Opportunity knocks in apartment sales market

Transcription

20110912-NEWS--1-NAT-CCI-CL_--
9/9/2011
3:43 PM
Page 1
$2.00/SEPTEMBER 12 - 18, 2011
Opportunity
knocks in
apartment
sales market
Loan access, low vacancy contribute to uptick
By STAN BULLARD
[email protected]
The volume of apartment sales
in Northeast Ohio is up and is likely
to continue gaining momentum
through the rest of the year amid a
low-vacancy market for residential
rental properties.
Big sales already have occurred
this year, and more are on the way if
large properties quietly being marketed — including the Statler Arms
and Bingham Apartments in downtown Cleveland — are bought by
the end of December.
Through the end of August, with
the crucial fourth-quarter commercial real estate selling season still
INSIDE: Apartment owners ring up
multimillion-dollar deals in 2011.
Page 5
ahead, 11 Northeast Ohio apartment complexes had been sold for
at least $1 million; they had a total
price tag of $33 million. For all of
2011, 11 such properties changed
hands for a total of $46 million,
according to the website www.
TerryCoyne.com. The site, operated
by Terry Coyne, executive vice president of Grubb & Ellis Co.’s Cleveland office, does not track the
region’s huge market for multifamily properties with under 30 suites
that sell for less than $1 million.
See SALES Page 5
STEVE BENNETT
A ROAD MAP TO REBIRTH
Ohio City’s commercial investments extend beyond
venerable West Side Market, breweries
By STAN BULLARD
[email protected]
B
lock by block, the resurgence of the commercial area surrounding West 25th Street
in Cleveland’s Ohio City neighborhood is
spreading beyond the shadow of the West
Side Market and the domains of breweries and
restaurants in its Market Square District.
Construction workers recently began renovating
a line of storefronts at West 25th and Jay Avenue
that for 40 years were bricked in for security
reasons. New owners are taking positions in properties ranging from the former Ohio City fire
station — a landmark dating from the 1840s — to
the dilapidated, long-mothballed Jay Hotel. And
plans for a loft conversion — the first in a decade
on West 25th — also are in the works.
37
See REBIRTH Page 13
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KeyCorp CEO directs focus on
business lending, balance sheet
Beth Mooney charts institution’s growth strategy
By MICHELLE PARK
[email protected]
Beth Mooney believed
KeyCorp’s stock was undervalued when she took the
helm of Cleveland’s largest
bank four months ago.
The closing price on May
2 was $8.53. The closing
price last Thursday, Sept.
8 — $6.42 — was down
almost 25% from when she
became chairman and CEO.
Suffice it to say, there are many
economic headwinds to grapple
with, Ms. Mooney acknowledged. Today, growth is a
game of inches, not yards,
but Key, armed with a
strategy Ms. Mooney devised prior to being named
CEO, will grow, she anticipates.
“I think Key is at a favorable inflection point,” she
Mooney
said in an interview last
See MOONEY Page 21
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SMALL BUSINESS
Mapleside’s new owners work to turn farm into
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PLUS: RESALE BUSINESS ■ GRAND OPENINGS ■ & MORE
Entire contents © 2011
by Crain Communications Inc.
Vol. 32, No. 37
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Americans love their cars, but gas prices approaching $4 a gallon are curbing
their enthusiasm for driving. The Federal Highway Administration reports that
travel on all U.S. roads and streets fell by 1.4% — that’s 3.8 billion vehicle
miles — in June 2011 from June 2010. (We still drove a total of 259 billion
miles that month.) For the year through June, travel was down 1.1%, or 15.5
billion miles, to 1.45 trillion vehicle miles. Here’s a look at road travel by region
for June:
Region
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Change from June 2010
60.4 billion
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West
56.9
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South Atlantic
55.0
-1.8
South Gulf
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9/9/2011
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Page 1
SEPTEMBER 12 - 18, 2011
3
Cleveland off
radar for expo
center operator
Euclid venue succumbs to lack of shows as
envisioned level of events fails to materialize
By JAY MILLER
[email protected]
MARC GOLUB
Kevin Suttman last week reached a long-awaited goal: shipping Seven Brothers Distilling Co.’s artisan vodka to stores
across Northeast Ohio and about 20 in the Columbus area.
WORKING ON
THEIR CRAFT
Area distillers see fresh water, crops as avenues to gain
share of $40 billion spent nationwide on spirits each year
By KATHY AMES CARR
[email protected]
WHAT IS A CRAFT DISTILLER?
W
ithin the confines of
an old red barn in
Leroy
Township
that’s the size of a
19th-century schoolhouse, Kevin
Suttman has been toiling with a
low-temperature distilling process
that uses local spring water and
stone-ground winter wheat and
corn to distill a premium brand of
smooth vodka.
The technique preserves the
sweet aroma of the winter wheat
and eliminates any harsh flavors
that traditional, high-temperature
distilling processes produce,
according to Mr. Suttman.
Just last week, Mr. Suttman
See CRAFT Page 25
Much like craft brewers and regional
vintners, craft distillers focus on making
quality products that are representative of
the heritage of the communities from
which they hail.
Craft distillers produce alcoholic
beverage spirits by distillation, or by
infusion through distillation or re-distillation.
Maximum production for a “craft” or
“artisan” distiller should not exceed
250,000 proof gallons per year, according
to the American Distilling Institute.
A LITTLE HELP, PLEASE?
Area craft distillers see big potential for
their spirits, but they’re aiming to get some
relief from lawmakers.
Currently, Ohio law allows only three
A-3a permits — through which distillers
can sell their products on site. That means
Cuyahoga, Franklin and Hamilton counties
each have only one A-3a permit available.
Two state representatives have sponsored a bill that already has passed the
House of Representatives and would ease
the limits placed on the number of A-3a
permits issued.
The long-running Cleveland Home
& Garden Show and its companion
Cleveland Sport, Travel & Outdoor
Show, fixtures in the spring and fall,
are no more.
Gone, too, is the venue that
hosted them, the Great Lakes Expo
Center in Euclid. It closed May 31.
Chris Fassnacht, operator of the
expo center and president of Expositions Inc., the firm that mounted
the two shows, said last week he has
suspended operations in the Cleveland area. He said the sour economy
and aggressive marketing by the I-X
Center were responsible for the
demise of his operation.
“I would basically say it was just a
lack of shows” that led to the closing
of the expo center, Mr. Fassnacht
told Crain’s from the Lakewood
office of Expositions Inc., a 73-yearold firm. He said his firm continues
to promote shows in Pittsburgh but
will hold off on any Cleveland
shows “until the dust settles” and
the new Cleveland convention center opens downtown in 2013.
The expo center is a former Kmart
store that Mr. Fassnacht leased and
converted into exhibition space. It
opened in January 2010 with the
home and garden show.
That show and the sport and
outdoor show previously had been
held at the I-X Center. Before then,
the shows, under different names,
operated at the Cleveland Convention
See EXPO Page 21
THE WEEK IN QUOTES
“We used to only get
inquiries (about
vacant retail space)
from pawn shops,
furniture stores and
used appliance
shops.”
“A lot of small towns
can look at that and
say, ‘We’re a small
town. Why couldn’t
we have that, too?’”
— Cathy Belk, chief relationship
officer, JumpStart Inc. Page 9
— Tom Gillespie, owner TEG
Properties LLC, which owns
buildings on West 25th Street in
Cleveland. Page One
“People are seeking
authentic experiences.
People not only want
that fresh-baked
apple pie, but they
want to see where the
apples came from. It’s
about the local connections.”
“The economic condition of things right
now has definitely
changed people’s
focus on what they
have to have and
what’s important.”
— Laura Goss, owner of ReRun
Consignment Boutique, Avon.
Page 17
— Amir Eylon, tourism director
for the Ohio Tourism Division.
Page 17
INSIGHT
As sustainability summit nears, signs of progress take shape
By CHUCK SODER
[email protected]
Andrew Watterson is in charge of
the annual Sustainable Cleveland
2019 summit, but he’s not really in
control of it.
He’s OK with that: The summit
— which is scheduled to take place
Sept. 22 and 23 at Public Auditorium
in downtown Cleveland — is
meant to help people
come up with their own
ways to build a culture of
sustainability in Northeast Ohio.
“Our job is tilling the
soil to create conditions
for these things to prosper,” said Mr. Watterson, Watterson
who is chief of sustainability for the city of Cleveland.
Some of the seeds planted
in that soil since the first
summit two years ago
have started to germinate.
For instance, a group
focused on green buildings
is working with the city of
Cleveland to make 100
homes more energy efficient
as a pilot for a bigger project.
Another group focused on clean
water formed a nonprofit that has
created a campaign to drink tap
water and is making a documentary
about its effort to bring fresh water to
a school in Africa. A group interested
in local food created a nonprofit,
too, and it spurred the creation of
a company that could help urban
farmers. And the sustainable
transportation group convinced
the state to make the Lorain-
Carnegie Bridge more accessible to
bicyclists and pedestrians.
Many other initiatives are in the
works, too. However, the green building group’s project appears to be
among the most ambitious so far.
The working group, one of 17
formed after the first summit in
August 2009, is in the process of
creating a nonprofit called the
See SIGNS Page 21
4
9/9/2011
3:44 PM
Page 1
SEPTEMBER 12 - 18, 2011
Expertise in bank
compliance boosts
Cleveland company
By MICHELLE PARK
[email protected]
Righting an early mistake has
resulted in unprecedented growth
for a small Cleveland company,
AML RightSource.
AML, which provides anti-money
laundering (hence the “AML”)
monitoring to banks, so far in 2011
has added the most new clients it
ever has gained in a single year, and
it expects the growth to continue.
The company sells its service to
banks that must comply with the
Bank Secrecy Act. It has added five
clients this year, bringing its total to
15, a 50% increase. Revenue through
August is up 47% from a year ago,
said president and CEO Tom Pratt.
He did not disclose specific figures.
Mr. Pratt said there’s a good chance
AML will sign four more banks yet
this year. The goal is to close 2011
with at least 18 clients on the books
and to reach 36 clients in 2012.
He attributes the 6-year-old
company’s growth this year to a new
focus on marketing.
“One of the mistakes that we probably made early on was not really
focusing on the sales and marketing
side,” Mr. Pratt said. “We’re accounting,
finance and operational guys.”
Now, Mr. Pratt said, the company
is establishing name and brand
recognition, evidenced in six words
they’ve heard more often from people: “ ‘Oh yeah, we’ve heard of you.’”
Malaga Bank, a Palos Verdes
Estates, Calif., bank with $824 million
in assets, is one of AML’s newest customers. Connie Begovich, assistant
vice president of deposit compliance
and Bank Secrecy Act officer at
Malaga, learned of AML through a
bankers’ compliance conference a
few years ago and signed on in January because regulatory compliance is
taking up more time, she said.
“You don’t have enough hours in
a day to do all that’s being asked of
you,” she said.
The Bank Secrecy Act, passed in
1970 and designed to root out drug
and organized crime money, tasks
institutions with monitoring transactions for suspicious activity. At a
four-branch bank like Malaga, there
isn’t space for additional personnel,
Ms. Begovich said. Plus, finding people who know how to identify suspicious activity is a struggle.
So the bank hired AML to
take day-to-day monitoring off Ms.
Begovich’s plate.
“I think for ... what they provide
and some of the tradeoffs of having
an employee here, I’d say that they
are reasonable,” she said of the cost.
The new marketing strategy that
Mr. Pratt says has boosted business
launched in January and has included
advertising and direct email campaigns to compliance officers and
high-level executives.
AML also began conducting free
webinars every other week, Mr. Pratt
said, covering topics such as how compliance professionals can prepare for
and pass their Bank Secrecy Act
exams. Attendance to AML’s webinars
frequently has exceeded 100, he said.
AML’s clients all are community
banks such as Malaga. None are in
Northeast Ohio. Their asset sizes
range from $260 million to more
than $5 billion, Mr. Pratt said.
A bank that hires AML does not
eliminate its need for an internal
compliance officer, but it does enable an institution to avoid hiring
more personnel, he added.
Hiring at AML itself, though, has
been a must. The company this year
has grown to eight employees from
five, and Mr. Pratt hopes to hire two
more by year-end.
This time of year, when institutions
are coming into budget cycles for the
coming year, is a time when bank
executives are focused on return on
investment, so AML will market
heavily the cost savings it can provide.
“The industry norm is that I as a
bank will go out and buy software, will
hire people, will deal with turnover
of those people,” Mr. Pratt said. “I will
do it all myself. We’re in the process
of disrupting the industry norm.” ■
Volume 32, Number 37 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except
for combined issues on the fourth week of May and
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week of July, the third week of December and fourth
week of December at 700 West St. Clair Ave., Suite
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by Crain Communications Inc. Periodicals postage
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9/9/2011
2:55 PM
Page 1
SEPTEMBER 12 - 18, 2011
Sales: NE Ohio benefits from stability
continued from PAGE 1
Dollar volume is suppressed
somewhat this year because banks
are flooding the market with distressed properties at discounts.
The stepped-up deal activity
shows the market for apartments is
starting to reawaken, although at
nothing like the pace prior to 2008,
when the recession hit.
Chris Smythe, CEO of Smythe
Property Advisors LLC in Cleveland,
said the market for apartments “is
picking up, but it does not have the
strong, fleet legs like it did at the
height of the boom.”
Buyers are looking for bargains at
both ends of the spectrum: Large,
institutional owners want prime
properties with more than 200
units, and smaller, mom-and-pop
investors who can afford to pay cash
or mostly cash are looking for small
apartment properties.
Renewed appetite for multifamily
investments is out there, but
experienced buyers are as careful
about what they consume as a middle-aged man after a heart attack.
“There is no feeding frenzy like
what developed prior to 2008,” said
Vicki Maeder, a vice president in
investment sales at the Cleveland
office of CB Richard Ellis. “Formerly,
people were intent about outbidding other people just to control the
real estate.”
The virtues of stability
Two factors — improved fundamentals and broader availability of
loans for apartments, albeit with
stricter financial requirements —
account for the apartment sales uptick.
Michael Shemo, president of
Wolf Real Estate Group in Beachwood, said occupancies are high in
the region, and rents are up.
“Northeast Ohio is seen as a stable market, because we don’t have
the thousands of apartment units
coming out of the ground that you
see in other markets such as the
Carolinas,” Mr. Shemo said. The
market is so attractive that Wolf is
preparing to offer about 500 units
for sale, he said, though he would
not identify the properties.
The Northeast Ohio Apartment
Association trade group estimates vacancy is just 3.2% in the region, a very
low number by historical standards.
Meanwhile, “money is cheap,”
says Joe Bobeck Jr., development
manager at Great Lakes Financial
Group of Cleveland. Governmentbacked apartment loans can be had
for 4.5% to 5.5%, while interest rates
for other commercial properties
start at 5.5% and go up from there.
Moreover, government-backed loans
do not require personal guarantees
and often are assumable, though down
payment requirements remain high.
Still, getting the money remains
an issue in some cases, even for
well-heeled groups.
For instance, Finch Group, a
Boca Raton, Fla.-based apartment
owner and developer, is assembling
city, state and federal funds for a
$12 million renovation of Hawk’s
Landing Apartments, 14601 Puritas
Ave. in Cleveland, as it works to
OPENING NEW DOORS
Apartment owners ring up multimillion-dollar deals in 2011:
■ Emerick Manor, 4671 Country
Lane, Warrensville Heights, is a
133-unit complex acquired by a
Brooklyn, N.Y., investor group for
$3.3 million.*
■ Stone Ridge, 1000 Stone
Ridge, Berea, is a 144-unit complex
acquired by a Pittsburgh investor
group for $13.3 million.*
■ Dorchester Village, 137 Chestnut Lane, Richmond Heights, is a
473-unit complex acquired by a
New York City-based apartment
concern for $5.4 million.*
■ Lakeland Plaza, 25551 Lakeland Blvd., is a 120-unit complex
acquired by K&D Group of Willoughby
for $1.2 million.**
SOURCES: *ALEC PACELLA, NAI DAUS, AND
REAL CAPITAL ANALYTICS.
**CUYAHOGA COUNTY LAND RECORDS.
close a deal with a court-appointed receiver to buy the property, said Mark
Dodds, Finch’s Cleveland-based
staff architect. Mr. Dodds declined
to say how much Finch would pay
for the property, though he noted it
will not acquire the complex without
funds to redo it.
“It’s a wreck,” Mr. Dodds said of the
144-suite complex that dates from the
1960s. “The only things we’re saving
are the brick veneer outside and the
masonry inside the buildings.” The
acquisition will give Finch its fifth
5
property, and nearly 1,000 units, in
Northeast Ohio, Mr. Dodds said.
healthy enough today that “we’re
seeing multiple bids again,” he said.
More lookers
Downtown deals afoot?
Dan Siegel, the Beachwood-based
owner of about 5,000 rental units, recently added to his holdings with the
purchase for $600,000 of the 60-unit
Kingsway Apartments, 2326 W. 14th St.
in Cleveland’s Tremont area.
“The property has a lot of potential,” Mr. Siegel said. “There are few
large apartment properties in
Tremont; it’s mostly single-family
properties. It’s a nice infill location
where people want to live, especially
since all the restaurants went in. It’s a
great location for people who work
downtown and want to live nearby.”
Mr. Siegel said he knows “a lot of
people” also looked at the Kingsway
because the 19th-century structure
has “good bones.” He plans to
renovate the building, now just 75%
occupied, to boost occupancy, and
to hike rents by about $100 a month
to between $550 and $650.
The revival in the popularity of
apartments as investments has its
downside, according to Mr. Siegel,
who said he knows he will pay more
for apartments now than he did a
year ago. He said he has seen some
properties trade for more than he
would have paid for them.
Dan Burkons, a Marcus & Millichap vice president who handles
apartment properties, said among
properties of less than 200 units,
local “mom-and-pop” buyers are
able to buy properties again after
being outbid by investors from the
coasts earlier this decade. Mr. Burkons
said the market has improved every
year since it died in 2009. It’s
Meanwhile, bigger deals are looming. A sale of Statler Arms, 1127 Euclid
Ave., may be in the cards, as it is an
asset in the Lehman Brothers Holding
Corp. Chapter 7 bankruptcy action
that is nearing completion in the
Southern District of New York. If
Statler Arms does not stay in a portfolio of more than 10,000 apartment
units that court minions are marketing, a local buyer may do a follow-on
deal, insiders say.
A Lehman affiliate, Pami Statler
LLC, in 2006 bought Statler Arms
after a developer defaulted on a $33
million loan backed by the U.S.
Department of Housing and Urban
Development; the loan was used
to convert the one-time hotel and
office building to apartments.
Also, industry insiders say multiple owners of large local portfolios
have looked at the 340-suite Bingham Apartments, 1278 W. Ninth St.
in the city’s Warehouse District.
RRE VIP LLC, an affiliate of Philadelphia-based Resource Real Estate
Inc., last year bought the defaulted
$45 million HUD loan that was used
to convert the former warehouse to
apartments. It later foreclosed to
gain title to the trendy loft complex.
If either or both big properties
trade, their sale prices are likely to
be in the tens of millions of dollars.
Downtown Cleveland properties, in
particular, are benefiting from the
addition of the Medical Mart and
Convention Center, the Horseshoe
Casino Cleveland and Flats East
Bank office-hotel project.
■
6
9/9/2011
1:21 PM
Page 1
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SEPTEMBER 12 - 18, 2011
Cleveland Hts. tests economic
strategy with security outfit
By JAY MILLER
[email protected]
Cleveland Heights wants to be
known as a safe city. Now it’s trying
to use its new economic development department to help make that
case — and to bring jobs to the eastern suburb, too.
A centerpiece of the city’s efforts
involves inking an agreement with
FST21 Ltd., an Israeli security technology company that would make
Cleveland Heights its regional base
of operations. FST21 is preparing to
roll out its new, highly regarded
SafeRise system, a biometric security
product that it is bringing to the
United States. The business needs a
conditional occupancy permit from
the city to open for business and is
negotiating a lease with the city for
space in the former Coventry School.
“We would like to be considered
the homeland security mecca of the
Midwest,” Mayor Ed Kelley said. “We
believe that this type of security is
the wave of the future, and we are
going full throttle ahead trying to
attract and locate these businesses
here in Cleveland Heights.”
The city is tagging the program,
“Smart City, Safe City.”
The strategy evolved as Cleveland
Heights was outfitting Coventry
School for commercial use. It’s leasing
out office space in the 1970s-era
school building and hopes to attract
other tenants with a business development center there that will nurture small businesses.
The business center will be operated by Cleveland State University
with some state and federal small
You Need A
Production Worker.
“This is a new wave of
economic development.
We’re ahead of the
curve.”
– Ed Kelley, mayor, City of
Cleveland Heights
business money. Beachwood had
hosted the center, but it lost its home
when that city decided to close its
business incubator late last year.
It might seem odd that a small
city such as Cleveland Heights —
population 46,121 — in a large metropolitan area would be looking to
create an economic development
strategy on its own. But the city is
undaunted.
“This is a new wave of economic
development,” the mayor said.
“We’re ahead of the curve.”
Testing a concept
The city was looking for a security
system for the school building late
last year and found FST21 through
Howard Gudell, a partner in SGI
Global Business Advisors LLC, an
international business consulting
firm. Mr. Gudell also was a founder
of the Ohio-Israel Chamber of Commerce, which has been successful
at attracting Israeli companies to
Northeast Ohio.
As the city talked about installing
the FST21 system, the concept of
using Cleveland Heights as a base of
operations for FST21 in the region,
and using city buildings for system
demonstrations and beta testing,
began to take shape.
“We thought there was an opportunity to expand the concept to
drive an economic development
program around it,” said Howard
Thompson, who was hired by
Cleveland Heights last December
as its first economic development
director.
Mayor Kelley said the city has a
number of older office buildings of
various sizes and from various eras
that he believes can be attractive to
young businesses looking for lowcost space.
“This can be a huge opportunity
to implement a part of my dream to
build a safe and secure smart city,”
said Aharon Zeevi Farkash, FST21’s
chairman and CEO, during a visit to
Coventry School last month. “One
of the major vectors that will face
our life in the 21st century is the
development of mega-cities” and
the security needs that come with
them.
Mr. Farkash is a retired Israeli
major general who at one time was
head of military intelligence.
An opportunity recognized
In addition to using security firms
to bolster its tax base, Cleveland
Heights wants to be the place where
these new technologies are tested.
So it will install a SafeRise system at
city buildings and hopes to spread
their use to schools and even apartment buildings in the community.
Mr. Gudell, a consultant to Cleveland Heights, said the business
attraction effort initially will focus
on Israeli companies.
“We want to attract advanced
homeland security companies and
technologies from around the
world,” he said in an email. “Israel
will be the initial country we would
concentrate on because of its leadership position in homeland security
technologies and our (SGI Global’s)
relationship with Israeli companies
and government officials.”
FST21’s SafeRise security product
is a biometric identification system
installed at entryways. It uses a
combination of face and voice
recognition to scan and identify the
person seeking entry. If the individual is known to the system — say, a
resident of a building or employee
of a company — the system can
grant access immediately. If the
individual isn’t known, the system
uses voice prompts to ask questions
and call a resident or a reception
desk to authorize entry.
It even can analyze emotional
patterns in voices to determine if a
person known to the system is under
duress.
SafeRise was named product of
the year at the 2011 Security Industry
Association New Product Showcase
and won a similar award at the 2011
Electronic Security Expo.
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8
9/9/2011
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Page 1
SEPTEMBER 12 - 18, 2011
Akron marathon participation keeps pace Physician fees key
contributor in
higher spending
Event continues to set
healthy gains; companies
also step up sponsorships
By JESSICA ZIGMOND
Modern Healthcare
By JOEL HAMMOND
[email protected]
An economic impact study conducted by
the University of Akron’s economics department last winter showed the Akron Marathon
contributed more than $4 million to the area’s
economy.
Expect that figure to grow significantly after this year’s event, set for Saturday, Sept. 24.
If participation hits the cap race officials
have set, the number of runners would
increase nearly 29%, to 14,250, over last year’s
total of 11,051. In 2009, 10,566 runners participated, up from 9,100 in 2008.
Look for the event to reach its goals, as
procrastinators send in registrations at a rate
of “hundreds a day,” said Katie Greenwald of
Hitchcock Fleming & Associates, which handles public relations for the race.
The event features four races: a full
marathon (capped at 2,000 runners), a half
marathon (4,250), a marathon relay (6,000)
and a 1-mile kids’ fun run (2,000). The Akron
marathon relay — in which five runners
compete in varying distances, from an uphill
2.8-mile segment to a race-closing 7.9-mile
stretch — is the fourth-largest relay event in
the country, according to Running USA, a 12year-old nonprofit running advocacy and
research group based in Los Angeles.
Running USA data also show the growth in
Akron mirrors a nationwide trend. According
to the group, marathon participation in the
PHOTO PROVIDED
Participation continues to rise at the Road Runner Akron Marathon.
United States rose 8.6% in 2010 from 2009, to
507,000. The largest, in New York City, drew
44,977 participants.
Half marathons experienced even greater
growth — to 1.4 million finishers in 2010 from
1.1 million in 2009, a jump of 24%. The largest
half marathon, in Indianapolis, drew 31,046
runners. Ms. Greenwald said the 60% growth
in female participation also is mirrored in the
Akron field.
Sponsors, too
Runners aren’t the only ones returning or
flocking to the race; sponsorships, too, are
increasing.
Ms. Greenwald said sponsorships overall
are up 6% this year compared with last year.
They include Time Warner Cable, the event’s
title sponsor, and Acme Fresh Markets and
Novo Nordisk, which sponsor the half
marathon and relay, respectively.
Time Warner Cable renewed its sponsorship this winter, and will stay in the fold for at
least the next four years. And it wasn’t a difficult
decision, according to director of public affairs
Tish Biggs, who cited the name of the company’s
high-speed Internet service — Road Runner —
being a perfect fit. (Marathon officials
dropped the Road Runner name this year.)
“We were there from the beginning, and
we’ve always felt the race offers a great opportunity to the community to come together,” Ms.
Biggs said of the event that started in 2003
with 3,473 participants. “It’s a very healthy
activity. We saw it as a wonderful opportunity
for our brand.”
■
New research finds that fees paid to physicians in the U.S. are higher than in other countries and are the main cause of higher overall
spending in America on physicians’ services.
The study — which appears in the September issue of the journal Health Affairs —
reported that 2008 per capita spending on
physician services in the United States was
$1,599, while per-person spending for these
services across all other Organisation for Economic Co-operation and Development countries averaged about 81% less than that, or
about $310 per person.
The study also showed that public and
private payers paid somewhat higher fees to
primary care physicians and much higher fees
to orthopedic physicians for hip replacements
than their public and private counterparts in
other countries. And both U.S. primary-care
and orthopedic physicians also earned higher
incomes — $186,582 for the former and
$442,450 for the latter — than those physicians in other countries.
“For decades, concern has been raised that
greater financial incentives may be needed so
that enough American doctors will choose to
become primary-care physicians,” wrote the
study’s co-authors, Miriam Laugesen, an
assistant professor of health policy and management at Columbia University, and Sherry
Glied, assistant secretary of planning and evaluation at the U.S. Department of Health and
Human Services.
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SEPTEMBER 12 - 18, 2011
9
Community-focused funds capitalize on JumpStart model
By CHUCK SODER
[email protected]
John Dearborn believes small
cities can be good places to grow
small companies into big ones.
Over the past nine months, four
Northeast Ohio cities — Barberton,
Canton, Wooster and Mansfield —
have worked with JumpStart Inc. to
start or expand seed loan funds for
startup companies that appear to
have high growth potential.
A few more cities in the area likely
will join them over the next year or two,
said Mr. Dearborn, president of JumpStart, a Cleveland-based nonprofit
that assists and invests in startups.
The seed loan funds are meant to
help the cities grow their own companies and, in some cases, attract
startups from other areas.
None of the cities that have started
funds is particularly large — Canton
has about 73,000 residents, Mansfield has about 48,000 and both Barberton and Wooster have fewer than
27,000, according to 2010 figures
from the U.S. Census Bureau.
Startup companies, however,
don’t need to be based in big cities,
Mr. Dearborn said.
He described how, in the late
1980s, he helped start a company in
a town of 2,000 people in New
Hampshire. The company, Astral
Development, created one of the first
image-editing programs for the PC.
“Ideas can come from anywhere,”
he said.
Barberton Community Development Corp. in August said it would
launch a $500,000 fund that would
provide loans of up to $50,000 to
companies that appear able to raise
additional venture capital. The only
catch is the company has to be based
in Barberton or move to the city.
Canton started a similar fund
in July. Wooster started one last
November.
Mansfield’s fund is somewhat
different. The Braintree Business
Development Center in Mansfield
over the past year has loaned almost
$100,000 to four Richland County
companies through the Appleseed
Microfinance fund, said Bob Leach,
Braintree’s director of operations.
Braintree and JumpStart announced
last week that the fund would begin
loaning money to companies
throughout Northeast Ohio, but it
largely will target companies in
rural areas because most of the money
it has raised so far came from a U.S.
Department of Agriculture grant.
Strength in small numbers
The groups that run the funds
choose the startups that receive the
loans, which tend to have low interest rates and friendly payback terms.
However, JumpStart helps them find
the companies, and in some cases it
helps them figure out which ones
deserve money.
JumpStart did not seek out the
cities and suggest that they start loan
funds for startups, said Cathy Belk,
chief relationship officer at JumpStart.
Instead, during conversations that
the nonprofit regularly holds with
area leaders, officials from those
cities inquired about how they might
create and attract more startup companies.
During those conversations,
JumpStart often cited Cuyahoga
County’s North Coast Opportunities
Technology Fund as a model they
could follow. That fund has made
$1.6 million in loans to 18 startups
that since have raised more than $6
million in follow-on capital. They
employ 40 people, though some of
the entrepreneurs did not include
themselves in that figure.
Though there naturally are going
to be more startups to finance in
Cuyahoga County due to its size,
Wooster has shown that big opportunities exist in small cities, too, Ms.
Belk said. She cited how ABSMaterials Inc. recently raised $11 million
to help it commercialize a water
purification technology developed
at the Ohio Agricultural Research
and Development Center in Wooster.
“A lot of small towns can look at
that and say, ‘We’re a small town.
Why couldn’t we have that, too?’”
she said.
Leveraging existing assets
entrepreneurs to Barberton, Mr.
Genet said, noting that a lack of
convenient highway access makes
it hard for the city to attract larger
companies.
Mr. Dearborn said he doesn’t
expect Northeast Ohio communities will use city-focused funds to
steal startups from one another.
Instead, the loans will push wouldbe entrepreneurs to pursue their
ideas, he said, again citing his experience starting Astral Development.
“The most important decision
was to start,” he said.
Mr. Dearborn said he knows of
no other region with so many community-focused funds in such close
proximity.
Among Barberton’s assets are the
Babcock & Wilcox Power Generation
Group and plants owned by aluminum maker Alcoa and specialty
materials producer PPG Industries.
From those companies could
come spinoffs or former employees
who want to start their own business, Mr. Dearborn said.
Barberton Mayor Bob Genet also
cited those companies as assets.
“There is a lot of activity here in
the city of Barberton,” Mr. Genet said.
The Barberton Community
Development Corp. wanted to start
the fund partly because it wanted
something it could use to attract
Neither does Jim Jaffe, president
and CEO of the National Association of Seed and Venture Funds,
which is based in Philadelphia.
Mr. Jaffe said the guidance of
JumpStart — an organization he
respects — will be essential to these
loan funds. Otherwise they may not
be able to figure out which startups
have the best chance of succeeding,
he said.
Mr. Jaffe agrees that it’s possible
for small cities to attract and grow
enough startups to make seed loan
funds a worthwhile investment.
He’s not yet ready, however, to say
they’ll succeed.
“Is it a good idea? I don’t know,”
he said.
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20110912-NEWS--10-NAT-CCI-CL_--
10
9/8/2011
3:52 PM
Page 1
SEPTEMBER 12 - 18, 2011
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker ([email protected])
EDITOR:
Mark Dodosh ([email protected])
MANAGING EDITOR:
Scott Suttell ([email protected])
OPINION
Blah blah
A
stimulus plan by any other name is still the
same. It all amounts to the government
trying to engineer an economic recovery,
and as we’ve seen over the last three years,
government engineering can’t replace market
forces in producing large quantities of jobs that last.
Remember the immortal words “shovel-ready
projects,” anyone? That’s the phrase President
Barack Obama repeatedly used as he went about
selling his original stimulus package shortly after he
took office in January 2009. He cast a vision of hundreds of thousands of workers toiling away on infrastructure projects that were ready to roll. Well, the
promised jolt didn’t happen.
A report in the summer of 2009 by the Government Accounting Office would reveal that most of
the stimulus outlays for state and local governments
weren’t going toward roads, bridges, sewers and
other public works projects. Rather, the GAO would
report, most of the money was bolstering Medicaid
programs and the budgets of state governments,
including Ohio’s, so that hordes of the president’s
supporters — unionized public employees —
wouldn’t need to be laid off. When the stimulus
money ran out, so did the means to pay for those
jobs, leaving governors such as John Kasich with the
inevitable (and unenviable) task of laying off workers
who by all rights should have been out of work way
back then.
So, let’s scratch off our job-creation (notice how
we didn’t use the word ‘stimulus’?) list any proposal
that involves trusting the government to dole out a
large pot of money for a specific purpose.
Instead, let’s focus on eliminating government
initiatives that inhibit private-sector hiring because of
their feared cost to employers. Start with amending
the president’s health care plan as constituted, or
repealing it altogether and devising a proposal that
won’t make employers afraid of adding to their
payrolls.
To help return to the job rolls people who already
are out of work, let’s get behind legislation pushed
by Ohio’s senior U.S. senator, Sherrod Brown, that
would prohibit employers from refusing to consider
unemployed Americans for open jobs. It’s unconscionable how some employers explicitly exclude the
unemployed from consideration for job openings,
including by telling employment agencies to screen
out jobless applicants.
And to give consumers and employers a greater
sense of the long-term financial stability of the U.S.
government, let’s quit proposing grandiose programs that only add to the federal deficit and instead
concentrate on piecing together a plan for bringing
down the deficit, and with it, the federal debt.
The president and Congress both have managed
to lose the faith of the American people. The latest
public opinion poll released last Wednesday, Sept.
7, by the IBOPE Zogby International research firm
found that the percentage of voters saying the
nation is on the wrong track reached a new high of
75%. The message people are sending is that they
don’t want a stimulus; they know the government is
broken (and broke), and they want a fix. And the
country will continue to slog along until they get it.
FROM THE PUBLISHER
Remembering our man Dirk Kruger
D
irk Kruger was indeed a man of
stop. I only wish it could have been
his word.
longer — much longer.
I first met Dirk when he
After four very successful years with
came to Cleveland for a lunch
our sales team, Dirk tragically was killed
to discuss future job prospects at Crain’s
in a car crash on the Thursday before the
Cleveland Business. At the time, he was a
Labor Day weekend. According to news
senior sales representative for a weekly
reports, the driver of an oncoming vehibusiness newspaper in Pittsburgh. He
cle crossed the center line on state Route
was doing well, enjoying his
44 at mid-afternoon and ran
job and had been a leading
head-on into Dirk’s car. Dirk
BRIAN
member of their sales team for
never made it out of Robinson
TUCKER
several years. Dirk’s wife, Tracy,
Memorial Hospital (his obituwas from Pittsburgh, so family
ary appeared last week in our
was close.
pages).
Dirk, however, drew on his
Throughout last week, as we
adaptive strength from growing
gathered at the wake and again
up in a military family, and felt
at his memorial service, I couldn’t
there was something better
help but recall Dirk’s words
here in Cleveland. The consumwhen he first met with Crain’s
mate family man, Dirk had besales director Mike Malley and
friended a Cleveland-area family at
me.
junior baseball tournaments in which
“I know about Crain and what a great
his son was playing, and liked what he
company it is,” he said. “I know about
heard about our town.
your paper and love the idea of moving
Dirk and Tracy visited, and were
to Cleveland and selling for you.
intrigued. So Dirk went about mapping
“And I promise you — you won’t be
his plan for coming to Cleveland, and
disappointed.”
I’m so thankful that Crain’s was his first
Well, Dirk lived up to that promise,
and much more. He worked tirelessly,
always among our leading sales representatives, helping advertisers develop
the perfect mix of print ads, digital
impressions and event sponsorships
to support their business-to-business
branding efforts in Northeast Ohio.
His clients loved him because he
was there to help them. For Dirk, it was
never about simply getting the next ad
from a client, and then moving onto his
next appointment. He knew we would
only be successful if we were helpful, and
that is exactly what he did for all his
clients.
We all miss him already, and that’s a
void we’ll feel for a long time. But it will
be especially hard during college basketball season, and especially during March
Madness when his beloved Kansas Jayhawks always would be in the mix.
So we tip our hat, remember his contagious grin and recall his usual greeting
during the NCAA basketball tournament:
“Rock, chalk, Jayhawks, baby.”
I’m sure he’s in heaven, thinking
about his pool sheet. We’ll always know
who he picks to win it all.
■
THE BIG ISSUE
Should the federal government be spending money to create jobs or cutting expenses to decrease the national debt?
JAY WESTBROOK
JOHN JENKINS
AL SAMMON
STACEY HULL
Cleveland (represents
Ward 16 for Cleveland
City Council)
Cleveland
Bay Village
Cleveland
They should be looking at ways
to cut the national debt, and
they should be spending money
to create jobs. We’ve got an
infrastructure problem in the
United States, so we need to
look at that.
I think they ought to be
spending money to create
jobs. Nine to 10% unemployment nationwide — it’s pretty
clear we need some job focus.
I think they should be cutting
costs right now. They seem to
be spending a lot as it is.
Spending money to create
jobs. I believe the proper role
of government is to spend
money on public works and on
infrastructure.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com
20110912-NEWS--11-NAT-CCI-CL_--
9/8/2011
2:14 PM
Page 1
SEPTEMBER 12 - 18, 2011
Tech execs target more IT grads
Group continues work
after grant runs out
By CHUCK SODER
[email protected]
The plan to pump up Northeast
Ohio’s pipeline of information technology graduates is starting to fall
into place.
A board that includes IT executives
from some of the region’s biggest
companies has taken some early
steps to increase the number and
quality of IT students graduating
from area colleges.
For one, the Regional Information
Technology Engagement Board has
laid the foundation to start implementing a British job classification
system that could give colleges and
IT students a better sense of the skills
and traits businesses want for various
IT positions.
The RITE Board also is working
with colleges to create a culture where
more IT students apply for internships and know where to look for
them; has designed the first version
of a scorecard colleges can use to
evaluate their IT programs; and has
produced events and marketing
materials meant to convince younger
students to pursue IT careers.
Perhaps the most important
achievement, however, is that the
two-year-old RITE Board still is
passionately pursuing its goal, even
though the $287,000 state grant that
financed much of its work over the
past year ran out in June, said Jim
Shanahan, director of the Entrepreneurship Innovation Institute at
Lorain County Community College.
The school is one of five area colleges
working with the board.
“The most important thing is to
keep this moving,” said Dr. Shanahan,
who helped organize the RITE
Board as part of a state initiative
called the Ohio Skills Bank.
The board’s effort to implement
Britain’s Skills Framework for the
Information Age has a lot of potential, said co-chair Joe LaMantia, who
also is president of supply chain software firm e-Ventus Corp. of Cleveland.
The SFIA (pronounced “Sophia”)
system was designed to define the
skills and traits someone needs to
fill a particular IT position. That
way, a student interested in IT can
figure out what a “business analyst”
does, for instance. Then a college
can better prepare the student for
that job and more easily find him or
her a relevant internship.
The board — which includes
high-level IT executives from 16
organizations such as the Cleveland
Clinic, Sherwin-Williams Co. and
Goodyear Tire & Rubber Co. — held
focus groups to define the skills and
traits needed to fill five common
entry-level IT jobs at RITE Board
companies. Then about 60 IT students
from the five partner schools — LCCC,
Cleveland State University, the University of Akron, Baldwin-Wallace
College and Stark State College — took
tests to gauge how good of a match
they were for their preferred jobs.
The board plans to keep exploring
ways to apply the SFIA system more
broadly, Mr. LaMantia said.
Board co-chair Bill Blausey, who
also is chief information officer of
manufacturer Eaton Corp., emphasized how the board is trying to get
more companies and schools to
post and hunt for internships on an
existing website, NeoIntern.net.
Schools are putting more emphasis
on IT internships, too, Mr. Blausey
said, noting how Baldwin-Wallace
put someone in charge of IT internships because of the board.
“You have a really big difference
school to school on how much
importance they place on these
internships and co-ops,” he said.
The RITE Board conducted surveys following the events it organized to drum up interest in IT, and
it plans to conduct more analysis on
what marketing methods work best,
Mr. Blausey added.
In the future, the board likely will
get more grant money to add to the
dues it collects from board members,
Mr. LaMantia said. If it doesn’t,
though, it will continue on, he said.
“The people in the industry leading
this are very committed to solving
this problem,” he said.
■
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Rubber & Plastics News
Goodyear Tire & Rubber Co.’s
North American Tire business has
shown solid improvement in the
first six months of 2011, and
Stephen R. McClellan, the unit’s
new president, is looking for more
of the same in the second half.
Mr. McClellan, who was named
to the top spot in mid-August, said
the operation has great momentum
going for it after delivering strong
results in each of the first two quarters.
“This is a great time for the (North
American Tire) business,” he said,
and it has “great products, talented
people building them and selling
them, and consumers who see their
value.”
Mr. McClellan took over the
presidency of North American Tire
following the recent departure of
Curt Andersson, who left Goodyear
to pursue “other professional interests,” according to the company.
During Mr. Andersson’s tenure, “we
have continued our progress toward
returning North American Tire
to sustainable profitability,” said
Richard J. Kramer, the Akron-based
tiremaker’s chairman, president
and CEO.
Mr. Andersson had been with
Goodyear since early 2010, when he
was brought on board as president
of North American Tire, replacing
Mr. Kramer in that position. He
previously worked at the Cooper
Crouse-Hinds division of Cooper
Industries in Syracuse, N.Y.
The 45-year-old Mr. McClellan,
who has served as president of the
company’s North American consumer business division since 2008,
will continue his duties in that position until a successor is named.
He is confident the North American
Tire unit will continue to grow.
“Our strategy is sound, and we’re
on the right path,” McClellan said.
“Even though we’re facing challenging
work and demanding goals, I’m
confident we will deliver because of
the strength of our products, the
improvement of our processes and
the capabilities” and dedication of
the business unit’s employees.
He maintained that North American Tire will be successful because
it has one of the world’s greatest tire
brands, “outstanding products and
a commitment to operational excellence.”
Since joining Goodyear in 1988,
Mr. McClellan has held a variety
of management positions on the
consumer side of the business,
including finance, sales and distribution.
In December 2001, he moved
into Goodyear’s commercial business, initially as president of Wingfoot Commercial Tire Systems before
becoming vice president, Commercial Tire Systems, in September
2003.
“Steve brings strong leadership
and a proven track record of
delivering results,” according to Mr.
Kramer. “Steve’s career of more
than 20 years at Goodyear has
included progressively larger leadership positions within North American Tire. His success in running the
North American consumer and
commercial tire businesses and his
strong relationships with customers
make him a natural successor to the
role.”
A strong believer in working as a
team, Mr. McClellan cited two key
areas that Mr. Kramer stresses:
building capabilities while delivering
results.
“One person doesn’t do that,” he
said. “We do it together.”
■
(Mike McNulty is a senior reporter
with Rubber & Plastics News, a sister publication of Crain’s Cleveland
Business.)
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11
20110912-NEWS--12-NAT-CCI-CL_--
12
9/8/2011
1:25 PM
Page 1
SEPTEMBER 12 - 18, 2011
Type: Employer’s withholding,
unemployment
Amount: $112,714
TAX LIENS
The Sky Quest Travel Experience:
The Internal Revenue Service filed tax
liens against the following businesses
in the Cuyahoga County Recorder’s
Office. The IRS files a tax lien to
protect the interests of the federal
government. The lien is a public notice
to creditors that the government has a
claim against a company’s property.
Liens reported here are $5,000 and
higher. Dates listed are the dates the
documents were filed in the
Recorder’s Office.
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CONVENIENCE
LIENS FILED
Light of Peace Society
12015 Cromwell Ave., Cleveland 44120
ID: NA
Date filed: July 19, 2011
Type: Individual income tax return
Amount: $500,987
Northern Ohio’s Premier Air Charter Company
216-362-9904
www.FlySkyQuest.com
[email protected]
Empire Management Group LLC
27000 Springside Lane, Olmsted Falls
ID: 33-1036273
unemployment
Amount: $150,294
Lobecks Hot Rod Parts Inc.
560 Golden Oak Parkway, Cleveland
ID: 34-1454604
unemployment
Amount: $149,749
SJT Enterprises Inc.
28045 Ranney Parkway, Suite L,
Westlake
ID: 34-1638133
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City View Mechanical Inc.
6111 Carey Drive, Suite 2, Valley View
ID: 20-0205114
unemployment, corporate income
Amount: $100,833
Yelsky & Lonardo Co. LPA
75 Public Square, Suite 800, Cleveland
ID: 34-1527486
unemployment, partnership income
Amount: $68,137
Northeast Ohio Electric LLC
5069 Cohen Drive, Bedford Heights
ID: 34-1921661
Type: Employer’s withholding
Amount: $65,137
Anna Carrie Home Health Care
and Services Inc.
15322 Waterloo Road, Cleveland
ID: 30-0264062
Type: Employer’s federal tax return
Amount: $39,661
Green Thumb Florists Garden
Center and Landscapers Inc.
11515 Lorain Ave., Cleveland
ID: 34-1824632
unemployment
Amount: $26,027
Will Repair Inc.
2901 E. 65th St., Cleveland
ID: 34-1577547
Amount: $25,073
Kyron Plating Corp.
1336 W. 114th St., Cleveland
ID: 34-0960138
Amount: $21,517
The Ventures Inc.
P.O. Box 771686, Lakewood
ID: 20-5967810
unemployment
Amount: $19,211
Itek Systems Inc.
22700 Shore Center Drive, Suite 100,
Euclid
ID: 34-1874489
Amount: $16,272
Thompson Ground Development Inc.
12640 Euclid Ave., East Cleveland
ID: 34-1533357
Type: Employer’s withholding, unemployment, failure to file complete return
Amount: $15,376
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X L Excavating Inc.
12291 Eagle Nest Drive, North Royalton
ID: 34-1971682
Type: Employer’s federal tax return
Amount: $14,143
CORPORATE BANKING BUSINESS BANKING TREASURY MANAGEMENT COMMERCIAL REAL ESTATE PRIVATE BANKING
ANKING
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Kidz Corner Inc.
3749 E. 142nd St., Cleveland
ID: 26-0385951
unemployment
Amount: $13,622
Q
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BUS708_11
Task Force Interiors LLC
3574 W. 44th St., Cleveland
ID: 65-1313251
Amount: $12,263
20110912-NEWS--13-NAT-CCI-CL_--
9/8/2011
2:15 PM
Page 1
SEPTEMBER 12 - 18, 2011
Rebirth: Potential extends beyond W. 25
th
“This is a neighborhood that has
some real partisans moving in who
are looking to put their roots
down,” says videographer Graham
Veysey, a Shaker Heights native
who rented a Bridge Avenue loft in
Ohio City when he came home
from New York three years ago. Mr.
Veysey said he decided, even then,
that the renaissance of Ohio City “is
for real and not just talk.”
Mr. Veysey now has put his money
where his mouth is. Through Ohio
City Firehouse LLC, he recently
shelled out almost $400,000 to buy
Firehouse No. 4, 1455 W. 29th St.,
which had languished on the market
for years.
The six-person staff of Mr. Veysey’s
North Water Partners video business
is in the firehouse’s second floor rec
room and he lives on the first floor.
He also is renting out to other businesses parts of the structure that
most recently were used as a photography studio, and he even has a
bidding war for one office.
Keeping the faith
Mr. Veysey is no loner in commercial investment in the neighborhood.
At 1810 W. 25th St., at the southwest corner of West 25th and Jay,
workers recently exhumed three
storefronts that were bricked in and
plan soon to begin removing bricks
from sashes on the building’s north
side for another nine windows.
The space in the building that
dates from the early 20th century is
the latest venture by TEG Properties LLC, which owns the nearby
Heil and Gillespie buildings, 1848
W. 25th and 1836 W. 25th, respectively,
at Bridge Avenue.
Tom Gillespie, TEG’s owner, said
he is adding the 8,000 square feet
of retail space because he is
impressed by resurgent retail interest
in the street. He credits that
interest to the nearby breweries
and developer MRN Ltd.’s $20 million makeover of the United Office
Building and other nearby structures as new-breed retail space, with
tenants such as Penzeys Spices and
Campbell’s Popcorn Shop.
“We used to only get inquiries
(about vacant retail space) from
pawn shops, furniture stores and
used appliance shops,” said Mr.
Gillespie, whose TEG ventures are a
sideline to his environmental consulting company, Getco Environmental, which has offices in his
Gillespie Building.
Mr. Gillespie restored the Heil
and Gillespie buildings as contemporary retail, office and loft space a
decade ago while retaining their
classic post-Civil War era looks. He
has weathered the coming and
going of many tenants through the
years.
“I’ve never lost faith in the
street,” Mr. Gillespie said. He
declined to say how much he spent
on getting the new storefronts
ready — some of the former Woodworks furniture refinishing shop
“We see Lorain as
another avenue for
growth. There are a
lot of buildings there.”
– Eric Wobser, executive
director, Ohio City Inc.
still has classic tin ceilings above it
— but he’s putting his own money
into the venture.
“There’s little lending for this
type of investment property without tenants and a 40% down payment,” Mr. Gillespie said. His solution: using his own equity, hiring
his own crews and working in the
space on weekends with his 3-yearold son, Owen, as a helper.
Lofty goals
Ironically, making a go of the
restored sandstone and decorative,
steel-columned storefronts pulled
TEG Properties into an even bigger
venture.
To provide needed parking
spaces for the new storefronts and
his other properties, a partnership
Mr. Gillespie heads last year
acquired the mortgage on the former Jay Hotel property, 2515 Jay
Ave., which stands immediately
west of the building with his
new storefronts. He subsequently
secured ownership of the property
at a sheriff’s sale and has repaired
its parapets and windows to protect
it from the elements.
Thanks to its four-story height
and a façade with ornate carved
sandstone features, the old hotel
could serve as an anchor for the
north end of the Market Square
District, said Eric Wobser, executive
director of the Ohio City Inc. nonprofit development group. Mr.
Wobser sees the building as a site
for additional apartment rentals
and has heard talk of it as a boutique hotel.
Mr. Wobser’s enthusiasm aside,
Mr. Gillespie said he is not
convinced the old hotel could be
converted to apartments at a
market rate. He acknowledged he
has been approached by a developer
he declined to identify about using
it as a boutique hotel.
“It definitely will not become
condos,” Mr. Gillespie said of the
last failed makeover plan for the
hotel.
Mr. Wobser has his own reason
for advocating for more apartments: demand. He said vacancies
are almost nonexistent among loft
projects on the street. The situation
is the Ohio City version of the
familiar tale of resurgent rentals
after the collapse of the for-sale
housing market three years ago.
However, another loft project is
in the wings. West 25th St. Lofts LLC,
which owns the former Exhibit
Builders property at 1526 W. 25th St.
and several adjoining properties,
has secured Ohio Historic Preservation Tax Credits for a $7 million
restoration of the former Baehr
Brewery dating from the 1870s as
13
restored retail space and 67
market-rate apartment rentals.
Rick Foran, a member of West 25th
Street Lofts LLC, declined comment
on the project.
“We’re not discussing it until we
get financing,” he said.
Mr. Wobser said the loft project
could help extend redevelopment of
West 25th north toward Detroit Avenue,
much the way that MRN’s United
Office Building project stabilized the
south end of the Market District.
Market-driven
The time has come to look at projects spreading north in the Market
District, Mr. Wobser said, “since we
figured out Moda.”
The solution for the long-shuttered Moda nightclub at 1867 W.
25th fell into place last month as
Mitchell’s Ice Cream in Rocky River
announced it has optioned the property for another of its shops and for a
new headquarters to capitalize on
the food and entertainment-related
attractions of the West Side Market
area.
Even with all those projects, Mr.
Wobser said Ohio City is looking at
another way to build on demand
associated with the West Side
Market and nearby properties.
With a $7,500 grant from the nonprofit assistance group Neighborhood Progress Inc. and $2,500 of its
own, Ohio City Inc. has commissioned the Northeast Ohio Urban
Design Center to prepare a conceptual design for how to redevelop
Lorain Avenue west of West 25th Street.
“We see Lorain as another avenue
for growth,” Mr. Wobser said. “There
are a lot of buildings there.”
■
The largest pediatric
health care provider
in NE Ohio.
AKRONCHILDRENS.ORG
20110912-NEWS--14-NAT-CCI-CL_--
9/8/2011
1:21 PM
Page 1
Supporting the economy of Greater
Carbide Industries LLC
Central Carbide LLC
Manufacturer of calcium
chloride and acetylene
Participation in a multi-bank
credit facility
January 2011
Raven Lining Systems, Inc.
Manufacture and sales of high performance
coatings for wastewater treatment and
water infrastructure
L&M Auto Specialty LLC
Complete Auto Care Provider
Building contractor and construction
manager for the commercial, industrial
and institutional markets
Term Loan Financing
January 2011
Real Estate Financing
January 2011
Working Capital Line of Credit
January 2011
Stoddard NLA LLC
Branam Fastening Systems,
Inc.
Manufacturer and distributor of collector
Porsche car parts
OEM distributor of fasteners, hardware
and stud welding products
Working Capital and Term
Financing
March 2011
Line of Credit and
Equipment Financing
March 2011
Vintage Development
Group LLC
Chagrin River Walk LLC
National Threaded
Fasteners Ltd.
Real estate developers and
property managers
Flange bolt importer and distributor
February 2011
Working Capital Financing
March 2011
MPDS Memphis Ltd.
Emerald Overlook
MPDS West Park Ltd.
Canterbury Court
Panzica
Construction Company
Playhouse Square
Foundation
Consolidated
Investment
Corporation
Performing arts center
Multi-Unit Apartment
Community Managers
May 2011
Participation in multi-bank
revolving credit and
Allen Theatre renovation loan
May 2011
Real estate investment, management and
development company
SpringCo
Metal Coatings, Inc.
Versatile metal coating job shop with
multiple coating and plating capabilities
May 2011
Working Capital, Equipment and
Commercial Real Estate Financing
May 2011
Pearne & Gordon LLP
Davco Fastener Co.
WXZ Residential
Group / Hazel LLC
Intellectual property law firm providing
patent and trademark services
Industrial Fastener Distribution
Commercial Real Estate Developer
Working Capital and
June 2011
Multi Family Construction
Financing
July 2011
Monclova One LLC
Redwood Management specializes in the
development and management of
apartment communities
Financing
June 2011
June 2011
We believe in Greater Cleveland and we’re lending to the businesses that make it great.
Let us show you why these local companies chose FirstMerit in 2011.
For more information call Sean Richardson, Northcoast Region CEO, at 216.802.6565
20110912-NEWS--15-NAT-CCI-CL_--
9/8/2011
1:21 PM
Page 1
r Cleveland, one partnership at a time.
Shale
Construction
Services LLC
Duke Graphics, Inc.
KR Northwest LLC
Full service print, direct mail and
fulfillment provider
Redwood Management specializes in the
development and management of
apartment communities
Working Capital, Equipment and
January 2011
Financing
January 2011
Choice Child Care and
Preschool, Inc.
Provider of quality childcare and
educational programs
Construction Financing
April 2011
GPD
Development LLC
Ciro’s Property
Management, Inc.
Real Estate Owner and Manager
Commercial Owner-Occupied and
Investment Real Estate Financing
April 2011
D&S Custom Van, Inc.
Harbor Communications
LLC
Equipment rental, inspection and
engineering services related to storm
water, erosion and sediment control
Business media company with magazines,
websites and events for industries served
Equipment Financing
February 2011
Line of Credit
February 2011
Sheoga Hardwood Flooring
& Paneling, Inc.
Presrite Corporation
Manufacturer of solid, high quality
hardwood flooring and paneling
High-tech metal forging for a variety
of industrial applications
April 2011
Participation in a multi-bank
credit facility
May 2011
Continental
Enterprises Ltd.
Moving Solutions, Inc.
M.C. Mobility Systems, Inc.
Customized moving services for
local and long distance
Full service collision and restyling center
and mobility products dealer
Luxury Apartment Community
June 2011
June 2011
Real Estate Refinancing
June 2011
Real Estate, Equipment and
June 2011
Hodell-Natco Industries,
Inc.
Sea-Land Chemical Co.
Nationwide, solution-focused wholesale
distributor of fasteners and chain
100% employee owned specialty
chemical distribution company
Finance of Commercial Out Lots
July 2011
ABL Financing
August 2011
ABL Financing
August, 2011
Hemingway at Boston
Heights LLC
Construction and mini-perm
financing of a 25,000 sf
office building
July 2011
State Road
Associates
Member FDIC
20110912-NEWS--16-NAT-CCI-CL_--
16
9/8/2011
1:24 PM
Page 1
Malie to associate.
communications; Thea Wilson to
director, Department of Early Childhood Education.
Blaha, Andy Damberger, Joe
DeLiberato, Nick Hunter, Megan
Kessler, Dave Koval, Mike
Murphy, Brian Murray, Nicole
Oakes, Scott Schmit and Brad
Schoenfelt to senior associates.
UNIVERSITY OF AKRON: Nita
Sahai and Bryan Vogt to faculty,
College of Polymer Science and
Polymer Engineering.
SS&G: Anna Friedman and Sharon
Uecker to senior associates; Ann
Butekoff to manager; Sarah
Edwards to administrative assistant.
GOLDSTEIN GROUP COMMUNICATIONS: J. Paige Boyer to account
manager.
GOING PLACES
JOB CHANGES
ARCHITECTURE
VOCON: Jeff Gibbon and Kerre
Ovens to project managers; Greg
Roda to intern architect, designer
and project manager; Nick Faehnle
to project designer; Lindsey Ray to
interior designer.
CONSTRUCTION
GILBANE BUILDING CO.: Scott Orr
to project executive; Aaron Claxton
and Cameron Hill to project engineers; John Coughlin and Lenny
Jatsek to senior office engineers;
Todd Gerber to project manager;
William Helmet to senior project
engineer.
RUHLIN CO.: Suzy Martin to
marketing coordinator; Alan Ely to
site safety specialist; Bill White to
quality control specialist; Marquessa
Callaghan to safety/HR administrative assistant.
EDUCATION
CUYAHOGA COMMUNITY
COLLEGE: Belinda Miles to
executive vice president, Academic
and Student Affairs.
MUSIC SETTLEMENT: Lisa M.
Smith to director, marketing and
SEPTEMBER 12 - 18, 2011
FINANCIAL SERVICE
APPLE GROWTH PARTNERS:
Wayne Chamberlain to business
valuation senior associate; Lindsay
Cooper, Sean Cwynar and Paul
Martin to senior associates; Kathryn
Lee to human resources manager;
Tom McClary and Angelique
Rogers to managers; Krista Clarke
to associate.
ZINNER & CO. LLP: Joe Ramey
to senior manager, accounting
and tax services; Brett Neate to
tax manager; Ted Austin to IT
administrator.
HEALTH CARE
SUMMA HEALTH SYSTEM: Cynthia
Struk to president, Home Care, Hospice
and Palliative Care Services.
ULMER & BERNE LLP: Mark Floyd
to partner and co-chair, Employment &
Labor Practice Group.
MARKETING
LIGGETT STASHOWER: Kelly
Molnar to controller; Celeste
Conklin and Pete Grasso to account
supervisors; Laura Kuenzel to assistant media planner; Kurt Eyman to
account coordinator.
INSURANCE
COHEN & CO.: Neal Sheehan to
senior staff accountant; Bill Boyer,
Andreana Shengelya, Brendan
Walsh, Marissa Beck, Emily Kwong
and Carmella Ballone to staff
accountants; Todd Pence and Ben
Schillig to staff accountants, Cohen
Fund Audit Services; Shelyn Hunley
and Jenera Scott to Cohen Healthcare Consulting; Derek Austin to
software developer.
OSWALD COS.: Michelle Gaertner
to director of business development.
NONPROFIT
GRANT THORNTON LLP: Joe
TUCKER ELLIS & WEST: Paul J.
WILLCARE: John Ventresco to
community relations specialist.
LEGAL
DWORKEN & BERNSTEIN CO.
LPA: Jim Timmerberg, Shelley
Fleming and Joshua Strickland to
associates.
ROBERT J. FEDOR, ESQ., LLC:
Kevin L. Preslan to associate.
AMERICAN HEART ASSOCIATION:
Donna Ferrante to Cleveland Metro
vice president; Megan French to
director, go Red for Women.
EUCLID AVENUE CONGREGATIONAL
CHURCH: James J. Rutledge Jr. to
finance manager.
FAIRMOUNT CENTER FOR THE
ARTS: Jessica Leary Allen to
executive director.
SERVICE
nsights
RADCOM INC.: Tina White to
account representative.
FROM A
BUSINESS
OWNER
“Cox is responsive
to our needs
because they’re
local. And in
business, location
really is everything.”
Vogt
Feda
Struk
Malie
Boyer
Moore
J. Kallmeyer A. Kallmeyer
KNOTICE: Jeff Carey to director of
analysis and strategy; Brent Williams
to director, professional services.
SKODA MINOTTI MARKETING
SERVICES: John C. Moore to
managing director, strategic marketing
programs; John Kallmeyer to director
of visual marketing; Alyson Kallmeyer
to marketing project manager.
BEACON FINANCIAL PARTNERS:
Matthew Feda to planning advice and
technology specialist.
Sahai
BOARDS
AMERICAN HEART ASSOCIATION:
Jeffrey M. Embleton (Mansour,
Gavin, Gerlack & Manos Co. LPA) to
chairman; Brian P. Griffin to president.
AWARDS
SOCIETY OF RESEARCH
ADMINISTRATORS: Kathryn
Watkins-Wendell (University of
Akron) received a Distinguished
Faculty Award.
Send information for Going Places to
[email protected].
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20110912-NEWS--17-NAT-CCI-CL_--
9/8/2011
3:23 PM
Page 1
SEPTEMBER 12 - 18, 2011
17
SMALL BUSINESS
INSIDE
19 ADVISER:
CAREFULLY
WEIGH PRODUCT
IDENTITY.
Shoppers
rethinking
resale, see
value option
Consumers’ desire for
deals rises; stigma fades
By MICHELLE PARK
[email protected]
J
MARC GOLUB PHOTOS
ABOVE: Brunswick residents Greg and Kelly Clement reopened Mapleside Farms in June after acquiring the property in late 2010 from the Eyssen family. Their goal
is to expand the farm’s drawing power beyond its most traditional events. BELOW: The Melrose Grille underwent $1 million in improvements before reopening.
A NEW BEGINNING
Mapleside Farms’ new owners work to expand the Brunswick staple
into an agritourism destination with more entertainment options
By KATHY AMES CARR
[email protected]
F
or generations,
Mapleside Farms in
Brunswick has been
a mecca for sunset
enthusiasts, apple lovers
and restaurant patrons
with a taste for predictable
comfort food.
Each summer, visitors
flock to the bucolic Pearl
Road institution for its
spectacular views of the
sunset, and each fall, the
Johnny Appleseed Festival
lures throngs of tourists, all
jockeying to partake in the
tradition of bagging their own
apples and indulging in
homemade cider.
But last winter, financial
difficulties associated with the
business threatened to forever
ON THE WEB: For a video interview with the Clements and a deeper look at
Mapleside Farms, visit www.CrainsCleveland.com/Mapleside.
spoil these rituals. The 100acre farm, which had been in
the Eyssen family since 1927,
was slated to be sold at a
Medina County sheriff’s sale,
appraised at $2.8 million.
That’s when Brunswick
residents Greg and Kelly
Clement spotted an opportunity ripe for the picking.
The couple acquired the
mortgage on the property
from Fifth Third Bank for less
than the $4 million that the
Eyssen family owed, according
to Mr. Clement, although
he declined to specify the
purchase price.
“People love Mapleside.
We wanted to preserve it
and make it a year-round
destination,” Mr. Clement
said.
Since taking over the
operation in late 2010 and
reopening in June, the
Clements have been busy
doing just that, recasting
Mapleside as an agritourism — or farm-based
recreation — destination.
The hope is to protect the
farm’s heritage while
expanding upon its potential
to attract more people beyond
the location’s more traditional
draws, such as the restaurant,
bakery and Johnny Appleseed
Festival.
See FARMS Page 20
udy Schordock puts it this way:
“It’s like resale shopping’s been
discovered.”
If it’s been discovered, it
seems the lure has stuck: Though
the recession is officially over,
Northeast Ohio resale store owners
continue to watch their sales climb.
At The Red Geranium in North
Royalton, where consignment
items include jewelry, collectibles
and vintage clothing, sales were up
11% this June over June 2010 and
were up 14% in calendar year 2010
over 2009, said Ms. Schordock, the
owner. The shop has been open for
17 years.
“People who would have never
stepped foot into a resale shop are
doing it,” she said. “Everyone is
looking for a bargain.”
Gerri’s Closet, an upscale consignment boutique in Green that’s
been in business for 14 years, has
been racking up new shoppers and
consigners, too. Owner Gerri Talevich estimates sales were up 15% to
20% in the first half of 2011 over the
year-ago period.
More broadly, the most recent
operating survey by NARTS: The
Association of Resale Professionals
echoes these examples of local
growth: Sales were up 12.7% in 2009
over 2008, 9.8% in 2008 over 2007
and 6.9% in 2007 over 2006.
Adele R. Meyer, executive director
of NARTS, which is headquartered
in the Detroit suburb of Saint Clair
Shores, isn’t surprised that the
growth persists.
“Even when the economy recovers,
the industry keeps the new
customers it attracted during an
economic downturn as they continue
to love the values they get shopping
resale,” she said.
What’s old is new
Having been in business for
nearly two decades, Ms. Schordock
believes current sales growth is
driven largely by the economy:
People want to sell, not give away,
what they own and want to score
deals on what they buy.
Laura Goss, owner of ReRun
Consignment Boutique in Avon,
agreed. She estimates her store’s
June sales were up more than 40%
from last June and her July sales up
12% over last July. Sales have been
up every year since she opened in
2008, she said, and she doesn’t
See RESALE Page 18
20110912-NEWS--18-NAT-CCI-CL_--
9/8/2011
1:26 PM
Page 1
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SMALL BUSINESS
IRS more closely watches boss’s salary
I
t may feel liberating to some
business owners that they have
the authority to decide for
themselves how big of a paycheck
to draw, but it can be easy to forget
that the Internal Revenue Service is
scrutinizing those decisions.
To be more specific, it’s the
salary drawn by shareholders in S
corporations that is of greatest
interest to the IRS — and they’re
looking at it more skeptically than
ever these days.
Examiners are concerned about
owners whose paychecks seem a
little thin. It makes the IRS wonder
if those owners are abusing one of
the key characteristics that distinguishes the S corporation from other
legal structures under which a
business might operate.
The S corporation is the structure
of choice for many small businesses
in large part because of how it allows
income to pass through the entity,
free of income and employment
tax, so it is reported as income to
shareholders. That’s different from
other corporate structures.
In an S corporation, shareholders
also can take dividend distributions
from the entity that are not subject to
the usual taxes, such as income tax,
Social Security tax and Medicare tax
because the S structure subjects the
profits to tax only once, whether or
not it is distributed to the owners.
That has led some owners in S
corporations to look at how much
they pay themselves via a regular
paycheck and how much they take in
the form of distribution dividends.
Consider the tax impact for the
business if an owner takes a dividend
check instead of a payroll check.
F
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W
unding
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orking capital
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PETERDEMARCO
TAX TIPS
In a simple illustration, assume a
company earns $100,000 in income
in a single year, and the president of
the company is the only employee.
He takes compensation of $100,000
over the course of that year.
The company taxable income is
reduced to zero, but it must pay a
7.6% payroll tax on that amount
and must withhold payroll tax from
the salary. All together, the tax bill
will be a little more than $13,000.
If that same owner takes a
$100,000 dividend distribution
instead of a paycheck, then the
company and the owner avoid the
$13,000 in employment taxes. The
owner still will report the same total
income of $100,000 on his personal
income tax return, but the overall tax
impact will inevitably be reduced.
It’s an extreme example, and any
owner who takes payment from the
company in this fashion would
invite the wrath of the IRS. Active,
hands-on business owners must take
a reasonable measure of their compensation as employment income.
But how much is reasonable?
The IRS has provided scant direct
guidance on that point, but case
law is starting to provide more
guidelines for owners to follow.
First, the IRS will look at whether
the owner is a significant employee
who actively works for the company,
or an absentee shareholder.
Compensation is paid to people
who work while dividends are paid
based on an investment or an
ownership interest, so an active
employee logically should draw a
paycheck commensurate with his
or her contribution to the business.
The IRS also might look at the
nature of the business. In a serviceoriented company, value is generated
almost entirely by the work of its
employees. In a more product-driven
business, more of the value is driven
by capital and assets, so a lower
salary might be more justified.
Examiners will look at how the
owner’s compensation compares
with similar professionals in other
companies, and with other employees
inside the same company.
It also will look at historical
salary and revenue data looking
for logical trends in increases or
decreases. Finally, the IRS might
even do some ratio analysis, studying
the owner’s pay as a percentage of
sales or profits, or the relationship
between compensation and dividend
payments.
While business owners might
enjoy the flexibility that comes with
writing their own paychecks, they
need to be mindful of the various
tax implications to avoid inviting
unwelcome scrutiny.
■
Mr. DeMarco is vice president and
director of tax services for the regional accounting and business consulting firm of Meaden & Moore,
headquartered in Cleveland.
Resale: Even wealthy shoppers give it a try
ire additional staff
SEPTEMBER 12 - 18, 2011
expect that to change.
“The economic condition of
things right now has definitely
changed people’s focus on what
they have to have and what’s
important,” she said. “I really
don’t think, even if the economy
turns around, that a majority of
people are going to go back to
their old ways.”
People who’ve discovered, for
example, that they can sell their
clothing through a consignment
shop like ReRun aren’t going to
revert to donating it to Goodwill
just because the economy
improves, she said.
Ms. Schordock believes the
growth in sales and of resale shops
— which is evident in the number
that have popped up locally —
also is driven by the increased
number of television shows that
promote resale shopping, and the
continued push for recycling.
The stigma of resale shopping
appears to have faded, too, store
owners say, but that began to
occur long before the recession
struck. In fact, one of the best
forms of advertising for resale
stores today is word of mouth, Ms.
Meyer of NARTS noted.
“Years ago, it wasn’t that way
because people didn’t want to
brag that they bought something
at a resale shop,” she said. “Nowadays, people are proud to save
money, people are proud of their
bargains and people are very, very
tuned into recycling and the environment.”
The recession, meanwhile, drew
in a demographic that didn’t previously shop resale, Ms. Goss said.
“(Shopper) income levels are
much higher than they once
were,” she said. “With that come
higher expectations of customer
service. Resale stores have become
so boutique-like.”
Consider, for example, that
ReRun Consignment carries some
expensive labels, including Coach
and Louis Vuitton, and offers
coupons and promotions to
compete with the retail world.
Taking it mainstream
Though a seeming majority of
resale shops are enjoying growth,
there have been casualties.
For example, Patricia Lucas
shuttered her Lakewood store,
Haute Stuff, in June, a little more
than a year after she opened
because sales had fallen for
months and were so depressed she
wasn’t breaking even. In retrospect, she believes her choice to
open near several established
resale shops was unwise.
However, many of NARTS’
approximately 1,200 member
stores are expanding, remodeling
and adding new locations, Ms.
Meyer said.
The Big Red Wagon is a Columbus
venture that collects consigned
items and hosts biannual sales of
maternity, teenager and baby
items. The company, which opened
in 2008, began selling franchises
about a year ago and already is on
its fifth, said Susan Nimon, coowner. All are in Northeast Ohio.
Ms. Goss of ReRun also hopes to
grow, perhaps with a second location, though she doesn’t have a
timeframe for when.
Many expect the upward trend
in resale to continue. “I do not see
this industry going backward in
any way because it has such a
good foothold,” Ms. Meyer said.
“It’s already increased so much. It’s
become so much more mainstream.”
Though her shop has enjoyed
increased sales overall this year,
Ms. Schordock of The Red Geranium
noted this summer’s been slow.
Sales in August ended “a little
below” last August — disappointing
since the prior months were better
than last year. She blames the
heat, for one, and the cost of gas.
But she and other store owners
remain optimistic. With school in
session and the holidays approaching,
she expects this fourth quarter to
exceed fourth quarter 2010.
“It’s going to keep going as
more and more people realize that
it’s OK to do this — it’s OK to walk
into a resale shop,” Ms. Schordock
said.
■
20110912-NEWS--19-NAT-CCI-CL_--
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1:25 PM
Page 1
SEPTEMBER 12 - 18, 2011
CRAIN’S CLEVELAND BUSINESS 19
SMALL BUSINESS
Developing a brand-new brand might not be necessary
Companies must consider the benefits, potential
pitfalls involved when launching new identity
C
ompanies are innovating
more than ever. However,
introducing a new product
doesn’t necessarily mean
you need to create a new name,
new logo, new website and new
brochures.
In many instances, it’s better for
the company and its customers if an
existing product name is used versus generating a new one.
In some circumstances, a new
name does make sense, and following
a structured process will surprisingly
be faster and result in a better name.
Here’s an approach to help you
navigate through this issue.
■ Is your innovation a new
product or is it a new brand? Is it
added functionality, an enhanced
version of an existing product, or an
entirely different offering? Are the
customers new and different?
If the product and target market
are at all similar to your current set,
then you likely can avoid developing
a new brand name.
■ A new brand is expensive.
Sure, it’s exciting to develop a new
brand. But that excitement is
dwarfed by the cost and complexity
associated with creating one.
A specialized ad agency should
be retained to help with a logo, look
and style (called brand identity).
Then, the brand identity needs to
be applied to business cards, email
templates, website, print ads and
whatever else is part of the brand
launch and ongoing marketing
program.
However, the most significant
costs are those associated with
building awareness of the new
brand. How are people going to
learn about it? Online ads? TV?
Radio? Newspaper or magazine?
■ A structured process trumps
brainstorming. OK, so your new
product is really different and is for
a different audience. And, you have
the budget to support creating and
promoting the new brand. Avoid
the temptation to have your staff
brainstorm around the conference
room table.
Instead, agree on criteria that
create boundaries and limits, such
as easy to say, not sounding like a
competitor and being original.
Then, list the emotional and rational
benefits of the new product and
their synonyms.
Playing with combinations of
those words, words in other languages and invented words that
convey those benefits will help you
create a list of names.
As you winnow the list, refer to
the benefits and criteria to stay
focused on your original guidelines.
■ Test your finalists. Put your
short list through a filter.
What do you want customers to
think of when they hear the name?
How does the name relate to your
company’s other products? Is it
memorable? When you search the
name online, are other companies
using ones that are similar? Is it
easy to say, read and spell? Is it
fresh and original? Does it evoke
the emotions that you want customers to connect to your brand?
■ A new brand needs a domain
name and trademark. Easy to
obtain 10 years ago, today it’s
challenging to select a name with
an available domain name.
Unfortunately, it’s an important
part of the brand creation process.
Check GoDaddy.com or Register
.com to see if the domain name is
available.
In addition to the domain name,
the brand needs to be trademarked.
LAURASHERIDAN
ADVISER
It’s key to protecting the goodwill
and value of your brand.
You can conduct a free, cursory
check on www.trademarkia.com or
the government’s site, www.uspot
.gov/trademarks/index.usp, to
determine if the trademark is available. This basic research does not
replace the need to have your
attorney complete a thorough
investigation of the trademark.
■ Just say ‘no,’ if you can. For
those innovations that complement
your existing product line, save
money and time by developing a
product name only. Consider how
the names of the current products
relate to one another, and generate
another one in the same “family.”
There’s no need to develop a
new logo, brand identity system or
website. Leverage what your
customers know and love about
your existing products to announce
your newest offering.
If the answer is a new brand,
follow the structured process outlined above. Resist the temptation
to shortcut the effort by using a
random name without a solid
foundation.
■
Ms. Sheridan is president of
Viva La Brand, the Clevelandbased marketing strategy and ad
agency search firm.
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20110912-NEWS--20-NAT-CCI-CL_--
9/8/2011
3:25 PM
Page 1
20 CRAIN’S CLEVELAND BUSINESS
SEPTEMBER 12 - 18, 2011
SMALL BUSINESS
Farms: New owners seize recent gains made in agritourism
According to the 2007 U.S. Census
of Agriculture, the most recent
figures available, 23,350 farms
throughout the nation indicated
they offered agritourism and
recreation opportunities, generating
$566 million. During that same
year, 418 Ohio farms collected
nearly $5 million in agritourismrelated income.
“There’s only so much leverage
we can have between the apple
house, bakery and restaurant,”
said Mr. Clement, noting that
earlier this year the eatery underwent a $1 million facelift. It
reopened as The Melrose Grille,
with a menu that highlights many
farm-to-table menu items and
locally grown ingredients.
The Clements also built a stage
behind the restaurant, overlooking
the orchard, and each Friday this
summer featured a different concert as a way to entertain families
and ensure a steady flow of traffic
to the farm.
“We want to pull people into the
farm and get them in the orchards,
the fields and the pumpkin
patch,” Mr. Clement said. “There’s
only so much revenue the traditional business can produce, but
turning the business into an
adventure farm” and creating
themed events provides a growth
avenue, too.
This fall, the new owners are
creating what Mr. Clement calls
Ohio’s largest corn maze to
encourage children and their adult
counterparts to navigate through
32 acres. They also are building a
250-foot slide into the orchard and
are constructing a giant tree house
nestled in the woods.
“I think the largest ones now are
10,000 square feet in Minnesota and
England,” Mr. Clement said of the
tree house. “Ours will be bigger
than that.”
The Clements say the orchard’s
4,000 apple trees additionally could
provide an idyllic setting for a
festival of lights or perhaps a Polar
Express-type concept during winter.
Amir Eylon, tourism director for
the Ohio Tourism Division, said
agritourism is not a new phenomenon, but it has been gaining
traction over the last 12 to 15 years.
“People are seeking
authentic experiences. ...
It’s about the local
connections.”
– Amir Eylon
tourism director,
Ohio Tourism Division
“As independent farmers have
dealt with the challenges of
running their farms, agritourism
has helped generate year-round
revenue,” he said.
Mr. Eylon said the number of
agritourism events, such as pick
your own apples, farmers markets
and corn maze adventures, has
been increasing among Ohio
farms. He cites the growing event
calendar list on the state’s website
DiscoverOhio.com as evidence of
this resurgence in agritourism.
“People are seeking authentic
experiences,” he said. “People not
only want that fresh-baked apple
pie, but they want to see where the
apples came from. It’s about the
local connections.”
Hoping they bite
Farm manager Bill Eyssen said
he and his family, which still help
operate the business, are “very
satisfied” with the outcome so far
and the direction Mapleside is
headed.
“We were probably frontrunners of agritourism 20 years
ago, but Greg’s insight is to
expand that even more and make
Mapleside bigger and better,” Mr.
Eyssen said.
Mr. Clement said both June and
July sales were about 90% over the
like periods one year earlier. He’s
also projecting sales in the new
operation’s first full year of business
in 2012 will be about $5 million.
The Clements are not new to
the entrepreneurial world. They
also are co-founders of Parma
Heights-based Realeflow, which
specializes in business management, marketing tools and software
for entrepreneurs and investors in
the real estate industry.
That company, started in 2007,
made Inc. magazine’s 2011 list of
the 500 fastest-growing companies
in the United States, with sales
over a three-year period growing
823%, to $6 million in 2010 from
$646,000 in 2007.
The pair this summer also began
another venture, Agritourism
Coach, which consults farmers on
ways to grow new revenue streams.
They are using Mapleside as a
blueprint.
The Clements are generating
the buzz about both Mapleside
and Agritourism Coach through
the latter’s Facebook page, which
currently has more than 2,500
friends who have the opportunity
to view videos, read blogs, podcasts
and other posts about the business.
The Clements, meanwhile, plan
to conduct this winter a three- to
four-day “boot camp” on agritourism, which likely will take
place in Orlando or Las Vegas.
“There are about 2 million
farmers in the U.S., and we estimate
1.5 million of those will need help,”
Mr. Clement said. “The average
farmer only makes $12,000 a year.
“We’re completely stoked about
the future of this place and the
future of other farms,” he said. ■
GRANDOPENINGS
JB Dunn, Jack
Madda and Joe
Paster, the men
behind new
clothing store
J3 Clothing
Company.
PHOTO PROVIDED
J3 CLOTHING COMPANY
Moreland Towne Centre
34105 Chagrin Blvd.
Moreland Hills 44022
www.j3clothingcompany.com
With a collective 65 years of experience,
Jack Madda, JB Dunn and Joe Paster
bring to Northeast Ohio a new men’s
store that offers personal service,
unique style and inventive technology.
J3 Clothing Company aims to be
more than a place to shop; as such,
it also features a lounge area where
clients and customers may relax or
watch a game.
Phone 216-285-0555
Fax 216-285-0550
[email protected]
[email protected]
[email protected]
THE BEHAVIOR CLINIC
9680 Columbia Road
Olmsted Falls 44138
www.thebehaviorclinic.com
Owner Dr. Elizabeth Feltes is focused
solely on pet behavior issues, practicing the most positive, least intrusive
and most effective means possible.
Dr. Feltes conducts public seminars
throughout the state, offers continuing education for veterinarians and
technicians and consults on behavioral problem in companion pets. The
Behavior Clinic also offers specialty
classes, training evaluations, toys,
muzzles and a library pertaining to
dog and cat behavior. Hours are 8:30
a.m. to 6 p.m. Monday, Wednesday,
Thursday and Friday; and 9 a.m. to 1
p.m. Saturday.
Phone 440-334-8534
Fax 440-235-8534
[email protected]
KEVIN BUSTA INDUSTRIAL
FURNISHINGS
2673 W. 14th St.
Cleveland 44113
www.kevinbusta.com
Cleveland-based industrial-style artist
Kevin Busta has opened a store in
Tremont. Mr. Busta, who has received
national recognition for his industrialstyle furnishings and artwork since he
began his operation in November 2008,
earlier this year partnered with one of
his collectors, Michael Carreras. The
two since then have been focused on
expanding Mr. Busta’s efforts beyond
being a made-to-order venture. Store
hours are 11 a.m. to 6 p.m. Tuesday
through Saturday; noon to 5 p.m.
Sunday; and closed Monday.
216-206-6022
[email protected]
To submit a new business, send the
following by email to Amy Ann
Stoessel at [email protected]:
business name; address; city and
ZIP; website; brief description of
business; business phone number;
business fax number; business
email address; and date that business opened.
20110912-NEWS--21-NAT-CCI-CL_--
9/9/2011
3:55 PM
Page 1
SEPTEMBER 12 - 18, 2011
21
Mooney: Melding of corporate, Signs: Big firms brainstorm
community banks a priority
week with Crain’s. “I think we are
well positioned for the current
environment.”
For one, she said, Key has
enjoyed five consecutive quarters
of profitability. Plus, its problem
assets continue to decline, as seen
in a 50% drop in its nonperforming
loans to $842 million as of June 30
from $1.7 billion the year before.
The goal as Key moves into next
year is to stabilize its balance sheet
and begin growing, Ms. Mooney
said. She anticipates that growth
will come not through consumers
— who continue to deleverage
themselves — but through small
business, middle-market and corporate lending.
The anticipation that business
lending will be a main source of
growth fuels Key’s focus on aligning
the efforts of its two banks to net
more business customers, Ms.
Mooney said.
The plan, which the company
began implementing in 2009, is to
intersect the community bank,
which is Key’s bank branch presence, with its corporate bank,
which provides business customers
with Wall Street capabilities, such
as investment banking services.
The intersection of the two was a
strategy Ms. Mooney drove herself,
and one she believes helped land
her the CEO seat. Community
bankers in Key’s local markets
know their communities better
than anyone, and Key aims to marry
their connections with the expertise
and products of the corporate bank.
Here’s the plan
The corporate and community
bank leadership has written and
prioritized a list of thousands of
companies in Key’s markets to call
upon, Ms. Mooney said. That programmatic approach differs from
the haphazard way in which the
banks used to connect.
“You are creating opportunities
for both sides of the bank that you
wouldn’t have had before if they
weren’t calling together and showing
up as one team,” she said.
Key also continues to invest for
growth through its branches, which
it believes consumer and small
business customers want. In Northeast Ohio alone, the bank has
added 14 branches in the past four
years. Five more are slated by the
end of 2011.
The bank also is investing in
branches in Seattle, Portland, Ore.,
and Colorado, Ms. Mooney said.
Key plans to maintain its current
branch network, which spans 14
states from Alaska to Maine, Ms.
Mooney said. The bank, she noted,
may deploy capital to make fill-in
acquisitions in those markets.
Key in recent years has divested
certain businesses, including
marine and recreational vehicle
lending and student lending, as it
worked to redefine its business mix.
The company’s portfolio of markets
and businesses, Ms. Mooney said, is
what it believes to be the right one
for profitability.
“I feel like that hard work is
behind us,” Ms. Mooney said.
Time to ‘hunker down’
For Fred Cummings, whose
Beachwood hedge fund, Elizabeth
Park Capital Management, is an
investor in KeyCorp, the focus is on
Key’s profitability. He characterizes
the bank’s profitability as below
average, though he acknowledged it
has improved.
The company reported $234 million in net income attributable
to common shareholders in the
second quarter, compared to a profit
of $29 million in the like period a
year ago.
Mr. Cummings questions how
the bank will grow its net interest
income, which has declined, as it
shrinks its balance sheet and as
loan growth remains sluggish.
Mr. Cummings also observed
that the company’s expenses are
higher than its peers.
“That’s a bad combination, when
you have a lower margin and you
aren’t as efficient as your peers,” he
said.
Ms. Mooney said she believes
Key has outperformed analysts’
expectations in recent quarters. Its
credit profile has improved rapidly,
she said, and it repaid earlier this
year the $2.5 billion in Troubled
“We believe we are
undervalued. At this
current price, we believe
that even more so.”
– Beth Mooney, chairwoman
and CEO, KeyCorp
Asset Relief Program (TARP) funds
it received from the U.S. Treasury.
Key remains disciplined about its
expenses, Ms. Mooney said.
“I like our capabilities, and I
think we’ve just got to hunker down
and grow,” she said.
Though he believes Key could be
performing better, Mr. Cummings
acknowledged that Key’s credit
quality has improved, as have its
capital ratios.
“One could say that they have
excess capital,” he said.
Itching to buy its shares
That capital is a “checkbook”
that can be deployed opportunistically for growth, Ms. Mooney said.
While its primary goal this year
was to repay TARP, Key likely will
ask for the green light to repurchase
stock next year, Ms. Mooney
said. Banks must have regulatory
approval to buy back stock.
“We believe we are undervalued,”
she said. “At this current price, we
believe that even more so.”
When her first year as CEO
concludes, Ms. Mooney wants Key
to have had continued profitability
and wants its stock to have
performed well relative to its peer
group.
“With a little help from this economy, I look forward to telling the
story that we have stayed the course
on our strategy and that we can
point to how we’re winning with
our clients, that we are indeed
building
relationships,”
Ms.
Mooney said.
It’s only fair to give a new bank
CEO a year before assessing what’s
been accomplished, particularly
one leading a bank the size of Key,
Mr. Cummings said.
“These are big companies,”
he said. “They don’t turn over
night, so you’ve got to give her
some time.”
■
Expo: Larger competitor proved too much
Center and, earlier, at Public Auditorium in downtown Cleveland. The
sport and outdoor show, formerly
the Sportsman’s Show, began its
run in 1927. What was the Greater
Cleveland Home & Flower Show
began in 1942.
Unrealized vision
Mr. Fassnacht envisioned the
Euclid expo center as the home for
the two shows promoted by his
Expositions Inc. and for a variety of
consumer shows operated by other
show producers, who bring events
such as bridal fairs, baby fairs and
custom car shows to exhibition
halls nationwide.
For instance, International Gem
& Jewelry Show Inc. puts on shows
in 90 cities annually. It opened shop
at the Great Lakes Expo Center for
three days in May.
At the time he moved his shows
out of the I-X Center, Mr. Fassnacht
was optimistic.
“By 2011, we anticipate hosting
at least 125 events a year,” Mr. Fassnacht said in a news release in September 2009, when he announced
the planned move to Euclid.
It appeared to get off to a good
start. In March 2010, he told Crain’s
that the 10-day home and garden
show held that January drew 62,500
people, more than 13% above his
projected attendance.
However, the cornucopia of
events at the expo center did not
materialize.
“We anticipated getting a lot of
the small, 50,000-square-foot shows
— woodworking shows, trains shows,
gem and jewelry shows, things like
that,” Mr. Fassnacht said. “But a lot
of people want to wait and see how
a facility does” before bringing in a
show.
“The bottom line is if you have a
full fourth quarter and first quarter
(late fall to early spring), you can
make it, but if you don’t, chances
(of succeeding) are unlikely,” Mr.
Fassnacht said.
He said the expo center had
about 16 shows in the five months
it was open in 2011.
Competition from the west
The Great Lakes Expo Center also
was hurt by competition with the
I-X Center, which brought in a show
promoter, Marketplace Events of
Solon, to run home and garden and
outdoor shows at the mammoth
exhibit hall in Brook Park.
Tom Baugh, CEO of Marketplace
Events, said the I-X Center is among
Northeast Ohio Regional Energy
Alliance.
The alliance’s goal will be to
convince area residents to make
their homes more energy efficient
— by adding insulation, replacing
old furnaces, and so on — while also
designing a process that makes it
easier to do so.
Before the end of the year, the
Cleveland Housing Network, which
already helps the city’s low-income
residents make their homes more
energy efficient, plans to begin
conducting subsidized energy audits
on 100 homes owned by residents
of various income levels. Then those
residents will receive help figuring
out which upgrades they should
implement and how to apply for
rebates.
That assistance is important, said
Paul Ettorre, co-chair of the green
building committee. Many residents who get audits today don’t go
forward with improvements, he
said.
Early next year, the alliance aims
to conduct 100 more audits, this time
without a subsidy, in one of Cleveland’s inner-ring suburbs. That
pilot also would test the alliance’s
ability to market the audits and
drum up interest in energy efficiency,
which is the main focus of this
year’s summit.
this thing can get to scale,” he said.
Other initiatives include Drink
Local, Drink Tap, a nonprofit created
by the clean water working group.
The nonprofit is campaigning to get
people to replace bottled water with
tap, has organized beach cleanups
at Edgewater Park and is raising
money to bring clean drinking
water to a school in Uganda.
Drink Local, Drink Tap last week
announced it had raised $10,000
from the George Gund Foundation,
which will go toward the $50,000 it
needs to drill a well near the African
school and create a documentary
about the effort, said Erin Huber,
director of the nonprofit.
“Everything has moved very, very
quickly,” she said.
Jumping through hoops
One of the alliance’s long-term goals
is to make it easier to finance energyefficiency improvements, said Mr.
Ettorre, Great Lakes regional manager
for Key Bank Community Development Lending, which provides
financing for economic development
and community revitalization in markets served by the Cleveland bank.
For one, the alliance is thinking
about tapping into a revolving loan
fund that the state of Pennsylvania
created to finance energy-efficiency
improvements, he said. A similar
organization called the Cincinnati
Energy Alliance has made a “soft
commitment” to do the same thing,
he added.
The final goal would be to create
a system where homeowners
borrowing money to make energyefficiency upgrades could pay off
their entire monthly bill with the
amount they saved on energy costs
that month, Mr. Ettorre said.
“If you can get to that magic balance,
The local food group not only created Growhio, a nonprofit formed to
generate demand for local food, but
three men who met through the
group also founded Tunnel Vision
Hoops LLC.
The company, which works out
of the LaunchHouse business incubator in Shaker Heights, creates
portable greenhouses that farmers
can use to grow food in temperatures that otherwise would be too
cold. The company has built about
15 “hoop houses” since June 2010,
when Todd Alexander, Michael
Walton and Carlton Jackson founded
the business.
Tunnel Vision Hoops never
would have started, however, if the
three men had not met at the first
Sustainable Cleveland 2019 summit. The event has proven to be a
great forum for people interested in
sustainability to meet and come up
with ideas, said Mr. Alexander, who
also helped start Growhio.
“In my mind the summit has done
what it set out to do so far,” he said.
In addition to projects led by
working groups, a few dozen of the
biggest companies in Northeast
Ohio since the first summit have
been gathering for all-day meetings
twice a year to talk about their
sustainability initiatives.
The meetings give them an
opportunity to share best practices,
said Mr. Watterson, Cleveland’s
chief of sustainability. They’re even
helping develop metrics the city
could use to track the sustainability
of the region’s corporate community
as a whole, Mr. Watterson said. ■
the most attractive venues in which
his company operates.
“It was a difficult headwind (Mr.
Fassnacht) was trying to make an
adjustment in,” he said. “It would
be extremely difficult for anyone in
Cleveland outside of the I-X Center
to have a property that could grow
and be strong. The I-X’s presence in
this market is huge.”
Marketplace Events created the
Great Big Home & Garden Expo for
the I-X Center and stages 20 other
home and garden shows around the
country annually.
The competition for consumers
and exhibitors only was likely to
intensify for the expo center, as the
I-X Center announced in July that it
planed to make a $25 million to $30
million investment over the next
several years to spruce up the
former tank plant, now in its 25th
year as a convention center, and to
create new shows.
“It’s a very interesting industry
right now,” said Les Gray, vice
president of Southeast Productions
Inc. of Greensboro, S.C., and president of the National Association of
Consumer Shows, a Portland, Ore.,
trade group for show producers.
“The trickle-down effect of several
independent show promoters either
pulling back the footprint of the
shows they manage or pulling out
completely due to the lack of participation of exhibitors has had a huge
effect on venues,” he said.
Mr. Gray said the show business
is hurt whenever consumer products
companies trim marketing budgets
and either cut back on the number
of shows they participate in or on
the size of the booths they lease.
Mr. Fassnacht will maintain
Exposition Inc.’s office in Cleveland,
though it will be producing shows
elsewhere. The company has operated shows in Pittsburgh for 27 years.
“Expositions Inc. is still a viable
company,” he said. “I ran the expo
center, but they were two separate
companies.”
■
Inspiration in Pa.
20110912-NEWS--22-NAT-CCI-CL_--
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9/9/2011
1:10 PM
Page 1
SEPTEMBER 12 - 18, 2011
LARGEST INDUSTRIAL PARKS
RANKED BY TOTAL ACRES(1)
Industrial Park
Address
Rank Web site
Total acres
Number of
acres
occupied
Number of
businesses
in park
1,693
1,237
77
U.S. Route 42,
Avery Dennison, Momentive Performance Materials,
Route 82,
Eberhard Manufacturing, C.Trac, Clark-Reliance Corp. state
I-71, I-80
City of Strongsville
(440) 580-3118
Medina Blanking, Ohio Welded Blank, Three D Metals,
Fuserashi, MTD Products, Shiloh Industries
I-71
MTD Products
Businesses located in park
Property manager
Phone number
Freeway access
1
Strongsville Business and Technology Park
Foltz Parkway, Strongsville 44149
www.strongsville.org/content/strongsville_business_park.asp
2
Liverpool Industrial Park
Innovation Drive, Valley City 44280
900
400
8
3
Twinsburg Industrial Park
Highland Road/Enterprise Drive/Case Parkway/Pinnacle Parkway/
Edison Blvd., Twinsburg 44087
571
530
120
Verizon, United Stationers, Pepsi America,
Weatherchem, Rockwell Automation, Experient Inc.
I-271, I-480
NA
4
Akcan Industrial Park
Mt. Pleasant Road and Mayfair Road, Green 44720
www.dehoffdevelopment.com
400
250
41
Diebold Corp., Belden & Blake, Cintas, Lexington
Technologies, The Ohio Lottery, Inventors Hall of
Fame, Best Supply, Aramark, Massillon Plaque
I-77
DeHoff Development Co.
Daniel J. DeHoff
(330) 499-8153
4
Interstate Commerce Center
Mondial Parkway, Streetsboro 44241
www.geisco.net
400
144
20
Best Buy, Playtex, Chrysler, Hammer Co., Pods,
Millard, Aurora Plastics, Schwan's, Classic Honda,
Classic Nissan, Classic GMC, Flexalloy
I-80, I-480
Geis Property Management
Joe Perrow
(330) 528-3500
6
NEOCOM I
Navarre Road, Massillon 44646
www.massillondevelopment.com
380
70
7
Ziegler Tire, Case Farms, Kraft Power, E-Tank, Kendal U.S 30, I-77
Welding, PolyOne, Shearer's Foods
Miller Land Inc./Massillon
Development Foundation
(330) 833-3146
7
CAK International Business Park
Massillon Road (SR 241) and International Parkway, Green 44720
359
120
7
ASC Industries, Sam's Club/ASW, Akron Logistics,
Diebold Inc., General Electric, SilMix of Ohio/Wacker
Chemical Corp., J & K Subway/Prout
City of Green Planning Department
(330) 896-6614
8
Progress Drive Business Park
Pearl Road and Westwood Drive, Strongsville 44149
www.strongsville.org/content/progress_drive.asp
325
312
48
Route 42,
DeMag Plastics Group, PPG Industries, Atlantic Tool & U.S.
state Route 82,
Die, Archway Marketing, Empco
I-71, I-80
(440) 580-3118
9
Emerald Valley Business Park
Cochran Road and Pettibone Road, Glenwillow 44139
285
115
9
Home Depot, Stride Tool, Best Buy, Kauffman Tire,
Ris Paper, Owens & Minor, Saeco USA
First Industrial Realty Trust Inc.
Kelli Nicoloff
(513) 860-0480
10
Midway Industrial Park
Dutton Drive and Midway Drive, Twinsburg 44087
269
230
32
K & M International, Production Tool, Glass Equipment
Development, CEIA USA, WebMD, Polystar, Decco
I-480, I-271
Alloys, Towner Filtration
NA
11
Dow Circle Research Park
Sprague Road, Strongsville 44136
www.strongsville.org/content/dow_circle.asp
258
249
33
U.S. Route 42,
Akzo Nobel, Cintas, PNC Bank Technology Center,
Route 82,
Enterprise Holdings, Acuative, Honeywell International state
I-71, I-80
(440) 580-3118
12
Ascot Industrial Park
State Road, Akron 44223
www.ci.akron.oh.us/ed/development/indparks/ascot_park.htm
220
167
20
Pneumatic Scale, Coltene/Whaledent, SpunFab
Adhesive Fabrics, Coretec, Linden Industries, Main
Street Gourmet, Spectrum Plastics, Becker Pumps
State Route 8,
I-76, I-77
City of Akron
Rita Weinberg, Brent Hendren
(330) 375-2133
13
Diamond Business Center
Pettibone Road, Glenwillow 44142
www.geisco.net
200
53
3
Superior Beverage, Mat Holdings, Winston Products
I-480, state Route
422
Joe Perrow
(330) 528-3500
13
Frost Road Commerce Center
Philipp Parkway and Frost Road, Streetsboro 44241
www.geisco.net
200
175
22
L'Oreal, Venture Lighting, Wine Trends, Andrews
Moving, A. Duie Pyle, Seegott, Soft-Lite Windows
I-80, I-480
Joe Perrow
(330) 528-3500
15
Riverbend Commerce Park
Colorado Ave., Lorain 44052
www.cityoflorain.org/community/economic_development.shtml
199
20
3
Camaco Lorain Manufacturing, U.S. Post Office
Distribution Center, Horizon Daycare Center
Real Estate
State Routes 57, Cresco
V. Barna, George J. Pofok
611 and 254, I-90 Joseph
(216) 520-1200
16
French Creek Business Park
East River Road, Sheffield Village 44054
www.barnacaplan.com/ourproperties/detail.asp?id=137
187
12
1
ZF Trading Co.
I-80, I-90, state
Routes 301 and
254
Comprehensive Development
Solutions, Cresco Real Estate,
Dillin Corp.; George J. Pofok
17
Geauga Industrial Park
Industrial Parkway, Middlefield 44062
180
90
12
KraftMaid Cabinetry Inc., Mercury Plastics, Polychem
Dispersions, Johnsonite, Sajar Plastics, Normandy
Products, Penske
I-90, state Route
422
The Federal Improvement Co.
David Ford
17
Sidley Industrial Park
I-90 & state Route 45, Austinburg 44010
www.ashtabulagrowth.com/industrialpark.asp
180
30
1
Save A Lot
Interstate 90
Lu Dunlap
(440) 352-9343
17
York Alpha Park
York Alpha Drive, North Royalton 44133
www.northroyalton.org
180
120
108
Laszeray, Induction Tooling, Royal Wire, H & D Steel
Services, May Industries, Valley Tool and Die
I-71, I-77, state
Route 82
City of North Royalton
Thomas John Jordan
(440) 237-5484
20
Sweet Valley Business Park
9880 Sweet Valley Drive, Valley View 44125
160
132
75
XPedex, Dawn Enterprises, IBEW, ImaginIt, Pakrite,
Sherwin-Williams
I-480, I-77
Cresco
Simon Caplan
(216) 525-1472
21
Heritage Business Park
23555 Euclid Ave., Euclid 44117
157
41
9
Eaton, Keene Building Products, TECT, Cuyahoga
Community College, COAD, North American Plastics,
Pollak Foods, Babcock & Wilcox, JW Belt
I-90
Ohio Realty Advisors
(330) 659-4060
22
Brunswick North Industrial Park
945 Industrial Parkway North, Brunswick 44212
150
120
75
Fogg multi-tenant, Inflatable Images, Destiny
Manufacturing, All Construction Services, Philpott
Rubber, W. W. Williams
I-71
All Construction Services
David James LeHotan
22
Cleveland Business Park
17909-18601 Cleveland Parkway, Cleveland 44135
www.chelmproperties.com
150
82
8
NA
I-480, I-71
Chelm Properties Inc.
(440) 349-4300
22
Midway Industrial Park
Schaden Rd,/Keep Ct./Freedom Ct./Liberty Ct., Elyria 44035
150
123
26
Sunbelt, AIT, CHP Cancer Center, Symrise, APR,
Cleveland Plastic, Carpenter Steel, Marathon Steel
I-90, state Route
57
Logos Realty Co.
(440) 324-3550
22
Quantum Centre
Greenwich Road, Wadsworth 44281
www.naicummins.com
150
150
13
Parker Hannifin Corp., E. C. Morris Corp., Ebner
Furnaces Inc., Soprema Inc., Accel Group Inc.
I-76
NAI Cummins Real Estate
(330) 535-2661
22
Quarry Lakes Business Park
Quarry Lakes Drive, Sandusky 45840
150
42
6
Encore Industries Inc., Northern Ohio Educational
Computer Associates, SCC Resources Inc., North
Coast Cancer Care, Praxair Inc.
State Routes 2
and 101
Cresco Real Estate
George J. Pofok, Joseph V. Barna
(216) 525-1469
27
Columbia Road Industrial Subdivision
Columbia Road, Richfield Township 44286
147
31
4
Marathon Oil, FedEx, Bath Development Corp., 3230
Columbia Road LLC
I-77, I-271, I-80
NA
28
Taylor Woods Industrial Park
Taylor Parkway, North Ridgeville 44039
143
80
13
Invacare, Norlake, Wolff Brothers, Tool & Die
State Route 57
Systems, Poppee’s Popcorn, Cuyahoga Vending, Frito from I-480, State
Lay, Rhenium Alloys
Route 10
Logos Realty Co.
Bob Graham
440-324-3550
29
Mills Business Park
Faircrest & Sherman Church, Canton 44721
www.dehoffdevelopment.com
141
20
2
Medline Industries Inc., Old Dominion Freight Line
I-77
DeHoff Development Co.
Daniel James DeHoff
(330) 499-8153
30
Akron Canton Corporate Park
1525 Corporate Woods Parkway, Green 44685
www.camincorp.com
140
100
76
Hankook Tire, Goodrich De-Icing, Paychex, Prudential
Financial, Bonnot, InfoCision Management
I-77, state Route
241
CAM Inc.
Mike J. Mockbee
(330) 896-3253
30
Stonegate Corporate Park
Highlander Parkway, Richfield Village 44286
www.camincorp.com
140
65
14
Bureau of Criminal Identification, Cisco Systems Inc.,
Corporate Express, OEConnection
I-71, I-271
CAM Inc.
Mike J. Mockbee
(330) 896-3253
I-77, state Route
241
I-271, I-480
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these
listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of
Lists are available to purchase at www.crainscleveland.com.
(1) Information as of July 31, 2011.
RESEARCHED BY Deborah W. Hillyer
20110912-NEWS--23-NAT-CCI-CL_--
9/9/2011
2:52 PM
Page 1
SEPTEMBER 12 - 18, 2011
23
Bedford company’s intriguing foam draws attention
By DAN SHINGLER
[email protected]
A small company in Bedford has
a product that amazes most
observers, but it’s still looking for
its primary market and application.
The product, Aeroclay, is a sort of
foam made by a 2010 startup of the
same name and run by entrepreneur Lauren Wolfe.
Made from clay, water, some
proprietary additives and a freezedrying process, Aeroclay can be
made hard or soft, stiff or flexible. It
can be engineered to soak up water
like a sponge, or to be hydrophobic
and absorb no water at all. The
question is, what to do with it?
“It took us a good year to analyze
the technology and figure out
where to start,” said Ms. Wolfe, who
now has a few markets targeted for
her magic foam.
The attribute that has gained the
most attention so far is Aeroclay’s
ability to soak up oil while not soaking
up water — something that has
brought both the Discovery Channel
and National Geographic out to Bedford to check it out, Ms. Wolfe said.
In a real-time, five-minute video the
company prepared, an aquarium is
filled with water and black oil is
poured on top. Then, some crumbled Aeroclay is thrown on top of
the oil. By the end of the video, all
the oil has been soaked up, leaving
only clean water behind when
Aeroclay is fished out.
“And you can just wring it out
and use it all over again to do the
same thing,” Ms. Wolfe said.
That characteristic could be a
godsend to companies dealing with
oil spills, and Aeroclay hopes to
license it to one or more big oil
companies for that purpose.
In the meantime, it’s pursuing
other options. Aeroclay also makes
good packaging material and does
not contain the carcinogens found
in other foams, Ms. Wolfe said,
which has garnered interest from
some big shipping companies that
could be customers.
The drawback, if there is one, is
that Aeroclay requires freeze-drying, which often is thought of as a
difficult and expensive process. But
at least one international company
that makes freeze-drying equipment, New Zealand-based Cuddon
Ltd., is familiar with Aeroclay and
doesn’t think scaling up the freezedrying process is a problem.
Cuddon CEO Andy Rowe said not
only can modern freeze-drying technologies handle the volumes Aeroclay might need, but he’s also convinced his company or one like it
will be called upon to help produce it.
“I think the likelihood of someone taking on some of the potential
commercial products from Aeroclay is very good, especially with
the sustainable nature of the product’s base ingredients. It is really a
question of which product and
when as opposed to any question on
if it will go to commercialization,”
Mr. Rowe told Crain’s in an email
exchange.
But the first commercial sale of
Aeroclay might be for something
far less glamorous than cleaning up
oil spills. It turns out Aeroclay also
makes darn good cat litter, according
to Ms. Wolfe.
If that’s its first use, that’s fine by
Ms. Wolfe, because she’s confident
Aeroclay will find substantial uses.
“Companies are finding us,” she
said, “and so far, we’ve done no
marketing.”
■
Industrial
parks list
stays steady
There’s one not-very-exciting word
— “stable” — that defines Northeast
Ohio’s market for industrial parks.
But in this fragile economy, stable
really isn’t so bad.
The top seven entries on Crain’s
new list of Northeast Ohio’s Largest
Industrial Parks, ranked by total acres,
are exactly the same as they were in
the 2010 list: the same seven properties, same total acreage, same number
of acres occupied and same number
of businesses in the parks. They’re
also in precisely the same order.
Nos. 8 and 10 on this year’s list —
Progress Drive Business Park in
Strongsville and Midway Industrial
Park in Twinsburg — ranked No. 9
and 10 in 2010, also with the same
vital statistics.
That means the only change in the
top 10 is this year’s addition of
Emerald Valley Business Park in
Glenwillow. The 285-acre park has
nine businesses in the 115 acres that
are occupied.
The similarities in 2011 and 2010
extend beyond just the top of the list.
Of the 58 industrial parks on the
2011 extended list, 49 appeared on
the 2010 list with the same figures for
total acres, occupied acres and number
of businesses.
There are eight parks new to the
extended list this year.
If you’re doing the math — and at
this point, how could you not be
doing the math? — you know that
means there was one industrial park
on this year’s list that was on the
2010 list and has some different
numbers to report. That property is
the 157-acre Heritage Business Park
in Euclid, which now has nine businesses, up from six in 2010.
Here are other highlights from the
list:
■ Four properties report they are
fully occupied: the 150-acre Quantum Centre in Wadsworth, the
102-acre Valley Business Park in
Westlake, the 98-acre Park 82 in
Strongsville and the 68-acre Points
East Industrial Park in Twinsburg.
■ The industrial park capital of
Northeast Ohio is … Green.
The Summit County community
has five properties on the extended
list. It beat out strong challenges
from Cleveland and Strongsville,
with four each. — Scott Suttell
If you have an opportunity, we’re ready. This is no time to wait. And
we’re not. In fact, so far this year, we’ve extended nearly 10 billion dollars in
credit to business customers, and we plan to lend another 28 billion dollars
in the year to come. In addition to lending, we will keep supporting local
businesses with financial solutions and services that can improve productivity
and, ultimately, help them succeed. Find out how we can help you drive results
at 53.com/drivingresults or call 1-877-804-2091.
Loans subject to credit review and approval. Rates may vary based on credit qualifications. Fifth Third Bank, Member FDIC.
Equal Housing Lender.
20110912-NEWS--24-NAT-CCI-CL_--
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9/9/2011
1:12 PM
Page 1
SEPTEMBER 12 - 18, 2011
Retirement plans show little movement despite recent volatility
By DARLA MERCADO
Investment News
Advisers: Experience with fluctuations plays role
Even though the stock market’s
roller coaster ride has taken some
screaming drops in recent weeks,
retirement plan participants appear
to have chosen to keep their hands
and feet inside the cars, according
to major plan administrators and
record keepers.
At J.P. Morgan Retirement Plan
Services, which administers $121
billion in retirement assets, plan participants on Aug. 8 and 9 transferred
just $833 million, which is less than
0.7% of the asset base.
Principal Financial Group said
6,406 of the 2.4 million participants
in plans that it administers made
transfers on Aug. 8, more than three
times the 2,000 participants who
make a transaction on a typical day.
Still, just 0.25% of plan participants
took action on the day the Dow
Jones Industrial Average lost 5.5%.
Wells Fargo Institutional Retirement
and Trust reported about $1 billion
flowed into stable-value funds
between Aug. 1 and Aug. 15, less than
1% of the $164 billion in plan assets,
exclusive of defined benefit plans,
which Wells Fargo administers.
“Most vendors haven’t seen huge
numbers of transactions moving
assets out of equities into other
investments,” said Robyn Credico,
head of the defined contribution
practice at Towers Watson & Co. “In
fact, they haven’t seen much activity
at all.”
At Great-West Retirement Services,
a subsidiary of Great-West Life &
Annuity Insurance Co. that oversees
$150 billion in plan assets, $166
million moved from equities to fixedincome and stable-value investments
during the first two weeks of August,
with $74 million moving Aug. 8
alone. From Aug. 10 to Aug. 12,
however, $13 million flowed back
into equities, according to company
president Charles Nelson.
Many stay put …
Financial advisers who work with
small to midsize plans report a
similar lack of activity.
“I received six calls; three people
decided to be conservative,” said
Michael Preisz, president of Preisz
Associates Inc. and a member of the
Institutional Retirement Income
Council.
The firm manages about $300
million and oversees 100 group
retirement plans, each with less
than $5 million in assets. The three
participants who sought safety were
over age 55 and wanted to shift
more money to debt.
Financial advisers and executives
at retirement plan providers said
employees, while tending toward
caution, do not appear to be
panicked. During the wild swings a
few weeks ago, participants largely
sought information.
On Aug. 8, call volume at retirement plan service centers reached
levels set in late 2008, but “the emotion wasn’t anywhere near what it
was in 2008,” said Barrie Christman,
vice president of retirement and
investor services at Principal Financial.
“If there’s anything as a silver lining,
I think that (2008) has taught people
that these kinds of fluctuations can
happen,” Ms. Christman said.
Gary Allen, a financial adviser
with Prudent Investor Advisors,
agreed. He noted that in 2008 and
2009, clients realized that a systemic
downturn was taking place and
nobody would be safe.
“In 2008 and 2009, we thought it
would be a death march and we were
ready to hand out the flak jackets
and helmets,” Mr. Allen said. “The
situation now is normal — it’s volatile,
but that’s all the more reason to concentrate on what you can control.”
Another possible contributor to
the lack of activity is plan participants’ traditional inertia and the
fact that more of them now invest in
target date funds, a popular default
investment, which could make
them less likely to make changes.
“The people who go into these
target date funds are people who
either made an active election or
were defaulted; they tend to be
passive in behavior,” Ms. Credico of
Towers Watson said.
… but cash is king for some
However, not all plan advisers are
riding out the volatility. Those
working with separately managed
accounts and using a tactical investment approach have moved to
cash. Braver Wealth Management,
which manages $575 million and
works with plans under $20 million
in size, uses quantitative modeling
to rotate clients into and out of
equities.
Braver’s model detected volatility
in late July and moved assets fully into
cash by Aug. 4, missing the massive
decline that took place days later.
“We still reside in cash,” said
David D’Amico, president of the
firm. “You had a few decent days,
but that’s not enough for the model
to say that it’s safe to get back in.”
Randy Mowdy, an adviser with
Alliance Trust Co., took a similar
tack, placing about $800 million into
cash on Aug. 5 and staying there.
“That’s a lot of money that we’ve
preserved,” he said. “Because of our
economy today and the potential
for another recession, the chances
are good that we’re going to go back
and test those [market] lows.”
Mr. D’Amico noted that although
the tactical model doesn’t buy back
into the market at the absolute
lowest, nor does it bail at the summit
of a climb, the concept keeps plan
clients disciplined.
“People sell into the fear and buy
back 20% higher,” he said. “These
tactical strategies are tools advisers
can use to better manage their risk
and stick to long-term discipline.” ■
Darla Mercado covers insurance
and retirement products for Investment News, a sister publication of
Crain’s Cleveland Business.
BRIGHT SPOTS
Bright Spots is a weekly web feature
that highlights positive developments
in the Northeast Ohio business community. Send information for
Bright Spots to managing
editor Scott Suttell at
[email protected].
demand of customers.
■ Mobile app developer Figure 8
LLC of Cleveland has launched an
app called Paint Pro for the iPad,
the iPhone and the iPod Touch.
The app “makes choosing paint
simple by letting you quickly find a
paint color, compare it with different
manufacturer choices and share
your color ideas with others,” the
company said.
Paint Pro, priced at $1.99, allows
users to “capture a color from a picture or stored image and instantly
match colors from thousands of
choices,” Figure 8 said. It also “instantly suggests coordinating colors
and additional close-color matches
for reference.”
■ ERC in Mayfield
Village said it has made
a “major addition” to
its health insurance
program with the launch
of ERC Health Select.
The new program “includes an
exclusive network of physician clinics
that offer $5 co-pays and on-site
generic medications,” according to
ERC, the former Employers Resource
Council. Organizations also are eligible
rate reductions of up to 10%.
Earlier this year, ERC announced
it beat market averages for premium
rates for the 11th consecutive year. It
also retained 95% of its enrolled
pool, which ERC characterized as
“an unheard of rate” in the health
insurance industry.
The ERC Health middle-market
program is designed for companies
with more than 50 benefit-eligible
employees. It’s underwritten by
Anthem Blue Cross and Blue Shield.
■ Kowit & Passov Real Estate
Group in Mayfield Heights said it’s
bringing a Jacksonville, Fla.-based
barbeque chain to Northeast Ohio.
Woody’s Bar-B-Q has 30 stores in
Florida and four other states and is
coming to Streetsboro this fall.
Carla Massara with Kowit &
Passov represented the landlord on
a 3,000-square-foot lease for a site
in Streetsboro Commons near
Interstate 80 and state Route 14.
■ Rad-Con Inc. of Lakewood, a
supplier of batch annealing furnace
(BAF) equipment and software to
manage BAF shops, is helping a
customer expand in Indiana.
The customer, Stripco Inc., said
it’s adding three annealing bases
and a building large enough to more
than double the current existing
annealing capacity at a plant in
Mishawaka, Ind.
Rad-Con is providing the pure
hydrogen batch-annealing equipment, a continuation of a 15-year
business relationship between the
companies.
Construction has begun on the
nearly 10,000-square-foot addition
to Stripco’s existing precision
cold-roll strip plant. Production will
begin December. The expansion
allows Stripco to meet the growing
■ LaunchHouse, a pre-seed
investment fund and business
accelerator in Shaker Heights, said
it has made an investment in Purus
Health LLC, the company that
makes Good Greens Nutrition Bars.
The size of the investment was
not disclosed. Good Greens bars
“cater to a variety of different food
restrictions because they are 100%
vegan, gluten-free and have a lowglycemic index,” LaunchHouse said.
“Being a LaunchHouse portfolio
company is beneficial to a company
like mine because I am surrounded
by like-minded entrepreneurs,”
said Keith Pabley, founder of Purus
Health, in a statement. “The advisers,
business services and access to
talented individuals also working
out of LaunchHouse has made the
startup process seamless.”
20110912-NEWS--25-NAT-CCI-CL_--
9/9/2011
2:54 PM
Page 1
SEPTEMBER 12 - 18, 2011
25
Craft: New legislation aimed at easing permit restrictions
distributed for the first time 800
bottles of his Seven Brothers Distilling
Co.’s artisan vodka to liquor stores
throughout Ashtabula, Cuyahoga,
Geauga, Lake, Lorain, Portage and
Summit counties. About 20 stores
in Columbus also are set to receive
a shipment.
“I’ve rejected so many batches,”
he said. “I wanted it to be perfect.”
Mr. Suttman is among a fledgling
group of local artisan craft distillers
who are taking advantage of Ohio’s
fresh water and crops to produce
spirits that they hope satisfy the
palates of quality-conscious consumers.
Craft distilling represents a mere
1% of the $40 billion spent annually
on spirits in the United States.
However, Bill Owens, president of
the American Distilling Institute,
expects that percentage to grow
during the next few years.
According to the distilling institute, there are 306 distilled spirits
plants in the country. That’s nearly
five times the 68 plants in existence
in 2003, when the group formed to
promote a burgeoning craft distilling
renaissance. Eight craft distillers
are located in Ohio.
The organization projects between
400 and 450 craft distillers will be
located in the United States and
Canada by 2015. Mr. Owens said
antiquated state laws are standing
in the way of further growth among
craft distillers.
Many local craft distillers agree,
lamenting that Ohio’s stringent
laws prevent them from expanding
their businesses in much the same
way wineries and breweries have.
A bill is moving through the Ohio
Legislature that would ease restrictions on craft distillers and would
open the market so that more spirited entrepreneurs could participate in the burgeoning business.
Growing pains
Most craft distillers in Ohio,
including Mr. Suttman in Lake
County, hold A-3 liquor permits
that enable them to sell their
products through state liquor
stores. However, only three permits
known as A-3a permits are available
in Ohio that also allow consumers
to purchase a distiller’s products on
premises.
According to current state law,
only one A-3a permit may be issued
in each of the three counties with
populations greater than 800,000 —
Cuyahoga, Franklin and Hamilton.
Artisan distillers say those limitations stymie the ability to grow
their business.
“This is such a successful industry,
like the breweries and wineries,”
said Don Outterson, owner of
Woodstone Creek in Cincinnati,
which holds Hamilton County’s
A-3a permit. “There’s plenty of room
for more. And the state talks about
needing to create more jobs?”
House Bill 243, co-sponsored by
state Reps. Ron Young of Lake
County and Casey Kozlowski of
“There is plenty of room
for more. And the state
talks about needing to
create more jobs?”
– Don Outterson, owner, Woodstone Creek in Cincinnati
Ashtabula and northern Trumbull
counties, seeks to ease the restriction on the number of A-3a liquor
permits issued.
The bill passed the Ohio House
96-0 on June 23 and next will be heard
by the Insurance, Commerce and
Labor Committee in the Senate. Its
session begins in mid-September.
“The high points are, it opens up
the free market so a lot more people
can participate, and consumers would
be able to sample the product on
site,” Rep. Young said. “Right now,
they can purchase on site, but they
can’t taste. If you’ve never tried a
product, it’s important to have the
opportunity to sample it.”
They’ll drink to that
The A-3a permit in its current
form also restricts the volume of
liquor a consumer can buy on
premises. The permit holder cannot
sell more than one-and-a-half liters
of liquor per day to the same consumer. Rep. Young said he’d like to
see that limit raised to nine liters.
The Ohio Department of
Commerce supports the bill as it
currently stands, said Lyn Tolan,
communications director.
“It’s a nice secondary market for
farmers and the agriculture industry
in Ohio,” Ms. Tolan said.
Craft distillers aren’t the only
ones who stand to gain if the law’s
restrictions are relaxed.
A number of Northeast Ohio
wineries also have expressed interest
in distilling. They include South
River Vineyard in Geneva, which
already has bought the appropriate
equipment.
“The wineries out here, they are
growing,” Rep. Young said. “If you
could follow their growth and the
hundreds of people they employ …
boy, if craft distilleries could have
the same amount of growth, boy.”
Mr. Suttman said he would
pursue an A-3a permit, should it
become available.
“I’m excited about (the bill). I
can’t wait to expand,” Mr. Suttman
said. “We’re ready for Phase II. I’m
looking for investors or may pursue
a loan to build a local facility that
would produce and store whiskey.
“We’d ultimately love to have 15 to
20 products on the shelves,” he said.
Go with the flow
A line already is forming for
Cuyahoga County’s A-3a permit.
Market Garden Brewery, which
recently opened in Cleveland’s
Ohio City neighborhood and is owned
by Sam McNulty, has applied for
it; so has John Marek, who plans
by mid-2013 to open Portside Distillery, a 5,000-square-foot restaurant, brewery and distillery on West
Ninth Street in Cleveland’s Ware-
house District.
Mr. Marek said he hopes H.B.
243 passes by the time he’s ready to
open Portside so that he’s able to sell
his premium rum (and later whiskey,
bourbon, vodka and absinthe) on
site to customers.
“If House Bill 243 passes, there
will be a drastic increase in distilleries in Ohio,” he said. “There’s
been a huge increase in Ohio in the
last three to four years, and that will
continue.”
Tom Herbruck, owner of Tom’s
Foolery in Chagrin Falls, said he
doesn’t plan to pursue the A-3a
permit, even if it becomes more
ubiquitous.
“It works well for us to distribute
through the current state liquor
system,” Mr. Herbruck said of his
operation’s artisan applejack.
“We’ve only released one batch,
and that sold out pretty quickly,
mostly in Cuyahoga and Geauga
counties.”
Mr. Herbruck last week was set
to release 300 bottles of his second
batch of Tom’s Foolery Applejack,
which this year was awarded “best
in category” at the American Distilling Institute’s national competition. He also plans to begin distilling whiskey this fall and will be
ready to release his first batch of
bourbon in a few years.
“The A-3 license permits us to do
what we want to do,” Mr. Herbruck
said. “Our plans are to focus on
quality, and to take time to enjoy
what we are creating.”
■
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20110912-NEWS--26-NAT-CCI-CL_--
26
9/9/2011
4:06 PM
Page 1
SEPTEMBER 12 - 18, 2011
Languishing Shaker Heights condos may see new life
By STAN BULLARD
[email protected]
the property Aug. 31 from Heartpoint Devco LLC, the entity that
Heartland used to develop the
multimillion-dollar project at 1678
Van Aken Blvd. The project sold a
dozen units but was left with 39
unsold condos when the market
tanked in 2008.
However, negotiations between
Shaker Heights, the developer and
the lender made the transfer possible.
Southern Financial agreed to
pay $200,000 in disputed property
tax bills unpaid by Heartpoint
Devco as residential property
values plummeted.
Avalon Station, a long-stalled
condominium project next to the
Greater Cleveland Regional Transit
Authority rapid line in Shaker
Heights, may start rolling again
after its lender gained ownership
of the project from its builder,
Heartland Development Co. of
Cleveland.
Residences at Avalon Station
LLC, a corporation formed by
Southern Financial Group LLC of
Waco, Texas, received the deed to
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(216) 522-1383
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Southern Financial was not the
original lender on the project. It
acquired the mortgage on the fourstory development last year from
PNC, which had inherited it from
the former National City Bank. Mr.
Morris declined to say how much
his company paid for the $10
million mortgage, but he noted it
buys such mortgages across the
country.
Liz Schorgl, an agent at Howard
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Hanna’s Shaker Heights branch,
said Avalon Station units carry
asking prices between $108,250 for
a small, first-floor unit to a fourthfloor loft with an asking price of
$338,470. That is about 40% less
than the original asking prices, she
said.
All the suites were finished
before the project foundered in
the 2008 recession and housing
collapse. Mr. Morris said the units
do not need renovations, but his
company plans to repaint the
weathered sign on the site offering
suites for sale.
■
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Margaret Cannon, Shaker Heights
law director, said the city revised a
development agreement to release
Heartpoint Devco from developing
an adjoining two-acre parcel, and
the developer returned the parcel
to city control.
J. Gordon Priemer, chairman of
Heartland Developers, declined to
discuss in detail why he agreed to
sign over the deed to the lender.
“I’m not in that business anymore,”
Mr. Priemer said, adding, “A lot
depends on timing.”
Allan Morris, president of Southern
Financial, said gaining clear title to
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20110912-NEWS--27-NAT-CCI-CL_--
9/9/2011
1:40 PM
SEPTEMBER 12 - 18, 2011
Page 1
27
THEINSIDER
THEWEEK
SEPTEMBER 5 - 11
The top story: Energy giant Hess Corp. has
made one substantial investment and has lined
up another in eastern Ohio’s Utica Shale region,
where large amounts of oil and natural gas are
thought to be trapped. The New York company
agreed to acquire a 50% interest from Consol
Energy Inc. in nearly 200,000 acres in the Utica
Shale area for total payments of $593 million.
Hess also bought Marquette Exploration LLC and
other leases in the Utica Shale area, boosting its
position by 85,000 acres at a cost of about $750
million. Appraisal activities on the Marquette
Exploration acreage are planned to begin in the
fourth quarter.
Benz there, done much: K. Michael Benz,
president and CEO of the United Way of Greater
Cleveland for the last 17 years, said he plans to
retire in June 2012. Former
KeyCorp CEO Henry L.
Meyer III will lead a search
committee to find the replacement for Mr. Benz, who will
be 65 when he retires. Mr.
Benz has not confined his
community involvement to
United Way. He was instrumental in bringing the Rock
Benz
and Roll Hall of Fame and
Museum to Cleveland and served as that
institution’s executive director before joining
United Way. He also served 12 years as executive
vice president of the Greater Cleveland Growth
Association and seven years as executive director
of the Council of Smaller Enterprises.
REPORTERS’ NOTEBOOK
BEHIND THE NEWS WITH CRAIN’S WRITERS
Here’s your chance
to swim with a shark
■ You don’t have much time, but if you’re
good at putting video together, you may get
a shot at presenting your business idea to an
actual shark.
If that sentence is too cryptic for you, read on.
The Council of Smaller Enterprises small
business group is staging a “Business Pitch
Competition” similar to the concept of the
ABC television reality show, “Shark Tank.”
To add pizzazz to the competition, “Shark
Tank” panelist Daymond John — founder of
iconic fashion brand FUBU — will be one of
the judges of the COSE event, which is set
for Oct. 18 from 5:30 to 8 p.m. at Pickwick &
Frolic on East Fourth Street in downtown
Cleveland.
Here’s where the time crunch comes in.
To have a business idea considered, participants need to provide an executive summary and a two-minute video to COSE by
the deadline of 5 p.m. Friday, Sept. 23. The
top 20 ideas will advance to secondary judging, and eventually the top four business
ideas will get the chance to present in front
of Mr. John and other expert panelists.
For a full list of contest details and rules,
go to www.cose.org/pitch. — Mark Dodosh
City Enterprises Charitable Foundation,
Cleveland’s Wills for Heroes program in July
bought 12 laptops, plus software and printers. The equipment will be put to use for the
first time Oct. 1 during an event for Beachwood police and fire departments.
Wills for Heroes volunteers provide documents, such as wills and powers of attorney, at no cost to first responders.
When Bruce Hennes, one
of the non-lawyer members
of the Cleveland Metropolitan Bar Association’s board
of trustees, learned that program coordinators planned
to raise money for equipment, he made a few phone
calls. Forest City’s foundation “immediately stepped up to the plate,”
he said. — Michelle Park
Cool idea from
the Monsters
■ Local lawyers volunteering their time to
draw up estate planning documents for first
responders no longer will be doing it on borrowed equipment.
Using an $8,000 donation from Forest
■ Pro sports teams always are looking for
ways to enhance fan and sponsor experiences. It’s why the Indians offer batting
practice access and kids the ability to run
the bases; it’s why the Cavaliers allow kids to
shoot free throws on the court.
The Lake Erie Monsters think they’ve
found another really, really personal way.
The American Hockey League affiliate of
the Colorado Avalanche that begins its season Oct. 7 is ratcheting up its marketing for
its four-seat “Ice Box,” located between the
teams’ benches. Single-game tickets go for
$80, while five- and 10-game packages go for
MILESTONES
BEST OF THE BLOGS
Where there’s a will,
there’s a way
$110 per seat and include free parking and
Patron Club access, which covers all food,
beer and wine. (Single-game seats don’t include food and beverages.)
“Our goal is to always provide the most
accessibility to our team and we think the
Ice Box is a great way to deliver this to our
fans,” said Mike Ostrowski, the team’s senior vice president and chief
operating officer. “This is just
another example of how we
bring an up-close, exciting
and unique game-day experience to hockey fans.”
If you’ve ever smelled
game-worn hockey equipment, you know the experience certainly will be unique.
— Joel Hammond
Executive search with
a European flair
■ First, Minneapolis. Now, the world.
That has been the expansion track over
the last year of Mansfield & Associates, an
executive search firm in Cleveland.
The firm recently celebrated the one-year
anniversary of its Minnesota regional office,
headed by David Bares, former manager of
executive talent acquisition for Best Buy.
Now, it has opened a two-person European office in Budapest, Hungary, that is led
by Robert Mansfield, son of company president Ann Mansfield. Mr. Mansfield previously worked in Hungary and Serbia for the
Simonyi Consulting Center, a provider of
business development services at the University of Pecs in Hungary. — Mark Dodosh
Trading places:
Developers Diversified
Realty Corp. in Beachwood and Glimcher Realty
Trust in Columbus agreed to swap two shopping
centers that they say are “better aligned with the
other’s operating platforms and strategies.”
Developers Diversified will sell Glimcher its
Town Center Plaza in Kansas City, Kan., for
about $139 million, and Glimcher will sell Developers Diversified its Polaris Towne Center in
Columbus for about $80 million.
Ready to run: City of Cleveland law director
Robert Triozzi is resigning his post to make a run
for the Cuyahoga County prosecutor’s job. The
current county prosecutor, Bill Mason, has said
he will not run for re-election in 2012. Mr. Triozzi
served 10 years as a former Cleveland Municipal
Court judge before resigning to run for mayor of
Cleveland in 2005. He lost that election to Frank
Jackson, but Mr. Jackson named Mr. Triozzi as his
law director upon taking office in January 2006.
Scanning the market: The Ohio Third
Frontier Commission awarded about $6.6 million that will be used to finance six technology
development projects in Northeast Ohio. Among
the projects are two run by the Philips Healthcare Global Advanced Imaging Innovation
Center, a collaboration of Philips, Case Western
Reserve University and University Hospitals
Case Medical Center. The center received a
$1.58 million grant to improve the performance
of an existing Philips computed tomography
scanner so it could be used to diagnose more
heart problems than it can today.
This and that: Energy Focus Inc., a provider
of energy-efficient lighting systems based in
Solon, said it was awarded a $5 million lighting
retrofit contract with what it described as “a
leading southeastern energy services company.”
It did not identify the company. … Cohesant
Inc. in Beachwood said it has sold its piperestoration business, Curaflo of British Columbia, for $1.875 million. Curaflo is being purchased by its former founding partners, Brian
LeMaire, who continued to be an employee of the
company under Cohesant, and Stuart McNeil.
Excerpts from recent blog entries on
CrainsCleveland.com
THE COMPANY: Cresco Real
Estate, Independence
THE OCCASION: Its 20th anniversary
Founded in 1991 as a four-person real
estate company, Cresco has grown into a
full-service real estate provider with 25 professionals. In 2005, Cresco was selected as
a strategic alliance partner with Cushman &
Wakefield, the world’s largest privately held
commercial real estate service provider.
The Cushman & Wakefield partnership
enabled Cresco to provide clients with a full
range of services globally.
Despite the recent recession, Cresco said
it “experienced its highest revenue year ever
in 2010.”
Go to www.CrescoRealEstate.com for
more information.
THE COMPANY: The Dan Zola
Orchestra, Solon
THE OCCASION: Its 50th anniversary
The big band/dance band is celebrating
the milestone with a special concert slated
for Oct. 29 at the Springvale Ballroom in
North Olmsted.
The evening “promises a chance to dance
and dream to music from the 1930s and
’40s, complete with mirror balls (and) elegant
attire,” says Dan Zola, the 19-piece orchestra’s founder and leader.
General manager John Patai says the
orchestra keeps busy with 30 to 50 gigs a
year.
Visit www.ZolaBigBand.com for more
about the orchestra.
If he’s half as successful in
D.C. as he was in business …
■ U.S. Rep. Jim Renacci, a Republican from
Wadsworth who represents Ohio’s 16th
district, is the wealthiest of the 87 freshman
Republicans elected last year and is the 11thrichest lawmaker in Congress.
So reported The Hill in its “50 Wealthiest
for 2011” list. The publication found that 10
of the 50 richest members of Congress are
freshman House Republicans.
Rep. Renacci has an estimated net worth
of $35.9 million. He made his money
through LTC Management Services, the
Ohio nursing home owner and operator
that he founded in 1985. Rep. Renacci still
has close to $2 million in holdings tied to the
company. He’s the only Ohioan on the list.
The Hill found the 50 lawmakers on its list
this year “are substantially wealthier than
the class of 2010. Together,
they reported a minimum
net worth of more than $1.6
billion, about $200 million
more than the lawmakers on
last year’s survey.”
The rankings include
32 Republicans and 18
Democrats.
Congratulations! You’ve
bought a lot of cheap homes
■ You and your fellow U.S. taxpayers
own 248,000 homes, the result of record
numbers of people defaulting on government-backed mortgages, according to a
Bloomberg Businessweek story that quoted
a Cleveland housing expert.
With even more homes moving toward
default, the magazine reported, “Fannie
Mae, Freddie Mac and the Federal Housing
Administration are looking for a way to
unload them without swamping the already
depressed real estate market.” They’ve even
issued a public plea for ideas to help do this;
you have until Thursday, Sept. 15, to send
ideas to [email protected].
Bloomberg Businessweek said the government’s call for ideas is a sign it is deluged
with repossessions.
“It’s almost like having the captain of the
Titanic go on the public address system and
say, ‘Does anybody have an idea?’” said
Mark Wiseman, a former director of Cleveland’s foreclosure-prevention program.
“It’s not a confidence builder.”
Bad times bring out the
best in ‘modern Steinbecks’
■ Salon.com says the rough economy
has created several “modern Steinbecks,”
including Ohio writer Donald Ray Pollock,
who are chronicling the impact of the recession on American families.
The Midwest is particularly
fertile ground for this literature, according to Salon.com,
which cited Mr. Pollock’s
“The Devil All the Time,” set
in Ohio; Philipp Meyer’s
“American Rust,” set in
Pennsylvania steel country;
and Frank Bill’s “Crimes in
Southern Indiana.”
Mr. Pollock worked as a driver in a paper
mill for most of his adult life before
enrolling in the creative writing program at
Ohio State University at age 50. He told
Salon.com that writers now are “working
with an awareness and understanding of
the poor and dispossessed that we haven’t
seen ... since the Great Depression.”
He added, “You can’t have a small minority of wealthy lording it over a vast majority
of poor without something very bad eventually happening.”
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