP are private

companies and neither discloses itssales. But with only about 15 employeesBHP is only a tiny part of GEM,

which has between 800 and 1,000employees, depending on the pro-ject on which it is working. But BHPis an important part, Mr. Shoushersaid, and it allows GEM to bring anew product to clients who oftendidn’t know it existed.

“Over 50% of the customers that weshow the technology to, and that’sboth engineers and end users, are un-aware of the technology,” he said. “Wefit a certain size space — there are verybig systems for distributed energy, butthe small to medium tier is untappedand unknown.”

Now, GEM and BHP might havesome momentum. Mr. Blair said it’sbecoming easier to sell the systemsnow that a few are up and running andhe can use them for demonstrations.

And as natural gas prices continueto drop, the proposition of using thesystems for full-time electricity, asDominion does, makes them evenmore appealing, he said.

The system BHP installed at Dominion was its first one-mega-watt system, but it’s already workingon another at the University of Toledoand hopes to secure more, similar-size deals this year. Low gas pricesonly can help, Mr. Blair said.

“It started out as a good idea,” he said,“but now it’s an even better idea.” ■

By DAN [email protected]

David Blair doesn’t pretend hesaw the collapse of natural gas pricescoming, but the phenomenon sureisn’t hurting his sales pitch these days.

“We are certainly in a position tobenefit from that,” Mr. Blair sayswith the subtle smile of an engineerbemused by an attractive equation.

Mr. Blair’s company, Hudson-basedBHP Energy, designs and installs sys-tems that use jet engines powered bynatural gas to make electricity, whileat the same time providing additionalheating or cooling for a factory, office, data center or other building.

Mr. Blair formed the company in2002 and uses generation equipmentmade by Capstone Turbine Corp. ofCalifornia. When BHP started, it wasa period of cheap natural gas — liketoday, it was selling for less than $3per thousand cubic feet (MCF) —but its price was more volatile and itquickly went back up to more than$6 per MCF in 2003.

But BHP has not sold its systems somuch on price, as on performance.They are used by manufacturers, callcenters, computer installations andeven museums that must have reli-able, full-time power, Mr. Blair said.Usually, they are used as backup systems that quickly go to work providing electricity in the event of apower outage, he said.

BHP has installed the systems atthe Toledo Museum of Art, the Uni-versity of Toledo, Syracuse Universityand at Dominion East Ohio’s admin-istrative offices and call center onEast 55th Street in Cleveland.

The systems can be as small as a sin-gle jet engine producing 35 kilowattsof electricity, to larger systems that usemultiple engines to put out as much asa megawatt of power, Mr. Blair said.Even the biggest units fit into a struc-ture designed to be the same size as a

By GINGER [email protected]

When Jeff Price joined Twinsburg-based Experient Inc. two years agoas CEO, the event industry execu-tive was charged with repairing astruggling company and readying itfor a sale.

Now, his job is done. Experient, an integrated event

planner, was sold April 3 to anotherlarge company in the business, St.Louis-based Maritz Travel, for anundisclosed sum.

Under terms of the sale, Experientwill become a subsidiary of Maritz,which will assume the company’s540 employees. There were no layoffs as a result of the deal, andmost of Experient’s leadership willremain in Twinsburg.

“This is just a great strategic alliancebetween two really powerful brands,”said Mr. Price, who has left Experientand is looking for his next businessopportunity. “It remains to be seenhow meteoric the growth will be.”

While Experient focuses onevents for associations and govern-mental agencies, Maritz’s wheel-

house is in the corporate market.Together, the two companies willgarner a greater share of the market.

“This is a growth play, a growthstrategy. This is not about efficienciesor taking costs out,” said DavidPeckinpaugh, president of the 823-employee Maritz and a Clevelandnative.

Maritz over the last two years has experienced double-digit per-centage sales growth, fueled by therecovery of the economy, Mr. Peck-inpaugh said.

Mr. Peckinpaugh worked at Experient (then known as ConferonGlobal Services) for eight years, firstas executive vice president of salesand marketing and then as chiefmarketing officer. He said the com-bined power of the two brands willgive Maritz the leverage needed tomore aggressively move into theglobal market, which he sees as oneof the company’s key opportunitiesfor growth.

Maritz plans to invest in each ofthe divisions of the company andgrow each market.

“This is a huge statement for theindustry,” Mr. Peckinpaugh said. ■

Hudson company’selectricity-producingsystems draw interest



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2 Rockside-area officebuildings in foreclosureLimited demand hurts market in south suburbsBy STAN [email protected]

The slow, upward spiral of officevacancy in the southern suburbshas helped land two office buildings— the 4141 Rockside Building and6161 Oaktree Building — in Cuya-hoga County Court of Common Pleasin a foreclosure action.

Owned by a limited liability company led by real estate owner andbroker Donald King of Beachwood,the buildings are the subject of a fore-closure lawsuit filed by U.S. Bank astrustee and C-III Asset ManagementLLC as special servicer of the mort-gage on the properties. The lawsuitseeks to obtain the buildings to re-coup a 2007 loan of $10 million thatwas sold in the mortgage securitiesmarket.

The buildings, both more than 20years old, take their names from theiraddresses at 6161 Oak Tree Blvd. inIndependence and 4141 RocksideRoad in Seven Hills.

Both four-story buildings securethe same mortgage but fare differ-ently in the market. The 6161 Oaktree Building has a vacancy rateof about 6%, while the 4141 Rock-side Building has a 27% vacancyrate, according to CoStar, an onlinerealty data provider.

According to the lawsuit, filedMarch 16, the building owner hasfailed to make payments on the prop-erties since Jan. 1, 2011. The case wasassigned to Judge Janet Burnside.

Mr. King said his investor groupwants to restructure the loan becausehigh vacancies have pushed down

rents and values in the Rockside officemarket. He declined to discuss theforeclosure in more detail.

Mike Geller, a spokesman for C-III Asset Management, an Irving,Texas, firm that serves as a specialservicer on distressed loans, declinedcomment.

Bob Nosal, managing director ofGrubb & Ellis Co.’s Cleveland office,said he knows the buildings well —he has brokered their sale for oneparty or another three times — andbelieves their problem stems fromthe same malaise that afflicts theRockside Road office market:There’s limited demand for offices.

“If I were a speculative buyer, Iwould say they are worth half whatthey used to be,” Mr. Nosal said.

Statistics from Grubb & Ellis showoffice vacancy in the south suburbsreached 23.9% at the end of 2011,up a bit from 23.5% a year earlierbut much higher than the 18.7% vacancy rate at the end of 2008,when the recession was kicking intogear. Grubb & Ellis reports there is1.2 million square feet of empty spacealong the office corridor surroundingInterstate 77, compared with nearly900,000 square feet in 2008.

Despite the latest figures, VernonBlaze, financial coordinator for thecity of Independence, said he seesseveral recent leases in Independenceas reason to be optimistic.

“Independence’s central locationin Northeast Ohio, at two inter-states, along with its very low com-mercial property tax rate, is still adynamite combination that is hardto beat,” Mr. Blaze said. ■

Biochemical specialist sold to Mo. firm New owner planning investment in ResearchOrganics’ CuyahogaHeights operation

By CHUCK [email protected]

Rob Sternfeld is assured that hisfather’s legacy will live on.

He and his brother Fred on March30 sold Research Organics Inc. ofCuyahoga Heights to Sigma-AldrichCorp. of St. Louis.

Sigma-Aldrich plans to invest inResearch Organics’ 12-building cam-pus at 4353 E. 49th St., said Rob Stern-feld, president and CEO of ResearchOrganics, which makes high-puritybiochemicals.

“They’re committed to this siteand putting money into it,” he said.

Gilles Cottier, an executive vicepresident at Sigma-Aldrich, confirmedthat the company plans to invest inthe site this year, though he declinedto go into detail.

Research Organics will join SAFC,the custom manufacturing and ser-vices business unit of Sigma-Aldrich,

capacity were appealing.

A legacy lives onResearch Organics should benefit

from Sigma-Aldrich’s global sales infrastructure, Mr. Cottier said, notingthat most of the Cuyahoga Heightscompany’s sales come from NorthAmerica.

“We are the channel; we are theaccess to markets outside NorthAmerica,” he said.

Marvin Sternfeld founded thecompany in 1953 to produce chemicalsfor researchers. Research Organics,which until 1966 was called ClevelandChemical Laboratories, now employs79 people in Cuyahoga Heights. Todayits biggest customers are companiesthat make biopharmaceuticals, diag-nostic reagents and cell culture media.Most of its revenue comes from thesale of buffers that control pH levelsin media containing biological mate-rials, though it also makes aminoacid derivatives and other biochem-icals.

Rob Sternfeld said he expects busi-ness at the site to “go through theroof” given the synergies betweenthe two companies and Sigma-Aldrich’s resources.

“My father’s legacy will live on atthe site,” he said. ■

a public company that has about9,000 employees and posted $2.5 billion in sales last year. Rob Stern-feld will transition out of his role overthe next six months, helping preparesomeone else to run the operationsin Cuyahoga Heights.

Rob Sternfield said he and hisbrother, who worked for ResearchOrganics until 2001, weren’t lookingto sell the business until Sigma-Aldrich expressed interest in buying it.

The combination makes a lot ofsense, he said. For one, the SAFC unitof Sigma-Aldrich already is one ofResearch Organics’ biggest customers.

Though Sigma-Aldrich does makesome of the same products, the public company wants more manu-facturing capacity, Mr. Sternfeld said.Sigma-Aldrich also likes ResearchOrganics’ focus on quality control,he said. Research Organics is certi-fied to the ISO9001:2008 standard andworks to meet other quality standardsset by the U.S. Food & Drug Admin-istration and the International Phar-maceutical Excipients Council.

“If there was one company on theplanet that made sense to buy us,this was the one,” he said.

Mr. Cottier, of Sigma-Aldrich,agreed that the acquired company’squality systems and its manufacturing


“Just being a web firm or a (search engine optimization) firm won’tdo it. You have to lookacross those siloed disciplines.” – Paul Roetzer, CEO, PR 20/20

to implement DigiKnow’s expertiseon the larger firm’s client teams.

Landau founder Howard Landau,too, acknowledged that before hiscompany merged with Adcom, Landau could not deliver on certainrequests from clients that were outside its communications focus.Now, clients of each company canaccess Landau’s PR specialty andAdcom’s broader list of capabilities,such as web and app development,among other things.

“The challenge for companies isto be consistent in how they com-municate,” said Mr. Landau, whonoted that both Landau and Adcomwere healthy companies that simplysaw benefits to joining forces.

“Businesses can’t have two person-alities,” he said. “It used to be easier;it’s much more difficult today.”

Stuck in a pigeon holeLiggett, which employed 40 as

recently as last June, according toCrain’s research, filed for bankruptcyafter a bizarre two-week saga inwhich managing partner DavidMoore first said the company wasreorganizing around a “core team”despite widespread rumors it hadclosed. Its debts in its Feb. 3 bank-ruptcy filing totaled $2.7 million; assets were valued at $1.42 million.

Liggett shuttered due to a numberof factors, according to a formeremployee at the well-known brandingspecialist.

The former employee, who requested anonymity, said Liggettwas unwilling to lay off staff memberswhen the economy tanked, eventhough its move three years ago to a new, $2.2 million headquarters in Cleveland’s Theater District increased the company’s debt. Clientsalso struggled with constant Liggettemployee turnover on their accounts,the former employee said.

Yet perhaps the biggest factor in Liggett’s demise, the former employee said, was the company’ssole focus on brand building. Thecompany “pigeon-holed itself” intothat niche, the former employeesaid.

“(Mr. Moore) was so high on the building brands thing; we had to look beyond that,” the former employee said. “We had a lot of tal-

ented people who had experience inother industries. We needed to getnew business in other industries.”

The pendulum swingsIt remains to be seen, though, just

how integrated the local marketingbusiness becomes.

Sharon Toerek, president of theCleveland chapter of the AmericanAdvertising Federation who advisesmany marketing and communica-tions firms through her work as apartner at Independence law firmLicata & Toerek, said she hasn’tseen this much volatility in the industry in quite some time.

“The pendulum is swinging, andclients want to work with one shop(that is) integrated within its ownfour walls,” Ms. Toerek said. “Thosecompanies have to be a nerve centerwith their clients.”

Landau and DigiKnow each weresmaller companies that mergedwith larger companies; should weexpect, then, that the area’s littleguys all will explore possible mergers?Not necessarily.

PR 20/20 president Paul Roetzerfounded the Cleveland company in2005 with a hybrid, or integrated,approach. Since then, he’s grownthe company to 10 employees andpublished a book detailing his plan:“The Marketing Agency Blueprint,”a “handbook” for building hybridfirms.

“Just being a web firm or a (searchengine optimization) firm or a PRfirm won’t do it,” he said. “You haveto look across these siloed disciplines.”

‘One throat to choke’Mr. Roetzer maintains that his

company, despite employing fewerpeople than big companies, is capable of achieving success in anyarea a client demands — and canrespond if those clients need toadapt quickly.

“Big agencies struggle to makedramatic shifts in the way they operate or how their business modelsare structured,” Mr. Roetzer said.“Agencies that are smaller, oremerging firms, are better equipped.We change our direction quarterly ifnecessary.”

Cleveland-based thunder::tech,too, has achieved the integratedmodel while remaining relatively


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“They asked me the same tough questions. Thanks to my session with Al, I was confident, I had all the answers, and we closed the deal.” Michael Berlin Founder, Managing Member Briteskies, LLC 16 employees

small, said president Jason Therrien.Mr. Therrien said a variety of pressureson small firms and client conve-nience have led to some of the recentactivity.

“There are budgetary pressures,and time and resource pressures,”said Mr. Therrien, whose companyemploys about 30. “Clients, too,don’t have time to deal with 10 different agencies.”

Mr. Therrien said thunder::techhas invested in talent in differentkinds of skill sets to avoid such pit-falls in client relations.

“We had a client a few years backtell us they liked our model, becausethere was ‘one throat to choke,’” Mr.Therrien said. “We liked that. Theytold us that if there’s a problem, ‘Weknow who to go to.’ There’s a moveto that you’re seeing in the industrytoday.” ■


Marketing: Smaller firms can make it Benjamin Rose sells oldHQ, starts on new oneBy TIMOTHY [email protected]

The Benjamin Rose Institute onAging has broken ground on a $7.5million, 31,000-square-foot head-quarters in Cleveland, which thegroup’s president and CEO, RichardBrowdie, said will allow the agencydevoted to senior issues room forgrowth.

Benjamin Rose last week also finalized a deal to sell for $17.4 millionits 144,000-square-foot Kethley Houseon Fairhill Road in Cleveland to Kindred Healthcare Inc. of Louisville,Ky. Kethley House is the group’scurrent headquarters and site of itsformer nursing home that closed inearly 2006.

“The proceeds of the sale will liquidate our existing debt,” Mr.Browdie said. “We don’t have $17million burning a hole in our pocket,but it should allow us to liquidateour debt and pay for most of, butnot all, of the new building.”

Since Benjamin Rose’s nursinghome closed, Kindred has leased thespace and operated its own acute-

care hospital there. Kindred did notrespond to requests for commentabout what it will do with its addi-tional space.

Mr. Browdie said Benjamin Rose,which offers an array of home careand other services for low-incomeseniors, is poised for growth in thecoming years given the push at thefederal and state levels to better coordinate care in hopes of keepingpeople out of costly health care settings, such as nursing homes.

“Right now we see ourselves ashaving an opportunity because wehave a very long track record andhigh competency in coordinatingmultiple aspects of care,” Mr. Browdiesaid. “Care coordination is the buzz-word these days. As it happens, it’spart of our DNA.”

Mr. Browdie said the new spacealso offers the organization the opportunity to expand its researchoperations.

Benjamin Rose retained HermanGibans Fodor Inc. of Cleveland asits architect and Albert M. HigleyCo. of Cleveland as general contractorfor the project. ■



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TAX LIENSThe Internal Revenue Service filed taxliens against the following businessesin the Cuyahoga County Recorder’sOffice. The IRS files a tax lien to protect the interests of the federalgovernment. The lien is a public notice to creditors that the govern-ment has a claim against a company’sproperty. Liens reported here are$5,000 and higher. Dates listed arethe dates the documents were filed inthe Recorder’s Office.

LIENS FILED

IEC Technologies Corp.19111 Detroit Road, Suite 300,Rocky RiverID: 31-1606584Date filed: Feb. 22, 2012Type: Employer’s withholdingAmount: $330,591

IEC Technologies Corp.19111 Detroit Road, Suite 300,Rocky RiverID: 31-1606584Date filed: Feb. 22, 2012Type: Employer’s withholding, unemploymentAmount: $232,378

Solutions8102 Bainbridge Road, Chagrin FallsID: 34-1727132Date filed: Feb. 9, 2012

Type: Employer’s withholding, failureto file complete returnAmount: $150,899

Affordable Supply Center Inc.720 E. 152nd St., ClevelandID: 20-3513654Date filed: Feb. 14, 2012Type: Employer’s withholdingAmount: $137,303

Inner City Development and Personal Growth Foundation6816 Superior Ave., ClevelandID: 04-3774516Date filed: Feb. 22, 2012Type: Employer’s withholdingAmount: $92,083

Flannerys Pub of Cleveland Ltd.323 Prospect Ave. E., ClevelandID: 34-1837261Date filed: Feb. 2, 2012Type: Employer’s withholding, partnership income, failure to filecomplete returnAmount: $91,407

La Veer Partners Inc., La VeerChildcare & Enrichment Ctr.38679 Country Meadow Way, North RidgevilleID: 75-3251077Date filed: Feb. 9, 2012 Type: Employer’s withholding,

unemployment, corporate incomeAmount: $76,275

Dimpledough LLC4807 Rockside Road, Suite 370, IndependenceID: 20-4599233Date filed: Feb. 2, 2012Type: Employer’s withholdingAmount: $54,673

MSB Holdings LLC24481 Detroit Road, WestlakeID: 20-0897380Date filed: Feb. 7, 2012Type: Employer’s withholdingAmount: $50,306

Paul F. Smith Jr. DDS Inc.20119 Farnsleigh Road, Suite 207,Shaker HeightsID: 34-1337892Date filed: Feb. 7, 2012Type: Failure to file complete returnAmount: $48,161

Minotas Inc.734 Alpha Drive, Unit B, Highland HeightsID: 04-3734800Date filed: Feb. 2, 2011Type: Employer’s withholding, unemployment, corporate incomeAmount: $37,549

Tree of Hope Enrichment Center Ltd.17877 Saint Clair Ave., ClevelandID: 56-2330695Date filed: Feb. 22, 2011

Type: Employer’s withholdingAmount: $25,974

Construction North LLC31100 Pinetree Road, Suite 201,Pepper PikeID: 35-2317096Date filed: Feb. 22, 2011Type: Employer’s withholding, employer’s annual federal tax returnAmount: $25,240

Strebely Enterprises Inc. Mariannes Homestyle Bakery5670 Dunham Road, Maple HeightsID: 34-1875983Date filed: Feb. 2, 2012Type: Employer’s withholdingAmount: $16,933

Freds Autobody Inc.7172 Northfield Road, Walton HillsID: 34-1829838Date filed: Feb. 7, 2012Type: Employer’s withholdingAmount: $16,185

Kyron Plating Corp.1336 W. 114th St., ClevelandID: 34-0960138Date filed: Feb. 14, 2012Type: Employer’s withholdingAmount: $17,985

Westfall Legal Services Co. LPA75 Public Square, ClevelandID: 20-2368829Date filed: Feb. 16, 2012Type: Employer’s withholdingAmount: $12,512

Terra Serra LLC Café Ah-Roma38 W. Bridge St., BereaID: 34-1943631Date filed: Feb. 7, 2012Type: Employer’s withholdingAmount: $11,254

Lakeside Building Services Inc.P.O. Box 470433, Broadview HeightsID: 51-0585756Date filed: Feb. 22, 2012

Type: Employer’s withholdingAmount: $10,344

Berry Insulation Co.1600 E. 25th St., ClevelandID: 36-4628732Date filed: Feb. 9, 2012Type: Employer’s withholdingAmount: $10,193

CM Conrad Inc.29691 Lorain Road, North OlmstedID: 26-1947799Date filed: Feb. 7, 2012Type: Employer’s withholding, unemploymentAmount: $5,411

LIENS RELEASED

Canvas Specialty Mfg Co.4045 Saint Clair Ave., ClevelandID: 34-0890218Date filed: Nov. 16, 2011Date released: Feb. 7, 2012Type: Employer’s withholdingAmount: $24,050

Ohio Family Realty Inc.26747 Brookpark Ext., North OlmstedID: 42-1552978Date filed: Feb. 9, 2007Date released: Feb. 22, 2012Type: Employer’s withholdingAmount: $11,260

Varrsity Constructors LLC23209 Miles Road, Suite 2A, ClevelandID: 20-5305272Date filed: Nov. 18, 2011Date released: Feb. 14, 2012Type: Employer’s withholdingAmount: $6,134

Watsons Funeral Home Inc.10913 Superior Ave., ClevelandID: 34-0755005Date filed: July 7, 2010Date released: Feb. 7, 2012Type: Employer’s withholdingAmount: $31,762


Ohio Legacy Corp., theNorth Canton-based parentcompany of Premier Bank

& Trust, has learned that itsstock will remain listed on TheNasdaq Stock Market since thecompany has regained compli-ance with the required minimumbid price of $1 per share.

In a filing with the Securitiesand Exchange Commission, OhioLegacy revealed that it receivedthe notice from the Nasdaq onApril 2. The notice cited thecompany's closing bid price ofmore than $1 for the last 10consecutive business days —March 19 to March 30.

The company received noticeon March 8 that its stock hadfailed to maintain the requiredprice and that it had a period of180 days to regain compliance.

Ohio Legacy's stock price was$1.08 last Thursday, April 12.


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GOING PLACESJOB CHANGES

ARCHITECTUREPERSPECTUS ARCHITECTURE:Eric Lahrmer to project director;Jennifer Gibson to interior designer. TDA ARCHITECTURE: Scott Clifford to project manager.

AUTOMOTIVEPENSKE AUTOMOTIVE GROUP:John Barner to general manager,Audi Willoughby; Mike Burns to general manager and Todd Hartmannto new car sales manager, Toyota ofBedford; Steve Sanders to new carsales manager, Honda of Mentor.

EDUCATIONBALDWIN-WALLACE COLLEGE:Michael C. Nock to director, Black-stone LaunchPad program.KENT STATE UNIVERSITY: John L.West to Trustees Research Professor.

FINANCEFIRSTMERIT CORP.: Gerald A.Buck to vice president, commercial realestate banking, Erie Shores region.

FINANCIAL SERVICECM WEALTH ADVISORS: CynthiaG. Koury to partner. DMS MANAGEMENT SOLUTIONS:Paul A. Becker to accounting manager.

MANUFACTURINGBETTCHER INDUSTRIES INC.:Edward Alan Steele to director ofengineering. LIBRA INDUSTRIES: Phil Jones todirector of manufacturing.

MARKETINGFLEISHMAN-HILLARD INC.:Stephen Lee to senior vice president,corporate communications groupleader. HENNES PAYNTER COMMUNICA-TIONS: Howard Fencl to vice president. QUEZ MEDIA: Shannon Colon to

executive vice president, operations. PRICE FOR PROFIT: Brad Stevento partner. RGH ENTERPRISES INC.: SteveEisenberg to vice president, generalcounsel.TALENTWISE: Hollie Zelenka to regional sales manager, Ohio.

TECHNOLOGYTHE KARCHER GROUP: RobertoCapotosto to account manager;David Brown to account coordinator.

AWARDSNATIONAL DIVERSITY COUNCIL,OHIO: Ruth Ramos Clifford(Compass Consulting Services LLC)received a 2012 Ohio MulticulturalLeadership Award. VOCATIONAL GUIDANCE SERVICES: victor gelb received theHerbert E. Strawbridge LifetimeAchievement Award.

Send information for Going Places [email protected].

EisenbergLeszczSzaboTorokJonesSteeleWestGibsonLahrmer

interactive designer; Derek Bryan tomarketing manager; Aaron Lucasand Steve Pfeiffer to account executives; PJ Filipowicz to creativedirector; Marisa Dalessandro to senior marketing manager.

NONPROFITFREE MEDICAL CLINIC OFGREATER CLEVELAND: Dr. ReginaSavage to dental director. NORTH COAST COMMUNITYHOMES: Jan Schrag to director ofmarketing.SAINT LUKE’S FOUNDATION:Heather Torok to senior program officer, urban health and well-being.

REAL ESTATEKELLER WILLIAMS REALTY:

Danielle Szabo to community salesassociate.

SERVICEDIRECT CONSULTING ASSOCIATES:Brian Horowitz to project manager,health care IT practice.EMPLOYEE BENEFITS INTERNA-TIONAL: David N. Leszcz to principal.GREAT LAKES INTEGRATED: DavidEckhardt to chief financial officer;Kostika Radivoj to executive vicepresident, sales; Robert Schultz to

Ohio Legacystock will stayon Nasdaq

ON THE WEB Story from www.CrainsCleveland.com.


seasonal work force three weeksearlier than normal. The gardencenter ups its base staff of 12 to 15workers to 50 employees during thesummer.

Northeast Ohio had one of thewarmest winters on record, withtemperatures climbing as high as83 degrees in March. Such unsea-sonable weather created waves —good and bad — at area businessessuch as Gale’s.

At the Cleveland Metroparks,which operates 16 reservations,eight golf courses and the Cleve-land Metroparks Zoo, higher temperatures in March filled theparks with sunbathers, picnickersand dog walkers.

And in early April, people startedreserving picnic shelters, whichregularly don’t rent until mid-May,for mid-April, said Jane Christyson,director of marketing for ClevelandMetroparks.

Meanwhile, the Metroparks’biggest revenue drivers — the zooand golf courses — are bringing insizable increases in income. Thezoo’s revenue so far this year is up27% compared to the like period in2011, and golf courses are ahead ofbudget. Ms. Christyson said the ear-

ly business on the links and at thezoo likely won’t detract from futurerevenue because visitors usually go to those placesmultiple times a year.

“We haven’t put any seasonalson,” she said of adding summeremployees. “We’re just trying todeal with basically the startup of thesummer season two to three weeksbefore normal.”

Hot times for cold treatsMatt Thornicroft, assistant mar-

keting and communications man-ager of Cleveland-based Pierre’s IceCream Co., called the company’sfirst-quarter sales “very pleasing.

“We’ve noticed an increase thatwould be more typical of late springvolume in early spring,” Mr. Thor-nicroft said, though he refused todivulge sales figures.

Pierre’s strong quarter also can beattributed partly to the company’snew lactose-free ice cream flavors,which it unveiled at the first of the year. The ice cream opens the

company to a new pool of lactose-intolerant consumers.

At Cleveland Hopkins Interna-tional Airport, the unseasonableweather meant fewer headachesand greater cost savings. Because theweather was milder than in winterspast, airlines had fewer cancella-tions and delays. The airport alsodidn’t need to run its snow plows asoften, nor did it need to use asmany chemicals to clear runwaysand ready planes.

“We were expecting Armageddonaccording to the weather service,and what we got was spring inMarch,” said Jacqueline Mayo, theairport’s communications director.

The warm weather did cause afew problems, though, in the formof high winds, which took some ofthe smaller, regional jets with turbopropellers out of service.

The flip sideAt Cargill, which operates a rock

salt mine near the mouth of theCuyahoga River, reduced demand

“We were expecting Armageddon according to theweather service, and what we got was spring in March.” – Jacqueline Mayo, communications director, Cleveland Hopkins International Airport


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Weather: Sluggish demand for wintry products hurts somecontinued from PAGE 3

for road salt chipped away at thecompany’s production. It cut backat all three of its mines — in Cleve-land, where the company employs200 people, Lansing, N.Y., and AveryIsland, La.

In addition to reducing employees’hours at the three mines, Cargillalso laid off 10% to 20% of its employees in New York andLouisiana.

“Some days, while people wereworking, we weren’t bringing upsalt. We would do a lot of mainte-nance projects,” said spokesmanMark Klein. “We tried to fill the timethat way.”

Cargill stretches its productionprocess throughout the year, ensuringits salt supply is ready before winterweather hits. During the winter,crews typically mine six days perweek; Cargill reduced that figurethis past winter, though Mr. Kleinwouldn’t disclose specifics.

“If you take a long-term view ofthe business and the long-term relations you have with customers,you try to balance things out. Whenyou have a year of low demand, youstill are going to have customersnext winter and you need to be able

to serve them,” Mr. Klein said. The Little River Pet Resort in

Columbia Station, meanwhile, wasrolling in business this winter.

Tim Tringhese, the resort’s owner,said the lack of severe storms keptpet owners from canceling theirtravel plans, resulting in more sustained business. And sunnierweather led people to travel more,upping the numbers of dogs beingboarded.

“Our day care business in partic-ular was significantly busier thiswinter since pet owners want totake advantage of sunny days andget their dogs out playing for theday,” Mr. Tringhese said.

The resort’s overall sales throughMarch were up 15% compared tothe like period in 2011, while theday care program’s sales doubledfrom the previous year.

The mild winter also allowed Little River to make faster progresson its expansion, Mr. Tringhesesaid. The resort, which acquired two more acres, is adding 25 guestrooms and four play yards. The outdoor work wasn’t expected to befinished until March or April, butwas wrapped up by January. ■

PHOTO PROVIDED

Unseasonably warm weather this year has spurred higher sales at Pierre’s IceCream Co., keeping its Cleveland plant, seen above, busy.


By JAY [email protected]

With interesting foodand a front door lessthan 500 feet from theHorseshoe Casino

Cleveland, the odds are good thatPura Vida, a year-old restaurant,will benefit from the opening ofthe new gambling hall.

Brandt Evans isn’t expectingthousands of customers to flock tohis eatery.

“But if I just get 20 (customers) anight from the casino, I’ll be happy,”said the owner of the 100-seatbistro at 170 Public Square in theformer May Co. department storebuilding.

Mr. Evans, a chef trained at TheCulinary Institute of America, believes his style of presentation —he calls the menu’s roster of appetizer-size portions an “urbanpicnic” theme — will appeal tocasino-goers who may want just aquick break from the slot machinesand gaming tables.

“You can come in and get someappetizers, a couple cocktails andgo off and go gambling,” Mr. Evanssaid. “(And) vice versa: If you want

a late-night bite, the same situa-tion.”

And he thinks his 2:30 a.m.liquor license could keep thekitchen humming into the weehours as casino employees knockoff work and look for a place towind down.

Winners, too, because of theCleveland casino’s opening arelikely to be the 1,600 employeeswho keep the 2,100 slot machinesand 93 gaming tables runningsmoothly.

Beyond those jobs and Mr.Evans’ visceral enthusiasm, however, predicting the economicimpact of the new casino is prettymuch a crapshoot.

“For me, a casino is like any other business” that opens, saidcasino researcher Douglas Walker.“A casino is usually positive onemployment and wages” immedi-ately, he said.

After that, said Dr. Walker, anassociate professor of economicsat the College of Charleston (S.C.),his research on the impact of gambling on a community’s economy is inconclusive.

In a chapter in the forthcoming

GAME ON!We’re a month away from the scheduled opening of the Horseshoe Casino Cleveland.

Just what can we expect when it’s up and running?

INSIDECleveland offers latest case study in urban casinos

See URBAN Page 18

See ECONOMY Page 16

City-center gambling locations have different characteristics, challenges

■ BEING THE BOSS: We catch upwith general manager Marcus Glover togauge the casino’s readiness for opening. PAGE 16

■ WHAT’S NEXT?: Real estate insiders are betting that the casino will shake up development and retailleasing in downtown Cleveland. PAGE 17

■ OHIO’S OTHER PLAYERS: Sizingup the other three casinos in Ohio, in Toledo, Columbus and Cincinnati.PAGES 18-19

By MICHELLE PARK [email protected]

Build a casino in the heart ofdowntown, and they willcome. But who and at whatcost?

We’ll know soon enough.With the opening of the Horse-

shoe Casino Cleveland mereweeks away, this region soon willbe able to gauge for itself the positives and negatives of puttinga casino right smack dab in themiddle of a city.

This breed of facility is called anurban casino, and Detroit andNew Orleans are among a handful

of cities in the United States thathave been there and done that.More are likely to follow.

There is a trend toward more urban casinos, or those built intocity centers, in the United States,said Bill Eadington, director of theInstitute for the Study of Gamblingand Commercial Gaming at theUniversity of Nevada, Reno.

A law legalizing casinos wassigned in late 2011 in Massachu-setts, where the cities of Bostonand Springfield have been identi-fied as potential casino sites, andthere’s been a big push for urbancasinos in Miami and New YorkCity, too, said Mr. Eadington, a

professor of economics who hasstudied the gaming industry sincethe early 1970s.

“If (urban casinos) are successful,which I think they will be, therewill be a copycat effect,” he said.

Mr. Eadington wagers that thecasinos in Ohio, specifically thoseopening in Cleveland and Columbus,will enjoy more success than someothers.

“Both Cleveland and Columbusare a long way from competingcasinos … whereas Cincinnati already has casinos that servicethat market, and Toledo is roughly60 miles from Detroit,” he said. “Ifyou’re the only game in town,

you’ve got a better ability to drawpeople from that market, you’ve gotpricing power. You can be, frankly,a mediocre property and still dowell.”

Of course, urban casinos posesome unique challenges, Mr. Eadington said. Among them areparking issues, land assimilationand safety considerations.

Cleveland casino operatorshaven’t quantified the difference incost they incurred by developingHorseshoe Cleveland in the down-town Higbee Building instead ofsomewhere else. However, MattCullen, president and chief operatingofficer of Rock Gaming LLC, whichhas partnered with Caesars Enter-tainment Corp. to develop and

Horseshoe Casino Cincinnati

JANET CENTURY

Brandt Evans’ Pura Vida is located just across from the Horseshoe Casino Cleveland, which is expected to open May 14 pending final approval from the Ohio Casino Control Commission.

To gauge effects onlocal economy, wemay need to waitEnthusiasm seemingly abounds downtown, but how big a boost Horseshoe brings remains anyone’s guess


book, “Oxford Handbook on theEconomics of Gambling,” Dr.Walker writes that his several studiesof gambling since 1998 “suggestthat there is a short-term positiveimpact of casino gambling on economic growth, but that the effect dies out in the longer term.”

Uncertain jackpotA new casino, Dr. Walker theo-

rizes, draws money from lotteriesand other existing gambling oper-ations and pulls entertainmentdollars from other activities, blunting any real economic growth.

Dr. Walker is even skeptical ofthe value of the tax revenue thatflows from a casino into state andlocal government treasuries because “casino expenditurescome at the expense of noncasinoexpenditures to such a large extentthat, despite the high tax rates applied to casino revenue, the reductions in noncasino spendinglead to declines in sales tax rev-enues that are even larger.”

However, Dr. Walker’s argumentdoesn’t consider the value of shifting back to Cleveland thespending that goes to out-of-stateregional casinos, such as those inPennsylvania and West Virginia.

A study commissioned by theGreater Cleveland Partnership —the city’s chamber of commercegroup — when it spearheaded anunsuccessful attempt in 2005 tobring casino gambling to Ohio estimated that neighboring states’casinos siphoned $925.5 millionfrom the pockets of Ohioans,which translated into $367.3 million in lost tax revenue.

According to the GCP study,which was conducted by StrategicPartner Management Consulting

of Clarkston, Mich., Cleveland andCincinnati were “two of the topfeeder markets in the country forcasino customers” in 2002 and 2003.

A Horseshoe Casino Clevelandfact sheet estimates that gamblingthere will generate $100 million inannual gaming tax revenue thatwill go to local government andschool districts. The casino operatorestimates the city of Cleveland willget $29.7 million; Cuyahoga County, $18.7 million; and countyschool districts, $22.5 million.

Outside connectionsLike Dr. Walker, David Schwartz,

director of the Center for GamingResearch at the University ofNevada Las Vegas, isn’t sold on thebroader economic benefits of casinos.

“Basically, (casinos) would gen-erate revenues and create jobs,” hesaid. “Are they going to spark moredevelopment? Possibly, possiblynot, depending on whether peopleare going to patronize businessesoutside the casino.”

Unlike most casino operationsin the United States, the Clevelandcasino is in the center of the cityand its owners have made a commitment to connect to thebusinesses outside its doors.

Rock Ohio Caesars LLC, the jointventure of Cleveland Cavaliersmajority owner Dan Gilbert andCaesars Entertainment Corp. thatis building the Horseshoe Casino,has not taken the self-contained,city-within-a-city approach thatcharacterizes most casinos.

Rock Ohio Caesars has plannedonly a modest food court, whichincludes a Corky and Lenny’s delicatessen and Michael Symon’s B Spot burger joint. And though thecompany has bought the 205-roomRitz-Carlton Hotel that, like the casi-

no, is attached to Tower City Center,it expects many out-of-towners willchoose from among downtown’sexisting and planned hotels.

A different beastDavid Gilbert, president of

Positively Cleveland, the area’sconvention and visitors’ bureau, isnot yet hearing about big expansionplans from the hospitality industryoperators. Rather, he said, they aretaking a wait-and-see attitude.

“I think it’s hard to know exactlywhat to expect,” Mr. Gilbert said.“In a lot of ways this is exciting butunchartered territory; it’s differentfrom a new museum opening or ashort-term event.”

He is somewhat optimistic because of Rock Ohio’s strategy. Hesaid the casino is developing aprogram that will reward casinohigh rollers with vouchers for mealsat downtown restaurants and com-plimentary rooms at nearby hotels.

Mr. Gilbert also cites the burst of hotel development and redevel-opment that he believes has beenspurred by the casino and theCleveland Medical Mart and Convention Center that is underconstruction downtown.

He ticked off five hotel projectsthat currently are under way — therenovation of the former CrownePlaza Hotel Cleveland City Centre,across from Public Auditorium;the conversion of the SchofieldBuilding at East Ninth Street andEuclid Avenue; the under-con-struction Aloft Hotel that is part ofthe Flats East Bank project; andeven the Tudor Arms and Court-yard hotels at University Circle.

“You can tie the casino andmedical mart and convention cen-ter to that large amount of privateinvestment,” he said. ■

1166 CRAIN’S CLEVELAND BUSINESS APRIL 16 - 22, 2012

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THEINTERVIEWEconomy: Casino has neighbors in mindMARCUS G. GLOVERGeneral managerHorseshoe Casino Cleveland

QQ What needs to happen before theMay opening? Do you have acountdown?AA I’m reminded every day of whatour opening time frame is. I don’tneed a countdown. Most of thephysical elements are put in place.What’s going on inside now is whatwe call “punch list items.” Somethings are being repaired, othersfine-tuned. We’re developing internalcontrols and training our team tocomply with the minimum controlsset by the Ohio Casino ControlCommission.

QQ Will people know, upon walkinginside the casino, that it’s a former department store?AA There are quite a few elementsthat remain. Those who are inti-mately familiar with the HigbeeBuilding, they’ll notice the elementsthat remain, the crown moldingwork, the load-bearing columnswe’ve restored to their original, opulent state.

QQ What population will the Clevelandcasino work to appeal to most?AA We like to view our operation andentertainment experience as appealing to all demographicsabove 21. At the end of the day, weare trying to drive as much traffic todowntown as we can. We do feelwe’ll be able to drive some nationalbusiness. We will use the city ofCleveland as our anchor. Instead ofsending direct mail pieces tellingpeople to come to HorseshoeCleveland, we’ll tell them to cometo Cleveland, visit the Rock and RollHall of Fame, see your favorite playat PlayhouseSquare, and oh, by theway, Horseshoe Cleveland sits twoblocks away. Our model has alwaysbeen about connectivity and lever-aging the city’s assets.

QQ Do you have plans to combatany negative social impact, namely problem gambling?AA Sure. I would be remiss if I dismissedthat problem gambling is a chal-lenge. It affects 1% of the gamingpopulation, but we take it very seriously. When we see people whoengage in compulsive gaming behavior, we engage them. This ispart of who we are. (Caesars has),on each property we operate,roughly 20 or so responsible gam-bling ambassadors trained to iden-tify those who exhibit compulsivegaming behaviors. Our operation isan entertainment experience, and

FILE PHOTO/JASON MILLER

we want our guests to view it just asthat.

QQ What type of general managerdo you aim to be?AA I have a couple things that I try toimpart to my team. I think you’vegot to have the utmost integrity inanything you do. Communicationis key. I think trust, accountabilityand collective responsibility are allimportant. Having some sense ofempathy and caring is important.This is a very people-intensive business. I’ve always told our teammembers, opening up our doors islike inviting someone to our home.This is what I do for a living, but tosee so many people excited to seethis asset come online is very hum-bling.

QQ Do you gamble? If so, what’s yourfavorite gambling experience?AA This is my form of business. I frequent casinos to check out thecompetition. I cannot play at anyCaesars casinos. But my game ofpreference is craps. I love the number of decisions.

QQ What’s going to make Cleveland’scasino different? AA The city of Cleveland itself, whichalready has world-class assets. Ithink adding a casino operationstrengthens that profile. We are doing a casino very differently frommany places. Both Cleveland andCincinnati are building themdowntown to generate economicdevelopment and to leverage thegreat aspects each city has to offer.Building a casino in a historicbuilding, in a former departmentstore, is unrivaled in any location inthis country.

— Michelle Park


APRIL 16 - 22, 2012 CRAIN’S CLEVELAND BUSINESS 17

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Changes ahead for already-remade downtown real estateBy STAN [email protected]

Some bets are being placednow. Others may not bemade for years. Regardless,the opening of the Horseshoe

Casino Cleveland promises to shakeup real estate development and re-tail leasing in downtown Clevelandin a way not seen for a long time.

Even for someone with the per-spective of Ari Maron, a developerwho for a dozen years has livedand breathed the rebuilding oflower Euclid Avenue as a neigh-borhood, the additional buzz created by the casino is striking.

“The energy and the excitementabout downtown the last fewmonths have been palpable,” saidMr. Maron, a partner in family-owned MRN Ltd., which createdthe East Fourth Street Neighborhoodon that street and lower Euclid.

“We are seeing increasing interestin both retail leasing and residentialleasing,” Mr. Maron said.

Property owners, brokers anddowntown development expertssee two stages to the casino’s im-pact on the city. First is the imme-diate change in the streetscapethat should transform OntarioStreet and lower Prospect Avenueand may help invigorate adjoiningTower City Center.

The second stage will be whenthe new Cleveland Medical Martand Convention Center opens nextyear. That property is expected tobring more convention visitors , a

market Cleveland essentially hasnot tapped for years.

The combined impact of thecasino and convention center couldinclude new hotels from the FlatsEast Bank project on the CuyahogaRiver to Euclid and East Ninth Street.

Walk this wayTom Yablonsky, executive vice

president of the Downtown Cleve-land Alliance and executive directorof the Historic Gateway and Ware-house District neighborhood development groups, expects to seethe casino help create a “seamlesspedestrian experience” on Prospectfrom East Fourth Street to Ontarioand north on Ontario to PublicSquare because of real estate devel-opment activity along those routes.

Mr. Yablonsky also believesthere will be a continued transfor-mation of Euclid Avenue fromPublic Square east to Cleveland StateUniversity as a hospitality, enter-tainment and residential corridor.

A big opportunity on Prospect,Mr. Yablonsky said, will be thereuse of a block of five buildings— four of them empty — on thesouth side of Prospect between EastFourth and East Second streets.

One of those structures — a long-vacant building at 310 Prospect —and an adjoining 16-space parkinglot next door has attracted the interest of two prospective devel-opers, according to Rico Pietro, aprincipal of the Cresco real estatebrokerage who has a listing to sellthe properties for LR Development

Co. of Los Angeles. Mr. Pietro said LR is deciding

whether to sell those propertiesseparately from others in itsCleveland portfolio that he is mar-keting; those properties includemore than 600 parking spacesnearby at a parking lot and parkingdeck at 413-611 Huron Road.

The parking lots, which serve are-na and ballpark traffic, also are expected to benefit from the adventof the casino. Mr. Pietro said a totalof five prospective owners are look-ing at the entire portfolio; two arelocal and the rest are out of town.He said most of the prospectivebuyers, who hail from Canada toboth coasts, are drawn by both thecasino and other projects in down-town’s $2 billion building boom.

Ring-a-ding-dingThe mix of prospective retailers

is also different from what down-town has attracted in recent years,said Richard Sheehan, a vice presi-dent for investment services andretail at Grubb & Ellis Co.’s Cleve-land office. National retailers arein the hunt for space downtownthanks to the casino as well as theconvention center, Mr. Sheehan said.

Empty storefronts are availableon the Prospect side of the old MayCo., 200 Euclid Ave., and at 2025Ontario, both owned by MorganReed Group of Miami Beach.

Morgan Reed continues to studywhether to create apartments or ahotel on empty upper floors of theMay Co. building after the Cleve-

land City Planning Commission thisyear rejected its idea for using fourfloors as a parking garage. However,a Morgan Reed executive whospoke on grounds he not be identi-fied said street-level storefronts onProspect are another story.

“We have a number of interestedparties,” the executive said, althoughMorgan Reed has not concludedany leases so far. Noting that theneighborhood lacks a number ofretail services, he said interest ismainly from convenience andfood-store operators.

Matt Howells, owner of the ParkBuilding on the corner of Ontarioand Euclid and the adjoiningSouthworth Building on Ontario,said he is negotiating with a couple“grab-and-go” restaurants withperhaps 10 seats each for twostorefronts on Ontario and hopes toland a “very cool infill” retailer fora tiny, 700-square-foot storefront.

“The phone has been ringing offthe hook” with inquiries about theretail component of the multimil-lion-dollar condo and apartmentcomplex on Public Square, he said.He expects to conclude leases soon,although many prospects want towait until after the casino opens.

‘Deeper than the casino’Matt Cullen, president and chief

operating officer of Horseshoe Casi-no Cleveland partner Rock GamingLLC, said he hopes Cleveland bene-fits from what the casino is sure tobring: millions of people who willgive it a new sense of vitality.

“When you start seeing all thosepeople walking around on thestreet, you can see boutique retailerswho can make it that couldn’t whencars zoomed by,” Mr. Cullen said.

Although Tower City Centerowner Forest City Enterprises Inc.has said it expects to benefit fromthe start of casino gaming, thecompany did not comment forthis story. Forest City leased spacein its Higbee Building for the casino,sold its Ritz-Carlton Hotel to thecasino’s operators, and sold thecasino owners acreage on HuronRoad south of Tower City for construction of a new casino.

Mr. Cullen said he and partnerDan Gilbert do not believe theyneed to own nearby properties iftheir owners are taking steps thetwo men believe are good. Howev-er, one area Mr. Gilbert and hispartners might pursue is addingapartments downtown. With a 96%occupancy rate downtown creatinga shortage of places for casino work-ers to live, he sees apartments “asopportunity” for developers.

Some, like Steve Calabrese, anappraiser and developer who hasowned downtown properties fordecades, see the opening of thecasino as just the first shot in aresurgence of downtown.

“This is far deeper than the casi-no,” Mr. Calabrese said. “A numberof things are coming together inunison that will make this differentfrom past periods when the Ware-house District or the Flats or Gate-way were developing separately.” ■


operate the casinos in Clevelandand Cincinnati, noted, “Obviously,we paid a premium in order to dothat.”

The limitations would have beenfewer had the operators built fromthe ground up rather than renovatinga former department store, agreedMarcus G. Glover, general managerof Horseshoe Cleveland.

“We feel it will add a very uniqueaspect to this casino experience,”Mr. Glover said. “Just as much asthere were complexities to it, therewere benefits to it.”

Already in the gameThe reports out of New Orleans

and Detroit regarding those cities’urban casinos are largely positive.

The city of Detroit pulls in about$175 million a year in tax revenuesfrom its three casinos. And in NewOrleans, Harrah’s New Orleans isexpected to generate roughly $30million for the city in taxes in 2012alone, according to Cynthia Connick,who’s been involved with the casinosince its inception.

Initially, New Orleans’ downtowncasino operator had hurdles toclear — namely, bankruptcy after itencountered financing strugglesduring construction.

Over the years, however, the casino has drawn tourists and localsback to downtown, said Ms. Connick,executive director of Rivergate Development Corp., an agency thecity created to develop a defunctconvention center site into the casino. Nationwide marketing bythe casino and the loyalty perks ituses to give people an incentive to

1188 CRAIN’S CLEVELAND BUSINESS APRIL 16 - 22, 2012GAME ON!


Urban: New Orleans,Detroit casinos fit well

where more than 20 already operate.The math, he said, speaks for

itself: The annual revenue createdby casinos in Michigan has notchanged materially as more casinoshave opened. To expand the number, the pool of people beingdrawn upon and the frequency withwhich people go to casinos wouldneed to change, and he doubts either will.

“I think the reality of it is you willend up moving money from onepocket to the other,” Mr. Beattysaid.

Attempts to reach municipalleaders in both New Orleans andDetroit by Crain’s deadline wereunsuccessful.

Win, lose or draw?One of the main differences

between urban casinos and desti-nation casinos is the people theydraw.

A Las Vegas casino “exports”goods and services produced totourists who come from out of market, the University of Nevada,Reno’s Mr. Eadington said. Ohio’scasinos, meanwhile, likely will befrequented most by locals who livewithin a 30- to 40-mile radius.

“You’re going to be cannibalizingother businesses,” he suggested. “Itsucks up a lot of money that wouldgo elsewhere in the community.”

That said, there also will be thosewho come to town, and those whowould have gone elsewhere whonow may choose local entertainment.That phenomenon has some of theeconomic benefit that tourismwould have, he said.

Ultimately, the impact of thecasino in Cleveland will be judgedby the city’s own success, HorseshoeCleveland’s Mr. Cullen said.

“We think we can be a part of atransformation within the city ofCleveland,” he said. ■

OHIO’SOTHERPLAYERSHorseshoe Casino CincinnatiExpected open date: Spring 2013

The $400 million HorseshoeCasino Cincinnati is a partnership between DanGilbert’s Rock Gaming LLC

and Caesars Entertainment Corp.,the same group developing Cleve-land’s Horseshoe Casino.

The Las Vegas-style Cincinnaticasino will be a 354,000-square-foot, two-story property on 20 acresin the city’s Over-the-Rhine district.

About 100,000 square feet willhouse 2,300 slot machines, 73 tablegames and a 31-table World Seriesof Poker room. There will be a high-limits gaming area and a VIPplayers’ lounge.

A 33,000-square-foot second level will have multipurpose and

Hollywood Casino ColumbusExpected open date: Fourth quarter 2012

The $400 million HollywoodCasino Columbus will have3,000 slot machines, 70table games, a 30-table

poker room and two restaurants —an Epic Buffet and a Final CutSteakhouse — as well as a sportsbar, lounge and entertainmentvenue.

Originally planned for downtown,the location for the casino wasmoved to a 123-acre site west of thecity that previously was home to aDelphi auto parts plant. The Holly-wood Casino Columbus will be300,000 square feet, including theparking garage; the casino floor isabout 130,000 square feet.

Penn National Gaming Inc., thedeveloper of both the Columbusand Toledo casinos, has carried itsHollywood brand through both locations. Ohio spokesman BobTenenbaum said visitors can expectto see an art deco, 1930s Hollywooddesign.

With ties to several major Holly-wood studios, Penn National willcover its casino walls with enlargedmovie posters from classic and current movies. Movie trailers willplay on large multimedia screensthroughout the casino, while thesports bar area will show a variety

Hollywood Casino ToledoExpected open date: Week of May 28

The Hollywood Casino Toledo will have 2,000 slotmachines and 60 tablegames, plus a 20-table

poker room. The $300 million, 290,000-

square-foot casino and parkinggarage is owned and operated byPenn National Gaming Inc., and thesame art deco, 1930s Hollywoodmotif that’s being used in the com-pany’s Columbus location will becarried out at the northwest Ohiosite.

The casino will include moderntouches, including a $10 millionmultimedia system flashing movietrailers and scenes from classicfilms, and the sports bar will featuresporting event coverage.

One of the biggest problems thatcan be created by urban casinos —or gambling itself — is when peoplespend down their savings and destroytheir wealth, noted Bill Eadington, director of the Institute for the Study of Gambling and CommercialGaming at the University of Nevada,Reno. That’s a less tangible, harder-to-measure consequence.

What is known, however, is thatcasinos tend not to increase anarea’s number of problem gamblersso much as they increase the severity of the problem some peoplealready have, noted Keith Whyte, executive director of The NationalCouncil on Problem Gambling inWashington, D.C. The impact of urban casinos isn’t materially differentfrom that of destination casinos, henoted.

“Those people with existing problems may be able to get into alot deeper debt, may be able togamble at much higher stakes muchmore frequently … because that isnow much more available, so proximity does matter,” Mr. Whytesaid.

Mr. Whyte did say, however, thatthe prevalence of people gamblingto make money rather than gambling for fun is probably higherat urban casinos.

Horseshoe Casino Cleveland’speople are trained to identify problemgamers, and the referendum that allowed the casinos also allocatestax dollars to provide resources forthem, said Matt Cullen, presidentand chief operating officer of RockGaming LLC.

— Michelle Park

Gamblers’ problems can worsen

come to New Orleans also are bigpluses, she said.

“It was a new industry, so therewas a lot of trepidation about howit would fit into New Orleans,” Ms.Connick recalled. “There were someconcerns related to an increase incrime, to the fact that the casinowould detract from local businesses,both hotels and restaurants. I cantell you that none of those thingshave come true.”

Crime has not increased, shesaid, noting that statistics are reviewed periodically, though lessfrequently now that the casino hasbeen operating for 14 years. In addition, the casino partners withlocal restaurants and hotels, “sothose industries have not sufferedat all.”

Harrah’s New Orleans also is aterrific corporate citizen, she noted,citing the community service itsemployees do and how casino executives serve on various boardsthroughout the community.

More wouldn’t be merrierMarvin W. Beatty, spokesman for

Greektown Casino-Hotel in Detroit, said his property hasstrengthened Detroit in many of thesame ways.

“From our vantage point, we’vebeen nothing but positive for thecity,” said Mr. Beatty, vice presidentof community and public affairs.“We’ve hired people. We’ve paidtaxes. We’ve built infrastructure.”

The Greektown casino opened inNovember 2000, around the sametime all three of Detroit’s privatelydeveloped casinos opened.

Though he has no shortage of

reasons why the casino has beengood for Detroit, Mr. Beatty notedthat he opposes an effort to put ona statewide ballot a proposal tobuild eight more casinos in Michigan,

RENDERING PROVIDED


APRIL 16 - 22, 2012 CRAIN’S CLEVELAND BUSINESS 19

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special function space for businessmeetings, social events and enter-tainment.

The Cincinnati casino will havea steakhouse, buffet and food court,as well as a coffee shop and bar.The Horseshoe Casino Cincinnatiis expected to create about 1,700 jobs.

It is projected the casino will

generate $100 million annually ingaming tax revenue. Local distrib-ution of gaming taxes will provideapproximately $21 million to thecity of Cincinnati, $12.2 million toHamilton County and $14.1 million to Hamilton County schooldistricts during its first full year ofoperations. — Kimberly Bonvissuto

of sporting events.“It’s a relatively new concept that

all Penn National casinos will carry,”said Mr. Tenenbaum, adding thatPenn National has remodeled sever-al older casinos to bring them in linewith the Hollywood theme. “Theseare primarily entertainment facili-ties, and everyone relates to themovies. It’s a very high-end rendi-tion of something people are famil-iar with and enjoy.”

Hollywood Casino Columbushas an agreement with three central Ohio colleges and the Cen-tral Ohio Workforce Investment

Corp. to train about 1,200 of its anticipated 2,000 employees.

Columbus State CommunityCollege will offer culinary trainingfor food service operations; Hon-dros College will train prospectivetable-game dealers; and CentralOhio Technical College will train fora variety of nongaming positions,including technicians, casino cageemployees, safety personnel andfirst responders.

Penn National Gaming owns 19casinos throughout the UnitedStates.

— Kimberly Bonvissuto

Penn National spokesman BobTenenbaum said the Toledo casino,which is on 44 acres overlookingthe Maumee River and downtownToledo, will have a Final Cut Steak-house, an Epic Buffet, Skyboxsports bar, Take Two Grill and theH Lounge for live entertainment.

“Almost everything about thecasino says Hollywood. It’s very

obvious where you are,” Mr.Tenenbaum said. “There’s an entire piece of a wall in the Toledocasino that’s a depiction of MarilynMonroe and the famous scenefrom ‘The Seven Year Itch.’”

Mr. Tenenbaum said the Holly-wood Casino Toledo is expected tocreate 1,200 jobs.

— Kimberly Bonvissuto

Hollywood Casino Toledo,the interior ofwhich is seenhere, overlooksthe MaumeeRiver. RENDERINGPROVIDED


prices; then they’re rolled back.” Dr. Hill said a scattered number of

price increases doesn’t signify a trendnecessarily, but always is a good sign.

The automotive supply chain is onearea in which he has seen promise.As sales have risen, manufacturersstarted aggressively pricing goods.

“Particularly, the OEMs (originalequipment manufacturers) are treating their suppliers a bit better,”Dr. Hill said. “They’re not trying tobankrupt the supply chain.”

Among those suppliers is Akron-based Goodyear Tire & Rubber Co.,which this month increased prices 6%in its U.S. replacement consumer tirebusiness, which supplies tires to dealers.

Last November, Goodyear uppedthe price of its commercial truck tiresby 10% in order to offset rising rawmaterial costs, which in 2011 climbed30% compared to the previous year.

A greener bottom lineChart Industries’ Distribution and

Storage Group will raise prices nextmonth by 5% on its atmospheric andCO2 bulk tanks, and by 3% to 5% onits packaged gas transportable prod-ucts and MicroBulk vessels.

Kenneth Webster, vice president,chief accounting officer and controllerof Chart Industries, said the price hikesare tied to rising freight costs, fuelprices and material costs that haveeaten at the company’s bottom line.

“This year it’s more of a factor ofcovering costs. I think longer term itshould be a positive for us. As long asdemand is maintained, I would sayI’ll be fairly optimistic,” said Mr.Webster of price increases sticking.

Chart Industries is benefiting fromincreased demand for its productsbecause of the hydraulic fracturing,or fracking, activity in the oil and gasindustry. But even Cleveland-basedpaint maker Sherwin-Williams Co.,which operates in the beleagueredhousing sector, has raised prices,and apparently also has benefited.

Last week, Sherwin-Williams Co.announced that it was raising its estimate of the sales and earnings itexpects to report for the first quarterlargely because of an approximately20% increase in sales within its PaintStores Group. Sherwin-Williams saidthe increase was due to higher salesvolume and price increases.

Mike Conway, director of corporatecommunications and investor rela-tions for Sherwin-Williams, declinedto comment on the extent of thecompany’s price increases in advanceof its investor conference call sched-uled for this Thursday, April 19.

Exception to the ruleOf course, not every manufacturer

has had to hold off on raising prices.Cleveland-based Pipe Line Devel-

opment Co., which makes pipelinerepair and maintenance fittings, escaped the prize freezes with whichmany manufacturers have had to deal.

Marketing manager Kim Smith saidthe 98-employee Pipe Line was able toraise prices during the recession because of the firm’s overseas sales,which account for 70% of its business,and growth in the oil industry.

“The dollar is weak and oil pricesare high,” Ms. Smith said.

Pipe Line’s sales have grownabout 8.6% per year, which officialsplan to exceed in 2012, Ms. Smithsaid. ■


all over the country and locally atCleveland Browns headquarters inBerea, University Hospitals’ newAhuja Medical Center in Beachwoodand at University Circle, soon willhave his latest work — a sculpture offormer Plain Dealer rock critic JaneScott — unveiled at the Rock andRoll Hall of Fame and Museum indowntown Cleveland.

The sculpture originally was set tobe installed at the museum for theRock Hall’s celebration of the April14 induction ceremonies in Cleve-land, but instead will go in aroundthe Fourth of July, Mr. Deming said. Most recently, he completed an 8-foot sculpture of former Universityof Texas running back Ricky Williams,which was unveiled April 1 in Austin,Texas, at the school’s annual springfootball game.

Mr. Deming, a 1967 graduate ofCIA, said he figured out pretty quicklythat sculpting was his forte: In anearly class at the school, still harboringthoughts of a career as a portraitpainter, he discovered there wasn’tenough depth in that genre. How?He was poking holes in the paper.

“Painting wasn’t physical enough,I found out,” he said. He later earneda master’s of fine arts from Cran-brook Academy of Art in BloomfieldHills, Mich.

Prior to re-joining CIA in 1998, Mr.Deming was a professor, sculptorand administrator at the Universityof Texas for 26 years, completingbusts of such figures as SouthwestAirlines’ then-CEO Herb Kelleher,former Texas congressman and Lyndon Baines Johnson confidantJake Pickle, and former presidentGeorge H.W. Bush.

But Mr. Deming struggled to wincommissioned work for full figures,because he didn’t have any to hisname. So, about eight to 10 yearsago, he created a larger-than-life-size figure of Patrick Parker, ParkerHannifin Corp.’s former CEO. Then,the work followed.

Dreading the dreadlocksThere’s his re-creation of the late

U.S. Rep. Stephanie Tubbs Jones,who sits on a bench outside theWestern Reserve Historical Society.

Faces: From clay to bronze, process is long continued from PAGE 1

And the late Al Lerner, who ownedthe Browns, watches over theteam’s Berea headquarters. Thosesculptures are in addition to buststhat include University Hospitalsbenefactor Monte Ahuja and hiswife, Usha; Norma and Al Lerner;and James Pender, former CEO ofinsurance brokerage Oswald Cos.

All that led to Mr. Deming’s mostrecent work, the sculpture of Mr.Williams, the enigmatic and mari-juana-loving former University ofTexas player and No. 1 overall pickin the 1999 NFL draft. The creativeprocess took about nine months,with the modeling lasting aboutthree months and the bronze casting— done by Studio Foundry, locatedon Cleveland’s near East Side —lasting five to six months. That’satypical, as Mr. Deming said the JaneScott work took only about fourmonths total.

Mr. Deming starts with a smallmodel of what he wants a sculptureto look like. In Mr. Williams’ case, hethen formed the frame of the full-size figure with angle iron and packedthat frame with oil-based clay; challenges included Mr. Williams’dreadlocks and his signature visor onhis helmet.

“You know how these college rivalries are,” he said. “You can’t have

anything sticking off the sculpturethat opposing fans can rip off, so thedreadlocks were difficult.”

Studio Foundry cast the work inbronze, and Mr. Deming drove thefull-size Ricky to Austin by pulling a 16-foot trailer behind his GMC Denali. Ricky weighs 1,200 to 1,500pounds with a bronze base, Mr.Deming estimated, and he now sitsin the same corner of Darrell K.Royal-Texas Memorial Stadium as astatue of Earl Campbell, anotherformer Texas running back and theschool’s other Heisman Trophywinner.

Jim Baker, formerly associateathletic director for events at Texasand now athletic director at theUniversity of Texas at Arlington, saton a committee of three in chargeof picking the sculptor. He said Mr.Deming’s past work and his ties toTexas were big factors in commis-sioning him.

Mr. Baker said the school did notmake it easy on Mr. Deming, butTexas was happy with the result.Mr. Deming also produced a three-foot version of the statue to give tothe lead donor for the main sculp-ture now inside the stadium.

His work goes to the dogsIn addition to his Jane Scott piece,

Mr. Deming next April will take afull-size piece to the University ofTexas, of major track and fielddonor Mike Myers. He also sculptedthe Hall of Fame plaques embeddedin the exterior walls of ClevelandBrowns Stadium.

But busts and sculptures aren’tMr. Deming’s only specialties. Hisstudio at the old Lake Erie Screwfactory on Athens Avenue in Lake-wood — where Mr. Deming grewup, attended high school and nowhas been for two years since retiringfrom CIA — overflows with abstractwelds of random tools and ofunique dog pieces. He got startedon the latter while in Texas, whenthe Texas Fine Art Associationasked for something themed to thesubject of time for a fundraiser.

His work quickly resembled adog — an oxygen tank for the headand plumbing parts for the toes,with random metals welded intoshape — so he finished it, thinkinghe’d find another idea for a time-themed piece later.

Instead, he gave the associationthe dog, which sold for $5,000.Now, pieces in his “encounter” series, of dogs playing or fighting(depending upon how you view dog interactions), typically sell for$15,000. ■

David Deming’ssculpture workincludes thelate StephanieTubbs Jones,who sits outsidethe Western Reserve Historical Society in University Circle, and lateClevelandBrowns ownerAl Lerner, whostands guard atteam headquar-ters in Berea.PHOTOS PROVIDED


Prices: Fornow, a way tocover costs

Other scientists have been im-pressed by the research, publishedin February in the online version ofthe journal Science. Among them isDr. Michael Rafii, associate medicaldirector of the Alzheimer’s DiseaseCooperative Study, a group based inLa Jolla, Calif., that works to advanceresearch related to the disease.

Dr. Rafii described the results as“startling.” Though other drugshave shown the ability to removebeta-amyloid from the brains ofmice, Dr. Rafii said he knows of nodrugs that have done so as rapidlyas bexarotene.

The research also is importantbecause it represents “a differentpathway to target in the treatmentof Alzheimer’s,” Dr. Rafii said.Whereas bexarotene uses ApoE toremove beta-amyloid, other drugsbeing tested use either antibodiesto bind with the protein fragments ormolecules that block the enzymesthat produce them.

Still, the drug needs to be proven

in humans, Dr. Rafii said.Not only are humans and mice

physically much different, but themouse version of Alzheimer’s is dif-ferent than the human version, hesaid. For one, the mice, bred to havea rare dominant gene that causesAlzheimer’s in humans, don’t sufferpermanent neural damage, but hu-mans with Alzheimer’s eventually do.

Words of warningDr. Bill Thies, chief medical and

scientific officer for the Chicago-based Alzheimer’s Association,voiced similar cautions, noting thatseveral researchers have createdtreatments that worked in mice butfailed in Alzheimer’s patients.

Still, Dr. Thies lauded the study.Drs. Landreth and Cramer are off toa good start, he added, given thatthe drug already has been approvedby the U.S. Food & Drug Adminis-tration for treating skin cancer. Therarely prescribed drug is sold underthe brand name Targretin by phar-maceutical firm Eisai Co. of Japan.

The company’s patent on the drugexpires this year.

“It’s got a history. We know some-thing about its safety,” he said.

The research has caught the atten-tion of families affected byAlzheimer’s.

Dr. Landreth said he has receivedhundreds of emails and phone callsfrom people clamoring to receive thedrug. He instead directs them to theAlzheimer’s Association, which pairspatients with clinical trials testingvarious Alzheimer’s treatments.

There’s a huge amount of desper-ation among the estimated 5.4 millionU.S. residents that have Alzheimer’s,Dr. Landreth said. Existing drugsjust treat symptoms while the con-dition grows worse, he said. Multipledrugs that could reverse the condi-tion are in clinical trials, but nonehave received FDA approval.

Even though bexarotene is on themarket, Dr. Landreth strongly recommends doctors avoid prescrib-ing it for off-label use. For instance,he noted that no one knows what

happens to a person’s brain if you re-move beta-amyloid so quickly.

Needed: Lots of moneyIf a phase I clinical trial was to

start today, it still would take five to seven years before ReXceptorcould finish testing the drug inAlzheimer’s patients and win FDAapproval to start selling bexarotenefor use in treating Alzheimer’s, saidMichael Haag, a technology transferofficial at CWRU who is serving asReXceptor’s CEO.

And there’s no telling whetherthe drug will make it through clinicaltrials or whether the company willattract the “hundreds of millions ofdollars” that will be needed to com-plete all of them, Mr. Haag said.

“We are going to be in need of astrategic partner with that kind ofmoney,” he said.

However, the team wants tobuild ReXceptor in the Clevelandarea, Dr. Landreth said.

“We’re committed to staying inNortheast Ohio,” he said. ■

Drug: Alzheimer’s sufferers clamor for treatmentcontinued from PAGE 3


The department issued 179 permits for horizontal fracking wellsin the Utica shale from Jan. 1, 2009,to March 31 of this year, though themajority of the permitting activityhas occurred in recent months.

ODNR issued 90 horizontal wellpermits between Jan. 1 and March 31of this year, its records show — andobservers say the number for Aprilcould be even larger than the 37 permits issued in March, the last fullmonth for which figures were avail-able. The number of horizontal drillingpermits issued by the state has goneup each month this year, with 23 issued in January and 30 in February.

But permits only tell part of thestory, according to ODNR’s state geologist, Larry Wickstrom.

“What you really need to watch isthe number of rigs in the state,” saidMr. Wickstrom, who spoke to Crain’safter addressing a crowd of severalhundred people at a sold-out shalegas conference in Cambridge, Ohio,last Wednesday, April 11.

Dig those rigsMr. Wickstrom said with so much

demand for rigs across the UnitedStates, each one is valuable — andany time they spend sitting idle ismoney lost for the energy companiesthat own them. Each rig can put inplace a horizontally fracked well inabout three weeks, he said — andthere are 21 rigs in the state so far.

Eight of those rigs belong to thelargest driller in the state, Chesapeake,and it will move more here this year,said company spokesman Pete Kenworthy. The company intends tohave 20 rigs up and running in Ohioby the end of this year, he said.

If math isn’t your thing, 20 rigs, eachproducing a new well every threeweeks, equates to about 15 new wellsbeing drilled in Ohio each month, or apace of about 180 new wells a year.

But that’s just one company, andobservers say when all the drillersactive in Ohio are considered, thepace of drilling will be much higher.Mr. Wickstrom estimates 200 hori-zontal wells will be drilled in Ohiothis year alone, and the pace will increase to about 1,000 new wellsper year by the end of 2014, he said.

Each well has an economic impact— they cost between $3 million and$6 million apiece to drill, require cement pads that take between fiveand 15 acres of space apiece, and takein 5 million to 6 million gallons ofwater during the drilling process, ac-cording to various industry studies.They also use dozens of vendors andsuppliers, from water trucking com-panies to landscapers, studies show,helping to multiply their impact.

Carrollton is hoppingThat impact already is felt in places

such as Carroll County, which Mr.Wickstrom said is a hotbed of activityso far because its gas is rich in liquids.

Amy Rutledge, executive directorof the Carroll County Chamber


Honoring Health Care Professionals, Volunteers & Champions of Corporate Wellness

Administrator of the Year Terry Davis, Our Lady of the WaysideJan Murphy, Fairview HospitalEileen Saffran, The Gathering Place

Advancements in Health CareDaniel Dietrich, NASA Glenn Research Center

Allied HealthBarbara Davis, Fieldstone Farm Therapeutic Riding CenterMarilyn Mount, PT, University Hospitals and Cleveland Clinic (retired)Barbara Palmisano, Northeast Ohio Medical University

Health Care AdvocateElaine Borawski, Ph.D., Case Western Reserve School of MedicineMedWish International

NurseBarbara Humrick, Rainbow Babies & Children’s HospitalJoan Kavanagh, MSN, RN, ACNO, Cleveland ClinicCarole Wright, RN, Eliza Bryant VillageSexual Assault Nurse Examiner Team (SANE), Fairview Hospital

PhysicianJeff Auletta, MD, Rainbow Babies & Children’s HospitalGeorge Kikano, MD, CPE, FAAFP, FACPE, Case Western Reserve School of MedicineRobert McLain, MD, Cleveland Clinic - Center for Spine HealthDaniel Meges, MD, Care Alliance

VolunteerMarge Donley, The Renaissance/Eliza Jennings Senior Care NetworkJack Kochis, Hospice of the Western ReserveKathy Pender, Beech Brook

Wellness: The Healthiest EmployerERCHattie LarlhamIndependence Excavating. Inc.Medical Mutual of OhioUniversity Hospitals

2012 AWARD RECIPIENTS

Awards luncheonWednesday, May 23

Executive Caterers at Landerhaven Registration: 11am

Luncheon & Awards: 12:30 - 1:30pm

Reserve your tickets todaywww.CrainsCleveland.com/hchtix

or call 216-771-5388

Award recipient special section: May 14

Advertising & sponsorship opportunities available. Deadline: May 3

Contact: Nicole Mastrangelo 216-771-5158 or [email protected]

Presented by:

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Volume 33, Number 16 Crain’s Cleveland Busi-ness (ISSN 0197-2375) is published weekly, exceptfor combined issues on the fourth week of May andfifth week of May, the fourth week of June and firstweek of July, the third week of December and fourthweek of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2012by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $2.00. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. 1-877-824-9373.

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Permits: New business follows gas of Commerce and Convention & Visitors Bureau, told the Cambridgeaudience last week that working onshale gas-related issues is now herfull-time job, and it’s bringing newbusiness opportunities to the county.Every day, multiple people walkinto her office in Carrollton seekingproperty, office space, employees orsome other resource needed bydrillers and their suppliers, she said.

Carrollton’s restaurants are busy,hotels are booked and drillers arepaving roads to gain their own accessto rural sites. Many former one-lanedirt roads are now freshly paved two-lane roads, she said.

“We would have never been ableto upgrade those roads ourselves,”she said.

Spreading the wealthOther areas soon will feel that same

boost, predict people such as Mr.Wickstrom and Chesapeake’s Mr.Sheppard.

Chesapeake, for one, will continueto move resources to Ohio from other states, Mr. Sheppard said.

Mr. Wickstrom also notes thatwhile natural gas prices continue tofall, the price of oil is holding atabout $100 a barrel or more — and thatprice is driving production to Ohio.

And don’t forget about plain oldcrude oil, said Mr. Wickstrom, whoestimates there are 5 billion barrels ofcrude oil that can be recovered fromOhio’s shale. That number, he said,reflects a recovery rate of about 5% —

meaning that 5% of the oil in the shalewill be extracted — though Mr. Wick-strom noted that some drillers predictthey’ll recover far more than that.

“About the most we can say about

a volumetric approach like this is it’sa guess, and we know we’re wrong,’”Mr. Wickstrom said. “But I’d rather below and be wrong” than to guess toohigh, he said. ■



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Guess he knows which way the wind is blowing■ The 500 or so people at the Ohio Shale Energy conference in Cambridge lastWednesday might have noticed that one of

the discussion leaderswas Ed Weston, the manwho built the Cleveland-based Great Lakes WindNetwork into an organi-zation of more than1,000 U.S. companies inthe wind energy field.

At a conference toutingthe advantages of shalegas?

You bet, said Mr. Weston, who was quickto say that his presence did not mean he’slost enthusiasm for wind energy. He still believes in it, but he also thinks natural gasis likely to serve as an energy bridge thathelps get the nation away from its dirtiestsource of energy, coal, to eventually usingwind, solar and other forms of renewablepower. Natural gas burns cleaner than coal,but like any fossil fuel still releases carbonand other pollutants into the atmospherewhen it’s burned.

But there’s another reason Mr. Westonsaid he supports natural gas — because doingso serves the members of his wind network.

“We did some research and found thatmost of them are already in the oil and gasindustry,” Mr. Weston said.

He didn’t mention that as the price of natural gas drops, it’s crowding out wind inboth local and national conversations about

how to meet the U.S.’s energy needs. — DanShingler

MAI spreads the wealth in its updated offices ■ More than $1 million of renovations haveequipped the downtown Cleveland officesof MAI Wealth Advisors with a café, a tradingroom and … a living room.

Yes, the wealth management firm turneda conference room into a living room, com-plete with “nice cushy chairs and a couch”— an effort to provide a casual, relaxed atmosphere for clients, said Rick Buoncore,MAI managing partner.

Finishing touches are under way, and anopen house is planned for the summer atthe offices, located on the 11th and 12th floorsof the IMG Building on East Ninth Street.

The firm’s predecessor office was openedin the building about 50 years ago, and thisis the first major renovation, Mr. Buoncoresaid.

The café is a large room with an islandwhere people can eat and the firm can conduct its monthly town hall meetings.The trading room is an interactive spacewith four large television screens on the wallwhere MAI executives can host webinarsand can hold demonstrations, such as onportfolio hedging, for clients.

“It’s a lot easier seeing it and hearing it,versus looking over someone’s shoulder attheir desk,” Mr. Buoncore said.

The $1.3 million project wasn’t only for thebenefit of the firm’s clients and employees,but for the city, too, he said, noting how the

firm committed to downtown for another 11years in its renewed lease. That lease affordsthe firm about 5,000 more square feet,bringing its total to 25,000. —Michelle Park

This video gets to theheart of the matter■ A five-minute video could help save lives— or at least that’s what MetroHealth pulmonologist Daryl Thornton has discov-ered.

Dr. Thornton, also an assistant professorin the Center for Reducing Health Disparitiesat Case Western Reserve University, dispatcheda team of researchers to area Bureau of Motor Vehicles offices and armed them withiPods loaded with a video encouraging people to become organ donors.

Turns out, the simple trick worked, as84% of those who watched the video becameorgan donors compared to 72% of thosewho didn’t watch the video, according to hisresearch published this month in the Annalsof Internal Medicine, a medical journal. Theresults were more dramatic among theAfrican-American community, as 76% ofthose who watched the video became organdonors compared with 54% of those whodidn’t.

“As far as effective interventions go, it’scheap, it’s brief and it’s potent,” Dr. Thorntonsaid. “There shouldn’t be much resistanceto implementing it on a large scale.”

Dr. Thornton said his next step is workingwith the state of Ohio to make the videos aregular part of BMV operations. — TimothyMagaw

WHAT’S NEW

THE COMPANY: Diversified Fall Protection, WestlakeTHE PRODUCT: Loading DockRolling Safety Gate

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

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THEWEEK APRIL 9 - 15

Schools, teachers agree to agree:Cleveland Mayor Frank Jackson and DavidQuolke, president of the Cleveland Teachers Union,reached an agreement on a plan to reform theCleveland Metropolitan School District. The reform effort, called the Cleveland Transforma-tion Plan, would give the district greater flexibilityto close underperforming schools and to partnerwith charter schools. It also would give schoolprincipals greater responsibility over budgetingand hiring. A key to the accord was the mayor’sdecision to abandon his call for tearing up theexisting contract with the teachers’ union in order to give the union and the district a so-called“fresh start” on their relationship. The mayorsaid agreement on eight other key elements ofthe plan eliminated the need for tearing up theexisting contract. For more on Mr. Quolke, seePage 8.

New items on the menu: Country musicstar Toby Keith’s namesake bar and grill head-lines five new restaurants that developers of the Flats East Bank project announced havecommitted to taking space at the mixed-use project in Cleveland’s Flats. Other eateries thatplan to join Toby Keith’s I Love This Bar & Grillare Ken Stewart’s, part of the Ken Stewart’s familyof upscale restaurants; restaurateur Fabio Salerno’sLago, which offers Italian food at four Cleveland-area locations; Flip Side, a high-end burger concept with operations at First & Main in Hudsonand Easton in Columbus; and Dos Tequilas, aMexican restaurant.

Sticking close to home: Plastics resins supplier A. Schulman Inc. plans to move itsheadquarters to a new location in Fairlawn twomiles from its current home. The new building,which will anchor the new Fairlawn CorporatePark, will be 34,000 square feet and will house130 employees. A. Schulman also will move employees from its Akron Product TechnologyCenter to the new building and to its Akronmanufacturing operations, and says it plans tosell the technology center and its current head-quarters building. The latter will be bought byLandridge Development of Fairlawn, fromwhich A. Schulman will lease its new headquarters.

Welcome to Akron: University Park Alliance,a nonprofit development corporation in Akron,has signed an agreement with Equity Inc. ofColumbus for the real estate developer to construct and manage the first two buildings ofa planned mixed-use development at East Marketand Forge streets in Akron. The partners did notput a cost on the two structures, which will beEquity’s first projects in Akron. University ParkAlliance said Equity plans to start constructionthis spring on a two-story, 25,000-square-footbuilding that will house Child Guidance & FamilySolutions of Akron. Also planned is a 75,000-square-foot commercial building.

Capital keeps coming: Radisphere NationalRadiology Group Inc. has raised another $5 million in equity financing, capping a $15 millioninvestment round. Three investors contributed tothe round, according to documents Radispherefiled with the Securities and Exchange Commis-sion. The company, which has its largest officein Beachwood, provides remote and on-site radiology services to community hospitals.


BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com.

Get ready for morehousing pain this year■ A Reuters story, reported largely fromNortheast Ohio, served as a warning foranyone who thought the strengtheningeconomy was going to bring an end to thehousing slump.

Rather, the news service said, “a painfulPart Two of the slump looks set to unfold:Many more U.S. homeowners face theprospect of losing their homes this year asbanks pick up the pace of foreclosures.”

Mark Seifert, executive director of Empowering and Strengthening Ohio’sPeople, a counseling group with 10 officesin Ohio, told Reuters, “We are right backwhere we were two yearsago. I would put money on2012 being a bigger year forforeclosures than 2010.”

He added, “Last year wasan anomaly, and not in agood way.” In 2011, the“robo-signing” scandal, inwhich foreclosure docu-ments were signed withoutbeing properly reviewed,prompted banks to hold backon new foreclosures pending a settlement.

Numbers available so far this year backup those statements. For instance, mort-gage servicing provider Lender ProcessingServices reported in early March that U.S.foreclosure starts jumped 28% in January.Although foreclosure starts were well belowthe same period in 2010, those begun byDeutsche Bank were up 47% from last year,while those of Wells Fargo rose 68%.

Still caught up in the crisis is DanielBurns, 52, a Garfield Heights resident whoin December 2010 lost his job as a long-haultruck driver and manager. To cover his

mortgage, Mr. Burns received a grant froma government fund using money repaidfrom the 2008 bank bailout. However, Reuterssaid, the grant is due to expire in early 2013.

Mr. Burns told Reuters flatly, “If thingsdon’t pick up, I will be out on the street.”

Organizational fiends ofthe world unite in Cleveland■ Clevelanders are among the most orga-nized people in the country when it comesto detail-oriented tasks such as maintainingfinancial records and filing taxes on time,according to a Forbes.com post based on anew ranking by doxo, an e-payment websiteand “digital filing cabinet.”

Steve Shivers, co-founder and CEO ofdoxo, told Forbes.com the timing of whenpeople file their taxes suggests “who’s got

their junk drawers in order.”The firm “looked at sev-

eral metrics of organization to compile the first annuallist of the Most OrganizedCities, just in time for taxseason,” the website reported.“Each city’s numbers weretallied and the Metrosawarded a ranking on thedOI, the ‘doxo OrganizationalIndex.’”

The firm ranked large U.S. cities based on a number of key organization factorsbroken down by what doxo called “Primary”and “Secondary” factors. Primary factors include recycling rates, individual incometax filing timeliness and junk mail cancella-tions. An example of a secondary factor isconcentration of members of the NationalAssociation of Professional Organizers.

By this measure, Cleveland is the country’s13th-most-organized city, ahead of Denverand behind Pittsburgh. (Isn’t that always thecase?) No. 1 was Boston, followed byRaleigh, N.C., and Miami.

The company recently unveiled an improvedloading dock safety gate that complementsits existing line of fall protection products.

The OSHA-compliant rolling safety gateprotects workers from loading dock falls andis available in six-, eight- and 10-foot stockwidths, according to Diversified Fall Protection.

“The average loading dock poses a four-foot fall hazard, which is enough to cause serious injury or death to pedestrians andfork lift operators,” says company presidentJeff Schneid.

The barrier system’s pivoting design usesa rolling wheel that provides total accessibilityto the dock’s overhead door and truck opening, according to the company. Whennot in use, the safety gate “is easily rolledback to the locked and protected position.”The pivot-and-roll feature “eliminates lifting andremoving heavy sections of portable guardrail, keeping loading docks gated and OSHA-compliant when not in use,” the companysays.

A floor-based, pin lock feature also reduces tripping hazards posed by other mobile dock safety gates currently on themarket, according to the company.

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