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August 8-14, 2011 issueTRANSCRIPT
“It’s like a retroactive tax increase.” – Mark Eisele, vice president and chief financial officer, Applied Industrial Technologies Inc.
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Vol. 32, No. 32
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INSIDE
Mortgagelendersopeningnew doorsBanks hiring despitetepid housing marketBy MICHELLE [email protected]
Joshua Beyl says he’s never seenhis rivals in the mortgage business soaggressive.
The mortgage loan officer, whohas worked in mortgage lending 12years, said even when he prices a loanas low as he can, he’s still being beatenmore often for borrowers’ business.
Mr. Beyl, who works for NationsLending Corp. in Middleburg Heights,noticed a marked change in themortgage market earlier this year.
“Banks are more aggressive because they need to keep that income coming in,” he said.
The aggressiveness of the businessseems only to be building, as a num-ber of lenders are hiring mortgagestaff and offering limited-time interestrate promotions to attract business.
First Federal of Lakewood has hired10 new mortgage originators thisyear alone and plans to add anotherseven by year-end, which would bringits residential lenders to a total of 48.
“Our HR department is workingovertime,” said Ronald R. Webb,First Federal senior vice presidentand chief lending officer.
Banking giant Chase is hiring, too,and hosted a mortgage operationsjob fair last week. The bank plans tofill about 50 mortgage positions thismonth in Cleveland. Some are new,and some are existing, though Chasespokeswoman Mary Kay Bean didn’tprovide a breakdown.
“We want to be there and lend toqualified buyers when they are readyto buy a home and refinance ahome,” Ms. Bean said.
And Nations Lending has a “gutsy,ambitious” plan to grow by January2013 to 220 mortgage originatorsfrom its current 65, said Michael T.Bardy, vice president of operations.
Today’s interest rates have createda “world of opportunity,” Mr. Bardynoted. But there’s more.
“We’re under way to what should
See MORTGAGES Page 6
Owner ofprime sitesseeks toamend loanOutcome of Gotham King’s debttalks could impact office marketBy STAN [email protected]
A partnership that owns nine prime office buildingsin Cleveland’s eastern suburbs is in talks with its lenderin efforts to modify the $136 million loan the investorsused to buy the portfolio from Duke Realty Corp. in2007.
Local real estate investor Donald King, who along withNew York investor group Gotham Partners bought thenine buildings, last week confirmed reports in mortgageindustry publication Trepp-Wire and by the Morningstarinvestment research firmthat the loan was assigned to“special servicing” by thelender. LNR, a company in Miami Beach that managesdistressed mortgages for lenders and also buys distressed loans and properties from lenders, is in thespecial servicer role.
Mr. King confirmed that Gotham King skipped its Julypayment on the mortgage, but he described the failureto pay as a means to get a special servicer appointed toconsider the investors’ efforts to restructure the loan.
“We’re simply talking to the lender to restructure theloan,” said Mr. King, who is the managing member ofGotham King Fee LLC, the partnership that owns thebuildings. “The real estate market is not what it waswhen we purchased the properties. It’s pretty typical ofwhat a lot of landlords are doing.”
Nonetheless, a local real estate expert, who spoke ongrounds of anonymity, said Gotham King risks losing theproperties if the lender, identified in mortgage docu-ments as LBUBS 2007-C2, chooses not to restructure the
KeyBank Center soldAn unidentified investor group
won the bid in an online auctionfor the 23-story office tower at800 Superior Ave., which soonwill have a vacancy rate of about60%. The purchase price was far less than the property’s landvalue. To read more, see StanBullard’s story on Page 3.
See KING Page 8
FIRMS FEAR LIFOMAY HIT SHREDDER
Local companies face significant tax liabilities if government nixes traditional accounting method
By DAN [email protected]
They’re talking again inWashington, D.C., aboutdoing away with LIFO accounting for business —
and that could cost companies inCleveland and across the nation billions in new tax liabilities.
At least one area company, Applied Industrial Technologies Inc.
of Cleveland, says it alone has tensof millions of dollars riding on theissue of eliminating the last-in, first-out method of accounting.
Mark Eisele, Applied Industrial’svice president and chief financialofficer, said the recent proposal byPresident Barack Obama to elimi-nate LIFO and require companies topay taxes for its use to date wouldbe expensive. It would mean his
See LIFO Page 11
INSIDE: A closer look atthe properties in GothamKing’s portfolio. Page 8
20110808-NEWS--1-NAT-CCI-CL_-- 8/5/2011 3:53 PM Page 1
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TAKEOFFIf it seems like your flights out of Cleveland Hopkins International Airport and Akron-Canton Airport are getting more expensive, well, they are. New federal data showthat average domestic fares at Cleveland Hopkins International Airport rose 10% inthe first quarter of 2011 compared with the like quarter of 2010. Fares during thatperiod at Akron-Canton rose 10.5%. Both airports’ fare increases were higher thanthe national average. Here’s how Ohio five largest airports stack up against the nation as a whole.
Airport Q1 2011 fare Q1 2010 fare % changeCincinnati $465.75 $404.29 15.2%
Cleveland 407.59 370.65 10.0
Dayton 342.20 314.12 8.9
Columbus 333.72 299.05 11.6
Akron-Canton 297.66 269.48 10.5
U.S. average 355.72 328.12 8.4
SOURCE: U.S. BUREAU OF TRANSPORTATION STATISTICS; WWW.BTS.GOV
20110808-NEWS--2-NAT-CCI-CL_-- 8/5/2011 1:25 PM Page 1
AUGUST 8 - 14, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3
INSIGHT
THE WEEK IN QUOTES
Tri-C acquires more Westlake propertyIndustrial park acreage seen as ideal forcampus development as enrollment surgesBy TIMOTHY [email protected]
Although Cuyahoga CommunityCollege isn’t done developing existingland at its new campus in Westlake,the school already is pursuing moreproperty in the area to accommo-date what it perceives as an explo-sive market for its services.
Tri-C has signed an agreement topay $1.21 million for two plots, totaling about 11 acres, of the Beacon Westlake industrial parkthat sits north of Interstate 90 off
Clemens Road — just steps awayfrom the college’s new WestshoreCampus. The deal is pending finalapproval by the State ControllingBoard, which is set to rule on thematter today, Aug. 8.
Charles Marshall, a developerwho owns the land, said Tri-C andWestlake officials expressed interestin changing the site from an industrialzone to one that would be moreconducive toward a college envi-ronment.
“They don’t look at an industrialsite as a good entrance statement to
a Tri-C campus,” Mr. Marshall said.“They would rather have support facilities for Tri-C. The whole area ischanging from what we originallydesigned it for.”
The industrial park houses fourcompanies — Industrial ElectricWire, West Shore Distributors, Con-trolco and Inspection Engineering —and a daycare center. However, Mr.Marshall said no business will needto move, as there are more than 40acres available at the business park.
The college opened a $24.3 million,65,000-square-foot building thisspring on its Westshore Campus, a31-acre site it bought in 2008. Tri-C’smaster plan for the campus calls fora two more buildings, according toCraig Foltin, the college’s executive
Mysterious bidder nabsKeyBank Center for$7.1M in online auctionBuyer faces challenges with outfitting buildingBy STAN [email protected]
In a surprise move in downtownCleveland’s long-ailing office mar-ket, an unidentified investor grouphas won the bidding for vacancy-rid-dled KeyBank Center, which former-ly was known as McDonald Invest-ment Center, via a lender-orderedonline auction at www.auction.com.
Michael Guggenheim, presidentof the Guggenheim Realtors broker-age in Beachwood, confirmed therewas a successful bidder in the webauction that concluded July 27 forthe building at 800 Superior Ave.,
“We would have to paytaxes on things thathappened decades ago.… It’s sort of like ifthey repealed thehome interest deduc-tion on your house andsaid you had to payall that back.”— Mark Eisele, vice president andchief financial officer, Applied In-dustrial Technologies Inc. Page One
“We had to rethinkthe way we did busi-ness. It’s difficult forone agency on its ownto address the needsof every client.”— SueAnn Naso, president,Staffing Solutions Enterprises.Page 13
“Real estate’s not going to go down forforever. I think there’ssome belief that thereal estate market isas bad as it’s going toget and it’s going toget better.”— Kevin T. Jacques, the BoyntonD. Murch Chair in finance atBaldwin-Wallace College. PageOne
“These new technolo-gies are a perfect wayas a younger agent tosell yourself.”— Joe Rath, real estate agent,ERA Rath Realtors in Rocky River.Page 15
See BID Page 8
JUST THE TICKETSCleveland firm Veritix scores big in sporting event sales,plans to up the ante with foray into targeted marketing
By CHUCK [email protected]
our years ago, Flash Seats was just awebsite where Cavs fans sold extratickets.
Now it’s part of a software systemthat has been used to sell well over $1 billionin tickets — both physical and digital — forlive events in 30 states.
Veritix, the Cleveland company that devel-oped Flash Seats, has won the right toprocess ticket sales for several major sportsteams and entertainment venues since 2008.Its clients include the owner of the arenawhere the Denver Nuggets play, the athleticdepartment at Texas A&M University andeven the NCAA.
F
PHOTO PROVIDED
Sam Gerace, CEO of Cleveland-based Veritix, says the company that processes ticket sales for major sports eventsis planning to bolster staff size at its Cleveland office.
See VERITIX Page 7
STAN BULLARD
vice president of administrationand finance.
Dr. Foltin said residents in thewestern suburbs “pay property taxesthat help fund us and keep our
tuition low, and we’re just begin-ning now to tap into this area of thecounty that also deserves thesekinds of opportunities.”
See LAND Page 28
20110808-NEWS--3-NAT-CCI-CL_-- 8/5/2011 1:40 PM Page 1
44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
Volume 32, Number 32 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 © 2011by 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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Influx of out-of-region patientsexacerbates nursing shortageBy TIMOTHY [email protected]
Northeast Ohio’s health care sector may be staring down a nursingshortage faster than anticipated dueto an influx of patients migratingfrom outside the region for care, according to a new work force fore-cast released by a local hospital advocacy group.
“In a lot places, that (in-migra-tion) doesn’t matter, but in a placelike Cleveland, where you have organizations like University Hospi-
tals and the Cleveland Clinic, youhave people coming from the rest ofOhio, nearby states and even allover the world,” said Craig Moore, aMassachusetts-based consultantand economist who helped developthe forecast for the Center forHealth Affairs.
“That is substantial,” Dr. Mooresaid. “That increases the demandfor health care and the demand fornurses.”
Work force projections rarelyconsider what Dr. Moore character-izes as “export sales” — those that
come from outside the region forcare — but rather focus solely on regional demographics. Assuming amodest growth in the amount of careprovided to outsiders, Dr. Mooresaid the demand for nurses couldsurpass the supply as quickly as later this year or early next year. By2015, the region could face a short-age of about 2,000 full-time-equiva-lent registered nurses and as manyas 4,000 by 2020.
“There’s going to be more need formore health care and people in thehealth profession are going to be retiring,” Dr. Moore said. “That’s aperfect storm.”
Dr. Moore compared economicdata from Northeast Ohio’s healthcare sector to similar-size markets.He found that total receipts, payrolland employment figures of Cleve-land’s health care sector far exceedthose of San Antonio, Cincinnati,Columbus and other comparablecities — a factor he attributes largelyto providing care to people from outside the region.
Dr. Moore suggested that as muchas one-third of health care revenuesgenerated in Cleveland come frompatients who live outside NortheastOhio.
An aging population also factorsinto the looming nursing shortage,according to several health care professionals. They say the workforce forecast model developed byDr. Moore and Cypress Research, alocal consulting group, could help allinterested parties avert a potentialsquall.
For example, Northeast Ohio isflush with accredited nursing programs, many of which have wait-ing lists for prospective students. Butwith the new work force forecast,many nursing schools are expected toconsider expanding their programs, ifthey aren’t already.
“There is a direct relationship between the number of students andthe number of nurses needed,” saidLaura Dzurec, dean of Kent StateUniversity’s School of Nursing. “Thishelps us figure that out.”
The forecasting tool also can beadopted by hospitals, allowing themto modify variables — such as patientmigration patterns and patient volumes —to gauge the demand fornurses for their institutions. Tradi-tionally, hospitals largely have basedhiring on annual turnover rates andfactors such as whether a new wingor building was opening.
“One area there was a huge gapwas that we did not have regional information about our supply of reg-istered nurses and (licensed practi-cal nurses), as well as the demand,”said Lisa Anderson, vice presidentfor the Center for Health Affairs.“The federal government does sur-veys and breaks it down by state, butthis gets us down to local level.” ■
20110808-NEWS--4-NAT-CCI-CL_-- 8/5/2011 2:51 PM Page 1
be — hopefully, probably — thelargest purchase market that we’veever seen,” he said. Once con-sumers regain confidence, it’s “onlynatural” that they will take advan-tage of low home prices and lowrates, Mr. Bardy predicted.
All this amid a housing marketthat remains depressed.
On a national basis, refinance application levels are roughly 30%lower than they were when rateswere previously this low, and the levelof applications to buy homes has de-creased in the past couple monthsto lows last seen in 1997, accordingto the July monthly commentary bythe Mortgage Bankers Association.
But banks are flush with depositsand looking for places to lend.They’re not interested in buyingTreasury bonds because returns areso low, and their desire to do busi-ness lending is deflated by the potential for a second-wave reces-sion, said Kevin T. Jacques, whoworked for 14 years for the U.S. Department of the Treasury.
“Despite the fact that it mightseem a little strange, with real estate and mortgages, you still havethe potential for making some profitrelative to other opportunities,”
said Mr. Jacques, the Boynton D.Murch Chair in finance at Baldwin-Wallace College.
“Real estate’s not going to godown for forever,” he added. “I thinkthere’s some belief that the real estate market is as bad as it’s goingto get and it’s going to get better.”
Home field advantageSome banks may be acting now
because they believe the “sun iscoming up” and the housing marketis near the bottom, agreed Mike VanBuskirk, president of the Ohio BankersLeague. Plus, a good deal of mortgagepersonnel talent is available for hireas a result of cutbacks, he said.
First Federal’s Mr. Webb said hehas seen competitors react in twoways to the tough mortgage market:Some have focused on capturing whatbusiness exists, while others haveexited segments of the business.
First Federal has stayed “highlyfocused” on the mortgage businessbecause it’s a main source of revenue for the institution, saidDouglas R. Baker, vice president ofresidential lending.
The year 2010 actually was arecord lending — and record mort-gage — year for the institution, Mr.Webb said. It closed a half-billion
dollars in loans, and 80% of that wasresidential mortgages — largely refi-nances.
Unlike last year, about 80% of thisyear’s pipeline of mortgage loansare home purchases, Mr. Webb said.
“What we’re happy to see is thateven though the market may not begangbusters right now as far as activity, our share has certainly increased,” he said.
Mr. Baker said he believes FirstFederal’s increases are the result ofa “flight to quality” — more buyersdesiring to borrow from institutionswhere the underwriting is local. Healso said loan officers want to alignthemselves with local institutions.
Lower home prices have attractedsome buyers into the market, according to Ms. Bean of Chase.She called mortgages a “very important relationship product” forbanks because people who havethem are more likely to have otherproducts and services, such aschecking accounts, with that bank.
Chase’s new mortgage hires willjoin several hundred who alreadywork in the bank’s mortgage oper-ations in Northeast Ohio, Ms. Beansaid. Some will support the hun-dreds of mortgage loan officersChase has hired since 2009, and
66 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
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Mortgages: Economic uncertainty lingerssome will support the New York-New Jersey-Connecticut market, Ms.Bean said.
Chase’s mortgage market share,Ms. Bean said, was up in the Cleve-land area for all of 2010 over 2008.
Here’s the dealNot everyone is aiming to lure
mortgage business with added feeton the ground.
While its people are “optimisticfor the future,” Third Federal Savings& Loan Association of Cleveland isnot seeing a significant uptick inbusiness and is not hiring mortgagepersonnel, spokeswoman Jennifer L.Rosa said.
However, the thrift is developingwhat she termed “alternative ways,including products and pricing, toattract customers looking for ahome.” They include a promotionthat began two months ago that offersfirst-time homebuyers a discount ofone-quarter percentage point offtheir mortgage rate and a 10% downproduct introduced last month.
Fifth Third Mortgage Co. likewiseannounced in July that it’s offeringcustomers through Aug. 31 a choice oftwo new purchase mortgage incen-tives. Buyers can choose either a onepercentage point interest rate reduc-tion for the first year of a mortgage ortake a one-eighth percentage pointreduction for the life of the loan.
So, what’s next?Now remains a “very dangerous
environment” for bank lending andbank risk, Mr. Jacques of Baldwin-Wallace said, citing concerns of
another recession, instability in thereal estate markets and the risk of adowngrade to the credit rating of theUnited States.
“The macro environment is verydifficult, and if you’re a bank andyou’re trying to be more aggressivein any market, you’ve got to treadcarefully,” he said.
However, if banks’ credit under-writing standards are solid andthey’re picking the right markets,Mr. Jacques is confident that mort-gage isn’t a bad business to be in byany stretch. As banks increase theirmortgage lending efforts, more people who want to buy homes andcan qualify should have the financialability to do so, he noted.
It’s not that all these NortheastOhio bankers expect the mortgagebusiness to go gangbusters in thenear term. However, some are opti-mistic that business will pick up, andthey aim to be ready when it does.
While Mr. Webb forecasts in-creased volume for First Federal, hedoesn’t anticipate any big boom inlocal mortgage business over thenext year. The Mortgage Bankers As-sociation’s mortgage outlook for thisyear and next year also isn’t robust.
For all of 2011, the association antic-ipates total originations to decrease toabout $1 trillion from $1.57 trillion in 2010. Purchase originations areexpected to fall 12%, to $415 billionfrom $473 billion in 2010.
And as mortgage rates increaseslowly to 5% for a 30-year fixed-rateloan by year-end, the association expects refinance originations to de-crease 45%, to $603 billion. By theend of 2012, mortgage rates are ex-pected to increase to 5.6%, causing acontinued slide in refinances, theMBA has forecasted. ■
20110808-NEWS--6-NAT-CCI-CL_-- 8/5/2011 1:26 PM Page 1
The company — founded in 2006when an investment group led byCavs owner Dan Gilbert bought apatent related to the software — hasprepared for more growth.
For one, Veritix last November an-nounced it had secured a $100 mil-lion line of credit from RockbridgeGrowth Equity LLC, which also isone of Mr. Gilbert’s companies. Plus,for the past few years Veritix hasbeen hiring software engineers toimprove its technology, which givesits clients a way to sell tickets withoutactually issuing a physical piece ofpaper, said CEO Sam Gerace. Ticketholders enter events by simply swipinga credit card, a driver license or someother form of ID containing a mag-netic identification strip.
Because of the focus on the soft-ware, most of the company’s 83 employees work out of its offices inDallas and San Jose, Calif., not Cleve-land, Mr. Gerace said. Veritix acquired Dallas-based Vertical Alliancein late 2007, and the developers whocreated the first version of the soft-ware were based in Silicon Valley.
The next wave of growth, however,should boost the size of the company’sCleveland office, which today employs12, Mr. Gerace said.
“We’ve now started to grow thenon-engineering side of the busi-ness,” he said. “That’s where you’ll seethe bigger growth (in Cleveland).”
Analyze thisPart of that growth will come in
the form of a new team being formedat Veritix’s headquarters in TowerCity Center, which houses companyexecutives, as well as sales, marketingand some client services functions.
The new group will help clientsanalyze data they collect using Veri-tix’s software, Mr. Gerace said. Thecompany will hire at least five peopleto join that team, he said, addingthat it’s likely the group could have20 employees before the end of theyear.
Some clients use the software tostudy the habits of ticket buyers, andcould use that information to helpdesign marketing campaigns. For instance, sports teams could sendcoupons for team-owned restau-rants to ticket buyers who tend toshow up a few minutes before tipoff,Mr. Gerace said. The system can beprogrammed to send offers to ticketbuyers automatically or to alert salesstaff of upsell opportunities, he said,adding that it can be tied in to digitalmarketing software clients alreadyuse.
However, Mr. Gerace said someclients rather would have Veritixhelp them analyze data the softwarecollects.
“In many ways I think Veritix is amarketing and information systemscompany masquerading as a ticketingcompany,” he said.
The Veritix system was used to sellabout 11 million tickets valued at$585 million in 2010. The systemprocessed $390 million of tickets in2009, the same year it settled a law-suit with Ticketmaster that allowedit to sell tickets for every event atQuicken Loans Arena. It processed$208 million in tickets in 2008.
Veritix charges clients a fee onevery ticket they sell, Mr. Geracesaid, noting that the fee goes downfor clients that sell more tickets. Hedeclined to say how much Veritix receives per ticket or provide revenue figures for the company.
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Veritix: Software offers closer look at buyers’ habitscontinued from PAGE 3 Working out the kinks
The company still faces chal-lenges, of course.
Ticketmaster, which has its ownsystem for selling paperless tickets,remains the dominant player in theticketing business. Plus, an organi-zation called the Fan Freedom Pro-ject has been speaking out againstsome companies that offer digitaltickets, arguing that some systemsput unfair restrictions on how fanscan resell their tickets.
The Washington, D.C.-basedgroup doesn’t have a big problemwith Veritix’s system, mainly because it allows fans to transfertheir tickets electronically to other
people for free. Still, the companyshould change its software so thatfans can resell digital tickets on other online marketplaces, such asStubHub, said Jon Potter, presidentof the Fan Freedom Project. Stub-Hub, which is owned by eBay, finances the group.
“It’s not a complete solution,”
Mr. Potter said.Veritix has offered StubHub and
other ticket brokers the option ofinterfacing with the company’s system, but they would have to payto do so, Mr. Gerace said. Even so,ticket holders still can sell tickets topeople they know without paying afee: They can arrange payment inprivate and then transfer the ticketsas if they were a gift.
But if they want access to all thepotential buyers searching for ticketson Veritix’s network, they’ll have topay the fee.
“Our marketplace has value,” hesaid.
Kurt Schwartzkopf is a big fan ofthe technology. His company,
Kroenke Sports & Entertainment inDenver, uses the system to sell tick-ets at all the venues it owns, includingthe Pepsi Center, which is home tothe NBA’s Denver Nuggets and theNHL’s Colorado Avalanche.
The rate at which ticket buyersare using the Veritix system to buy paperless tickets “continues to astonish us,” said Mr. Schwartzkopf,who is Kroenke’s chief marketingofficer.
Not only does technology workwell, but the company’s ownersand its management also have a lotof industry experience, he said.
“They know this business betterthan anyone,” Mr. Schwartzkopfsaid. ■
“We’ve now started togrow the non-engineeringside of the business.That’s where you’ll seethe bigger growth (inCleveland).” – Sam Gerace, CEO, Veritix
20110808-NEWS--7-NAT-CCI-CL_-- 8/5/2011 1:27 PM Page 1
which soon will have a vacancy rateof around 60%. However, he de-clined to identify the winning bidderbecause the group asked him not todisclose that information before the
88 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
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Bid: Insiders say Cleveland market improving
King: Investor touts occupancy
purchase closes.A Google snapshot of the
www.auction.com page for the auc-tion of the building indicates a finalbid of $7.1 million, or double the$3.5 million initial bid price. Mr.Guggenheim wouldn’t comment onthe purchase price, though he saidmultiple parties were bidding forthe building that dates from 1969.
The last time the building sold inan arms-length transaction was in2007, when the Dallas-based realestate company Behringer Harvardpaid $45 million for the structure aspart of an 11-skyscraper portfolio.
Guggenheim served as the localbrokerage contact in the offeringand manages the building for LNRPartners, the lender in Miami Beachthat owns it. Under auction rules,the investor must close the deal bylate August or LNR could take the 23-story office tower back to market.
In a tantalizing twist to the mys-tery-cloaked purchase, a limited liability corporation named “800Superior, LLC” was recorded Aug. 2with the Ohio Secretary of State’soffice. However, the filing providesno clue to the identity of theDelaware-incorporated party thatintends to use the name.
Behringer surrendered the build-ing’s keys in 2010 to LNR, which invests in distressed mortgages andhandles distressed properties forlenders. Cuyahoga County assignsthe building a market value of $44million for property tax purposes.
The apparent winning bid is farless than the property’s land value,which the county sets at $11 million.In other words, the building’s buyerstands to get it for less than the landalone should fetch downtown.
Wide open spacesWhen Behringer gave up the
building, it said it did so because itfelt the cost of populating it with
new tenants was too costly andCleveland rents were too low to beworthwhile. Late last year, the CalfeeHalter & Griswold law firm announcedit would exit KeyBank Center for arenovated building all its own at1200 Rockwell Ave.; the move willempty six more floors this fall.
Just last year, the former EastOhio Gas Building at 1717 EastNinth St., on the opposite corner ofEast Ninth and Superior from Key-Bank Center, did not sell at an auc-tion. However, real estate expertssay the market for real estate invest-ments and leasing is improving inCleveland and across the country,and that the challenges faced byKeyBank Center are smaller thanthose of the mothballed, emptybuilding at 1717 East Ninth.
“No one would bid on a buildinglike this if their outlook on the citywere negative, negative, negative,”said Bill West, a partner at the Ostendorf-Morris Co. real estatebrokerage.
Mr. West said the process of addingtenants to KeyBank Center wouldbe less extensive and expensivethan returning the old East OhioGas Building to service. Nonethe-less, Mr. West said it still will take asizable amount of cash to outfitspace for new tenants, which willmake it hard to turn a profit at current rental rates.
Viewing a pending sale of thebuilding as a step forward for Cleve-land is Michael Deemer, director ofbusiness development at the Down-town Cleveland Alliance stakeholdergroup.
“We’re not aware who the win-ning bidder is, but look forward toengaging with them to discuss themarket downtown and make surethey are fully aware of all state,county and city support for bringingbusinesses to the building,” Mr.Deemer said. ■
Because the properties in theGotham King portfolio account forabout 20% of the office space in theeastern suburbs, the outcome ofGotham King’s debt talks could havea profound impact on the broaderoffice market, even if the lender doesnot put the properties in foreclosure.
Steve Egar, president of Egar Asso-ciates real estate brokerage, said ifMr. King succeeds in reducing theportfolio’s debt outstanding orachieving other favorable loan mod-ifications, the owner would be ableto compete more vigorously for tenants. As a result, lower rents maytrickle through the market.
And if the buildings went intoforeclosure, they could create a glutof available properties on the marketthat further would depress the valueof competing buildings.
The properties held by GothamKing either were developed by Indi-anapolis-based Duke between 1997and 2001 or were acquired by Dukeafter it entered the Cleveland market.The real estate investment trust shedthe portfolio in 2007 as part of a plandisclosed in 2005 to exit NortheastOhio in search of stronger office andindustrial markets.
Duke retains 14 buildings in theRockside Road office corridor and inNorth Olmsted that it has been un-able to sell. ■
debt and looks to foreclose. Mr. Kingsaid he does not worry about thelender instituting a foreclosure ac-tion, though he would not detail asto why he isn’t concerned.
The Gotham King portfolio com-mands local attention because it in-cludes many of the gems of the EastSide office market, from the Lander-brook Corporate Center I, II and IIIoffice buildings in Mayfield Heightsto Corporate Circle in Pepper Pike.The properties encompass nearly900,000 square feet of office space.
Mr. King declined to discuss thechanges in terms Gotham King isseeking from its lender. However, asfar as the properties go, Mr. Kingsaid, “Everything is good. We’reabout 85% occupied.”
F. Brock Walter, a principal at Pin-nacle Financial Group, a commercialmortgage brokerage in Indepen-dence, said it’s “almost a rule ofthumb” that a borrower must defaultin order to get a lender’s attention ona securitized loan.
Mr. Walter said it isn’t unusual tofind commercial securitized loansthat are classified as special servicing.About 6% of all syndicated commer-cial loans are in special servicing and11% of the loan balances outstandingin the securitized mortgage marketare in special servicing, according to
national data Mr. Walter provided.No foreclosure actions against the
properties had been filed as of lastThursday, Aug. 4, in either CuyahogaCounty or U.S. District Court inCleveland, according to a search ofcomputer databases. Mr. King saidno such formal legal filings were inthe offing.
Bob Nosal, managing director ofGrubb & Ellis Co.’s Cleveland office,said the former Duke portfolio hasfared well under Mr. King’s controland has renewed substantial top-tiertenants as their leases have expired.However, as rents generally are nowlower now than in 2007, the proper-ties likely produce less revenue tosupport the loan, and the value ofthe properties has declined since theloan was made, Mr. Nosal said.
PLUM SPACESThe following properties com-
prise Gotham King’s portfolio:■ Landerbrook Corporate Center
I, II and III in Mayfield Heights■ Corporate Circle I and II in
Pepper Pike■ Corporate Place, Beachwood■ One Corporate Exchange,
Beachwood■ Metropolitan Plaza, Highland Hills■ One Harvard Plaza, Highland Hills
continued from PAGE 1
20110808-NEWS--8-NAT-CCI-CL_-- 8/5/2011 2:58 PM Page 1
AUGUST 8 - 14, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
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JOB CHANGESEDUCATIONCASE WESTERN RESERVE UNIVER-SITY SCHOOL OF MEDICINE: Dr.David S. Rosenbaum (MetroHealth)to the Louis Rakita, MD and MauriceMoss, MD Professor in Cardiology.
ENGINEERINGMANNIK & SMITH GROUP INC.:Pamela L. Davis to director of planningand sustainable development, NE Ohio.
FINANCEBANK OF AMERICA MERRILL LYNCH:Larry McDonald to senior vice presi-dent, senior client manager; FlorenceHatvany to senior vice president, senior treasury solutions officer; EricJohnson to vice president, businessbanking client manager; Anna Benade to treasury solutions analyst.
FIRSTMERIT CORP.: Daniel P.Crawford to senior vice president, investment team leader; Scott E.Dodds to senior vice president, teamleader, business banking.
FINANCIAL SERVICEERNST & YOUNG LLP: GregoryMiller to partner. TRINITY PENSION CONSULTANTS:Beth Cecconi to defined benefit relationship manager.
HEALTH CAREUNIVERSITY HOSPITALS CASEMEDICAL CENTER: Dr. Pablo R.Ros to radiologist-in-chief; Dr. Warren R. Selman to neurosurgeon-in-chair.WILLCARE: Lolita Marshall tobranch administrator; Tammy Pakizto director of patient services.
LEGALGALLAGHER SHARP: Jamie Price
GOING PLACESto associate.
MANUFACTURINGFLACK STEEL: John M. LaScola tovice president, commercial operations.
MARKETINGAKHIA: Katrina Healy to senior account executive; Amber Davis,Carrie Drummond, Jodee Hammond, Holly Kleese and LukasTreu to assistant account executives.HILEMAN ENTERPRISES: Ana Terstage to web designer; MeganBardy to account manager. LIGGETT STASHOWER: JosephBaucco and Tim Boesel to graphicdesigners; Rachelle Patsey to account executive.
OPTIEM LLC: Jordan Burnside toSEO manager; Joe Santoli to paidsearch manager.
NONPROFITTRUST FOR PUBLIC LAND: DaveVasarhelyi to senior project manager;Kim Kimlin to project manager.
SERVICEGLOBAL TECHNICAL RECRUITERS:Stephanie Baker to vice president,operations and sales. IMARC RESEARCH: HuwaidaBetts, Lauren Dye, Jessica Flynn,Kelly Granath, Stephani Hulec,Jenine Jones, Jacqui Lingler,Jamie Wynbrandt and RebeccaYork to clinical research associates.
TECHNOLOGYINTERCON GROUP: Jennifer
Davis to director, social media marketing.
BOARDSCLEVELAND SOCIETY FOR HUMANRESOURCE MANAGEMENT:SueAnn Naso (Staffing Solutions Enterprises) to president; LaurenRudman to president-elect; DawnZima to past president; BethWarholy, Vicky DePiore, ShirleyHunter, Michael Hoffman, DougJustus and Janet Rohlik to vicepresidents; Pam Smith to chapteradministrator.
AWARDSAMERICAN NUCLEAR SOCIETY:Dan Yurman received a 2011 Special Recognition Award.BLACK PROFESSIONALS ASSOCI-ATION CHARITABLE FOUNDATION:
Randell McShepard (RPM International) received the 2011Black Professional of the Year Award. HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION:Kelly Linson and Jill Barber(Southwest General) received 2011Future Financial Leaders Awards.
INTERNATIONAL COUNSEL OFSHOPPING CENTERS: Michael E.Stevens (Forest City Enterprises) received the 2011 Trustees Distin-guished Service Award.
NATIONAL INSTITUTE FOR TRAUMA AND LOSS IN CHILDREN:Gretchen M. Miller (Domestic Violence and Child Advocacy Center)received the Trauma Consultant Supervisor Award.
Send information for Going Places [email protected].
MillerDavisRosenbaum
McShepardSelmanRos
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20110808-NEWS--9-NAT-CCI-CL_-- 8/4/2011 10:45 AM Page 1
There was plenty of angst-riddenfinancial news coverage over thepast couple weeks, what with allthe arguing and posturing in
Washington over the debt ceiling, thelosses in the U.S. equity markets and theongoing worry over the Eurozone.
But this lead paragraph — from aCNN/Money.com story — reallybothered me: It read: “The fightover the national debt is notover. Not even close.”
The story by Charles Rileywent on to predict that eventhough lawmakers finally votedto raise the debt ceiling so ourcountry did not default on itsobligations, we still face monthupon month of bickering andpolitical maneuvering over ourfuture course.
That’s just plain scary, for a couplereasons. Most obviously, we all shouldbe concerned about our fragile economyand the recovery that never seems to fully start. Part of the sluggishness is fear— on the part of consumers who aren’tspending and companies that aren’t hiring.
Who would have ever thought that we’d beat a place in the nation’s history where itwas a problem that our citizens were savingmore and paying down debt?
The other disconcerting truth is thatwe will now be victimized by months ofrepetitive political carping by both sides,neither of which distinguished itself in
the debt limit death dance.House Speaker John Boehner, aseasoned, respected veteran ofCapitol Hill battles, seemedpoised to strike a deal withPresident Obama that offered long-term benefits forour country and its economy.But he couldn’t convince hisstrident Tea Party wing, many ofwhom were elected on the “notaxes for any reason” mantra.
On the other side, liberal leaders of theDemocrats — such as Sen. Carl Levin ofMichigan — were mouthing the sameold, tired nonsense about how the “rich”aren’t paying enough taxes, and the Republicans wanted nothing more thanto gut services to the poor and elderly.
Because both our major parties and
their leaders have allowed their mostradical arms to hijack the politicalprocess, we have emasculated the veteranlegislators who know the value of com-promise after honest arguments over theissues at hand. Presidents of both partieshave presided over steady increases inAmerican debt because they can’t bringthemselves to say “no.”
Both should listen to Rob Portman,the U.S. senator from southern Ohio whois a respected former U.S. trade repre-sentative and federal budget director.He’s known as someone who’s reason-able and willing to compromise, yet whounderstands fully the perils we face as adebtor nation. He urges tighter spending,a reform of the tax code and smartchanges that would strengthen Medicareand Social Security for future generations.
Listen to him, Washington, and aban-don the shrill voices of the radical leftand right, of those whose only concern isgetting re-elected.
Now, perhaps more than ever, weneed real leaders, not political oppor-tunists, in our nation’s capital — for thesake of us all. ■
1100 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
We’ll seeT
rust and collaboration — two commoditiesthat at times have been in short supply in efforts to promote regionalization in North-east Ohio — will be among the linchpins
that will determine whether the wheels stay on JobsOhio, the nonprofit vehicle created by Gov.John Kasich to drive business development and jobcreation in the state.
We admit we haven’t been quick to endorse theconcept of turning over a big chunk of the economicdevelopment duties performed by the Ohio Depart-ment of Development to an organization that isn’tunder state control. One reason for our reticence isthat we haven’t found the department to be as plodding in responding to the needs of business asGov. Kasich has made it out to be, both before andafter his election last fall.
However, details that have emerged over the lastfew months of how JobsOhio would work have usinclined to give a try to this experiment in bringing aventure capitalist approach to a role that tradition-ally has been the province of the state bureaucracy.
We’re particularly intrigued by the idea of Jobs-Ohio contracting with six regional organizations —most of which already work in the economic devel-opment trenches — to serve as its primary eyes andears in their portions of the state. In Northeast Ohio,that job would be performed by Team NEO. It’s thebusiness attraction group that, in its early days, triedto play a bigger role in helping broker business expansion and retention deals, but eventually narrowed its focus because of resistance from municipal leaders and local chambers of commerceto Team NEO playing in their sandboxes.
Under the setup envisioned by Mark Kwamme,the venture capitalist whom Gov. Kasich wooed tohead JobsOhio for $1 a year, the six regional groupswould be the conduits through which deals wouldflow if the people behind them expect to securestate incentives such as loans and tax credits. Thatarrangement may not sit well with various mayorsand chamber heads, who have been accustomed tocontrolling the dealmaking process and working directly with state officials. And attempts to circum-vent it could provide an interesting test of the Kasich/Kwamme team’s commitment to its decentralized vision of how the economic develop-ment process should work.
For example, what happens when local civic leaders try to do an end-around their regional groupby bringing directly to the governor a big deal, suchas a potential headquarters relocation (think American Greetings), with hundreds if not thousandsof jobs at stake? Will exceptions be made to the JobsOhio rules for deals of a certain scale?
We raise the questions because history indicatesmany economic development officials at the grass-roots level may not embrace readily the change the Kasich administration is promoting.
It is going to take local officials trusting the regional intermediaries to look out for their best interests, then working together with them to makedeals happen, for JobsOhio to be the job creationtool the governor envisions. We’ll see whether itevolves as he, and we, hope.
FROM THE PUBLISHER
BRIANTUCKER
Fear of financial fragility not finished
PUBLISHER/EDITORIAL DIRECTOR:Brian D.Tucker ([email protected])
EDITOR:Mark Dodosh ([email protected])
MANAGING EDITOR:Scott Suttell ([email protected])
OPINION
BILLY BASSClevelandIt’s about time they cut somespending. What I cut was cableTV. Don’t know if I’m happy aboutthat. That’s just too much money for me. And I’ve cut outdriving as much as possible.
➤➤➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com
THE BIG ISSUE
CHRIS GAROFOLIPepper PikeI really haven’t cut anything. Ihaven’t had that much of a hit— yet.
LEAH HASLAGELakewoodI have started going out to eat a little less. That’s my bigindulgence. Instead of goingout three, four nights a week, Inow go out for one to two.
HANNAH DETECYoungstownI don’t cut on food because Ireally like food. But anythingshopping-wise (I cut), probablybecause I have too much, andI realize I don’t need that.
The U.S. Commerce Department announced that Americans cut their spending in June for the first time in nearlytwo years. What spending have you cut, what spending have you not cut, and why?
20110808-NEWS--10-NAT-CCI-CL_-- 8/4/2011 4:39 PM Page 1
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DIAMONDSThree Carats and Larger
company’s tax liability could rise bymore than $50 million based on current inventory levels — and asmuch as $60 million if those levelsclimb to where they were a few yearsago. The company would have 10years to pay, but that gives Mr. Eiselelittle comfort.
“That’s $60 million I don’t have toinvest in my facilities, to invest in mypeople and to expand,” Mr. Eisele said.
And Applied Industrial is notalone. The move would affect mostmanufacturers, along with their suppliers, retailers, car dealers andjust about any other business thatcarries an inventory. Applied Indus-trial and other businesses that wouldbe affected, along with their accoun-tants, are united in opposition to theproposed change.
“Add my name to the list of peoplewho don’t want to see LIFO go away,”said Suzy Hecht-Remer, owner ofMidwest Box Co., also in Cleveland.
Companies have been relying onthe LIFO accounting method foryears, often decades, in part becausethe federal government told them it wasan accepted method of accounting.Now the government might wantthem not only to stop the practice,but also to pay for using it in the past.That’s not fair, financial executivessay.
“It’s like a retroactive tax increase,”Mr. Eisele said. “We would have topay taxes on things that happeneddecades ago. It’s not like this moneyis sitting in my cash. It’s sort of like ifthey repealed the home interest deduction on your house and saidyou had to pay all that back, goingback to when you bought the house.”
LIFO-suctionUnder LIFO, a company uses the
price of the last piece of inventorypurchased or produced to determinethe cost of a product that’s been sold.
Think of it this way: If an oil company sells a barrel of oil for $100,which barrel does it sell: the last oneit pumped out of the ground, or theoldest barrel in its inventory?
The cost difference between thosetwo barrels can be great, just as it canbe for steel or widgets. If it’s the firstbarrel, and it cost the oil company$50 to produce, then the profit onthe sale is $50, which is the amountthat’s taxed. If the company sells thebarrel it just produced yesterday, itscost might be $95 — generating amuch smaller $5 profit on paper,and a much smaller tax liability withthe government.
The oil company and other busi-nesses tend to argue that they justsold their newest and most expen-sive piece of inventory, and their accountants says they have a validargument. After all, the oil companywill need to produce a new barrel ofoil to replace the one it just sold.
In times of high inflation, like the
some income it avoided in previousyears and decades, he said, but Jer-gens has grown so much since thenthat the amounts could be easilymanaged.
Still, Mr. Howard does not want topay that money or to lose a tool fromhis accounting tool box that he sayswould be handy if inflation spikesagain. And, like others, he thinks itwould be wrong to enact a changethat would affect some companiesbut not others, such as service busi-nesses that don’t rely on carrying inventory.
“It would be a disproportionateincrease in the tax burden on busi-nesses that carry inventory, andthat’s not fair,” Mr. Howard said.
‘Pressure for change’So far, though, the elimination of
LIFO is far from a done deal. Presi-dent Obama reportedly proposedthe idea most recently in early Julyduring budget negotiations, but legislation to do away with LIFO hasyet to be introduced.
Observers note, though, that thisis the second attempt by the Obamaadministration to kill the accountingmethod, following previous effortsby other politicians and financialregulators that pre-date the currentadministration.
“There’s pressure for change,”said Bober Markey’s Mr. Burak, whosaid he is watching the issue closelyon behalf of his clients.
But, Mr. Burak said there’s also resistance to that change, includingby some big companies, such asExxon Mobil, that may have billionsat stake.
“You better believe they’re goingto be spending some money to tryand make sure this doesn’t happen,”Mr. Burak said. ■
continued from PAGE 1
LIFO: Revenue shortage stirs movementHOW IT WORKS
1970s, LIFO was a useful tool forcompanies that were watching thecost of their goods and raw materialsskyrocket due to high inflation. Today, it’s called an “arcane” accounting method by no less thanthe president of the United States,who is only the latest in a long line ofpoliticians and financial pundits tocall for its abolishment.
This time, though, LIFO’s supportersare more worried. The government ishungry for tax revenue, and doingaway with LIFO could bring in $95billion over the next 10 years, TheNew York Times reports. Even the financial news outlet Bloomberg haspiled on, editorializing on July 15that “LIFO should be first tax reducerto go in a budget fix.”
Bloomberg argued that the UnitedStates should be in step with the rest of the world, which largely does not allow for LIFO accounting.Still others argue that cost-basis accounting, or a “first-in, first-out”(FIFO) method of accounting, moreaccurately would reflect a company’sreal profits.
Feeding timeBob Burak, partner and head of
the tax practice at Cleveland accounting firm Bober Markey Fedorovich, said about one-third ofhis clients use LIFO, and many ofthem would face new and significanttax liabilities.
“For a lot of my clients, it’s $3 million or $4 million in income theyhave to pick up and pay taxes on,”Mr. Burak said. “Auto dealers will behurt a lot, the oil and gas industryuses it quite a bit, so do manufacturers.It’s dispersed quite a bit among ourclients.”
Observers worry that LIFO mightbe especially vulnerable now becauseit presents an opportunity to raisetax revenues without raising actualtax rates.
“It’s all driven by revenue short-falls,” said Wes Howard, chief financial officer of Jergens Inc., a Cleveland supplier of tools and accessories to machine shops andgeneral industry. “Government at alllevels is looking for a buck.”
Mr. Howard said eliminating LIFOwould not cripple Jergens. The com-pany would need to pay taxes on
Last-in, first-out accounting, orLIFO, is favored by many companiesfor the tax relief it provides.
A company uses the price of thelast piece of inventory purchased orproduced to determine the cost of aproduct that’s been sold.
Companies arguing that they justsold their newest and most expen-sive piece of inventory, and their accountants says they have a validargument.
20110808-NEWS--11-NAT-CCI-CL_-- 8/4/2011 3:07 PM Page 1
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Hurt by foreign outfits?There’s cash for thatManufacturers can obtain up to $75K if affectedBy DAN [email protected]
Hurry up — the government stillis giving money to companies thatneed help fighting overseas compe-tition, but the cash might not last.
That’s the word from the GreatLakes Trade Adjustment AssistanceCenter, an entity at the University ofMichigan charged with managingfederal trade assistance for compa-nies in Ohio, Indiana and Michigan.
Manufacturing companies canreceive up to $75,000 in federalfunds if they can show that foreigncompetition has affected their busi-ness and that they will put up equalamounts of their own money, saidRuth Ann Church, the center’s projectmanager of sales and marketing.
“We can only work with compa-nies that have been hurt by imports,”Ms. Church said.
But applicants had better bequick. Because future money for theprogram is uncertain, it will not signup as many new companies as it hasin previous years.
“Most years, we take in about 16new companies,” Ms. Church said.“This year it will probably be morelike four.”
That’s in part so companies alreadyapproved for the program can con-tinue to tap into Trade Adjustment
Assistance money; those businessesinclude CIMA Plastics Group inTwinsburg.
The 60-employee plastic injectionmolder makes products for othermanufacturers under contract;among those products are containers,retail security tabs and electrical enclosures. It also made dispensersfor skin-care products before thatbusiness went to China, said CIMApresident and owner Jim Stewart.
CIMA turned to the assistancecenter for help. It has received$33,000 to date and used that moneyto hire consultants, including thedeveloper of a new product thatCIMA bought called the DynastySprayer. The device attaches to agarden hose and allows anythingfrom car wash fluids to bug killer tobe dispensed. CIMA hopes to sell thesprayer to the companies that makethose products, Mr. Stewart said.
Mr. Stewart concedes his companyprobably would have tried to do thedeal on its own. But it might nothave succeeded and could not havedone it as quickly without financialassistance from the center, he said.
Trade Adjustment Assistancefunds also can be used to hire out-side help to do market research,streamline production processes oreven introduce lean manufacturingstrategies, Ms. Church said. ■
20110808-NEWS--12-NAT-CCI-CL_-- 8/4/2011 2:38 PM Page 1
SMALL BUSINESSI N S I D E
AUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 13
15 QR CODESHELP REALTORSBETTER MARKETTHEIR LISTINGS.
■ Evan Morse, owner of Warrensville Animal Hospital since1972 and co-founder of the Free Animal Clinic of Cleveland, received the American Veterinary Medical Association’sPresident’s Award during the organization’s annual convention inSt. Louis.
The award “recognizes individuals and groups inside and outsideveterinary medicine who have made a positive impact on animal,human or public health, veterinary organizations and the profession,”according to the association.
Dr. Morse graduated from Tuskegee University and was oneof the first African-American veterinarians in Ohio. He specializes inexotic pets.
■ The Ohio Environmental Protection Agency issued a“covenant not to sue” to Cuyahoga County and Great LakesTowing Co. for a 2.18-acre property at 5300 Division Ave., clearing the way for site redevelopment under the state EPA’s Voluntary Action Program.
Issuance of the covenant completes the volunteers’ participationin the Voluntary Action Program, or VAP.
Following standards developed by Ohio EPA, the county andGreat Lakes Towing “hired a certified environmental professional toassess the site, identify any areas of concern and remediate soilcontamination on the property to a level that allows for commercialor industrial redevelopment,” according to the regulatory agency.
Cuyahoga County used a $2.1 million grant from the Clean OhioFund to help pay for the work, including installation of a bulkhead toprevent contaminated groundwater from migrating to the riverchannel.
Industrial operations on the property began in the 1890s, whenAmerican Shipbuilders Co. began manufacturing and repairingships, the Ohio EPA said. Great Lakes Towing is in the midst of anexpansion and recently installed a new crane system on the remedi-ated property.
■ Giant Leap Pictures, a local production company founded byCleveland native Kenny Latimer, is a few weeks away from wrapping up production on a feature-length film called “FallingBackwards.”
Mr. Latimer said it’s a “family-friendly drama” that tells the storyof a father who goes to extremes tosave his only son from drug addic-tion. It stars Cleveland nativeRobert Piper, who has appearedon “All My Children” and “RescueMe.”
The film eventually will appear intheaters in Cleveland, Canton and
New Philadelphia, Mr. Latimer said.A portion of the box office receipts from the film will go to Glen-
beigh, a nonprofit drug rehabilitation center in Rock Creek, Ohio,an affiliate of the Cleveland Clinic.
“That is my vision for this production company,” Mr. Latimersaid. “With every film we produce, a portion of the proceeds will goto a charity related to the theme of that movie. Should we becomeblessed to grow larger and make a substantial dent in the entertain-ment industry, it is our civic duty to inspire those we entertain andgive back to our communities.”
SHORT TAKESThese stories originally appeared in Crain’s Cleveland
Business’ Small Business Report, an email newsletter sentevery Thursday. To receive the report, visit www.CrainsCleveland.com/register and sign up.
MANY FINDCOLLABORATION
ADDS UPThese days, competitors learn that asking for
help can generate business, increase awareness
Rich Peterson received the call from an out-of-statecustomer who needed an order filled on the fly for1,000 plates and brackets.
The vice president of business development forAstro Manufacturing & Design said the Eastlake-based com-pany didn’t want to turn down the business, but all five ofits plants were slammed with work and unable to fulfill therequest.
“We called Tendon Manufacturing (in WarrensvilleHeights), and I said, ‘Can you help us out?’” Mr. Petersonsaid. “They called us back within 24 hours with a quote.”
Story by KATHY AMES [email protected]
See MATH Page 16
20110808-NEWS--13-NAT-CCI-CL_-- 8/4/2011 2:31 PM Page 1
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Guaranteed SBA loanshelp banks, businesses
Small businesses are the engine drivers of today’seconomy. In fact, 25 millionsmall businesses across the
United States employ more thanhalf of the country’s nongovern-ment work force and are the mainsource of new jobs.
While small businesses generatemore than half of our gross domesticproduct, obtaining business loansand lines of credit is difficult forthem.
Nonetheless, credit remainsavailable for small businesses thatprepare and plan, through banksand the U.S. Small Business Admin-istration, America’s largest single financial backer of small businesses.Together, the SBA and partnerbanks lend to small businessesthrough the 7(a) and 504 loan programs.
Both the SBA 7(a) and 504 programs are partnerships withbanks that grew as banks tightenedtheir credit standards for commercialand industrial loans and lines ofcredit during the recent downturn.
The 7(a) program guaranteesportions of loans that banks maketo small businesses, which can usethe loans for various purposes.
The SBA 504 program also guar-antees portions of loans to smallbusinesses, specifically providinglong-term, fixed-rate financing formajor fixed assets such as land,buildings and some types of equip-ment.
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within 24 hours after obtaining financial information from a borrower. Borrowers work with thePreferred Lenders, who work directlywith the SBA to obtain a guarantyon the loan that reduces the riskand allows for more favorable termsthan with conventional loans.
When the SBA guarantees a loanthat reduces the risk to the bank,and, in turn, allows the institutionto offer longer repayment terms tothe borrower, decrease the loanpayments and eliminate prepaymentpenalties (except for commercialreal estate financed through the 504program).
There are a number of benefits tothe SBA preferred lender program:
■ The SBA loan guaranty mini-mizes the bank’s risks.
■ It reduces the risk to the bankand allows it to provide loans itmight not otherwise risk, while enabling the bank to improve theborrower’s loan terms.
■ The bank’s financing leveragesthe SBA’s ability to assist small busi-nesses, facilitating investments thatbuild success and expand the taxrolls as well as enhance tax revenues.
■ SBA loans also benefit commu-nities by encouraging job develop-ment.
For 7(a) loans — the most common
kind of SBA loan — the maximumgross loan size is $5 million, and theloan guaranty is 75%.
Introduced during the 1980s, theSBA 504 loan program allows busi-ness owners to make significant investments in their businesses.The interest rate on 504 loans is fixedfor 10 years on equipment and 20years on real estate, compared totraditional small business loanswith 10- to 15- year terms for realestate, ending in a balloon payment.
Eligibility for both 7(a) and 504loans extends to businesses with anet worth of $15 million or less, andwith an average net income for thepreceding two completed fiscal yearsthat does not exceed $5 million.The borrower would have to exceedboth requirements to be deemedineligible for SBA financing.
The limit for 504 loans is $5 million for most applications, and$5.5 million for manufacturers andgreen projects.
In some cases, 504 loans also canbe used for refinancing existing debton loans, although some conditionsapply on refinancing existing debtthrough new SBA 504 loans.
As with all business loans, alender will review your credit scoresand other data, including the lengthof time your company has been inbusiness and its sales, revenues,profits and cash flow.
Simply put, all lenders need confi-dence that you are able to pay backthe loan.
Building an ongoing banking relationship with a business banking specialist who is a PreferredLender can be crucial for the success of your small business.
Working with a bank that offersspecial expertise and a range of financing options for businessescan help your company grow in difficult economic times or morefavorable conditions. ■
John Moshier is senior vice president,national SBA segment manager atKeyBank.
Budget offers credit for some investments
Alast-minute addition to therecent Ohio budget bill canprovide a substantial taxcredit for making invest-
ments in certain businesses operating in Ohio.
The credit equals 10% of a quali-fying investment in a business thatmeets the requirements describedbelow, and it is taken against the investor’s Ohio income tax liability.
The credit can equal up to $1 million for an individual, and formarried couples filing joint returns,a taxpayer’s spouse could make investments generating additionalcredits up to a separate $1 millionlimitation.
The credit cannot exceed an investor’s tax liability for the year,but any unused credit can be carriedforward for up to seven years.
Taxpayers eligible to receive thiscredit include individuals, trustsand estates. A pass-through entity,in which such an individual, estateor trust holds a direct or indirectownership or other equity interest,also is eligible, with the credit beingpassed through to the eligible owner.
The credit is provided for invest-ments in any form of business, including corporations, LLCs or part-nerships, in any industry, as long as
■ to acquire tangible personalproperty located in Ohio;
■ to acquire motor vehicles if themotor vehicles are purchased inOhio, registered in Ohio and arenecessary for the operation of theenterprise’s business;
■ to acquire real property locatedin Ohio and used in business;
■ to acquire intangible personalproperty, including patents, copy-rights, trademarks, service marks orlicenses used in business primarilyin Ohio; or
■ to pay compensation for newemployees of the business forwhom Ohio income tax must bewithheld, not including increasedcompensation for owners, officersor managers of the business.
Each of the acquisitions by thebusiness listed above must be heldfor either a two-year or five-yearholding period, based on when theinvestment is made.
The applicable holding period istwo years for qualifying invest-ments made on or after July 1, 2011,but before July 1, 2013, and fiveyears for qualifying investmentsmade on or after July 1, 2013. ■
Mr. Grassi is president of McDonaldHopkins LLC.
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certain other requirements are met.The key requirement for the Ohio
tax credit is that the investmentmust be in a business qualifying asa small business, defined as one inwhich either the assets do not exceed $50 million or annual salesare $10 million or less.
The credit is available only for investments in businesses with atleast 50 full-time equivalent employeesin the state of Ohio; or, if the busi-ness has fewer than 50 full-timeemployees, if more than one-half ofits employees are located in Ohio.
The final requirement is that thebusiness must use the investmentin one or more of the followingways in an amount at least equal tothe amount of the investment,within six months after receivingthe investment:
20110808-NEWS--14-NAT-CCI-CL_-- 8/4/2011 10:46 AM Page 1
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SMALL BUSINESS
Quick response codes offer Realtors rapid returnsAgents find buyers tobe more knowledgeableabout target properties
By JOEL [email protected]
Quick response codes areeliminating a lot of wastein the residential real estate business.
No, not of printed mate-rials, which agents still are churningout. Rather, the codes — includedon those printed materials and yardsigns — and other new technologiesare allowing agents to find customers.
The codes, which look similar to bar codes and are able to bescanned by any number of applica-tions for smart phones, such as theiPhone or Droid, can direct a househunter either to a specific home’svitals or an agency’s home page.That information instantly tells thepotential buyer whether they’re inthe right spot or whether a targethas two too many bedrooms.
“When people are at their desktopor laptop, we say they arebrowsers,” said Jim Bray, the president of Cutler Real Estate inCanton, with offices also located inStark and Medina counties. “Whenthey are out in the field, they arehunters, and brokerages must havemobile applications to take advan-tage of that.”
Mr. Bray said the company alwayshas monitored the circular ads inarea newspapers, and even atChristmas, there was little evidenceQR codes, as they’re known, werecatching on. Shortly thereafter,though, he noticed them poppingup in more places each week.
And recent reports suggest themarket will continue to grow: According to a June report by 3GVision, an Israeli tech companythat makes the i-nigma barcodescanner, second-quarter QR scansin the United States rose 39% overthis year’s first quarter, which followed a 181% surge over fourthquarter 2010.
Mr. Bray has a keen viewpointinto the technology, as he’s a partnerin Delta Media Group, a Canton ITprovider that focuses specifically onreal estate companies. Mr. Braysaid Delta hosts 30,000 agent websites and 500 company websites, and more are turningonto the QR technology.
Cutler first used the codes to direct customers to its home page,but in late April began tailoringthem to individual properties; itnow pairs a Cutler Real Estate “forsale” sign with a companion signfeaturing a large QR code scannablefrom a curbside car.
Talk to everyoneColdwell Banker Hunter Realty in
Beachwood has been using QRcodes in various capacities for ayear, said president Ed Dolinsky.Like Cutler, it started with fliers andpostcards and now has moved tofor-sale signs.
Additionally, Mr. Dolinsky saidthe brokerage has a text messageaddress — think “text FOR SALE to12345” — from which househunters without a smart phone andQR code reader can receive photos
of the specific property on theirphone.
“This way, you have everyonecovered,” Mr. Dolinsky said.“There aren’t any more wet piecesof paper flying around the proper-ties; instead, we have photos,videos and are keeping the buyerup to date in a new way.”
(For Cutler, having everyonecovered also includes people likeMr. Bray’s wife, who doesn’t textand doesn’t have a browser or aQR code reader; instead, she cancall a number and hear audio information about the property.)
At ERA Rath Realtors in Rocky
River, real estate agent Joe Rath —who also advises other agents ononline marketing — said linkingQR codes to videos of propertieshas been a big hit. He and otheragents there simply take shortvideos with their iPhones or Flipcameras, post them to YouTube oranother video-hosting site andconnect the footage with the cor-responding code.
“So we have open houses wherecustomers come and it’s like theyalready have walked through thehouse,” said Mr. Rath, whose company has been using the tech-nology for a year to 18 months.
“That’s the real benefit: Our agentshave quality leads.”
Whenever you’re readyHoward Hanna began creating
QR codes for its agents about ayear ago, said Barbara Reynolds,the company’s vice president ofglobal marketing and communica-tions. She said they’ve been a hitwith agents — who now have an-other tool to use — and potentialbuyers.
“People want to do their own information search,” Ms. Reynoldssaid. “We see buyers doing a greatdeal of research on their own, and
now they can do that more easilyand contact the agent when they’reready for the next step.”
Mr. Bray said agents who useDelta Media Group’s software cantrack when the QR code is activated,which offers them feedback to giveto their client, the seller. The technology also can help agents sellthemselves better to possibleclients, Mr. Rath said.
“Sellers usually interview two tothree agents, and these new tech-nologies are a perfect way as ayounger agent to sell yourself,” saidMr. Rath, who pitches potentialclients with an iPad presentation. ■
20110808-NEWS--15-NAT-CCI-CL_-- 8/4/2011 10:47 AM Page 1
Local manufacturers and othersmall enterprises that typicallycompete for the same or similarcustomer bases are discoveringthat collaborating in certain wayscan generate new business andraise awareness of their respectiveindustries.
“We’re competitors helpingeach other out,” Mr. Peterson said.“We’re learning each others’ capa-bilities, and we’re working togetheras an industry.”
These creative partnershipswere not common before the recession, said Kenneth M. Haffey,partner at business advisory firmSkoda Minotti in Mayfield Village.He noted that companies typicallyoperated at full capacity withhealthier staffing levels and had little or no need to work with theircompetitors to drum up additionalbusiness.
“People have figured out that 1plus 1 can equal 3,” said Mr. Haffey, referring to the many potential benefits of companiesworking together.
Building partnershipsThe impetus behind local manu-
facturers’ collaborative approachstems back to the Sept. 11 terroristattacks and the subsequent eco-nomic downturn, Mr. Petersonsaid.
Roger Sustar, owner of Mentor-based Fredon Corp., called a groupof area manufacturers together tostrategize on ways to collectivelymake manufacturing more viablein Northeast Ohio.
That initial meeting in early 2002drew about a dozen representatives.Now called the Alliance for WorkingTogether, the group has more than100 members who advocate for theregion’s manufacturing sector,said Mr. Peterson, the alliance’sco-chairman.
The recent recession only hasfueled manufacturers’ partnershipefforts.
Members not only promote theindustry’s capabilities but even refer business leads between eachother, as Astro and Tendon havedone.
The Alliance for Working Together also has spearheaded an effort to lure younger talent to thefield, a concern to manufacturersas skilled baby boomers retire.
The group and Lakeland Community College this fall willlaunch an associate of applied science certificate/degree program,with concentrations in manufac-turing, maintenance and repair,computer-aided drafting and automation, said Pat Hoyt, dean of workforce development and continuing education.
“We facilitate the manufacturersin helping them achieve theirgoals,” Ms. Hoyt said. “They’revery passionate.”
Manufacturers over a two-yearperiod raised about $200,000 thatwill be allocated for scholarshipsand programming, Ms. Hoyt said.
In harmonyAnother alliance, this one
between Mayfield Heights-basedStaffing Solutions Enterprises and Twinsburg-based IntegrityStaffing, materialized in May 2009as a way to attract new and existingcustomers during the recession.
The North East Ohio Talent Alliance was formed as a way to offer more services to both firms’clients, said SueAnn Naso, StaffingSolutions president.
“Once the recession hit, we hadto rethink the way we did business,”Ms. Naso said. “It’s difficult for oneagency on its own to address theneeds of every client. We createdthis partnership to address thoseneeds.”
Both operations have seen astrong uptick in their respectivejob placement businesses.
“We saw a spike in the tempbusiness in the second half of lastyear and it has continued,” shesaid. “Permanent placement hasstarted to pick up.”
The approach is similar to thatof three record stores — MusicSaves, Blue Arrow Records andThis Way Out Vintage Shop — inthe Waterloo Arts District in Cleve-land’s Collinwood neighborhood.
“We’re quite possibly the onlyplace in the country with three
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SMALL BUSINESS
Math: Companies rethink models continued from PAGE 13
record stores in a two-block area,”said Melanie Hershberger, co-ownerof Music Saves, who noted that demand for vinyl records has increased over the last decade.
Each store specializes in certaintypes of products, such as new music and independent rock andpop at Music Saves, but if a cus-tomer’s search for a specific titleturns up empty, store proprietorssend the client to their nearbyfriendly competitors.
“There’s enough business to goaround for all of us,” Ms. Hersh-berger said.
A toast to teamworkMeanwhile, 12 Northeast Ohio
breweries brewed up a plan in 2010to create a collaboration sampler toraise awareness about the Ohiocraft beer industry.
The concept surfaced on AprilFools’ Day, and even though gov-ernment red tape and distributionissues held up the 12-pack sam-pler’s release date — scheduled todebut for Cleveland Beer Week inOctober 2010 — the product hitshelves in April.
“There were 1,536 cases, and theysold out within hours,” at local grocery stores and other high-endspecialty beer shops, said John Najeway, co-owner of Akron-basedThirsty Dog Brewing Co.
Matt Chappel, co-owner ofCleveland-based Indigo Imp Brew-ery, which partnered with ThirstyDog Co. to create a smoked blacklager, noted that the idea wasn’t intended to be a money maker forbreweries.
“The brewers didn’t expect tomake money,” he said. “We lookedat it as sort of an advertising oppor-tunity, to raise awareness about the(craft beer) industry and get peopleto try new beers.”
The proceeds benefited the Jimmy Malone Scholarship Fund,which helps students attend college.
Mr. Najeway said the brewers arein talks about producing anothercollaboration sampler with thesame mission in mind.
“The point is to highlight Ohiocraft breweries first and foremost,to build awareness of great breweries in Ohio and to showcompetitors can work together,”said Mr. Najeway, president of theOhio Craft Brewers Association.“We’re not competing so muchagainst each other but getting people to convert to the craft beerindustry.”
Skoda Minotti’s Mr. Haffey saidhe thinks certain companies likelywill continue collaborating, even astheir business awakens from a recession slumber.
“I think there’s a long tail to this,”Mr. Haffey said. “We’re encouragedby business coming back, and peoplebeing creative in finding new waysto attract business.” ■
CLASSIC REALTY GROUP INC.500 E. Royalton Road, Suite 500,Broadview Heights 4414711925 Pearl Road, Suite 302,Strongsville 44136www.classicrealtygrp.comOwned by Susan R. Bradley, broker,and Frank Ferraro, manager, ClassicRealty is an independent real estatecompany serving Cuyahoga, Medinaand Summit counties.The firm employs 15 agents.Phone 440-526-4200Fax [email protected]
MARKET GARDEN BREWERY & DISTILLERY1947 W. 25th St., Cleveland 44113marketgardenbrewery.comThe Market Garden Brewery & Distillery is a 400-seat establishmentlocated in the Ohio City entertainmentdistrict. The brewery and distilleryserves brewmaster Andy Tveekrem’scarefully crafted brews and chefMichael Nowak’s artisinal brewpubspecialties, from scotch egg with garlic sausage, mustard and hotsauce to authentic Mexican tacos.Market Garden features spaces forprivate events, an outdoor beer garden, two bars, a sidewalk patioand soon will have a rooftop bar. Thebrewery is open 364 days a yearfrom 4 p.m. to 2 a.m.Phone 216-621-4000
SELECT HOME REFERRALS LLC 533 E. 315th St.Willowick 44095www.selecthomereferrals.comSelect Home Referrals LLC, ownedby Rick D’Alessandro, is a home improvement referral network of Northeast Ohio contractors and homeservice professionals. Referral ser-vices, provided free to the homeowner,provide links to home improvementprofessionals in various fields. Service providers are pre-screened,licensed and insured.Phone/fax 440-944-0675 [email protected]
TOTAL MANAGEMENT 30 Brandon CourtMoreland Hills 44022www.totalmanagement.comCo-founded by CEO Justin Pearl andJonathan Goler, Total Managementoffers to the public cloud-based property management software,which includes tools to manage large-and small-scale residential and commercial properties. Key featuresof the software include a duplicate invoice catcher and built-in live chat [email protected]
To submit a new business, send theinformation listed for each businessabove to Amy Ann Stoessel at astoessel@ crain.com.
“We’re encouraged bybusiness coming back, andpeople being creative infinding new ways to attractbusiness.”
– Kenneth M. Haffeypartner, Skoda Minotti
20110808-NEWS--16-NAT-CCI-CL_-- 8/4/2011 10:48 AM Page 1
Andrew J. Passen has helped guide Forest City Enter-prises Inc. through some significant times of change.
Indeed, Dr. Passen this summer helped managethe transition of the company’s leadership to the first
CEO, David LaRue, not related to the founding Ratner family. The HR leader, who joined the company in 2006, also
assisted in working through the first signif-icant layoffs in the company’s history.
Dr. Passen worked to secure severanceand outplacement assistance benefits for those affected, while also guiding a detailed plan to counsel those who remained and to maintain the company’s familial culture.
“In the last five years, the real estate industry, much like our economy, hasbeen through the ringer and back. Today,
Forest City stands strong, and one of the main reasons is Andrew Passen,” the nomination said.
Dr. Passen ultimately helped transition Forest City’s human resources department from a rules-based, opera-tionally focused personnel department to one that providesconsultative advice and is intricately involved in business directions.
He plays a role in strategic planning efforts, is involved inexecutive committee discussions and meetings and has takenon such tasks as updating job descriptions and overhaulingthe company benefits package.
Additionally, he also serves as the company’s executivesponsor of the St. Martin de Porres High School corporatework-study program.
“As a constant voice and driving force for positivity, inno-vation and continuous improvement, Andy Passen demon-strates the leadership skill, human capital expertise and com-munity/industry involvement worthy of being named humanresources executive of the year,” the nomination said.
Tom Hopkins is credited with leading many of thestrategic initiatives that have changed the way thatThe Sherwin-Williams Co. recruits, develops and pro-motes its employees, ultimately improving the caliber
of talent and employee retention rates at the company.“If ever there was a person ideally suited to lead the
human resource practice of an organization, large or small,Tom is that person,” the nomination said. “He was born withgreat intellect, but his deep sense of fairness and compassion,his unwavering moral principles, his initiative and strongwork ethic are products of his life experience.”
For instance, Mr. Hopkins tackled the issue of turnover atthe company’s more than 4,000 specialty paint stores and industrial coatings branches in part by designing and launchinga management training program, recruiting on more than 400
college campuses. The 29-year Sherwin-Williams veteran
also has worked to identify employees fromwithin the organization who exhibit leader-ship potential and to develop a formal succession planning process. Sherwin-Williams’ Emerging Leaders Initiativeworks in collaboration with Case WesternReserve University’s Weatherhead Schoolof Management to offer three-week inten-
sive leadership courses.“Tom has, arguably, led Sherwin-Williams through the
most turbulent manpower environment in the company’s history,” the nomination said. “During his tenure, we have become a significantly more global enterprise with a signifi-cantly more diverse work force. We have navigated an increasingly complex regulatory environment. We have embraced new technology and contained rapidly escalatinglabor and benefit costs. We have been a pioneer in work forcesafety and expanded our commitment to give back to thecommunities in which we live and work.”
Human resources executive of the year — public companies
STEVE BECKERsenior vice president of human resources
Sterling Jewelers Inc.
THOMAS E. HOPKINSsenior vice president of human resources
The Sherwin-Williams Co.
ANDREW J. PASSENexecutive vice president
of human resourcesForest City Enterprises Inc.
Steve Becker was brought on board at Akron-based Ster-ling Jewelers Inc. to make human resources a strategicbusiness partner.
And since starting at Sterling in 2005, Mr. Becker has done just that, facilitating efforts such as a new strategicvision, enhanced leadership and systems development,evolved communications strategies, increased community
involvement, and preferred employer status.
“Through his leadership, the functionhas been reinvented from a traditionalpolicy management and staffing functioninto a critical partner in company deci-sions and strategic initiatives,” the nomi-nation said. “Steve has given human resources an elevated strategic seat in theorganization.”
Mr. Becker — who has earned a place on Sterling’s execu-tive and budget review committees and is chairman of thecompany’s social, ethical and environmental committee — iscredited with developing a human resources strategy that hastransformed the organization.
Programs credited to Mr. Becker and his department include a careers website; a new hire orientation; leadershipand executive development programs; and an evaluation ofthe company’s rewards program, which encompasses all elements of compensation, benefits and wellness.
“Steve’s vision and strategic approach has enabled humanresources to add value to the business through focusing onSterling’s most critical asset —our team members,” the nom-ination said.
Becker
Hopkins
Passen
They’re the people behind thepeople.
Northeast Ohio’s human resources specialists and execu-
tives are not only managing the workforces of area companies, they are coordi-nating everything from training and incentive programs to employee recruiting.
For the first time, Crain’s ClevelandBusiness is honoring HR professionalswho have helped build their companieswith a strategic combination of the bestpeople, talent, development and culture.
In all, 33 Archer Awards finalists wereselected in nine categories: human resources executive of the year, publiccompany; human resources executive of theyear, private company; human resourcesexecutive of the year, nonprofit; innova-tion award; lifetime achievement award;rising star, public; rising star, private; rising star, nonprofit; and citizenship.
All profile information was gleaned fromthe nomination forms.
Judges for the event were Ron Alsop, editor, Workforce Management; Rob
Gilmore, partner, Kohrman, Jackson &Krantz; Sindy Warren, Warren & HaysLLC; and Paul Meshanko, managing partner, Edge Learning Institute of Ohio.
In choosing finalists and winners,judges took into consideration a variety ofqualities among nominees, includingleadership, best practices, achievementsand community involvement.
Winners will be announced at an eventfrom 5:30 to 8:30 p.m. on Wednesday, Aug.17, at LaCentre Conference and BanquetFacility in Westlake.
20110808-NEWS--17-NAT-CCI-CL_-- 8/4/2011 10:48 AM Page 1
1188 CRAIN’S CLEVELAND BUSINESS AUGUST 8 - 14, 2011
PERSONA L BUSINESS COMMERCI A L W EA LTH
Your great workmerits recognition.
Congratulations to all the finalists for the 2011 Archer Awards.
Best of luck from FirstMerit.
firstmerit.com
Human resources executive of the year — private companies
DEBBIE CONNELLYvice president of human resourcesHyland Software
Debbie Connelly cut herteeth at Hyland Softwarebeginning in 1997, whenshe was the only human
resources representative at the 30-employee company in Westlake.
Fourteen years later, Ms. Connellyhas directedboth the depart-ment and thefirm’s growth.The 16-memberhuman resourcesdepartment isthe commandcenter for about1,200 global employees.
“From the beginning, the focuswas on bringing in people whowanted to grow and learn with Hyland, creating a workplace culture where people wanted towork toward a common goal andmake Hyland a success, while
building a clear message of whatthe Hyland Software brand is,” Ms.Connelly is quoted as saying in thenomination.
She fostered Hyland’s philosophyas a people-driven, employee-moti-vated operation.
To build the company’s rosterwith the right kind of people, Ms.Connelly developed a recruitingprocess that entailed attracting theright type of candidates to Hylandand creating an environment in
which staffers would be committedto working.
She spearheaded the HylandSoftware Career Expo in late March,which attracted more than 800 people in four hours, to fill morethan 200 open positions.
Ms. Connelly also continues tofind better ways to garner construc-tive employee feedback and overthe past two years led career devel-opment and wellness initiatives tohelp achieve those goals.
She has built the Hyland brandthrough outreach efforts with localcolleges and universities. Ms. Connelly spearheaded the effort toincorporate the company into theRegional Information TechnologyEngagement Board, which is com-posed of local IT executives whostrategize on, among other things,increasing the quality and quantityof IT students graduating fromNortheast Ohio colleges. ■
Connelly
LAURA LEILIdirector of
human resourcesTMW Systems Inc.
TINA MYLESdirector of human resources
InfoCision Management Corp.
It can be challenging to identifyand attract employees withvery specific skill sets to a particular operation, but Laura
Leili has just the knack.Ms. Leili has led the way to recruit
qualified applicants to Beachwood-based TMW Systems Inc., a trans-portation service software company,
that currently employs 425individuals. The firm hasincreased its employeebase by 50% since 2007,when she joined the company.
“Laura Leili has a rareand valuable talent whichis to fully and clearly com-municate with ease to all— from our board members andemployee Ph.D.s to our entry-levelemployees and interns,” accordingto the nomination.
Ms. Leili has navigated the company through five acquisitionsin four years by working with theexecutive team to ensure employeesare informed and concerns are addressed immediately to mini-mize any interruptions on opera-tions.
She monitors compensation
trends and advises thefirm on how to remaincompetitive. TMW thisyear has added 56 newemployees in which somestrategic placement wasrequired.
She encourages employees to advancetheir education by taking
advantage of the company’s tuition reimbursement programand coaches managers to furtherdevelop their respective staffs. Ms.Leili also has introduced healthand wellness initiatives.
Her efforts extend beyond theoffice, too. Ms. Leili also guides anannual food drive for hunger centers near company offices hereand in Raleigh-Durham, N.C.; Dallas; Indianapolis; and Vancouver,British Columbia. ■
Leili
Tina Myles was tasked withrestoring order to InfoCision’sfragmented human resourcesdepartment when she
joined the Akron-basedteleservices company in2009. Her impact was immediate.
Ms. Myles has champi-oned corporate initiativesthat include improvingworkplace diversity, employee orientation andtraining, and fosteringcommunity partnerships.
She oversees a staff of 26, whichis responsible for 4,200 InfoCisionemployees.
Ms. Myles’ involvement with theGreater Cleveland PartnershipCommission on Economic Inclu-sion extended into the workplace,where she instituted programs andpolicies that recognize and cele-brate each employee’s background.InfoCision currently is composed ofmore than 70% minorities and females, according to the company.
Ms. Myles also helped cultivaterelationships with other communityorganizations to expand InfoCi-
sion’s pool of diverse candidates.The company entered into a part-nership with the Cleveland SightCenter to provide training and
jobs for blind and visuallyimpaired individuals.
She also improved theemployee orientation program by greeting newhires with welcomebaskets at their home,reimbursements for orien-tation-related travel ex-penses and a cake at theend of a three-day initia-
tion. Since the program was imple-mented, employee 90-day retentionrates increased to 90% from 60%.
Ms. Myles’ fiscal discipline also hashelped the company save money,with minimal impact on staffinglevels. In 2008, InfoCision’s cost-per-hire was $267; this year’s cost-per-hire was reduced to $80.
She also discovered that someemployees were not abiding by cer-tain tuition reimbursement policiesand guidelines, which resulted in anoverpayment of more than $30,000.Those policies since have been fol-lowed, yielding big savings. ■
Myles
Thank you for all you do – we areproud of your work and appreciateyour many contributions!
Leading provider of home health careand home intravenous therapies in Ohio.
Locations:Cleveland, Columbus, Cincinnati
www.csi-infusion.com • www.csi-network.com
Congratulations toKerensa Parke,finalist for the 2011Rising Star Award– private sector.
20110808-NEWS--18-NAT-CCI-CL_-- 8/4/2011 2:53 PM Page 1
AUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 19
CONGRATULATIONS!Penske Cleveland is very proud of Farrah Board for her selection as a finalist in the
Crain’s Cleveland Business Archer Awards Rising Star Category.
Farrah BoardHuman Resources Executive - Penske Automotive Cleveland
NOW HIRING FOR ALL POSITIONSEmail Farrah Board at [email protected]
Penske Automotive GroupA FORTUNE Most Admired Company
Human resources executive of the year — nonprofitsTOM
CORNHOFFdirector of
human resourcesCity of Solon
Tom Cornhoff’s job becameeven more challenging aftermajor cuts to local govern-ments were passed in Gov.
John Kasich’s new biennial budgetpassed by theOhio Legislature.
So far, the cityis plowing ahead:Last year, Mr.Cornhoff man-aged contractnegotiations fornine bargainingunits, with eightsettling without
arbitration. He also found ineffi-ciencies in the city’s Waste WaterTreatment Plant and saved Solon$348,000 by returning it to a self-sustaining state.
Mr. Cornhoff also has made automating HR functions a priorityby implementing new technology.He commissioned a wage study to
make sure the city was competitivein compensation, and he estab-lished a health insurance committeeto analyze whether employees wereproperly covered. Medical Mutualchose Solon as its model communityfor wellness initiatives.
Additionally, he persuaded cityofficials to self-insure workers’compensation, which has savedSolon hundreds of thousands ofdollars.
Mr. Cornhoff’s nomination alsoincluded a fun quirk: He possessesa knack for calming angry citizensat City Hall meetings.
“What sets Tom apart … is hisability to manage difficult and sen-sitive employee issues,” said SolonMayor Susan Drucker. ■
Cornhoff
MICHELLE MEERSdirector of
human resourcesPlayhouseSquare
Foundation
In her 23 years at the helm ofthe department Michelle Meerscreated, PlayhouseSquare’semployee roster has grown
more than 200%, to 320 employees.Half have beenemployed formore than fiveyears, while one-quarter havebeen employedthere at least 10years; the foun-dation’s reten-tion rate ishailed as one of
the highest nationally in the per-forming arts industry.
Ms. Meers has earned nationalplaudits for the HR internship pro-gram she developed, with formerunderstudies now in managementpositions at organizations rangingfrom Medical Mutual and Conti-nental Airlines to the Rock and RollHall of Fame Museum.
A promote-from-within policyhas boosted staff morale, and Ms.Meers implemented a wellness program, bringing in local expertsto advise workers on health carebenefits and finances. Employeesalso can nominate fellow employeesfor awards, while PlayhouseSquareoffers free monthly group birthdayparties and summer hours fromMemorial Day to Labor Day.
Ms. Meers also is an accom-plished actress, performing at localstaples such as the Dobama andHuntington theaters. ■
Meers
DENISE SMUDLAdirector of human resources
Jennings Center for Older Adults
Denise Smudlastarted at the Jen-nings Center in2004 with a focus
on improving recruitmentpractices and thus improvingretention. The results areevident: Jennings reportsthat its first-year turnoverhas decreased by nearly75%, while overall turnover has declined 58%. That has allowed the
An adviser from Towards Employment is on site eight hoursper week to counsel employees onwork-life support and career devel-opment, while the center also hasenhanced recognition programs,leadership training and an employeeassistance program.
Ms. Smudla chairs the city ofCleveland Healthcare Sector AdvisoryCouncil and directs the REACH Pro-ject, a long-term care work force de-velopment project in Cuyahoga andMahoning counties. The three-yearprogram — aimed at addressing “hir-ing and retaining talented staff nec-essary to fulfill the growing demandfor their (long-term care) services”— is funded by $1 million in grantsfrom foundations in each county. ■
center to realize a 74% decline in advertising expenses.
Practices Ms. Smudlaimplemented to achievethose savings includescreening tools such asbehavioral interviewing,while a customized orien-tation program allows
new hires the appropriate time tobecome acclimated.
Smudla
20110808-NEWS--19-NAT-CCI-CL_-- 8/4/2011 2:37 PM Page 1
2200 CRAIN’S CLEVELAND BUSINESS AUGUST 8 - 14, 2011
Congratulations to the inaugural class of Archer Award finalists!
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Innovation
BILL BUSBYvice president of human resourcesUS Endoscopy
CLEVELAND AIRPORT SYSTEM
Before 2007, when it imple-mented a new businessplan, the Cleveland AirportSystem did not have a
strategy for managing and evaluatingits 412 employees.
The Cleveland Airport systemaimed to have “the right peoplewith the right skills in the rightplaces at the right times,” thenomination said. As such, the air-port system, which includes Cleve-land Hopkins International Airport
and Burke Lakefront Airport, begana talent management program thathas reduced new-hire training time,curtailed employee turnover andincreased training opportunities.
As a result, employee retentionhas increased, and the internalpromotion rate has risen from 22%
in 2008 to 27% in 2010. Training opportunities also were offered toall employees, up from 30% in 2007.
“I have worked with the airport14 years, and this is the first time wehave had the opportunity to partici-pate in leadership development,”said Jean Simmonds, acting con-cessions and properties manager,in the nomination. “We never had aprogram geared toward developingthe administrative and leadershipstaff, other than some computertraining here and there.”
Along the way, the AirportsCouncil International-North Americanamed Hopkins the “Most Im-proved Airport in North America.”■
US Endoscopy was strug-gling with a high turnoverrate during a time whenthe Mentor medical device
company was gearing up for agrowth spurt.
Human resources vice presidentBill Busby needed to find a way toretain as many existing employeesas possible to keep personnel replacementcosts under control.
Indeed, US Endoscopyadded 50 employees in2010, bringing its head-count to 375, and it islooking forward to addi-tional growth with theopening of a building inMentor later this year.
“It is difficult to estimate theamount of money Bill has saved US
Endoscopy because ofthese efforts,” the nomina-tion said. “But it is safe to say that it has been hundreds of thousands ofdollars.”
Mr. Busby, who joinedthe company in May 2006,focused on the company’sproduction and sales teams.
The company studied what performance factors it should use
to evaluate employees and built aset of benchmarks that would beused to predict most effective employees and what to look for innew hires.
Mr. Busby then was able to improve the interview process bytraining managers on hiring tech-niques. He also created a leadershipdevelopment program, improvedcompensation packages and evenincreased employees’ days off,which was especially important forhourly employees.
As a result, turnover rates tum-bled. Turnover for production employees dropped to 8% from55% three years earlier. The salesforce turnover effort began a yearlater and sales force turnover hasdropped to 16% from 35% after twoyears. ■
Busby
HAROLD HARRISONdirector of human resources
and labor relationsCleveland Metroparks
As JumpStart’s vice president ofentrepreneurialtalent, Robert
Hatta helps young, high-growth companies createjobs and then matchesthem with the talent thatwill keep those companiesgrowing.
He’s only been onthe job ninemonths, butHarold Harrison
already has identified andstarted to tackle an area ofcritical concern for hisemployer, the ClevelandMetroparks. Mr. Harrison
ROBERT HATTA
vice president of entrepreneurial talent
JumpStart Inc.
“Robert has developed and implemented innovative talent programs that meet the specificand unique needs of our region’sjob creators,” the nomination said.
On behalf of JumpStart, Mr. Hatta is credited with helping resource-strapped startups to accelerate their growth in a varietyof ways, including by helping themrecruit and retain the top talent.
“Robert is also a thought leaderin the region when itcomes to entrepreneurialtalent,” the nominationsaid. “He blogs regularly,and entertainingly, oneverything from big pic-ture trends in entrepre-neurial hiring to advice forstartups, to things jobseekers should consider.”Hatta
is forecasting that nearly300 of the park system’s682 full-time employeeswill retire by 2020.
To prepare theMetroparks, Mr. Harrison isdeveloping a managementtrainee program to identifyhourly employees with theHarrison
20110808-NEWS--20-NAT-CCI-CL_-- 8/4/2011 2:36 PM Page 1
potential to move up so he canbroaden their awareness of the opportunities in the system. Andonce he identifies future managers,he plans to have them sit in on senior management meetings to geta taste of the how they can growwith their employer.
Mr. Harrison’s approach is “thereis plenty of opportunity,” the nomi-nation said.
In addition, Mr. Harrison is workingto automate hiring processes to reduce the time to hire and bolstering compensation and benefits packages, within budgetconstraints, to make the Metroparksan attractive place to work. ■
AUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 21
To this year’s inaugural nominees, finalists and winners...
Congratulates you for “Hitting the Mark”
We are pleased to recognize Northeast Ohio’s 2011 best in class Human Resources Leaders!
Howard & O’Brien Associates is an award-winning, retained executive search firm specializing in senior-level recruitment. Candidate selection is based on leadership philosophy, chemistry, and management
style to effortlessly mesh with our clients’ cultures to provide the “perfect fit”.
Lori Hedrick has made signifi-cant contributions in thearea of talent acquisition forthe 75-year-old marketing
and communications firm whereshe works — “most notably through
the early adop-tion of social recruiting andcommunitymanagement,”the nominationsaid.
“Lori has alongstandinghistory of chal-lenging the
boundaries of her discipline. Always aligned with business out-comes and driven by a passion tohire only the best in the business,Lori employs creative solutions thatgo beyond the traditional scope ofhuman resources and continuallyexceed expectations,” the nomina-tion said.
Ultimately, Ms. Hedrick shiftedthe thinking that talent recruitmenttakes place on job boards — rather,it’s about building relationshipsand matching values.
She also has invested her own time sharing knowledge and experi-ence in this area within various professional networks, as well aswith members of Northeast Ohio’sbusiness community and nonprofitsector.
“Lori has rewritten the play-book on talent acquisition by herfuturistic and social approach, filling the agency with the rightpeople at the right time and devel-oping relationships and connec-tions in a manner that is natural, effortless and much more user-friendly than the ways of the past,”the nomination said. ■
LORI HEDRICK
vice president of human resourcesMarcus Thomas
LLC
TONI MERLENOdirector of human resources
and operational servicesKendal Northern Ohio,
Kendal at Oberlin/Kendal at Home
The right staff can be criticallyimportant to any entitycharged with something asimportant as caring for the
elderly, and Kendal credits ToniMerleno with helping the organiza-tion get the right people in order todeliver a high level of care and
services.Ms. Merleno is the “consummate
human resources professional,” according to the nomination, havingmade a significant difference in thepast decade in the growth and suc-cess of Kendal Northern Ohio,which includes Kendal at Oberlin,
Kendal at Home and mostrecently Senior Indepen-dence.
“She has helped our organization attract thevery best and most com-passionate staff to provide care and services to seniors residing in sevencounties throughoutNorthern Ohio,” the Archer Awardsnomination said. “She has been anexcellent model, resource andfriend for more than 240 staff whovalue Kendal as an employer ofchoice.”
Ms. Merleno’s efforts are brought to life by consistent lowturnover and individual staff devel-opment. Those efforts also include
Hedrick
performance manage-ment with rewards forgoals met each year, high employee satisfaction asgauged regularly by out-side surveys, competitivewages and benefits, and afocus on employee andfamily wellness.
Her employer not onlycredits her with recruiting the righttalent, though.
Kendal also credits Ms. Merlenowith making the company a betterand more rewarding place to work,improving the productivity of all of its employees and improvingemployee health — all for the betterment of the seniors served byKendal. ■
Innovation
Mr. Hatta also is part of GlobalCleveland, a welcome center for foreign-born residents of Cleve-land.
Additionally, through JumpStart,Mr. Hatta hosts CEO mixers, atwhich the CEOs of JumpStart’sclient companies can gather toshare ideas and talk about talent attraction and best practices. ■
Merleno
20110808-NEWS--21-NAT-CCI-CL_-- 8/4/2011 2:57 PM Page 1
2222 CRAIN’S CLEVELAND BUSINESS AUGUST 8 - 14, 2011
© C
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6050 OAK TREE BLVD., STE. 500 • CLEVELAND, OH 44131
216.447.9000 • www.cbiz.com
CBIZ Congratulates
Leonora Yurichak on her nomination as an Archer Award Rising Star
• FINANCIAL SERVICES
• EMPLOYEE MANAGEMENT SERVICES
Congratulations, Kara Serger!
Vice President of Human Resources Eliza Jennings Senior Care Network
2011 Archer Awards Rising Star Finalist
For exceptional leadership in the recruitment and development of
our most valuable resource, our employees.
The outstanding talent and performance
of our dedicated staff makes us a recognized leader in the provision of not-for-profit
care and services to older adults on Cleveland’s West Side.
InnovationKATHYPUSKAS
human resources director
Jergens Inc.
Cartoon characters are helpingKathy Puskas make sureemployees at Jergens Inc.learn more about the bene-
fits and wellness initiatives availableat the Clevelandcompany.
Many of the 175people who workfor the maker ofindustrial toolsand supplieshave had a ten-dency to ignoreinformation the
company sends out on those topics. Thus, Ms. Puskas decided she
needed to do something to get theirattention. With the help of humanresource consulting firm FindleyDavies Inc., which has a Cleveland
office, Jergens teamed up with nationally syndicated cartoonistand Cleveland-area resident JennyCampbell, who then helped createthe mascots “Chip” and “Scrap.”
Now, twice a month, a new cartoon featuring the two charactersappears on big monitors through-out the plant and in the email
in-boxes of salaried employees.Scrap doesn’t take the time to learnabout his benefits and generallyleads an unhealthy lifestyle. Chip,meanwhile, pays attention and isbetter off for it.
The campaign seems to be working so far, since employeeshave been asking questions abouttopics in the cartoons, Jergens chieffinancial officer Wes Howard saidin the nomination.
Ms. Puskas — who also created a“spread the word” campaign inwhich benefit information is sentdirectly to spouses and dependentson Jergens plans — keeps her eyeout for new ways to explain benefitswhile also bringing “a fresh spin tohealth and wellness,” Mr. Howardsaid in the nomination. ■
ZACHARY SIMON
director of global executive talent
acquisitionEaton Corp.
Most big corporationsturn to othercompanies tohelp them
conduct searches for high-level executives.
Because of the efforts ofZachary Simon, however,Eaton Corp. of Clevelandnow conducts many ofthose searches itself,which has helped the company find
better candidates faster and at alower cost.
Eaton has built a departmentthat replicates the external searchfirm model. In 2007, the companycommitted resources to building anin-house executive search depart-ment that serves the entire corpora-tion in all regions of the world.
When Mr. Simon joined the diversified manufacturing companyin 2007, he’d already helped KeyCorpbuild out its own in-house executiverecruiting team. Prior to joining Key,Mr. Simon spent six years at execu-
tive search firm Christian& Timbers, which now isknown as CTPartners.
So far at Eaton, Mr. Simon’s seven-memberteam has conducted exec-utive searches in regions allover the world, coveringmost functions withinEaton. The team also has
recruited 10 executives to North-east Ohio.
“(Mr. Simon) and his team haveestablished a full-cycle recruitingmodel that identifies, attracts, as-sesses and acquires senior level tal-ent and also provides a consultativeassessment of candidates, the mar-ketplace and at times, competitiveintelligence,” the nomination said.
The team has helped the companysave more than $3 million over thepast four-plus years, based onEaton’s estimates, according to thenomination. ■
Puskas
Simon
PATRICIASTUMPP
senior vice presidentof human resources
Invacare Corp.
After beingnamedseniorvice
president of human resourcesin September2009, it didn’ttake PatriciaStumpp long tostart having a big impact on Invacare Corp.
A few months after getting the
Stumpp
JANETKENDALL
WHITEhuman capital
management leaderHuman Arc Corp.
20110808-NEWS--22-NAT-CCI-CL_-- 8/4/2011 2:34 PM Page 1
AUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 23
www.forestcity.net
Congratulationsto Andy Passen and all the finalists forThe 2011 Archer Awards for achievements in Human Resources.
Thank you for your leadership and skill in building
Northeast Ohio business talent, capabilities
and culture.
promotion, Ms. Stumpp took on aleadership role in an effort to trans-form the Elyria-based wheelchairmaker from a loosely connectedgroup of companies into a unifiedcorporation.
Ms. Stumpp and Invacare presi-dent and CEO Gerald Blouch, whoat the time was the company’s pres-ident and chief operating officer, ledthe effort to redesign the company’smanagement structure. Some of thechallenges she faced were related tostaffing: For instance, she recruitedan executive to lead global productdevelopment and another to headup operations and supply chainmanagement — functions previ-ously handled on a regional basis.
Ms. Stumpp also led the organi-zation design and communicationsfor the initiative, ensuring that it“transformed from words on paperinto a live strategic action plan,” ac-cording to Mr. Blouch. ■
Lifetime AchievementROBERT
MADISONpresident
Madison & Associates
Those who know RobertMadison’s tenure in the human resources fieldspeak to his knowledge, and
his readiness to share it.“Mr. Madison is the consummate
willing spirit,” wrote Morris W. Beverage Jr., president of LakelandCommunity College, in a letter of
recommendation. “I have neverknown him to turn his back on anindividual in need.”
Prior to starting his own consultingfirm, Mr. Madison led human resources activities world-wide for the internationalcompany, ISK BiosciencesCorp. in Concord. Heachieved recognition forISK for a “unique invest-ment and profit-sharingplan,” and also establisheda college recruiting programthat became recognized asa model within the industry.
“Bob Madison was a forwardthinker and presaged many devel-opments in HR before they becamecommon,” the nomination said.
It’s not only within his chosen
field that Mr. Madison has receivedcredit and accolades: He is the recipient of the Silver Beaver awardfrom the Boy Scouts of America, anaward for adult leaders who’ve
made an impact on youth.He’s involved in the So-
ciety for Human ResourceManagement and is a vol-unteer counselor andtrustee for Hudson JobSearch. Mr. Madisonteaches, too, at LakelandCommunity College.
“Having a heart for peo-ple and a keen desire to help them... his accomplishments demon-strate as much concern for the la-borers in Mexico or Spain as for theexecutives in the corporate suites,”the nomination said. ■
Madison
CHRISTOPHER MAURERexecutive vice president
and director of human resourcesFirstMerit Bank
Christopher Maurer’shuman resourcescareer hasspanned more
than 40 years, involvedhim wearing a number ofhats and placed him inboth union and nonunionenvironments.
And his dedication tothe field is evidenced not only in histenure, but by his involvement in
professional organizations,including the Stark CountyHuman Resources Associ-ation, with which he hasbeen involved for 30 years.
Today, Mr. Maurer leadshuman resources for aFirstMerit bank that’s on agrowth spurt and where hehas worked for 21 years.
“During his career, the bank has
Maurer
See MAURER Page 24
One reason Janet KendallWhite’s colleagues applaud her is because she applauds others.
In keeping with Human ArcCorp.’s aim to be a “Great Place toWork,” Ms. White led the way for
the implementa-tion of a corpo-rate recognitionprogram calledApplause.
Implementedabout six monthsago, Applause, ahigh-tech, points-based program,has had “phe-
nomenal” impact. More than 6,330individual recognitions were givenin the first quarter alone, and 100%of Human Arc associates receivedrecognition during that time.
Ms. White also has innovated todo more with less, particularly inleveraging her professional net-work. One example: As plans fortraining Human Arc leaders weredeveloped, it became apparent thatspace for such training was limited.
Ms. White contacted a nonprofitorganization with which she’s affili-ated and arranged a cost-effectivesolution: Human Arc would partnerwith the organization, which hadtraining needs but a limited budget.Human Arc would fund the trainingwhile the nonprofit would providethe space.
Whereas the “normal” cost ofnine full days of training space isabout $11,200, Human Arc has executed nine full days of trainingwith no training space costs. ■
White
20110808-NEWS--23-NAT-CCI-CL_-- 8/4/2011 3:00 PM Page 1
2244 CRAIN’S CLEVELAND BUSINESS AUGUST 8 - 14, 2011
YOUR STRATEGIC DIRECT MARKETING PARTNER1-866-670-4IMC | www.infocision.com
Finalist, Human Resources Executive of the Year – Private Companies
Tina Myles, Esq., SPHRHuman Resources Director, InfoCision
Thank you for your dedication to building a strong InfoCision team.
experienced tremendous growth intotal number of employees, as wellas skill level needed to serviceclients and compete in the market-place,” the nomination said.
Through surveying of acquiredand current employees and the coordination of a committee of executive leaders, FirstMerit devised
continued from PAGE 23
Lifetime Achievement
MAURER
DON STALLARDCEO and founder
The Reserves Network
In 1984, Don Stallard launchedThe Reserves Networkas an executive recruiting firm at a
single office in Rocky River. Today it has grown into a
Fairview Park-based tem-porary staffing company,serving the office, industrial,professional and technicalmarkets with more than160 employees, sales of $84 milliona year and 30 offices in eight states.The Reserves Network helps about20,000 people annually find cost-
free temporary employment.Mr. Stallard holds an MBA from
Ohio State University, but much ofhis style was honed by U.S. AirForce service, starting as a pilot inVietnam. He continued that career part time and retired as alieutenant colonel in the U.S. AirForce Reserves.
All the while Mr. Stallard wasbuilding The Reserves Network, heand the firm were contributing tothe community.
He served on more thana dozen civic and profes-sional boards on the localand national level, rangingfrom the board of the KentState University Founda-tion — his bachelor of science degree is fromKent State — to the GreaterCleveland Growth Associ-
ation. Additionally, The ReservesNetwork supports more than 20nonprofits, from Project WoundedWarrior to Harvest for Hunger. ■
Stallard
a strategy to understand the issuesof newly acquired employees, aswell as current employees.
Mr. Maurer also has enacted asuccession planning program forthe bank. The program identifiesindicators of leadership potentialand aims to nurture that potential.Additionally, Mr. Maurer has lednumerous projects to upgrade thetechnological capabilities of humanresources, including the institutionof online learning management. ■
Rising Star — PublicCARLA M. BENESHhuman resources supervisor
The Ritz-Carlton, Cleveland
At the hotel chain with aname synonymous withexceptional service, a col-league said Carla Benesh is
poised, confident and eloquent. Moreover, he says that if he were
assembling a dream management
team, he would make her a member. In four years in the human
resources industry, all spent withthe 36,000-employee hotel chain,she has earned the support of supe-riors who ask her for guidance incomplex situations. Yet she also
20110808-NEWS--24-NAT-CCI-CL_-- 8/4/2011 3:10 PM Page 1
of the AdvoCare Groupteam since her arrival five years ago.
“Her professionalism,sharp wit and kindnesshave been crucial to attracting new employees,creating a productiveworkplace environmentand boosting employeemorale,” AdvoCare Group CEOJoseph Cannelongo said in thenomination. “Megan embraces thecore values of the company, andher strength and endurance havehelped to move the company for-ward and continue to be successful.”
Ms. Busovicki has been responsible
for managing recruitmentand job placement duringa period of 35% growth forthe Cleveland company.
Indeed, she pulled double duty by leading thecharge to spread Advo-Care Group’s culturethroughout the region andcountry as it expanded its
headquarters and opened officesin Toledo and Columbus.
Ms. Busovicki developed a pro-gram for new hires to participatein a company-wide tour duringwhich they’re encouraged to sitwith each department to adapt toan integrated business model. ■
Rising Star — PublicAUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 25
Risk. Reinsurance. Human Resources.
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Aon Congratulates the 2011 Archer Award Finalists
FARRAHBOARDarea human
resources managerPenske AutomotiveGroup, Cleveland
With a total of eight yearsin human resources, including the
last three years at PenskeAutomotive Group, FarrahBoard has earned a reputa-tion for boosting coopera-tion while also managingstrife-prone situations.
For one, she assisted in asuccessful union avoidancecampaign at the Detroit-based
company’s Northeast Ohio autodealerships.
She also is described as a visible,effective communicator at Penskewho is able to advance its valuesand mission with a skill for mini-mizing conflict, according to thenomination.
At the same time, she has navigatedthe continuing challenges of serving in the auto industry, fromreducing staff to acquiring talent,including hiring managers and aiding in the transition betweenmanagers.
Moreover, she handledthe personnel integrationinvolved in the acquisi-tion of four dealerships inthree months, whichboosted Penske’s North-east Ohio employment30% to 400 workers.
She has also helped reduce employee turn-over to 36%, its best ratio
in six years. ■
LEONORAYURICHAKcorporate human
resources managerCBiz Inc.
Leonora Yurichak’s confi-dence and professionalismwere immediately noticedthe first time she walked
through the doors at CBiz’s Inde-pendence officeto personally de-liver her résumé.
Impressed byher initiative, thecompany createdan administra-tive positionspecifically forher skill set —and that was just
the beginning.While working at CBiz, Ms.
Board
Yurichak earned her degree atCleveland State University andsteadily climbed the corporate ladder, eventually landing as thecompany’s corporate human resources manager.
Yurichak
MEGANBUSOVICKIhuman resources
managerAdvoCare Group
The combination of MeganBusovicki’s ability to listenand willingness to create avibrant working environ-
ment are just a few reasons whyshe’s become such an integral part
Busovicki
Her co-workers credit her withcreating an environment wherefeedback is not only encouragedbut rewarded. For instance, Ms.Yurichak helped smooth the com-pany’s process for breaking in newhires and has taken on the role ofbecoming a confidante for new employees as they transition to thecompany.
Ms. Yurichak oversees the hu-man resources functions for about200 employees in Ohio, Kansas,Florida and California, but her workhas affected more than 5,000 em-ployees companywide when shestarted a workplace walking pro-gram that has gone national. ■
gets their full compliancewith the company’s employee performance review and tracking system.
She also has sharpenedthe skills to advance in theindustry by demonstratingfocus and strengtheningthe discipline within thecompany.
Ms. Benesh achieved that bycreating sustainable programs atthe hotel, particularly in areas that
help new human resourcesprofessionals and othernew hires succeed at thecompany.
She supervises all of thedepartment trainers atthe Ritz-Carlton Cleve-land — it calls themlearning coaches — andchampions the hotel’s
program of certifying new and recertifying employees to ensuretheir continuous improvement. ■
Benesh
Rising Star — Private
20110808-NEWS--25-NAT-CCI-CL_-- 8/5/2011 2:30 PM Page 1
2266 CRAIN’S CLEVELAND BUSINESS AUGUST 8 - 14, 2011
For a cast of thousandsHR STAR
PLAYHOUSESQUARE CONGRATULATES OUR MICHELLE MEERS
AND THE ARCHER HR AWARD FINALISTS.
playhousesquare.org
ERIN WHITErecruiting manager
Windward Partners
Rising Star — Private
Rising Star — Nonprofit
Erin White isn’t one to shyaway from the ever-evolvingrecruiting industry. By em-bracing the latest technology
and recruiting techniques, Ms.White has shown she’s the embodi-
ment of the nextgeneration ofhuman resourcesprofessionals.
Entrepreneur-ial by nature, Ms.White has inter-viewed candi-dates by Skypeand solidified a network of hu-
man resources professionals she cantap for advice. She also has extendedher network beyond WindwardPartners’ walls and was instrumentalin creating a group on the LinkedInsocial network for Cleveland recruiters to share best practices.
“Erin has a keen ability to quicklyunderstand client needs and precisely locate and recruit high-caliber candidates,” David Perel,principal at Windward Partners inIndependence, said in the nomina-tion. “She has produced tremen-dous results for our clients and as aresult has been contributing to thevalue of the Windward brand.”
At Windward Partners, an execu-tive search firm, Ms. White imple-mented an applicant tracking sys-tem that helped the firm becomepaperless. She also started the exec-utive recruitment services divisionat Windward. ■
LAUREN RUDMAN
human resources performance specialist
Greater ClevelandRTA
It makes sense that someonewho works at RTAshould be driven tosucceed.
Lauren Rudman, a life-long Clevelander, beganwork five years ago at thetransit agency as an HRassistant. Early in hertenure, Ms. Rudman“spearheaded an initiativeto reduce the time to fill keyunion positions from 90 days to 60days,” according to the nomination.
She was promoted to business
KERENSA F.PARKE
human resources coordinator
CSI Infusion &Network Services
Kerensa Parke isn’t afraid totry something new. It’s thatwillingness to experimentthat makes her stand out as
an HR professional.At a previous employer, human
resources firm Adecco, Ms. Parke’stechnological savvy “led to her progressive use of social media forrecruitment before this method waswidely considered by most recruiters,”according to the nomination.
In her current job at CSI Infusion,a provider of home health care ser-vices located in Brecksville with 125employees, Ms. Parke “revampedthe recruiting process forthe Cleveland and Colum-bus markets by creating a‘Stoplight’ candidate eval-uation program to increase efficiency inscreening processes,” thenomination stated.
Ms. Parke chairs thewellness committee at CSIInfusion, where she hasimplemented an annual company
screening. This preventive approachencourages employees to “know
their numbers” to reach ormaintain their wellnessgoals, according to thenomination. The informa-tion is handled in compli-ance with Health InsurancePortability and Account-ability Act regulations, thenomination stated, and it’sused to determine areas inwhich employees need
more health education. ■
White
Parke
analyst in 2008 and developed theagency’s HR Business Partnerstraining program, created its Diversity Recruitment and TrainingProgram and formalized a succes-sion plan that is evolving today, thenomination stated.
This summer, Ms. Rudman isleading RTA’s first internship program.She’s developing and maintainingrelationships with local colleges,according to the nomination, and isdesigning all the projects internswill handle, “ensuring that they aremeaningful and strategically relevant.”
Reflecting a desire to“modernize a traditionalorganization and make itmore relevant to a youngemployee demographic,”Ms. Rudman in November2009 started the RTA Future Leaders Club. Shecontinues to manage thegroup, which promotes pro-fessional development, holds
monthly lunches and hosts speakersfrom the Cleveland-area businesscommunity. ■
Rudman
20110808-NEWS--26-NAT-CCI-CL_-- 8/5/2011 1:28 PM Page 1
AUGUST 8 - 14, 2011 CRAIN’S CLEVELAND BUSINESS 27
KARA SERGERdirector of human
resources Eliza Jennings
Senior Care Network
DANIELBLAIN
senior vice presidentJewish Federation
of Cleveland
CLEVELANDAIRPORT SYSTEM
Rising StarNonprofit
Citizenship
Talk about making some-thing out of nothing.
When Kara Serger washired at Eliza Jennings
Senior Care Network in 2003, thenetwork didn’t have a human
resources de-partment, andHR matters werehandled at eachEliza Jenningsfacility by administratorson site. Sincethen, Ms. Sergerhas taken the HRfunctions “from
a departmental view to one that isorganizational in its scope and ex-pertise,” the nomination said.
“She has become a voice for theemployees and an advocate fortheir professional development,”the nomination stated. Eliza Jen-nings has about 600 employees andannual revenues of $34 million.
Overseeing HR functions at anylarge institution is a challenge. Inthe demanding field of long-termcare, where employee turnover rou-tinely hits 40% or more, it’s evenmore difficult. The nomination notedthat under Ms. Serger’s direction,Eliza Jennings’ turnover “consis-tently stays between 20% and 30%.”
Since 2008, Ms. Serger also hastaken a “proactive approach to accident prevention and providinga safe work environment,” whichhas enabled Eliza Jennings to cut itsworkers’ compensation premium by43%, the nomination stated. Totallosses from 2008 to 2011 “have beenslashed by 70%,” or nearly $750,000,according to the nomination.
She also serves on the Cleve-land/Cuyahoga Workforce Invest-ment Board’s health care sector ad-visory council. ■
Serger
The Cleveland Airport System thrives on its abilityto foster partnerships andemployee support in
promoting the greater good ofNortheast Ohio.
Airport employees over the pasttwo years raised $73,000 for variouscauses, gave $59,000 for communitysponsorships, donated 174 hoursfor community cleanup work andsupplied 34 pints of blood. Theyalso biked 305 miles and walked or ran 159 miles to raise money forcharitable causes.
Cleveland Hopkins InternationalAirport also hosted several fund-raising events in 2010, including thefirst “plane pull,” which raised$20,000 for Special Olympics ofOhio.
The Cleveland Airport System,which includes Burke LakefrontAirport, supports the United Way,Harvest for Hunger and RebuildingCleveland.
Its support of Youth Opportuni-ties Unlimited, a program to train teenagers for the world ofwork, included providing summerjobs for 40 youths in 2010, and it is upping that number to 150 in2011.
“The organization’s commitmentto lead by example inspires employees throughout the organi-zation to roll up their sleeves to perform yard/house work for an elderly woman; train for monthsriding a bike for miles to raise money for a cause; slow down thetime lock to share job knowledge toinner-city youth; dig their heels inpavement, pulling a plane 12 feet;and reach into their tighteningpockets to give generously to thoseless fortunate, because it is the cul-ture of the organization,” the nomi-nation said. ■
Daniel Blain stresses to allemployees that working atthe Jewish Federation ofCleveland is more than
just a job.Indeed, he
“leads the HRfunction at theJewish Federa-tion of Clevelandby setting an example for howa nonprofit professionalshould act,” his
nomination reads.
Mr. Blain ensures that a com-plete orientation is done for newemployees so they understand themission and the vision of the
agency. He also works to get all staffmembers involved in fundraisingcampaigns, both for the Jewishcommunity and the Clevelandcommunity generally through theUnited Way.
“It is very important to Danielthat all staff see what it is like toraise funds as well as give awaytheir own resources,” the nomina-tion said.
In fact, Mr. Blain is so successfulin getting employees involved inthe Federation’s mission that 100%of its employees contributed to theorganization’s fundraising efforts.■
Blain
CHRISTALENKO
director of employeedevelopment
Skoda Minotti
statement and brand phi-losophy at MayfieldHeights-based SkodaMinotti.
Each of the main initia-tives that the firm focuseson supports the firm’s efforts to enhance the fu-ture of the community —volunteer trust institute;quarterly on-site blood drive; done-in-a-day service projects; Meals onWheels; and jeans day donations.
Ms. Lenko and the HR group usea variety of methods to increaseparticipation and buy-in to these
programs, including infor-mational meetings, internalnewsletters and emails.
Employees are encour-aged to spend time helpingout in the community andare even able to countwork time spent with non-profits toward their 40-hour work week.
And their efforts must be workingquite well.
According to the nomination,employees spent a total of 2,022work hours with Northeast Ohiononprofits in 2010. ■C
hrista Lenko is a key figurein promoting the commu-nity service that is ingrained in the mission
Lenko
20110808-NEWS--27-NAT-CCI-CL_-- 8/5/2011 1:31 PM Page 1
2288 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
LARGEST FOREIGN-OWNED COMPANIESRANKED BY NUMBER OF LOCAL EMPLOYEES
Number of full-timeequivalentemployees
Rank
NameLocal addressPhone/Web site
Parent companyHQ location
6/30/2011
6/30/2010
Ohioemployees
Worldwideemployees
# oflocal
facilities Type of business Top local executive
1Sterling Jewelers Inc.375 Ghent Road, Akron 44333(330) 668-5000/www.sterlingjewelers.com
Signet Jewelers Ltd.Hamilton, Bermuda 2,679 2,323 3,343 16,229 36 Retail jewelry Mark Light
president, CEO
2Nestle USA in Solon (includes Nestle PreparedFoods and Baking)30003 Bainbridge Road, Solon 44139(440) 349-5757/www.nestleusa.com
Nestle S.A.Vevey, Switzerland 1,947 1,626 2,408 280,000 1
Manufacturer of Stouffer's and LeanCuisine prepared foods, Buitoni pastaand sauce, Hot Pockets and LeanPockets
Frank Higginspresident, CEO,Nestle Prepared Foods and Baking
3ArcelorMittal3060 Eggers Ave., Cleveland 44105(216) 429-6000/www.arcelormittal.com
ArcelorMittalLuxembourg 1,916 1,612 2,701 274,000 2 Steel manufacturer
Eric Haugevice president, general manager,ArcelorMittal Cleveland
4Bridgestone Americas Inc.1200 Firestone Parkway, Akron 44317(330) 379-7000/www.bridgestoneamericas.com
Bridgestone Corp.Tokyo 1,725 1,715 2,314 139,822 6 Tire manufacturer Hank Hara, chief technology officer, vp,
Bridgestone Americas Tire Operations
5Republic Engineered Products Inc.2633 Eighth St., NE, Canton 44704(800) 232-7157/www.republicengineered.com
Industrias CH S.A.B. deC.V.Tlalnepantla, Mexico
1,504 1,310 1,504 NA 4 Manufacturer of special bar qualitysteel
Jaime Vigilpresident, CEO
6Ben Venue Laboratories Inc.300 Northfield Road, Bedford 44146(440) 232-3320/www.benvenue.com
Boehringer Ingelheim Corp.Ingelheim, Germany 1,303 1,297 1,303 41,500 1 Manufacturer of sterile injectable
pharmaceutical productsThomas J. Murphypresident, CEO
7Philips Healthcare595 Miner Road, Highland Heights 44143(440) 483-3000/www.philips.com/healthcare
Royal Philips ElectronicsAmsterdam, Netherlands 1,250 1,250 1,250 117,000 1 Manufacturer of medical diagnostic
equipmentJames Mazelskygeneral manager,CT and nuclear medicine
8Saint Gobain Corp.750 E. Swedesford Road, Valley Forge 19482(610) 341-7000/www.saint-gobain-corporation.com
Saint-GobainParis 904 839 904 189,193 15
Construction products, high-performance materials, glasscontainers
John Crowepresident, CEO
9Luk USA LLC3401 Old Airport Road, Wooster 44691(330) 264-4383/www.lukusa.com
Schaeffler KGHerzogenaurach, Germany 800 800 800 70,000 1 Clutch systems and torque converters
for the automotive industryMarc McGrathpresident
10V&M Star2669 Martin Luther King Jr. Blvd., Youngstown 44510(330) 742-6300/www.vmstar.com
Vallourec GroupBoulogne-Billancourt,France
580 580 580 20,600 1 Seamless steel pipe, mainly OCTG andline pipe for the energy industry
Joel Mastervichpresident, COO
11AkzoNobel Paints LLC15885 W. Sprague Road, Strongsville 44136(440) 297-8000/www.akzonobel.com
AkzoNobelAmsterdam, TheNetherlands
576 550 1,059 55,590 10 International paint, coatings andspecialty chemicals company
Erik BoutsCEO,Akzo Nobel Paints LLC
12Meggitt Aircraft Braking Systems Corp.1204 Massillon Road, Akron 44306(330) 796-4400/www.aircraftbraking.com
Meggitt PLCDorset, England 512 525 512 NA 1 Aircraft wheels and brakes and related
landing gear systemsJ.J. Williamssenior vice president and generalmanager, global operations
13ABB Inc.29801 Euclid Ave., Wickliffe 44092(440) 585-8500/www.abb.com
ABB GroupZurich, Switzerland 440 460 700 116,500 1 Industrial process control systems
Mark TaftRegional BU manager,Power Generation, North America
14Bendix Commercial Vehicle Systems LLC901 Cleveland St., Elyria 44035(440) 329-9000/www.bendix.com
Knorr-Bremse GroupMunich, Germany 418 400 418 2,708 1
Leading developer of active-vehiclesafety technologies, air brake chargingand control systems and components
Joseph J. McAleesepresident, CEO
15Hitachi Medical Systems America Inc.1959 Summit Commerce Park, Twinsburg 44087(330) 425-1313/www.hitachimed.com
Hitachi Medical Corp.Tokyo, Japan 346 350 346 7,754 2 Medical imaging OEM Donald Broomfield
president, CEO
16Thomas Steel Strip Corp.Delaware Ave. NW, Warren 44485(330) 841-6222/www.tatasteeleurope.com
Tata Steel Ltd.Mubai, India 330 286 330 80,000 1 Cold rolled steel manufacturer William Boyd
president, CEO
17The Akron Beacon Journal44 E. Exchange St., Akron 44309(330) 996-3000/www.ohio.com
Black Press Ltd.Victoria, British Columbia 296 320 296 NA 1 Akron Beacon Journal and Ohio.com Andrea Mathewson
publisher
18Vesuvius USA Corp. - Foseco Foundry Division20200 Sheldon Road, Brook Park 44142(440) 826-4548/www.foseco.com
Cookson Group PLCLondon 263 241 297 NA 2
Leading manufacturer of refractoryproducts for the molten metalsindustries
William Pattersonregional vice president,Americas
19Bekaert Corp.3200 W. Market St., Suite 303, Akron 44333(330) 867-3325/www.bekaert.com
NV Bekaert SABelgium 243 NA 243 25,000 2 Manufacturer of cold rolled steel
David Best, chief financial andadministrative officer; Steve Mazak,sales director, North America
20Elster Perfection436 N. Eagle St., Geneva 44041(440) 415-1600/www.elster-perfection.com
Elster GroupLuxembourg 230 276 230 NA 2
Mechanical joining products for naturalgas and propane gas distributionsystems
Robert Diakdirector of operations
21Koyo Corporation of U.S.A.29570 Clemens Road, Westlake 44145(440) 835-1000/www.koyousa.com
JTEKT Corp.Osaka, Japan 210 180 210 36,775 2
Leading international manufacturer ofball and roller bearings for automotiveand industrial applications
Ken HopkinsCOO
22Pepperl+Fuchs Inc.1600 Enterprise Parkway, Twinsburg 44087(330) 425-3555/www.pepperl-fuchs.us
Pepperl+Fuchs GmbHMannheim, Germany 168 155 152 4,300 1 Manufacturer of sensors, controls, and
safety devicesWolfgang MuellerCOO
23EYE Lighting International of North America Inc.9150 Hendricks Road, Mentor 44060(440) 350-7000/www.eyelighting.com
Iwasaki Electric Co.Tokyo 130 160 130 3,500 1 Manufacturer and distributor of HID
light sourcesTom Salpietrapresident, COO
24Lafarge North America Inc.10325 State Route 43, Unit F, Streetsboro 44241(330) 954-1750/www.lafargenorthamerica.com
Lafarge S.A.Paris 124 130 124 NA 6 Construction material supplier and
producerMax Wolanskevice president, general manager
Source: Information is supplied by the companies unless footnoted and from corporate websites. Worldwide employee numbers are for the parent company and may be from theannual report or website. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. Wewelcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual business lists and The Book of Lists are available to purchaseat www.crainscleveland.com.
RESEARCHED BY Deborah W. Hillyer
Land: Development pace hinges on supportIf the financials fall into place, Dr.
Foltin said Tri-C plans to have thecampus developed in full over thenext five to seven years. By thattime, enrollment is expected tosurge to as many as 9,000 students— a size similar to Lakeland Com-munity College in Kirtland or Tri-C’s Metro campus in downtownCleveland.
The demand for classes in westernCuyahoga County is growing at arate faster than the projected 3%annual increase forecasted in thecollege’s master plan, Dr. Foltinsaid. He said the college has hadparticular success recruiting stu-dents from the West Side directlyout of high school, whereas Tri-Ctraditionally has served students intheir late 20s and early 30s.
“With the rising cost of tuition atthe (four-year universities) andwith increased quality and transferof classes from Tri-C, we’re seeing abig influx from those that used to betraditional college students,” Dr.Foltin said.
To keep up with the expectedboom in enrollment, the college expects to break ground on a secondbuilding in Westlake over the next
two or three years. The second andthird buildings, slated to cost about$20 million each, will house studentactivity and classroom space.
Though plans are fluid for whatto do with the land it plans to buy,Dr. Foltin said it likely would behome to a work force developmentcenter to offset the burden placedon its Corporate College West locationin Westlake. The Corporate CollegeWest building previously housedsuch programs, but now mainly offers courses that lead to degrees
because of increased demand.Dr. Foltin said the college still is
piecing together how to pay for theprojects. He said the rate at whichTri-C breaks ground depends on theamount of financial support the college receives from the state aswell as the success of a recentlylaunched capital campaign.
Tri-C five years ago completed acapital campaign that brought inabout $20 million, Dr. Foltin said.The college still is developing thescope of the current campaign. ■
continued from PAGE 3
20110808-NEWS--28-NAT-CCI-CL_-- 8/5/2011 1:31 PM Page 1
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3300 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 8 - 14, 2011
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Healthy share of ideas flow at Max-Wellness■ Michael Feuer is taking his new wellnessventure beyond the traditional retail modelthat scored big when he co-founded Office-Max.
Mr. Feuer recently opened a smaller version of his Max-Wellness stores at LakeHealth’s West MedicalCenter in Willoughby.The shop, like its largercounterparts, carrieswellness products notfound in drugstores.
“The traffic countsin hospitals are the bestI’ve ever seen com-pared to a retail store,”Mr. Feuer said.
The idea behind the hospital-based storewas sparked after Lake Health president andCEO Cynthia Moore-Hardy visited a Max-Wellness store and met soon thereafter withMr. Feuer. The Max-Wellness chief said hiscompany has gained access to thousands of prospective customers at West MedicalCenter, and the health system is able to extend another service to its patients.
“The great new marketers of this new eraare going to be the smart ones who knowhow to take merchandise to where the cus-tomer is instead of bringing the customer tous,” Mr. Feuer said.
Over the next three or four months, Mr.Feuer said he is bringing several health system CEOs and medical directors fromaround the country to see the store, and he
hopes to see others spring up.Later this year, Max-Wellness plans to set
up in airports, casinos and hotels 50 vendingmachine-like devices — dubbed “Max-Well-ness in-a-box” — that will dispense prod-ucts offered by the company.
Max-Wellness currently operates fourfull-service stores — two in Northeast Ohioand two in Florida — with a fifth set to open nextmonth in Columbus and others on the way.
“It’s this whole shtick of wellness in thisnew era, predicated on the fact the govern-ment can’t make you healthier and youremployer can’t make you healthier,” Mr.Feuer said. “It’s on the individual.” — TimothyMagaw
Thieves have a thing for the ’94 Accord■ Ohio’s car thieves have eclectic, and notparticularly good, tastes.
The National Insurance Crime Bureau(NICB) of Des Plaines, Ill., last week released its“Hot Wheels” list of the most-stolen vehiclesnationwide and in each state. Topping thelist in Ohio: the 2000 Dodge Caravan. (Ofcourse that’s what you guessed, right?)
Rounding out the top five in the BuckeyeState: the 1994 Honda Accord, the 1994Chevrolet Pickup, the 1999 Ford Taurus andthe 2000 Honda Civic.
Here’s something domestic automakerscan tout. “Nationally — and for the first timesince 2002 — thieves preferred domesticmakes over foreign brands,” the NICB reported, with Ford taking three slots in thetop 10, Dodge two and Chevrolet one.
The ’94 Accord has been the most-stolen
car nationwide for the last two years.Vehicle thefts in Ohio have been falling
for years, from 41,379 in 2005 to 22,890 in2009 and 21,242 last year, the NICB reports;the group cites improved car technology asa big deterrent to theft. — Scott Suttell
Lawyer bags plumjob in Atlanta■ He thought last year it was a “once-in-a-lifetime thing,” but this week, a member ofCleveland’s legal community again will beinside the ropes of the PGA Championship.
Andrew Dorman, a partner at Reminger Co.LPA, is caddying for Rob Moss, his grade-school friend and the head professional atPepper Pike Club, for the second consecu-tive year. This year’s practice rounds begintoday, Aug. 8, at the Atlanta Athletic Club.
In 2010, when Mr. Dorman and Mr. Mossfirst traveled to the PGA at Whistling Straitsin Kohler, Wis., they played with Ben Curtis,a Kent State University grad who won the2003 British Open, and sat near Tiger Woodsat lunch, Mr. Dorman recalled.
“A guy like me — just a dumb old lawyer— gets to walk the fairways with guys likethat,” quipped Mr. Dorman, who has prac-ticed law for 17 years and has a 5 handicap.
As they have in the past, Mr. Dorman andMr. Moss are making their trip to one ofgolf’s four majors a family affair: Their wivesand children are in Atlanta with them.
“When you love the game as much as wedo … to be that close to the pros you see onTV and to enjoy that experience with yourfriends and family — it’s about as good as itgets,” Mr. Dorman said. — Michelle Park
MILESTONES
THE COMPANY:Rosenberg Advertising,Lakewood
THE OCCASION:Its 30th anniver-sary
David Rosenberg (pictured) started thebusiness in 1981 as a one-man, one-clientmarketing and advertising agency. Today,the firm employs 15, and it has served morethan 200 clients in the past 30 years.
The firm, previously based in Cleveland’sWarehouse District, now operates from a renovated century home in Lakewood. Mr.Rosenberg says the office offers “a comfort-able environment ... that encourages good-will, resulting in great work.”
Its web site is www.RosenbergAdv.com.
THE COMPANY: Finelli ArchitecturalIron & Stairs, Solon
THE OCCASION: Its 50th anniversary
The family-owned manufacturer of custom-made wrought iron products and curvedwood staircases started in 1961 in Bedford.It since has evolved into what president FrankFinelli calls “a multimillion-dollar company(with) a state-of-the-art facility in Solon.”
After immigrating to America in 1947 fromItaly, Michael Finelli Sr. started Finelli Orna-mental Iron. “What started out in 1961 as abusiness in my father’s garage has steadilygrown over the years, and we are now veryexcited to be celebrating our 50th year inbusiness,” Frank Finelli said.
For information, visit FinelliIronWorks.com.
REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS
THEINSIDER
THEWEEK AUGUST 1 – 7
Global view: Squire, Sanders & Dempsey isplanning an expansion Down Under. The lawfirm is finalizing talks to add to its ranks a majorityof the partners of a western Australia firm thathas operated under the Minter Ellison brand formore than two decades. The combination ofMinter Ellison Perth and Squire Sanders is subject to a Squire Sanders partner vote that’s toconclude in August; it would allow SquireSanders to expand into Australia while strength-ening its presence in the Asia Pacific region.
A bright spot: Energy Focus Inc., a Solon-based provider of energy-efficient lighting prod-ucts, said it has been awarded a $23 million Navysupply contract to provide LED fixtures and itsproprietary IntelliTube LED lamps for use on theU.S. Navy fleet. Energy Focus said the majorityof the contract includes sales of fixtures usingthe company’s new IntelliTube lamps, which thecompany describes as “intelligent plug-and-playLED lamps” to replace the existing linear fluores-cent tube lamps used in most of the Navy’s lightfixtures.
Progress on the jobs front: ProgressiveCorp. announced plans for another round of hiring. The big auto insurer based in MayfieldVillage said it’s looking to fill 131 jobs in theCleveland market; 23 would be informationtechnology and analyst positions, and the other
108 would be sales, serviceand claims phone repre-sentative positions. InMay, Progressive an-
nounced it was hiring125 people in North-east Ohio.
Collective effort to save SB 5: TheGreater Cleveland Partnership said it will sup-port the campaign to keep Senate Bill 5, the col-lective bargaining bill that will appear as StateIssue 2 on the ballot Nov. 8, when voters will beasked to consider its repeal. GCP said it will workwith Building a Better Ohio, a nonprofit orga-nized to support SB 5, to rally business supportfor the campaign. SB 5 restricts the collectivebargaining rights of public employees and public school teachers, and it prohibits themfrom striking.
Makes sense: Bendix Commercial VehicleSystems LLC in Elyria completed the purchaseof the vehicle sensors business of Iteris Inc. Iterisput the purchase price at $14 million, with $2million subject to holdbacks and adjustmentsbased upon working capital at closing. In addition,Iteris said it expects to receive performance androyalty-related earn-outs as they occur over time.
Securus secures financing: JumpStartInc. and RiverVest Venture Partners announcedplans to invest a total of $750,000 in SecurusMedical Group, a biomedical technology start-up that moved to Cleveland from Boston in July.RiverVest, which is based in St. Louis but has aCleveland office, committed $500,000 to Securus,which is developing a technology meant to providereal-time temperature mapping within a bodycavity. The rest came from JumpStart, a nonprofitthat assists and invests in Northeast Ohio startups.
This and that: The long-rumored entry of another sports-talk radio station into Cleve-land’s media market is official. CBS Radioannounced that 92.3 The Fan, on WKRK-FM,92.3, will launch Aug. 29. . … Jim Fulton, a long-time Philips Healthcare executive, will serve asImalux Corp.’s first president and chief operatingofficer. Mr. Fulton will lead the market expansionprogram for Imalux’s Niris Imaging System,which uses near-infrared light to provide real-time, cross-sectional images of tissue structures.
AUGUST 8 - 14, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 31
BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com
Chief Wahoo is in Berlin?Now that’s a long road trip■ A bit of Cleveland is illuminating the skyof Berlin.
The Wall Street Journal explored the artscene of the German city in an interviewwith Cyprien Gaillard, a young French artistwho now calls Berlin home. The paper described Mr. Gaillard, 31, as “a rising starin the international art world.”
His latest project, unveiled a few weeksago, is in Mitte, Berlin’s oldest and inner-most district.
“On a derelict East German officebuilding, ominously called the “Houseof Statistics,” he has mounted a 12-meter neon replica of the logo ofthe Cleveland Indians baseballteam,” The Journal reported.
“Only visible at night, the logo,depicting a Native American with ahard-edged grin, floats eerily above the city,”according to the newspaper. “The project,which combines a symbol of the AmericanRust Belt with a souvenir of Communisttown planning, is meant to reflect on thebroader subject of urban decline.”
In Europe, such a work would only bepossible in Berlin, Mr. Gaillard said. “Youwould never find an abandoned building inthe middle of Paris,” he told the newspaper.
Lakeland, employers employhands-on training approach■ A new program at Lakeland CommunityCollege got some nice attention in a CNN-Money.com story about community col-leges’ efforts to train Americans for jobs thatcurrently are going unfilled.
“Employers are turning to communitycolleges because those lining up at the door
aren’t qualified,” said Anthony Carnevale,director of Georgetown University’s Centeron Education and the Workforce. “The skillsrequirement has gone up, and employersdon’t train entry-level workers anymore.”
CNNMoney.com noted that this fall, thefirst group of students will take part in Lake-land’s applied science program in manufac-turing. The initiative came from the Alliancefor Working Together, a group of more than100 manufacturers in Northeast Ohio. Localindustry leaders helped design the curriculumand will offer scholarships and internshipsto promising students.
Roger Sustar, president of Fredon Corp.in Mentor and the group’s founder, told
the website that the alliance wants tointerest high school students in pursuinga career in manufacturing and educate
them so they can enter the field. Hesays he could fill a dozen job openingsat his company “if we could get people.”
“You think we’ll let an 18-year-old kid run a $400,000 machine?” Mr.
Sustar said. “Are you crazy?”
Even at the Fed,money is tight■ The Federal Reserve Bank of Cleveland isdownsizing in Pittsburgh.
The Pittsburgh Business Times reportedthat the Cleveland Fed has eliminated 130 posts in its Pittsburgh office, bringing employment there to 175.
Another 112 will be cut during the next 11months, according to June Gates, a spokes-woman for the Cleveland Fed, which over-sees western Pennsylvania. Once the cutsare complete, the number of employees theFed has in Pittsburgh will be roughly 60,one-fifth of what it was before layoffs andvoluntary retirements began May 31.
The jobs all were in the Fed’s Treasury retailsecurities operations, which handle savingsbond transactions, and related IT posts.
FILE PHOTO/JESSE KRAMER
Michael Feuer: No,no, we’ll come toyou!
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