Crain's Cleveland Business

Suffice it to say, there are manyeconomic headwinds to grapple

with, Ms. Mooney acknowl-edged. Today, growth is agame of inches, not yards,but Key, armed with a strategy Ms. Mooney de-vised prior to being namedCEO, will grow, she antici-pates.

“I think Key is at a favor-able inflection point,” shesaid in an interview last

$2.00/SEPTEMBER 12 - 18, 2011

Entire contents © 2011 by Crain Communications Inc.

Vol. 32, No. 37

07447001032

637 SPECIAL SECTION

SMALL BUSINESSMapleside’s new owners work to turn farm intoagritourism destination ■■ 7PLUS: RESALE BUSINESS ■■ GRAND OPENINGS ■■ & MORE

NEW

SPAP

ER

A ROAD MAP TO REBIRTHOhio City’s commercial investments extend beyond

venerable West Side Market, breweries

By STAN BULLARD [email protected]

Block by block, the resurgence of the com-mercial area surrounding West 25th Streetin Cleveland’s Ohio City neighborhood isspreading beyond the shadow of the West

Side Market and the domains of breweries andrestaurants in its Market Square District.

Construction workers recently began renovatinga line of storefronts at West 25th and Jay Avenuethat for 40 years were bricked in for security reasons. New owners are taking positions in prop-erties ranging from the former Ohio City fire station — a landmark dating from the 1840s — tothe dilapidated, long-mothballed Jay Hotel. Andplans for a loft conversion — the first in a decadeon West 25th — also are in the works.

See REBIRTH Page 13

Opportunityknocks inapartmentsales marketLoan access, low vacancy contribute to uptickBy STAN [email protected]

The volume of apartment sales in Northeast Ohio is up and is likelyto continue gaining momentumthrough the rest of the year amid alow-vacancy market for residentialrental properties.

Big sales already have occurredthis year, and more are on the way iflarge properties quietly being mar-keted — including the Statler Armsand Bingham Apartments in down-town Cleveland — are bought bythe end of December.

Through the end of August, withthe crucial fourth-quarter commer-cial real estate selling season still

ahead, 11 Northeast Ohio apart-ment complexes had been sold forat least $1 million; they had a totalprice tag of $33 million. For all of2011, 11 such properties changedhands for a total of $46 million, according to the website www.TerryCoyne.com. The site, operatedby Terry Coyne, executive vice pres-ident of Grubb & Ellis Co.’s Cleve-land office, does not track the region’s huge market for multifam-ily properties with under 30 suitesthat sell for less than $1 million.

See SALES Page 5

See MOONEY Page 21

KeyCorp CEO directs focus onbusiness lending, balance sheet

By MICHELLE [email protected]

Beth Mooney believedKeyCorp’s stock was under-valued when she took thehelm of Cleveland’s largestbank four months ago.

The closing price on May2 was $8.53. The closingprice last Thursday, Sept. 8 — $6.42 — was down almost 25% from when shebecame chairman and CEO.

Mooney

GO BEHIND THE NEWS Each Monday, Crain’s reporters offer a

deeper analysis into the top stories that appear in that week’s newspaper. Visit www.CrainsCleveland.com/section/audio.

Beth Mooney charts institution’s growth strategy

INSIDE: Apartment owners ring upmultimillion-dollar deals in 2011. Page 5

STEVE BENNETT

20110912-NEWS--1-NAT-CCI-CL_-- 9/9/2011 3:43 PM Page 1

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TAPPING THE BRAKESAmericans love their cars, but gas prices approaching $4 a gallon are curbingtheir enthusiasm for driving. The Federal Highway Administration reports thattravel on all U.S. roads and streets fell by 1.4% — that’s 3.8 billion vehiclemiles — in June 2011 from June 2010. (We still drove a total of 259 billionmiles 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 regionfor June:


SEPTEMBER 12 - 18, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“We used to only getinquiries (about vacant retail space)from pawn shops,furniture stores andused applianceshops.”— Tom Gillespie, owner TEGProperties LLC, which ownsbuildings on West 25th Street inCleveland. Page One

“People are seekingauthentic experiences.People not only wantthat fresh-baked apple pie, but theywant to see where theapples came from. It’sabout the local con-nections.”— Amir Eylon, tourism directorfor the Ohio Tourism Division.Page 17

Cleveland offradar for expocenter operatorEuclid venue succumbs to lack of shows asenvisioned level of events fails to materializeBy JAY [email protected]

The long-running Cleveland Home& Garden Show and its companionCleveland Sport, Travel & OutdoorShow, fixtures in the spring and fall,are no more.

Gone, too, is the venue that hosted them, the Great Lakes ExpoCenter in Euclid. It closed May 31.

Chris Fassnacht, operator of theexpo center and president of Expo-sitions Inc., the firm that mountedthe two shows, said last week he hassuspended operations in the Cleve-land area. He said the sour economyand aggressive marketing by the I-XCenter were responsible for thedemise of his operation.

“I would basically say it was just a

lack of shows” that led to the closingof the expo center, Mr. Fassnachttold Crain’s from the Lakewood office of Expositions Inc., a 73-year-old firm. He said his firm continuesto promote shows in Pittsburgh butwill hold off on any Clevelandshows “until the dust settles” andthe new Cleveland convention cen-ter opens downtown in 2013.

The expo center is a former Kmartstore that Mr. Fassnacht leased andconverted into exhibition space. Itopened in January 2010 with thehome and garden show.

That show and the sport and outdoor show previously had beenheld at the I-X Center. Before then,the shows, under different names,operated at the Cleveland Convention

“A lot of small townscan look at that andsay, ‘We’re a smalltown. Why couldn’twe have that, too?’”— Cathy Belk, chief relationshipofficer, JumpStart Inc. Page 9

“The economic condi-tion of things rightnow has definitelychanged people’s focus on what theyhave to have andwhat’s important.”— Laura Goss, owner of ReRunConsignment Boutique, Avon.Page 17

See EXPO Page 21

MARC GOLUB

Kevin Suttman last week reached a long-awaited goal: shipping Seven Brothers Distilling Co.’s artisan vodka to storesacross Northeast Ohio and about 20 in the Columbus area.

WORKING ONTHEIR CRAFT

Area distillers see fresh water, crops as avenues to gain share of $40 billion spent nationwide on spirits each year

By KATHY AMES [email protected]

Within the confines ofan old red barn inLeroy Townshipthat’s the size of a

19th-century schoolhouse, KevinSuttman has been toiling with alow-temperature distilling processthat uses local spring water andstone-ground winter wheat andcorn to distill a premium brand ofsmooth vodka.

The technique preserves thesweet aroma of the winter wheatand eliminates any harsh flavorsthat traditional, high-temperaturedistilling processes produce, according to Mr. Suttman.

Just last week, Mr. Suttman

WHAT IS A CRAFT DISTILLER?Much like craft brewers and regional

vintners, craft distillers focus on makingquality products that are representative ofthe heritage of the communities fromwhich 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 exceed250,000 proof gallons per year, accordingto the American Distilling Institute.

A LITTLE HELP, PLEASE?Area craft distillers see big potential for

their spirits, but they’re aiming to get somerelief from lawmakers.

Currently, Ohio law allows only three A-3a permits — through which distillerscan sell their products on site. That meansCuyahoga, Franklin and Hamilton countieseach have only one A-3a permit available.

Two state representatives have spon-sored a bill that already has passed theHouse of Representatives and would easethe limits placed on the number of A-3apermits issued.See CRAFT Page 25

As sustainability summit nears, signs of progress take shapeBy CHUCK [email protected]

Andrew Watterson is in charge ofthe annual Sustainable Cleveland2019 summit, but he’s not really incontrol of it.

He’s OK with that: The summit— which is scheduled to take placeSept. 22 and 23 at Public Auditoriumin downtown Cleveland — is

meant to help peoplecome up with their ownways to build a culture ofsustainability in North-east Ohio.

“Our job is tilling thesoil to create conditionsfor these things to pros-per,” said Mr. Watterson,who is chief of sustain-ability for the city of Cleveland.

Some of the seeds plantedin that soil since the firstsummit two years agohave started to germinate.

For instance, a group focused on green buildingsis working with the city ofCleveland to make 100homes more energy efficientas a pilot for a bigger project.

Another group focused on clean

water formed a nonprofit that hascreated a campaign to drink tapwater and is making a documentaryabout its effort to bring fresh water toa school in Africa. A group interestedin local food created a nonprofit,too, and it spurred the creation ofa company that could help urbanfarmers. And the sustainabletransportation group convincedthe state to make the Lorain-

Carnegie Bridge more accessible tobicyclists and pedestrians.

Many other initiatives are in theworks, too. However, the green build-ing group’s project appears to beamong the most ambitious so far.

The working group, one of 17formed after the first summit inAugust 2009, is in the process ofcreating a nonprofit called the

See SIGNS Page 21

Watterson



Volume 32, Number 37 Crain’s Cleveland Busi-ness (ISSN 0197-2375) is published weekly, exceptfor combined issues on the fourth week of May andfifth week of May, the fourth week of June and firstweek of July, the third week of December and fourthweek of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2011by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $2.00. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. 1-877-824-9373.

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Expertise in bankcompliance boostsCleveland company By MICHELLE [email protected]

Righting an early mistake has resulted in unprecedented growthfor a small Cleveland company,AML RightSource.

AML, which provides anti-moneylaundering (hence the “AML”)monitoring to banks, so far in 2011has added the most new clients itever has gained in a single year, andit expects the growth to continue.

The company sells its service tobanks that must comply with theBank Secrecy Act. It has added fiveclients this year, bringing its total to15, a 50% increase. Revenue throughAugust 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 chanceAML will sign four more banks yetthis year. The goal is to close 2011with at least 18 clients on the booksand to reach 36 clients in 2012.

He attributes the 6-year-old company’s growth this year to a newfocus on marketing.

“One of the mistakes that we prob-ably made early on was not really focusing on the sales and marketingside,” Mr. Pratt said. “We’re accounting,finance and operational guys.”

Now, Mr. Pratt said, the companyis establishing name and brandrecognition, evidenced in six wordsthey’ve heard more often from peo-ple: “ ‘Oh yeah, we’ve heard of you.’”

Malaga Bank, a Palos Verdes Estates, Calif., bank with $824 millionin assets, is one of AML’s newest cus-tomers. Connie Begovich, assistantvice president of deposit complianceand Bank Secrecy Act officer atMalaga, learned of AML through abankers’ compliance conference afew years ago and signed on in Janu-ary because regulatory compliance istaking up more time, she said.

“You don’t have enough hours ina day to do all that’s being asked ofyou,” she said.

The Bank Secrecy Act, passed in1970 and designed to root out drugand organized crime money, tasksinstitutions with monitoring trans-actions for suspicious activity. At afour-branch bank like Malaga, thereisn’t space for additional personnel,Ms. Begovich said. Plus, finding peo-ple who know how to identify suspi-cious 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 provideand some of the tradeoffs of havingan employee here, I’d say that theyare reasonable,” she said of the cost.

The new marketing strategy thatMr. Pratt says has boosted businesslaunched in January and has includedadvertising and direct email cam-paigns to compliance officers andhigh-level executives.

AML also began conducting freewebinars every other week, Mr. Prattsaid, covering topics such as how com-pliance professionals can prepare forand pass their Bank Secrecy Act exams. Attendance to AML’s webinarsfrequently has exceeded 100, he said.

AML’s clients all are communitybanks such as Malaga. None are inNortheast Ohio. Their asset sizesrange from $260 million to morethan $5 billion, Mr. Pratt said.

A bank that hires AML does noteliminate its need for an internalcompliance officer, but it does en-able an institution to avoid hiringmore personnel, he added.

Hiring at AML itself, though, hasbeen a must. The company this yearhas grown to eight employees fromfive, and Mr. Pratt hopes to hire twomore by year-end.

This time of year, when institutionsare coming into budget cycles for thecoming year, is a time when bank executives are focused on return oninvestment, so AML will market heavily the cost savings it can provide.

“The industry norm is that I as abank will go out and buy software, willhire people, will deal with turnoverof those people,” Mr. Pratt said. “I willdo it all myself. We’re in the processof disrupting the industry norm.” ■


Dollar volume is suppressedsomewhat this year because banksare flooding the market with dis-tressed properties at discounts.

The stepped-up deal activityshows the market for apartments isstarting to reawaken, although atnothing like the pace prior to 2008,when the recession hit.

Chris Smythe, CEO of SmytheProperty Advisors LLC in Cleveland,said the market for apartments “ispicking up, but it does not have thestrong, fleet legs like it did at theheight of the boom.”

Buyers are looking for bargains atboth ends of the spectrum: Large,institutional owners want primeproperties with more than 200units, and smaller, mom-and-popinvestors who can afford to pay cashor mostly cash are looking for smallapartment properties.

Renewed appetite for multifamilyinvestments is out there, but experienced buyers are as carefulabout what they consume as a mid-dle-aged man after a heart attack.

“There is no feeding frenzy likewhat developed prior to 2008,” saidVicki Maeder, a vice president in investment sales at the Clevelandoffice of CB Richard Ellis. “Formerly,people were intent about outbid-ding other people just to control thereal estate.”

The virtues of stabilityTwo factors — improved funda-

mentals and broader availability ofloans for apartments, albeit with

stricter financial requirements —account for the apartment sales uptick.

Michael Shemo, president ofWolf Real Estate Group in Beach-wood, said occupancies are high inthe region, and rents are up.

“Northeast Ohio is seen as a sta-ble market, because we don’t havethe thousands of apartment unitscoming out of the ground that yousee in other markets such as theCarolinas,” Mr. Shemo said. Themarket is so attractive that Wolf ispreparing to offer about 500 unitsfor sale, he said, though he wouldnot identify the properties.

The Northeast Ohio ApartmentAssociation trade group estimates va-cancy is just 3.2% in the region, a verylow number by historical standards.

Meanwhile, “money is cheap,”says Joe Bobeck Jr., developmentmanager at Great Lakes FinancialGroup of Cleveland. Government-backed apartment loans can be hadfor 4.5% to 5.5%, while interest ratesfor other commercial propertiesstart at 5.5% and go up from there.Moreover, government-backed loansdo not require personal guaranteesand often are assumable, though downpayment requirements remain high.

Still, getting the money remainsan issue in some cases, even forwell-heeled groups.

For instance, Finch Group, aBoca Raton, Fla.-based apartmentowner and developer, is assemblingcity, state and federal funds for a$12 million renovation of Hawk’sLanding Apartments, 14601 PuritasAve. in Cleveland, as it works to


Sales: NE Ohio benefits from stabilitycontinued from PAGE 1 OPENING NEW DOORS

Apartment owners ring up multi-million-dollar deals in 2011:■ Emerick Manor, 4671 CountryLane, Warrensville Heights, is a133-unit complex acquired by aBrooklyn, N.Y., investor group for$3.3 million.*■ Stone Ridge, 1000 Stone Ridge, Berea, is a 144-unit complexacquired by a Pittsburgh investorgroup for $13.3 million.*■ Dorchester Village, 137 Chest-nut Lane, Richmond Heights, is a473-unit complex acquired by aNew York City-based apartment concern for $5.4 million.*■ Lakeland Plaza, 25551 Lake-land Blvd., is a 120-unit complex acquired by K&D Group of Willoughbyfor $1.2 million.**

SOURCES: *ALEC PACELLA, NAI DAUS, ANDREAL CAPITAL ANALYTICS. **CUYAHOGA COUNTY LAND RECORDS.

property, and nearly 1,000 units, inNortheast Ohio, Mr. Dodds said.

More lookersDan Siegel, the Beachwood-based

owner of about 5,000 rental units, re-cently added to his holdings with thepurchase for $600,000 of the 60-unitKingsway Apartments, 2326 W. 14th St.in Cleveland’s Tremont area.

“The property has a lot of poten-tial,” Mr. Siegel said. “There are fewlarge apartment properties inTremont; it’s mostly single-familyproperties. It’s a nice infill locationwhere people want to live, especiallysince all the restaurants went in. It’s agreat location for people who workdowntown and want to live nearby.”

Mr. Siegel said he knows “a lot ofpeople” also looked at the Kingswaybecause the 19th-century structurehas “good bones.” He plans to renovate the building, now just 75%occupied, to boost occupancy, andto hike rents by about $100 a monthto between $550 and $650.

The revival in the popularity ofapartments as investments has itsdownside, according to Mr. Siegel,who said he knows he will pay morefor apartments now than he did ayear ago. He said he has seen someproperties trade for more than hewould have paid for them.

Dan Burkons, a Marcus & Mil-lichap vice president who handlesapartment properties, said amongproperties of less than 200 units, local “mom-and-pop” buyers areable to buy properties again afterbeing outbid by investors from thecoasts earlier this decade. Mr. Burkonssaid the market has improved everyyear since it died in 2009. It’s

healthy enough today that “we’reseeing multiple bids again,” he said.

Downtown deals afoot?Meanwhile, bigger deals are loom-

ing. A sale of Statler Arms, 1127 EuclidAve., may be in the cards, as it is an asset in the Lehman Brothers HoldingCorp. Chapter 7 bankruptcy actionthat is nearing completion in theSouthern District of New York. IfStatler Arms does not stay in a portfo-lio of more than 10,000 apartmentunits that court minions are market-ing, a local buyer may do a follow-ondeal, insiders say.

A Lehman affiliate, Pami StatlerLLC, in 2006 bought Statler Arms after a developer defaulted on a $33million loan backed by the U.S. Department of Housing and UrbanDevelopment; the loan was used to convert the one-time hotel andoffice building to apartments.

Also, industry insiders say multi-ple owners of large local portfolioshave looked at the 340-suite Bing-ham Apartments, 1278 W. Ninth St.in the city’s Warehouse District.

RRE VIP LLC, an affiliate of Phila-delphia-based Resource Real EstateInc., last year bought the defaulted$45 million HUD loan that was usedto convert the former warehouse toapartments. It later foreclosed togain title to the trendy loft complex.

If either or both big propertiestrade, their sale prices are likely tobe in the tens of millions of dollars.Downtown Cleveland properties, inparticular, are benefiting from theaddition of the Medical Mart andConvention Center, the HorseshoeCasino Cleveland and Flats EastBank office-hotel project. ■

close a deal with a court-appointed re-ceiver to buy the property, said MarkDodds, Finch’s Cleveland-basedstaff architect. Mr. Dodds declinedto say how much Finch would payfor the property, though he noted itwill not acquire the complex withoutfunds to redo it.

“It’s a wreck,” Mr. Dodds said of the144-suite complex that dates from the1960s. “The only things we’re savingare the brick veneer outside and themasonry inside the buildings.” Theacquisition will give Finch its fifth


business money. Beachwood hadhosted the center, but it lost its homewhen that city decided to close itsbusiness incubator late last year.

It might seem odd that a smallcity such as Cleveland Heights —population 46,121 — in a large met-ropolitan area would be looking tocreate an economic developmentstrategy on its own. But the city isundaunted.

“This is a new wave of economicdevelopment,” the mayor said.“We’re ahead of the curve.”

Testing a conceptThe city was looking for a security

system for the school building latelast year and found FST21 throughHoward Gudell, a partner in SGIGlobal Business Advisors LLC, aninternational business consultingfirm. Mr. Gudell also was a founderof the Ohio-Israel Chamber of Com-merce, which has been successful at attracting Israeli companies toNortheast Ohio.

As the city talked about installingthe FST21 system, the concept ofusing Cleveland Heights as a base ofoperations for FST21 in the region,and using city buildings for systemdemonstrations and beta testing,began to take shape.

“We thought there was an oppor-tunity to expand the concept to drive an economic developmentprogram around it,” said HowardThompson, who was hired byCleveland Heights last December as its first economic developmentdirector.

Mayor Kelley said the city has anumber of older office buildings ofvarious sizes and from various erasthat he believes can be attractive toyoung businesses looking for low-cost space.

“This can be a huge opportunityto implement a part of my dream to

build a safe and secure smart city,”said Aharon Zeevi Farkash, FST21’schairman and CEO, during a visit toCoventry School last month. “Oneof the major vectors that will faceour life in the 21st century is the development of mega-cities” andthe security needs that come withthem.

Mr. Farkash is a retired Israelimajor general who at one time washead of military intelligence.

An opportunity recognizedIn addition to using security firms

to bolster its tax base, ClevelandHeights wants to be the place wherethese new technologies are tested.So it will install a SafeRise system atcity buildings and hopes to spreadtheir use to schools and even apart-ment buildings in the community.

Mr. Gudell, a consultant to Cleve-land Heights, said the business attraction effort initially will focuson Israeli companies.

“We want to attract advancedhomeland security companies andtechnologies from around theworld,” he said in an email. “Israelwill be the initial country we wouldconcentrate on because of its lead-ership position in homeland securitytechnologies and our (SGI Global’s)relationship with Israeli companiesand government officials.”

FST21’s SafeRise security productis a biometric identification systeminstalled at entryways. It uses acombination of face and voicerecognition to scan and identify theperson seeking entry. If the individ-ual is known to the system — say, aresident of a building or employeeof a company — the system cangrant access immediately. If the individual isn’t known, the systemuses voice prompts to ask questionsand call a resident or a receptiondesk to authorize entry.

It even can analyze emotionalpatterns in voices to determine if aperson known to the system is underduress.

SafeRise was named product ofthe year at the 2011 Security IndustryAssociation New Product Showcaseand won a similar award at the 2011Electronic Security Expo. ■

“This is a new wave ofeconomic development.We’re ahead of thecurve.” – Ed Kelley, mayor, City of Cleveland Heights


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Cleveland Hts. tests economicstrategy with security outfitBy JAY [email protected]

Cleveland Heights wants to beknown as a safe city. Now it’s tryingto use its new economic develop-ment department to help make thatcase — and to bring jobs to the east-ern suburb, too.

A centerpiece of the city’s effortsinvolves inking an agreement withFST21 Ltd., an Israeli security tech-nology company that would makeCleveland Heights its regional baseof operations. FST21 is preparing toroll out its new, highly regardedSafeRise system, a biometric securityproduct that it is bringing to theUnited States. The business needs aconditional occupancy permit fromthe city to open for business and isnegotiating a lease with the city forspace in the former Coventry School.

“We would like to be consideredthe homeland security mecca of theMidwest,” Mayor Ed Kelley said. “Webelieve that this type of security isthe wave of the future, and we aregoing full throttle ahead trying to attract and locate these businesseshere in Cleveland Heights.”

The city is tagging the program,“Smart City, Safe City.”

The strategy evolved as ClevelandHeights was outfitting CoventrySchool for commercial use. It’s leasingout office space in the 1970s-eraschool building and hopes to attractother tenants with a business devel-opment center there that will nur-ture small businesses.

The business center will be oper-ated by Cleveland State Universitywith some state and federal small



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By JOEL [email protected]

An economic impact study conducted bythe University of Akron’s economics depart-ment last winter showed the Akron Marathoncontributed more than $4 million to the area’seconomy.

Expect that figure to grow significantly af-ter this year’s event, set for Saturday, Sept. 24.

If participation hits the cap race officialshave set, the number of runners would increase nearly 29%, to 14,250, over last year’stotal of 11,051. In 2009, 10,566 runners partic-ipated, up from 9,100 in 2008.

Look for the event to reach its goals, as procrastinators send in registrations at a rateof “hundreds a day,” said Katie Greenwald ofHitchcock Fleming & Associates, which han-dles public relations for the race.

The event features four races: a fullmarathon (capped at 2,000 runners), a halfmarathon (4,250), a marathon relay (6,000)and a 1-mile kids’ fun run (2,000). The Akronmarathon relay — in which five runners compete in varying distances, from an uphill2.8-mile segment to a race-closing 7.9-milestretch — is the fourth-largest relay event inthe country, according to Running USA, a 12-year-old nonprofit running advocacy and research group based in Los Angeles.

Running USA data also show the growth inAkron mirrors a nationwide trend. Accordingto the group, marathon participation in the

Akron marathon participation keeps paceEvent continues to sethealthy gains; companiesalso step up sponsorships

United States rose 8.6% in 2010 from 2009, to507,000. The largest, in New York City, drew44,977 participants.

Half marathons experienced even greatergrowth — to 1.4 million finishers in 2010 from1.1 million in 2009, a jump of 24%. The largesthalf marathon, in Indianapolis, drew 31,046runners. Ms. Greenwald said the 60% growthin female participation also is mirrored in theAkron field.

Sponsors, tooRunners aren’t the only ones returning or

flocking to the race; sponsorships, too, are increasing.

Ms. Greenwald said sponsorships overallare up 6% this year compared with last year.They include Time Warner Cable, the event’s

title sponsor, and Acme Fresh Markets andNovo Nordisk, which sponsor the halfmarathon and relay, respectively.

Time Warner Cable renewed its sponsor-ship this winter, and will stay in the fold for atleast the next four years. And it wasn’t a difficultdecision, according to director of public affairsTish Biggs, who cited the name of the company’shigh-speed Internet service — Road Runner —being a perfect fit. (Marathon officialsdropped the Road Runner name this year.)

“We were there from the beginning, andwe’ve always felt the race offers a great opportu-nity to the community to come together,” Ms.Biggs said of the event that started in 2003with 3,473 participants. “It’s a very healthy activity. We saw it as a wonderful opportunityfor our brand.” ■

PHOTO PROVIDED

Participation continues to rise at the Road Runner Akron Marathon.

By JESSICA ZIGMONDModern Healthcare

New research finds that fees paid to physi-cians in the U.S. are higher than in other coun-tries and are the main cause of higher overallspending in America on physicians’ services.

The study — which appears in the Septem-ber issue of the journal Health Affairs — reported that 2008 per capita spending onphysician services in the United States was$1,599, while per-person spending for theseservices across all other Organisation for Eco-nomic Co-operation and Development coun-tries averaged about 81% less than that, orabout $310 per person.

The study also showed that public and private payers paid somewhat higher fees toprimary care physicians and much higher feesto orthopedic physicians for hip replacementsthan their public and private counterparts inother countries. And both U.S. primary-careand orthopedic physicians also earned higherincomes — $186,582 for the former and$442,450 for the latter — than those physi-cians in other countries.

“For decades, concern has been raised thatgreater financial incentives may be needed sothat enough American doctors will choose tobecome primary-care physicians,” wrote thestudy’s co-authors, Miriam Laugesen, an assistant professor of health policy and man-agement at Columbia University, and SherryGlied, assistant secretary of planning and eval-uation at the U.S. Department of Health andHuman Services. ■

Physician fees keycontributor in higher spending



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Community-focused funds capitalize on JumpStart modelBy CHUCK [email protected]

John Dearborn believes smallcities can be good places to growsmall companies into big ones.

Over the past nine months, fourNortheast Ohio cities — Barberton,Canton, Wooster and Mansfield —have worked with JumpStart Inc. tostart or expand seed loan funds forstartup companies that appear tohave high growth potential.

A few more cities in the area likelywill join them over the next year or two,said Mr. Dearborn, president of Jump-Start, a Cleveland-based nonprofitthat assists and invests in startups.

The seed loan funds are meant tohelp the cities grow their own com-panies and, in some cases, attractstartups from other areas.

None of the cities that have startedfunds is particularly large — Cantonhas about 73,000 residents, Mans-field has about 48,000 and both Bar-berton and Wooster have fewer than27,000, according to 2010 figuresfrom 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 late1980s, he helped start a company ina town of 2,000 people in NewHampshire. The company, AstralDevelopment, created one of the firstimage-editing programs for the PC.

“Ideas can come from anywhere,”he said.

Barberton Community Develop-ment Corp. in August said it wouldlaunch a $500,000 fund that wouldprovide loans of up to $50,000 tocompanies that appear able to raiseadditional venture capital. The onlycatch is the company has to be basedin 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 Mansfieldover the past year has loaned almost$100,000 to four Richland Countycompanies through the AppleseedMicrofinance fund, said Bob Leach,Braintree’s director of operations.Braintree and JumpStart announcedlast week that the fund would beginloaning money to companiesthroughout Northeast Ohio, but itlargely will target companies in rural areas because most of the moneyit has raised so far came from a U.S.Department of Agriculture grant.

Strength in small numbersThe groups that run the funds

choose the startups that receive theloans, which tend to have low inter-est rates and friendly payback terms.However, JumpStart helps them findthe companies, and in some cases ithelps them figure out which onesdeserve money.

JumpStart did not seek out thecities and suggest that they start loanfunds for startups, said Cathy Belk,chief relationship officer at JumpStart.Instead, during conversations thatthe nonprofit regularly holds witharea leaders, officials from thosecities inquired about how they mightcreate and attract more startup com-panies.

During those conversations,JumpStart often cited CuyahogaCounty’s North Coast OpportunitiesTechnology Fund as a model theycould follow. That fund has made$1.6 million in loans to 18 startupsthat since have raised more than $6

million in follow-on capital. Theyemploy 40 people, though some ofthe entrepreneurs did not includethemselves in that figure.

Though there naturally are goingto be more startups to finance inCuyahoga County due to its size,Wooster has shown that big oppor-tunities exist in small cities, too, Ms.Belk said. She cited how ABSMate-rials Inc. recently raised $11 millionto help it commercialize a waterpurification technology developedat the Ohio Agricultural Researchand Development Center in Wooster.

“A lot of small towns can look atthat and say, ‘We’re a small town.Why couldn’t we have that, too?’”she said.

Leveraging existing assetsAmong Barberton’s assets are the

Babcock & Wilcox Power GenerationGroup and plants owned by alu-minum maker Alcoa and specialtymaterials producer PPG Industries.

From those companies couldcome spinoffs or former employeeswho want to start their own busi-ness, Mr. Dearborn said.

Barberton Mayor Bob Genet alsocited those companies as assets.

“There is a lot of activity here inthe city of Barberton,” Mr. Genet said.

The Barberton Community Development Corp. wanted to startthe fund partly because it wantedsomething it could use to attract

entrepreneurs to Barberton, Mr.Genet said, noting that a lack ofconvenient highway access makesit hard for the city to attract largercompanies.

Mr. Dearborn said he doesn’t expect Northeast Ohio communi-ties will use city-focused funds tosteal startups from one another. Instead, the loans will push would-be entrepreneurs to pursue theirideas, he said, again citing his expe-rience starting Astral Development.

“The most important decisionwas to start,” he said.

Mr. Dearborn said he knows ofno other region with so many com-munity-focused funds in such closeproximity.

Neither does Jim Jaffe, presidentand CEO of the National Associa-tion of Seed and Venture Funds,which is based in Philadelphia.

Mr. Jaffe said the guidance ofJumpStart — an organization he respects — will be essential to theseloan funds. Otherwise they may notbe able to figure out which startupshave the best chance of succeeding,he said.

Mr. Jaffe agrees that it’s possiblefor small cities to attract and growenough startups to make seed loanfunds a worthwhile investment.He’s not yet ready, however, to saythey’ll succeed.

“Is it a good idea? I don’t know,”he said. ■


irk Kruger was indeed a man ofhis word.

I first met Dirk when hecame to Cleveland for a lunch

to discuss future job prospects at Crain’sCleveland Business. At the time, he was asenior sales representative for a weeklybusiness newspaper in Pittsburgh. Hewas doing well, enjoying his job and had been a leadingmember of their sales team forseveral years. Dirk’s wife, Tracy,was from Pittsburgh, so familywas close.

Dirk, however, drew on hisadaptive strength from growingup in a military family, and feltthere was something betterhere in Cleveland. The consum-mate family man, Dirk had be-friended a Cleveland-area family at junior baseball tournaments in whichhis son was playing, and liked what heheard about our town.

Dirk and Tracy visited, and were intrigued. So Dirk went about mappinghis plan for coming to Cleveland, andI’m so thankful that Crain’s was his first

stop. I only wish it could have beenlonger — much longer.

After four very successful years withour sales team, Dirk tragically was killedin a car crash on the Thursday before the Labor Day weekend. According to newsreports, the driver of an oncoming vehi-cle crossed the center line on state Route

44 at mid-afternoon and ranhead-on into Dirk’s car. Dirknever made it out of RobinsonMemorial Hospital (his obitu-ary appeared last week in ourpages).

Throughout last week, as wegathered at the wake and againat his memorial service, I couldn’thelp but recall Dirk’s wordswhen he first met with Crain’ssales director Mike Malley and

me. “I know about Crain and what a great

company it is,” he said. “I know aboutyour paper and love the idea of movingto Cleveland and selling for you.

“And I promise you — you won’t bedisappointed.”

Well, Dirk lived up to that promise,

and much more. He worked tirelessly, always among our leading sales repre-sentatives, helping advertisers developthe perfect mix of print ads, digital impressions and event sponsorships to support their business-to-businessbranding efforts in Northeast Ohio.

His clients loved him because he was there to help them. For Dirk, it wasnever about simply getting the next adfrom a client, and then moving onto hisnext appointment. He knew we wouldonly be successful if we were helpful, andthat is exactly what he did for all hisclients.

We all miss him already, and that’s avoid we’ll feel for a long time. But it willbe especially hard during college basket-ball season, and especially during MarchMadness when his beloved Kansas Jay-hawks always would be in the mix.

So we tip our hat, remember his con-tagious grin and recall his usual greetingduring the NCAA basketball tournament:“Rock, chalk, Jayhawks, baby.”

I’m sure he’s in heaven, thinkingabout his pool sheet. We’ll always knowwho he picks to win it all. ■


Blah blahA

stimulus plan by any other name is still thesame. 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 marketforces in producing large quantities of jobs that last.

Remember the immortal words “shovel-readyprojects,” anyone? That’s the phrase PresidentBarack Obama repeatedly used as he went aboutselling his original stimulus package shortly after hetook office in January 2009. He cast a vision of hun-dreds of thousands of workers toiling away on infra-structure projects that were ready to roll. Well, thepromised jolt didn’t happen.

A report in the summer of 2009 by the Govern-ment Accounting Office would reveal that most ofthe stimulus outlays for state and local governmentsweren’t going toward roads, bridges, sewers andother public works projects. Rather, the GAO wouldreport, most of the money was bolstering Medicaidprograms and the budgets of state governments, including Ohio’s, so that hordes of the president’ssupporters — unionized public employees —wouldn’t need to be laid off. When the stimulusmoney ran out, so did the means to pay for thosejobs, leaving governors such as John Kasich with theinevitable (and unenviable) task of laying off workerswho by all rights should have been out of work wayback then.

So, let’s scratch off our job-creation (notice howwe didn’t use the word ‘stimulus’?) list any proposalthat involves trusting the government to dole out alarge pot of money for a specific purpose.

Instead, let’s focus on eliminating governmentinitiatives that inhibit private-sector hiring because oftheir feared cost to employers. Start with amendingthe president’s health care plan as constituted, orrepealing it altogether and devising a proposal thatwon’t make employers afraid of adding to theirpayrolls.

To help return to the job rolls people who alreadyare out of work, let’s get behind legislation pushedby Ohio’s senior U.S. senator, Sherrod Brown, thatwould prohibit employers from refusing to considerunemployed Americans for open jobs. It’s uncon-scionable how some employers explicitly exclude theunemployed from consideration for job openings,including by telling employment agencies to screenout jobless applicants.

And to give consumers and employers a greatersense of the long-term financial stability of the U.S.government, let’s quit proposing grandiose pro-grams that only add to the federal deficit and insteadconcentrate on piecing together a plan for bringingdown the deficit, and with it, the federal debt.

The president and Congress both have managedto lose the faith of the American people. The latestpublic opinion poll released last Wednesday, Sept.7, by the IBOPE Zogby International research firmfound that the percentage of voters saying the nation is on the wrong track reached a new high of75%. The message people are sending is that theydon’t want a stimulus; they know the government isbroken (and broke), and they want a fix. And thecountry will continue to slog along until they get it.

FROM THE PUBLISHER

BRIANTUCKER

Remembering our man Dirk Kruger

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

JAY WESTBROOKCleveland (representsWard 16 for ClevelandCity Council)Spending money to createjobs. I believe the proper roleof government is to spendmoney on public works and oninfrastructure.

➤➤➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com

THE BIG ISSUE

JOHN JENKINSClevelandThey should be looking at waysto cut the national debt, andthey should be spending moneyto create jobs. We’ve got an infrastructure problem in theUnited States, so we need tolook at that.

AL SAMMONBay VillageI think they ought to be spending money to createjobs. Nine to 10% unemploy-ment nationwide — it’s prettyclear we need some job focus.

STACEY HULLClevelandI think they should be cuttingcosts right now. They seem tobe spending a lot as it is.

Should the federal government be spending money to create jobs or cutting expenses to decrease the national debt?

D



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Tech execs target more IT grads Group continues workafter grant runs out

By CHUCK [email protected]

The plan to pump up NortheastOhio’s pipeline of information tech-nology graduates is starting to fallinto place.

A board that includes IT executivesfrom some of the region’s biggestcompanies has taken some earlysteps to increase the number andquality of IT students graduatingfrom area colleges.

For one, the Regional InformationTechnology Engagement Board haslaid the foundation to start imple-menting a British job classificationsystem that could give colleges andIT students a better sense of the skillsand traits businesses want for variousIT positions.

The RITE Board also is workingwith colleges to create a culture wheremore IT students apply for intern-ships and know where to look forthem; has designed the first versionof a scorecard colleges can use toevaluate their IT programs; and hasproduced events and marketing materials meant to convince youngerstudents to pursue IT careers.

Perhaps the most importantachievement, however, is that thetwo-year-old RITE Board still is

passionately pursuing its goal, eventhough the $287,000 state grant thatfinanced much of its work over thepast year ran out in June, said JimShanahan, director of the Entrepre-neurship Innovation Institute at Lorain County Community College.The school is one of five area collegesworking with the board.

“The most important thing is tokeep this moving,” said Dr. Shanahan,who helped organize the RITEBoard as part of a state initiativecalled the Ohio Skills Bank.

The board’s effort to implementBritain’s Skills Framework for theInformation Age has a lot of poten-tial, said co-chair Joe LaMantia, whoalso is president of supply chain soft-ware firm e-Ventus Corp. of Cleveland.

The SFIA (pronounced “Sophia”)system was designed to define theskills and traits someone needs tofill a particular IT position. Thatway, a student interested in IT canfigure out what a “business analyst”does, for instance. Then a collegecan better prepare the student forthat job and more easily find him orher a relevant internship.

The board — which includeshigh-level IT executives from 16 organizations such as the ClevelandClinic, Sherwin-Williams Co. andGoodyear Tire & Rubber Co. — heldfocus groups to define the skills andtraits needed to fill five common entry-level IT jobs at RITE Boardcompanies. Then about 60 IT students

from the five partner schools — LCCC,Cleveland State University, the Uni-versity of Akron, Baldwin-WallaceCollege and Stark State College — tooktests to gauge how good of a matchthey were for their preferred jobs.

The board plans to keep exploringways to apply the SFIA system morebroadly, Mr. LaMantia said.

Board co-chair Bill Blausey, whoalso is chief information officer ofmanufacturer Eaton Corp., empha-sized how the board is trying to getmore companies and schools topost and hunt for internships on anexisting website, NeoIntern.net.Schools are putting more emphasison IT internships, too, Mr. Blauseysaid, noting how Baldwin-Wallaceput someone in charge of IT intern-ships because of the board.

“You have a really big differenceschool to school on how much importance they place on these internships and co-ops,” he said.

The RITE Board conducted sur-veys following the events it orga-nized to drum up interest in IT, andit plans to conduct more analysis onwhat marketing methods work best,Mr. Blausey added.

In the future, the board likely willget more grant money to add to thedues it collects from board members,Mr. LaMantia said. If it doesn’t,though, it will continue on, he said.

“The people in the industry leadingthis are very committed to solvingthis problem,” he said. ■

Goodyear’s North American unit growingBy MIKE McNULTYRubber & Plastics News

Goodyear Tire & Rubber Co.’sNorth American Tire business hasshown solid improvement in thefirst six months of 2011, andStephen R. McClellan, the unit’snew president, is looking for moreof the same in the second half.

Mr. McClellan, who was namedto the top spot in mid-August, saidthe operation has great momentumgoing for it after delivering strongresults in each of the first two quarters.

“This is a great time for the (NorthAmerican Tire) business,” he said,and it has “great products, talentedpeople building them and sellingthem, and consumers who see theirvalue.”

Mr. McClellan took over the presidency of North American Tirefollowing the recent departure ofCurt Andersson, who left Goodyearto pursue “other professional inter-ests,” according to the company.During Mr. Andersson’s tenure, “wehave continued our progress towardreturning North American Tire to sustainable profitability,” saidRichard J. Kramer, the Akron-basedtiremaker’s chairman, presidentand CEO.

Mr. Andersson had been withGoodyear since early 2010, when hewas brought on board as presidentof North American Tire, replacingMr. Kramer in that position. He previously worked at the CooperCrouse-Hinds division of CooperIndustries in Syracuse, N.Y.

The 45-year-old Mr. McClellan,who has served as president of thecompany’s North American con-sumer business division since 2008,will continue his duties in that posi-tion 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 challengingwork and demanding goals, I’mconfident we will deliver because ofthe strength of our products, theimprovement of our processes andthe capabilities” and dedication ofthe business unit’s employees.

He maintained that North Amer-ican Tire will be successful becauseit has one of the world’s greatest tirebrands, “outstanding products anda commitment to operational excel-lence.”

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 distrib-ution.

In December 2001, he movedinto Goodyear’s commercial busi-ness, initially as president of Wing-foot Commercial Tire Systems beforebecoming vice president, Commer-cial Tire Systems, in September2003.

“Steve brings strong leadershipand a proven track record of delivering results,” according to Mr.Kramer. “Steve’s career of morethan 20 years at Goodyear has included progressively larger lead-ership positions within North Amer-ican Tire. His success in running theNorth American consumer andcommercial tire businesses and hisstrong relationships with customersmake him a natural successor to therole.”

A strong believer in working as ateam, Mr. McClellan cited two keyareas that Mr. Kramer stresses:building capabilities while deliveringresults.

“One person doesn’t do that,” hesaid. “We do it together.” ■

(Mike McNulty is a senior reporterwith Rubber & Plastics News, a sis-ter publication of Crain’s ClevelandBusiness.)



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TAX LIENSThe Internal Revenue Service filed taxliens against the following businessesin the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federalgovernment. The lien is a public noticeto creditors that the government has aclaim against a company’s property.Liens reported here are $5,000 andhigher. Dates listed are the dates thedocuments were filed in theRecorder’s Office.

LIENS FILED Light of Peace Society12015 Cromwell Ave., Cleveland 44120ID: NADate filed: July 19, 2011Type: Individual income tax returnAmount: $500,987

Empire Management Group LLC27000 Springside Lane, Olmsted FallsID: 33-1036273Date filed: July 19, 2011Type: Employer’s withholding, unemploymentAmount: $150,294

Lobecks Hot Rod Parts Inc.560 Golden Oak Parkway, ClevelandID: 34-1454604Date filed: July 8, 2011Type: Employer’s withholding, unemploymentAmount: $149,749

SJT Enterprises Inc.28045 Ranney Parkway, Suite L,WestlakeID: 34-1638133Date filed: July 21, 2011

Type: Employer’s withholding, unemploymentAmount: $112,714

City View Mechanical Inc.6111 Carey Drive, Suite 2, Valley ViewID: 20-0205114Date filed: July 26, 2011Type: Employer’s withholding, unemployment, corporate incomeAmount: $100,833

Yelsky & Lonardo Co. LPA75 Public Square, Suite 800, ClevelandID: 34-1527486Date filed: July 19, 2011Type: Employer’s withholding, unemployment, partnership incomeAmount: $68,137

Northeast Ohio Electric LLC5069 Cohen Drive, Bedford HeightsID: 34-1921661Date filed: July 28, 2011Type: Employer’s withholdingAmount: $65,137

Anna Carrie Home Health Careand Services Inc.15322 Waterloo Road, ClevelandID: 30-0264062Date filed: July 21, 2011Type: Employer’s federal tax returnAmount: $39,661

Green Thumb Florists Garden Center and Landscapers Inc.11515 Lorain Ave., ClevelandID: 34-1824632Date filed: July 6, 2011Type: Employer’s withholding, unemploymentAmount: $26,027

Will Repair Inc.2901 E. 65th St., ClevelandID: 34-1577547Date filed: July 28, 2011Type: Employer’s withholdingAmount: $25,073

Kyron Plating Corp.1336 W. 114th St., ClevelandID: 34-0960138Date filed: July 26, 2011Type: Employer’s withholdingAmount: $21,517

The Ventures Inc.P.O. Box 771686, LakewoodID: 20-5967810Date filed: July 13, 2011Type: Employer’s withholding, unemploymentAmount: $19,211

Itek Systems Inc.22700 Shore Center Drive, Suite 100,EuclidID: 34-1874489Date filed: July 13, 2011Type: Employer’s withholdingAmount: $16,272

Thompson Ground Development Inc.12640 Euclid Ave., East ClevelandID: 34-1533357Date filed: July 14, 2011Type: Employer’s withholding, unem-ployment, failure to file complete returnAmount: $15,376

X L Excavating Inc.12291 Eagle Nest Drive, North RoyaltonID: 34-1971682Date filed: July 21, 2011Type: Employer’s federal tax returnAmount: $14,143

Kidz Corner Inc.3749 E. 142nd St., ClevelandID: 26-0385951Date filed: July 28, 2011Type: Employer’s withholding, unemploymentAmount: $13,622

Task Force Interiors LLC3574 W. 44th St., ClevelandID: 65-1313251Date filed: July 19, 2011Type: Employer’s withholdingAmount: $12,263


“This is a neighborhood that hassome real partisans moving in whoare looking to put their rootsdown,” says videographer GrahamVeysey, a Shaker Heights nativewho rented a Bridge Avenue loft inOhio City when he came homefrom New York three years ago. Mr.Veysey said he decided, even then,that the renaissance of Ohio City “isfor real and not just talk.”

Mr. Veysey now has put his moneywhere his mouth is. Through OhioCity Firehouse LLC, he recentlyshelled out almost $400,000 to buyFirehouse No. 4, 1455 W. 29th St.,which had languished on the marketfor years.

The six-person staff of Mr. Veysey’sNorth Water Partners video businessis in the firehouse’s second floor recroom and he lives on the first floor.He also is renting out to other busi-nesses parts of the structure thatmost recently were used as a pho-tography studio, and he even has abidding war for one office.

Keeping the faithMr. Veysey is no loner in com-

mercial investment in the neigh-borhood.

At 1810 W. 25th St., at the south-west corner of West 25th and Jay,workers recently exhumed threestorefronts that were bricked in andplan soon to begin removing bricksfrom sashes on the building’s northside for another nine windows.

The space in the building that

dates from the early 20th century isthe latest venture by TEG Proper-ties LLC, which owns the nearbyHeil and Gillespie buildings, 1848W. 25th and 1836 W. 25th, respectively,at Bridge Avenue.

Tom Gillespie, TEG’s owner, saidhe is adding the 8,000 square feet of retail space because he is impressed by resurgent retail interestin the street. He credits that interest to the nearby breweriesand developer MRN Ltd.’s $20 mil-lion makeover of the United OfficeBuilding and other nearby struc-tures as new-breed retail space, withtenants such as Penzeys Spices andCampbell’s Popcorn Shop.

“We used to only get inquiries(about vacant retail space) frompawn shops, furniture stores andused appliance shops,” said Mr.Gillespie, whose TEG ventures are asideline to his environmental con-sulting company, Getco Environ-mental, which has offices in hisGillespie Building.

Mr. Gillespie restored the Heiland Gillespie buildings as contem-porary retail, office and loft space adecade ago while retaining theirclassic post-Civil War era looks. Hehas weathered the coming and going of many tenants through theyears.

“I’ve never lost faith in thestreet,” Mr. Gillespie said. He declined to say how much he spenton getting the new storefrontsready — some of the former Wood-works furniture refinishing shop

still has classic tin ceilings above it— but he’s putting his own moneyinto the venture.

“There’s little lending for thistype of investment property with-out tenants and a 40% down pay-ment,” Mr. Gillespie said. His solu-tion: using his own equity, hiringhis own crews and working in thespace on weekends with his 3-year-old son, Owen, as a helper.

Lofty goalsIronically, making a go of the

restored sandstone and decorative,steel-columned storefronts pulledTEG Properties into an even biggerventure.

To provide needed parkingspaces for the new storefronts andhis other properties, a partnershipMr. Gillespie heads last year acquired the mortgage on the for-mer Jay Hotel property, 2515 JayAve., which stands immediatelywest of the building with his new storefronts. He subsequently secured ownership of the propertyat a sheriff’s sale and has repairedits parapets and windows to protectit from the elements.

Thanks to its four-story height

and a façade with ornate carvedsandstone features, the old hotelcould serve as an anchor for thenorth end of the Market SquareDistrict, said Eric Wobser, executivedirector of the Ohio City Inc. non-profit development group. Mr.Wobser sees the building as a sitefor additional apartment rentalsand has heard talk of it as a bou-tique hotel.

Mr. Wobser’s enthusiasm aside,Mr. Gillespie said he is not convinced the old hotel could beconverted to apartments at a market rate. He acknowledged hehas been approached by a developerhe declined to identify about usingit as a boutique hotel.

“It definitely will not becomecondos,” Mr. Gillespie said of thelast failed makeover plan for thehotel.

Mr. Wobser has his own reasonfor advocating for more apart-ments: demand. He said vacanciesare almost nonexistent among loftprojects on the street. The situationis the Ohio City version of the familiar tale of resurgent rentals after the collapse of the for-salehousing market three years ago.

However, another loft project isin the wings. West 25th St. Lofts LLC,which owns the former ExhibitBuilders property at 1526 W. 25th St.and several adjoining properties,has secured Ohio Historic Preserva-tion Tax Credits for a $7 millionrestoration of the former BaehrBrewery dating from the 1870s as

“We see Lorain as another avenue forgrowth. There are a lot of buildings there.” – Eric Wobser, executive director, Ohio City Inc.


The largest pediatric health care provider

in NE Ohio.A K R O N C H I L D R E N S . O R G

continued from PAGE 1

Rebirth: Potential extends beyond W. 25th restored retail space and 67 market-rate apartment rentals.

Rick Foran, a member of West 25th

Street Lofts LLC, declined commenton the project.

“We’re not discussing it until weget financing,” he said.

Mr. Wobser said the loft projectcould help extend redevelopment ofWest 25th north toward Detroit Avenue,much the way that MRN’s UnitedOffice Building project stabilized thesouth end of the Market District.

Market-drivenThe time has come to look at pro-

jects spreading north in the MarketDistrict, Mr. Wobser said, “since wefigured out Moda.”

The solution for the long-shut-tered Moda nightclub at 1867 W. 25th fell into place last month asMitchell’s Ice Cream in Rocky Riverannounced it has optioned the prop-erty for another of its shops and for anew headquarters to capitalize onthe food and entertainment-relatedattractions of the West Side Marketarea.

Even with all those projects, Mr.Wobser said Ohio City is looking atanother way to build on demand associated with the West Side Market and nearby properties.

With a $7,500 grant from the non-profit assistance group Neighbor-hood Progress Inc. and $2,500 of itsown, Ohio City Inc. has commis-sioned the Northeast Ohio UrbanDesign Center to prepare a concep-tual design for how to redevelop Lorain Avenue west of West 25th Street.

“We see Lorain as another avenuefor growth,” Mr. Wobser said. “Thereare a lot of buildings there.” ■


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ARCHITECTUREVOCON: Jeff Gibbon and KerreOvens to project managers; GregRoda to intern architect, designer and project manager; Nick Faehnleto project designer; Lindsey Ray tointerior designer.

CONSTRUCTIONGILBANE BUILDING CO.: Scott Orrto project executive; Aaron Claxtonand Cameron Hill to project engi-neers; John Coughlin and LennyJatsek to senior office engineers;Todd Gerber to project manager;William Helmet to senior project engineer. RUHLIN CO.: Suzy Martin to marketing coordinator; Alan Ely tosite safety specialist; Bill White toquality control specialist; MarquessaCallaghan to safety/HR administra-tive assistant.

EDUCATIONCUYAHOGA COMMUNITY COLLEGE: Belinda Miles to executive vice president, Academicand Student Affairs. MUSIC SETTLEMENT: Lisa M.Smith to director, marketing and

communications; Thea Wilson to director, Department of Early Child-hood Education.UNIVERSITY OF AKRON: Nita Sahai and Bryan Vogt to faculty, College of Polymer Science and Polymer Engineering.

FINANCIAL SERVICEAPPLE GROWTH PARTNERS:Wayne Chamberlain to business valuation senior associate; LindsayCooper, Sean Cwynar and PaulMartin to senior associates; KathrynLee to human resources manager;Tom McClary and AngeliqueRogers to managers; Krista Clarketo associate.BEACON FINANCIAL PARTNERS:Matthew Feda to planning advice andtechnology specialist.COHEN & CO.: Neal Sheehan to senior staff accountant; Bill Boyer,Andreana Shengelya, BrendanWalsh, Marissa Beck, Emily Kwongand Carmella Ballone to staff accountants; Todd Pence and BenSchillig to staff accountants, CohenFund Audit Services; Shelyn Hunleyand Jenera Scott to Cohen Health-care Consulting; Derek Austin tosoftware developer.GRANT THORNTON LLP: Joe

Blaha, Andy Damberger, Joe DeLiberato, Nick Hunter, MeganKessler, Dave Koval, Mike Murphy, Brian Murray, NicoleOakes, Scott Schmit and BradSchoenfelt to senior associates. SS&G: Anna Friedman and SharonUecker to senior associates; AnnButekoff to manager; Sarah Edwards to administrative assistant.ZINNER & CO. LLP: Joe Rameyto senior manager, accounting and tax services; Brett Neate to tax manager; Ted Austin to IT administrator.

HEALTH CARESUMMA HEALTH SYSTEM: CynthiaStruk to president, Home Care, Hospiceand Palliative Care Services.WILLCARE: John Ventresco to community relations specialist.

INSURANCEOSWALD COS.: Michelle Gaertnerto director of business development.

LEGALDWORKEN & BERNSTEIN CO. LPA: Jim Timmerberg, ShelleyFleming and Joshua Strickland toassociates. ROBERT J. FEDOR, ESQ., LLC:Kevin L. Preslan to associate.TUCKER ELLIS & WEST: Paul J.

Malie to associate. ULMER & BERNE LLP: Mark Floydto partner and co-chair, Employment &Labor Practice Group.

MARKETINGGOLDSTEIN GROUP COMMUNICA-TIONS: J. Paige Boyer to accountmanager. KNOTICE: Jeff Carey to director ofanalysis and strategy; Brent Williamsto director, professional services.LIGGETT STASHOWER: Kelly Molnar to controller; Celeste Conklin and Pete Grasso to accountsupervisors; Laura Kuenzel to assis-tant media planner; Kurt Eyman to account coordinator.SKODA MINOTTI MARKETING SERVICES: John C. Moore to managing director, strategic marketingprograms; John Kallmeyer to directorof visual marketing; Alyson Kallmeyerto marketing project manager.

NONPROFITAMERICAN HEART ASSOCIATION:Donna Ferrante to Cleveland Metrovice president; Megan French to director, go Red for Women.EUCLID AVENUE CONGREGATIONALCHURCH: James J. Rutledge Jr. tofinance manager.FAIRMOUNT CENTER FOR THEARTS: Jessica Leary Allen to executive director.

SERVICERADCOM INC.: Tina White to account representative.

BOARDSAMERICAN HEART ASSOCIATION:

Jeffrey M. Embleton (Mansour,Gavin, Gerlack & Manos Co. LPA) tochairman; Brian P. Griffin to presi-dent.

AWARDSSOCIETY OF RESEARCH ADMINISTRATORS: KathrynWatkins-Wendell (University ofAkron) received a Distinguished Faculty Award.

Send information for Going Places [email protected].


he declined to specify thepurchase price.

“People love Mapleside.We wanted to preserve itand make it a year-rounddestination,” Mr. Clementsaid.

Since taking over the operation in late 2010 andreopening in June, theClements have been busydoing just that, recastingMapleside as an agri-tourism — or farm-based

recreation — destination. The hope is to protect the

farm’s heritage while expanding upon its potentialto attract more people beyondthe location’s more traditionaldraws, such as the restaurant,bakery and Johnny AppleseedFestival.

By KATHY AMES [email protected]

For generations,Mapleside Farms inBrunswick has beena mecca for sunset

enthusiasts, apple loversand restaurant patronswith a taste for predictablecomfort food.

Each summer, visitorsflock to the bucolic PearlRoad institution for itsspectacular views of the sunset, and each fall, theJohnny Appleseed Festivallures throngs of tourists, alljockeying to partake in thetradition of bagging their ownapples and indulging inhomemade cider.

But last winter, financial difficulties associated with thebusiness threatened to forever

SMALL BUSINESSI N S I D E

SEPTEMBER 12 - 18, 2011 CRAIN’S CLEVELAND BUSINESS 17

19 ADVISER:CAREFULLYWEIGH PRODUCTIDENTITY.

Shoppersrethinkingresale, seevalue option Consumers’ desire fordeals rises; stigma fadesBy MICHELLE [email protected]

Judy Schordock puts it this way:“It’s like resale shopping’s beendiscovered.”

If it’s been discovered, itseems 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 NorthRoyalton, where consignmentitems include jewelry, collectiblesand vintage clothing, sales were up11% this June over June 2010 andwere up 14% in calendar year 2010over 2009, said Ms. Schordock, theowner. The shop has been open for17 years.

“People who would have neverstepped foot into a resale shop aredoing it,” she said. “Everyone islooking for a bargain.”

Gerri’s Closet, an upscale con-signment boutique in Green that’sbeen in business for 14 years, hasbeen racking up new shoppers andconsigners, too. Owner Gerri Tale-vich estimates sales were up 15% to20% in the first half of 2011 over theyear-ago period.

More broadly, the most recentoperating survey by NARTS: TheAssociation of Resale Professionalsechoes these examples of localgrowth: Sales were up 12.7% in 2009over 2008, 9.8% in 2008 over 2007and 6.9% in 2007 over 2006.

Adele R. Meyer, executive directorof NARTS, which is headquarteredin the Detroit suburb of Saint ClairShores, isn’t surprised that thegrowth persists.

“Even when the economy recovers,the industry keeps the new customers it attracted during aneconomic downturn as they continueto love the values they get shoppingresale,” she said.

What’s old is newHaving been in business for

nearly two decades, Ms. Schordockbelieves current sales growth is driven largely by the economy: People want to sell, not give away,what they own and want to scoredeals on what they buy.

Laura Goss, owner of ReRunConsignment Boutique in Avon,agreed. She estimates her store’sJune sales were up more than 40%from last June and her July sales up12% over last July. Sales have beenup every year since she opened in2008, she said, and she doesn’t

See RESALE Page 18See FARMS Page 20

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 goalis 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 BEGINNINGMapleside Farms’ new owners work to expand the Brunswick staple

into an agritourism destination with more entertainment options

spoil these rituals. The 100-acre farm, which had been inthe Eyssen family since 1927,was slated to be sold at aMedina County sheriff’s sale,appraised at $2.8 million.

That’s when Brunswick residents Greg and Kelly

Clement spotted an opportu-nity ripe for the picking.

The couple acquired themortgage on the propertyfrom Fifth Third Bank for lessthan the $4 million that theEyssen family owed, accordingto Mr. Clement, although

ON THE WEB: For a video interview with the Clements and a deeper look at Mapleside Farms, visit www.CrainsCleveland.com/Mapleside.


expect that to change.“The economic condition of

things right now has definitelychanged people’s focus on whatthey have to have and what’s important,” she said. “I reallydon’t think, even if the economyturns around, that a majority ofpeople are going to go back totheir old ways.”

People who’ve discovered, forexample, that they can sell theirclothing through a consignmentshop like ReRun aren’t going to revert to donating it to Goodwilljust because the economy improves, she said.

Ms. Schordock believes thegrowth in sales and of resale shops— which is evident in the numberthat have popped up locally —also is driven by the increasednumber of television shows thatpromote resale shopping, and thecontinued push for recycling.

The stigma of resale shoppingappears to have faded, too, storeowners say, but that began to occur long before the recessionstruck. In fact, one of the bestforms of advertising for resalestores today is word of mouth, Ms.Meyer of NARTS noted.

“Years ago, it wasn’t that waybecause people didn’t want tobrag that they bought somethingat a resale shop,” she said. “Nowa-days, people are proud to save

money, people are proud of theirbargains and people are very, verytuned into recycling and the envi-ronment.”

The recession, meanwhile, drewin a demographic that didn’t pre-viously shop resale, Ms. Goss said.

“(Shopper) income levels aremuch higher than they oncewere,” she said. “With that comehigher expectations of customerservice. Resale stores have becomeso boutique-like.”

Consider, for example, that ReRun Consignment carries someexpensive labels, including Coachand Louis Vuitton, and offerscoupons and promotions to compete with the retail world.

Taking it mainstreamThough a seeming majority of

resale shops are enjoying growth,there have been casualties.

For example, Patricia Lucasshuttered her Lakewood store,Haute Stuff, in June, a little morethan a year after she opened because sales had fallen formonths and were so depressed shewasn’t breaking even. In retro-spect, she believes her choice toopen near several established resale shops was unwise.

However, many of NARTS’ approximately 1,200 memberstores are expanding, remodelingand adding new locations, Ms.Meyer said.

The Big Red Wagon is a Columbusventure that collects consigneditems and hosts biannual sales ofmaternity, teenager and babyitems. The company, which openedin 2008, began selling franchisesabout a year ago and already is onits fifth, said Susan Nimon, co-owner. All are in Northeast Ohio.

Ms. Goss of ReRun also hopes togrow, perhaps with a second loca-tion, though she doesn’t have atimeframe for when.

Many expect the upward trendin resale to continue. “I do not seethis industry going backward inany way because it has such agood foothold,” Ms. Meyer said.“It’s already increased so much. It’sbecome so much more mainstream.”

Though her shop has enjoyedincreased sales overall this year,Ms. Schordock of The Red Geraniumnoted this summer’s been slow.Sales in August ended “a little below” last August — disappointingsince the prior months were betterthan last year. She blames theheat, for one, and the cost of gas.

But she and other store ownersremain optimistic. With school insession and the holidays approaching,she expects this fourth quarter toexceed fourth quarter 2010.

“It’s going to keep going asmore and more people realize thatit’s OK to do this — it’s OK to walkinto a resale shop,” Ms. Schordocksaid. ■


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SMALL BUSINESS

IRS more closely watches boss’s salary

It may feel liberating to somebusiness owners that they havethe authority to decide forthemselves how big of a paycheck

to draw, but it can be easy to forgetthat the Internal Revenue Service isscrutinizing those decisions.

To be more specific, it’s thesalary drawn by shareholders in Scorporations that is of greatest interest to the IRS — and they’relooking at it more skeptically thanever these days.

Examiners are concerned aboutowners whose paychecks seem alittle thin. It makes the IRS wonderif those owners are abusing one ofthe key characteristics that distin-guishes the S corporation from otherlegal structures under which a business might operate.

The S corporation is the structureof choice for many small businessesin large part because of how it allowsincome to pass through the entity,free of income and employmenttax, so it is reported as income toshareholders. That’s different fromother corporate structures.

In an S corporation, shareholdersalso can take dividend distributionsfrom the entity that are not subject tothe usual taxes, such as income tax,Social Security tax and Medicare taxbecause the S structure subjects theprofits to tax only once, whether ornot it is distributed to the owners.

That has led some owners in S corporations to look at how muchthey pay themselves via a regularpaycheck and how much they take inthe form of distribution dividends.Consider the tax impact for the business if an owner takes a dividendcheck instead of a payroll check.

PETERDEMARCO

TAX TIPS

In a simple illustration, assume acompany earns $100,000 in incomein a single year, and the president ofthe company is the only employee.He takes compensation of $100,000over the course of that year.

The company taxable income isreduced to zero, but it must pay a7.6% payroll tax on that amountand must withhold payroll tax fromthe salary. All together, the tax billwill be a little more than $13,000.

If that same owner takes a$100,000 dividend distribution instead of a paycheck, then thecompany and the owner avoid the$13,000 in employment taxes. Theowner still will report the same totalincome of $100,000 on his personalincome tax return, but the overall taximpact will inevitably be reduced.

It’s an extreme example, and anyowner who takes payment from thecompany in this fashion would invite the wrath of the IRS. Active,hands-on business owners must takea reasonable measure of their com-pensation as employment income.But how much is reasonable?

The IRS has provided scant directguidance on that point, but caselaw is starting to provide moreguidelines for owners to follow.

First, the IRS will look at whetherthe owner is a significant employeewho actively works for the company,or an absentee shareholder.

Compensation is paid to peoplewho work while dividends are paidbased on an investment or an ownership interest, so an activeemployee logically should draw apaycheck commensurate with hisor her contribution to the business.

The IRS also might look at the nature of the business. In a service-oriented company, value is generatedalmost entirely by the work of itsemployees. In a more product-drivenbusiness, more of the value is drivenby capital and assets, so a lowersalary might be more justified.

Examiners will look at how theowner’s compensation compareswith similar professionals in othercompanies, and with other employeesinside the same company.

It also will look at historicalsalary and revenue data looking for logical trends in increases or decreases. Finally, the IRS mighteven do some ratio analysis, studyingthe owner’s pay as a percentage ofsales or profits, or the relationshipbetween compensation and dividendpayments.

While business owners might enjoy the flexibility that comes withwriting their own paychecks, theyneed to be mindful of the varioustax implications to avoid invitingunwelcome scrutiny. ■

Mr. DeMarco is vice president anddirector of tax services for the re-gional accounting and business con-sulting firm of Meaden & Moore,headquartered in Cleveland.


Resale: Even wealthy shoppers give it a try



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SMALL BUSINESS

Developing a brand-new brand might not be necessaryLAURASHERIDAN

ADVISERC

ompanies are innovatingmore than ever. However,introducing a new productdoesn’t necessarily mean

you need to create a new name,new logo, new website and newbrochures.

In many instances, it’s better forthe company and its customers if anexisting product name is used ver-sus generating a new one.

In some circumstances, a newname does make sense, and followinga structured process will surprisinglybe faster and result in a better name.

Here’s an approach to help younavigate through this issue.

■ Is your innovation a new product or is it a new brand? Is itadded functionality, an enhancedversion of an existing product, or anentirely different offering? Are thecustomers new and different?

If the product and target marketare at all similar to your current set,then you likely can avoid developinga new brand name.

■ A new brand is expensive.Sure, it’s exciting to develop a newbrand. But that excitement isdwarfed by the cost and complexityassociated with creating one.

A specialized ad agency shouldbe retained to help with a logo, lookand style (called brand identity).

Then, the brand identity needs tobe applied to business cards, emailtemplates, website, print ads andwhatever else is part of the brandlaunch and ongoing marketing program.

However, the most significantcosts are those associated withbuilding awareness of the newbrand. How are people going tolearn about it? Online ads? TV? Radio? Newspaper or magazine?

■ A structured process trumpsbrainstorming. OK, so your newproduct is really different and is fora different audience. And, you havethe budget to support creating andpromoting the new brand. Avoidthe temptation to have your staffbrainstorm around the conferenceroom table.

Instead, agree on criteria thatcreate boundaries and limits, suchas easy to say, not sounding like acompetitor and being original.Then, list the emotional and rationalbenefits of the new product andtheir synonyms.

Playing with combinations ofthose words, words in other lan-guages and invented words thatconvey those benefits will help youcreate a list of names.

As you winnow the list, refer tothe benefits and criteria to stay focused on your original guidelines.

■ Test your finalists. Put yourshort list through a filter.

What do you want customers tothink of when they hear the name?How does the name relate to yourcompany’s other products? Is itmemorable? When you search thename online, are other companiesusing ones that are similar? Is iteasy to say, read and spell? Is itfresh and original? Does it evokethe emotions that you want cus-tomers 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 withan available domain name.

Unfortunately, it’s an importantpart of the brand creation process.Check GoDaddy.com or Register.com to see if the domain name isavailable.

In addition to the domain name,the brand needs to be trademarked.

It’s key to protecting the goodwilland value of your brand.

You can conduct a free, cursorycheck on www.trademarkia.com or

the government’s site, www.uspot.gov/trademarks/index.usp, to determine if the trademark is avail-able. This basic research does notreplace the need to have your attorney complete a thorough investigation of the trademark.

■ Just say ‘no,’ if you can. Forthose innovations that complementyour existing product line, savemoney and time by developing aproduct name only. Consider howthe names of the current productsrelate to one another, and generateanother one in the same “family.”

There’s no need to develop a

new logo, brand identity system orwebsite. Leverage what your customers know and love aboutyour existing products to announceyour newest offering.

If the answer is a new brand, follow the structured process out-lined above. Resist the temptationto shortcut the effort by using arandom name without a solidfoundation. ■

Ms. Sheridan is president of Viva La Brand, the Cleveland-based marketing strategy and adagency search firm.

Companies must consider the benefits, potentialpitfalls involved when launching new identity



SMALL BUSINESS

GRANDOPENINGS

According to the 2007 U.S. Censusof Agriculture, the most recent figures available, 23,350 farmsthroughout the nation indicatedthey offered agritourism andrecreation opportunities, generating$566 million. During that sameyear, 418 Ohio farms collectednearly $5 million in agritourism-related income.

“There’s only so much leveragewe can have between the applehouse, bakery and restaurant,”said Mr. Clement, noting that earlier this year the eatery under-went a $1 million facelift. It reopened as The Melrose Grille,with a menu that highlights manyfarm-to-table menu items and locally grown ingredients.

The Clements also built a stagebehind the restaurant, overlookingthe orchard, and each Friday thissummer featured a different con-cert as a way to entertain familiesand ensure a steady flow of trafficto the farm.

“We want to pull people into thefarm and get them in the orchards,the fields and the pumpkin

patch,” Mr. Clement said. “There’sonly so much revenue the tradi-tional business can produce, butturning the business into an adventure farm” and creatingthemed events provides a growthavenue, too.

This fall, the new owners arecreating what Mr. Clement callsOhio’s largest corn maze to encourage children and their adultcounterparts to navigate through32 acres. They also are building a250-foot slide into the orchard andare constructing a giant tree housenestled in the woods.

“I think the largest ones now are10,000 square feet in Minnesota andEngland,” Mr. Clement said of thetree house. “Ours will be biggerthan that.”

The Clements say the orchard’s4,000 apple trees additionally couldprovide an idyllic setting for a festival of lights or perhaps a PolarExpress-type concept during winter.

Amir Eylon, tourism director forthe Ohio Tourism Division, saidagritourism is not a new phenom-enon, but it has been gaining traction over the last 12 to 15 years.

“As independent farmers havedealt with the challenges of running their farms, agritourismhas helped generate year-roundrevenue,” he said.

Mr. Eylon said the number ofagritourism events, such as pickyour own apples, farmers marketsand corn maze adventures, hasbeen increasing among Ohiofarms. He cites the growing eventcalendar list on the state’s websiteDiscoverOhio.com as evidence ofthis resurgence in agritourism.

“People are seeking authenticexperiences,” he said. “People notonly want that fresh-baked applepie, but they want to see where theapples came from. It’s about thelocal connections.”

Hoping they bite Farm manager Bill Eyssen said

he and his family, which still helpoperate the business, are “verysatisfied” with the outcome so farand the direction Mapleside isheaded.

“We were probably front-runners of agritourism 20 yearsago, but Greg’s insight is to expand that even more and makeMapleside bigger and better,” Mr.Eyssen said.

Mr. Clement said both June andJuly sales were about 90% over thelike periods one year earlier. He’salso projecting sales in the newoperation’s first full year of businessin 2012 will be about $5 million.

The Clements are not new tothe entrepreneurial world. Theyalso are co-founders of ParmaHeights-based Realeflow, whichspecializes in business manage-ment, marketing tools and softwarefor entrepreneurs and investors inthe real estate industry.

That company, started in 2007,made Inc. magazine’s 2011 list ofthe 500 fastest-growing companies

in the United States, with salesover a three-year period growing823%, to $6 million in 2010 from$646,000 in 2007.

The pair this summer also begananother venture, AgritourismCoach, which consults farmers onways to grow new revenue streams.They are using Mapleside as ablueprint.

The Clements are generatingthe buzz about both Maplesideand Agritourism Coach throughthe latter’s Facebook page, whichcurrently has more than 2,500friends who have the opportunityto view videos, read blogs, podcastsand other posts about the business.

The Clements, meanwhile, planto conduct this winter a three- tofour-day “boot camp” on agri-tourism, which likely will takeplace in Orlando or Las Vegas.

“There are about 2 million farmers in the U.S., and we estimate1.5 million of those will need help,”Mr. Clement said. “The averagefarmer only makes $12,000 a year.

“We’re completely stoked aboutthe future of this place and the future of other farms,” he said. ■

Farms: New owners seize recent gains made in agritourismcontinued from PAGE 17

J3 CLOTHING COMPANYMoreland Towne Centre34105 Chagrin Blvd.Moreland Hills 44022www.j3clothingcompany.com With a collective 65 years of experience,Jack Madda, JB Dunn and Joe Pasterbring to Northeast Ohio a new men’sstore that offers personal service,unique style and inventive technology.J3 Clothing Company aims to bemore than a place to shop; as such,it also features a lounge area whereclients and customers may relax orwatch a game.Phone 216-285-0555Fax [email protected]@[email protected]

THE BEHAVIOR CLINIC9680 Columbia RoadOlmsted Falls 44138www.thebehaviorclinic.comOwner Dr. Elizabeth Feltes is focusedsolely on pet behavior issues, practic-ing the most positive, least intrusiveand most effective means possible.Dr. Feltes conducts public seminarsthroughout the state, offers continu-ing education for veterinarians andtechnicians and consults on behav-ioral problem in companion pets. TheBehavior Clinic also offers specialtyclasses, training evaluations, toys,muzzles and a library pertaining todog and cat behavior. Hours are 8:30

a.m. to 6 p.m. Monday, Wednesday,Thursday and Friday; and 9 a.m. to 1p.m. Saturday.

Phone 440-334-8534 Fax [email protected]

KEVIN BUSTA INDUSTRIAL FURNISHINGS2673 W. 14th St.Cleveland 44113www.kevinbusta.comCleveland-based industrial-style artistKevin Busta has opened a store inTremont. Mr. Busta, who has receivednational recognition for his industrial-style furnishings and artwork since hebegan his operation in November 2008,earlier this year partnered with one ofhis collectors, Michael Carreras. Thetwo since then have been focused onexpanding Mr. Busta’s efforts beyondbeing a made-to-order venture. Storehours are 11 a.m. to 6 p.m. Tuesdaythrough Saturday; noon to 5 p.m.Sunday; and closed [email protected]

To submit a new business, send thefollowing by email to Amy AnnStoessel at [email protected]:business name; address; city andZIP; website; brief description ofbusiness; business phone number;business fax number; businessemail address; and date that busi-ness opened.

JB Dunn, JackMadda and JoePaster, the menbehind newclothing store J3 ClothingCompany.PHOTO PROVIDED

“People are seekingauthentic experiences. ...It’s about the localconnections.”

– Amir Eylontourism director,

Ohio Tourism Division


week with Crain’s. “I think we arewell 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 seenin a 50% drop in its nonperformingloans to $842 million as of June 30from $1.7 billion the year before.

The goal as Key moves into nextyear is to stabilize its balance sheetand begin growing, Ms. Mooneysaid. She anticipates that growthwill come not through consumers— who continue to deleveragethemselves — but through smallbusiness, middle-market and cor-porate lending.

The anticipation that businesslending will be a main source ofgrowth fuels Key’s focus on aligningthe efforts of its two banks to netmore business customers, Ms.Mooney said.

The plan, which the companybegan implementing in 2009, is tointersect the community bank,which is Key’s bank branch pres-ence, with its corporate bank,which provides business customerswith Wall Street capabilities, suchas investment banking services.

The intersection of the two was astrategy Ms. Mooney drove herself,and one she believes helped landher the CEO seat. Communitybankers in Key’s local marketsknow their communities betterthan anyone, and Key aims to marrytheir connections with the expertiseand products of the corporate bank.

Here’s the planThe corporate and community

bank leadership has written andprioritized a list of thousands ofcompanies in Key’s markets to callupon, Ms. Mooney said. That pro-grammatic approach differs fromthe haphazard way in which thebanks used to connect.

“You are creating opportunitiesfor both sides of the bank that youwouldn’t have had before if theyweren’t calling together and showingup as one team,” she said.

Key also continues to invest forgrowth through its branches, which

it believes consumer and smallbusiness customers want. In North-east Ohio alone, the bank hasadded 14 branches in the past fouryears. Five more are slated by theend of 2011.

The bank also is investing inbranches in Seattle, Portland, Ore.,and Colorado, Ms. Mooney said.

Key plans to maintain its currentbranch network, which spans 14states from Alaska to Maine, Ms.Mooney said. The bank, she noted,may deploy capital to make fill-inacquisitions in those markets.

Key in recent years has divestedcertain businesses, including marine and recreational vehiclelending and student lending, as itworked to redefine its business mix.The company’s portfolio of marketsand businesses, Ms. Mooney said, iswhat it believes to be the right onefor profitability.

“I feel like that hard work is behind us,” Ms. Mooney said.

Time to ‘hunker down’For Fred Cummings, whose

Beachwood hedge fund, ElizabethPark Capital Management, is an investor in KeyCorp, the focus is onKey’s profitability. He characterizesthe bank’s profitability as below average, though he acknowledged ithas improved.

The company reported $234 mil-lion in net income attributable to common shareholders in the second quarter, compared to a profitof $29 million in the like period ayear ago.

Mr. Cummings questions howthe bank will grow its net interestincome, which has declined, as itshrinks its balance sheet and asloan growth remains sluggish.

Mr. Cummings also observedthat the company’s expenses arehigher than its peers.

“That’s a bad combination, whenyou have a lower margin and youaren’t as efficient as your peers,” hesaid.

Ms. Mooney said she believesKey has outperformed analysts’ expectations in recent quarters. Itscredit profile has improved rapidly,she said, and it repaid earlier thisyear the $2.5 billion in Troubled

Asset Relief Program (TARP) fundsit received from the U.S. Treasury.Key remains disciplined about itsexpenses, Ms. Mooney said.

“I like our capabilities, and Ithink we’ve just got to hunker downand grow,” she said.

Though he believes Key could beperforming better, Mr. Cummingsacknowledged that Key’s creditquality has improved, as have itscapital ratios.

“One could say that they have excess capital,” he said.

Itching to buy its sharesThat capital is a “checkbook”

that can be deployed opportunisti-cally for growth, Ms. Mooney said.

While its primary goal this yearwas to repay TARP, Key likely willask for the green light to repurchasestock next year, Ms. Mooney said. Banks must have regulatoryapproval to buy back stock.

“We believe we are undervalued,”she said. “At this current price, webelieve that even more so.”

When her first year as CEO concludes, Ms. Mooney wants Keyto have had continued profitabilityand wants its stock to have performed well relative to its peergroup.

“With a little help from this econ-omy, I look forward to telling thestory that we have stayed the courseon our strategy and that we canpoint to how we’re winning withour clients, that we are indeedbuilding relationships,” Ms.Mooney said.

It’s only fair to give a new bankCEO a year before assessing what’sbeen accomplished, particularlyone leading a bank the size of Key,Mr. Cummings said.

“These are big companies,” he said. “They don’t turn overnight, so you’ve got to give hersome time.” ■

“We believe we are undervalued. At this current price, we believethat even more so.” – Beth Mooney, chairwomanand CEO, KeyCorp


Northeast Ohio Regional Energy Alliance.

The alliance’s goal will be to convince area residents to maketheir homes more energy efficient— by adding insulation, replacingold furnaces, and so on — while alsodesigning a process that makes iteasier to do so.

Before the end of the year, theCleveland Housing Network, whichalready helps the city’s low-incomeresidents make their homes moreenergy efficient, plans to begin conducting subsidized energy auditson 100 homes owned by residentsof various income levels. Then thoseresidents will receive help figuringout which upgrades they should implement and how to apply for rebates.

That assistance is important, saidPaul Ettorre, co-chair of the greenbuilding committee. Many resi-dents who get audits today don’t goforward with improvements, hesaid.

Early next year, the alliance aimsto conduct 100 more audits, this timewithout a subsidy, in one of Cleve-land’s inner-ring suburbs. That pilot also would test the alliance’sability to market the audits anddrum up interest in energy efficiency,which is the main focus of thisyear’s summit.

Inspiration in Pa.One of the alliance’s long-term goals

is to make it easier to finance energy-efficiency improvements, said Mr.Ettorre, Great Lakes regional managerfor Key Bank Community Develop-ment Lending, which provides financing for economic developmentand community revitalization in mar-kets served by the Cleveland bank.

For one, the alliance is thinkingabout tapping into a revolving loanfund that the state of Pennsylvaniacreated to finance energy-efficiencyimprovements, he said. A similarorganization called the CincinnatiEnergy Alliance has made a “softcommitment” to do the same thing,he added.

The final goal would be to createa system where homeowners borrowing money to make energy-efficiency upgrades could pay offtheir entire monthly bill with theamount they saved on energy coststhat month, Mr. Ettorre said.

“If you can get to that magic balance,

this thing can get to scale,” he said.Other initiatives include Drink

Local, Drink Tap, a nonprofit createdby the clean water working group.The nonprofit is campaigning to getpeople to replace bottled water withtap, has organized beach cleanupsat Edgewater Park and is raisingmoney to bring clean drinking water to a school in Uganda.

Drink Local, Drink Tap last weekannounced it had raised $10,000from the George Gund Foundation,which will go toward the $50,000 itneeds to drill a well near the Africanschool and create a documentaryabout the effort, said Erin Huber, director of the nonprofit.

“Everything has moved very, veryquickly,” she said.

Jumping through hoopsThe local food group not only cre-

ated Growhio, a nonprofit formed togenerate demand for local food, butthree men who met through thegroup also founded Tunnel VisionHoops LLC.

The company, which works outof the LaunchHouse business incu-bator in Shaker Heights, createsportable greenhouses that farmerscan use to grow food in tempera-tures that otherwise would be toocold. The company has built about15 “hoop houses” since June 2010,when Todd Alexander, MichaelWalton and Carlton Jackson foundedthe business.

Tunnel Vision Hoops neverwould have started, however, if thethree men had not met at the firstSustainable Cleveland 2019 sum-mit. The event has proven to be agreat forum for people interested insustainability to meet and come upwith ideas, said Mr. Alexander, whoalso helped start Growhio.

“In my mind the summit has donewhat it set out to do so far,” he said.

In addition to projects led byworking groups, a few dozen of thebiggest companies in NortheastOhio since the first summit havebeen gathering for all-day meetingstwice a year to talk about their sustainability initiatives.

The meetings give them an opportunity to share best practices,said Mr. Watterson, Cleveland’schief of sustainability. They’re evenhelping develop metrics the citycould use to track the sustainabilityof the region’s corporate communityas a whole, Mr. Watterson said. ■

Center and, earlier, at Public Audi-torium in downtown Cleveland. Thesport and outdoor show, formerlythe Sportsman’s Show, began itsrun in 1927. What was the GreaterCleveland Home & Flower Showbegan in 1942.

Unrealized visionMr. Fassnacht envisioned the

Euclid expo center as the home forthe two shows promoted by his Expositions Inc. and for a variety ofconsumer shows operated by othershow producers, who bring eventssuch as bridal fairs, baby fairs andcustom car shows to exhibitionhalls nationwide.

For instance, International Gem& Jewelry Show Inc. puts on showsin 90 cities annually. It opened shopat the Great Lakes Expo Center for

three days in May. At the time he moved his shows

out of the I-X Center, Mr. Fassnachtwas optimistic.

“By 2011, we anticipate hostingat least 125 events a year,” Mr. Fass-nacht said in a news release in Sep-tember 2009, when he announcedthe planned move to Euclid.

It appeared to get off to a goodstart. In March 2010, he told Crain’sthat the 10-day home and gardenshow held that January drew 62,500people, more than 13% above hisprojected attendance.

However, the cornucopia ofevents at the expo center did notmaterialize.

“We anticipated getting a lot ofthe small, 50,000-square-foot shows— woodworking shows, trains shows,gem and jewelry shows, things likethat,” Mr. Fassnacht said. “But a lot

of people want to wait and see howa facility does” before bringing in ashow.

“The bottom line is if you have afull fourth quarter and first quarter(late fall to early spring), you canmake it, but if you don’t, chances(of succeeding) are unlikely,” Mr.Fassnacht said.

He said the expo center hadabout 16 shows in the five monthsit was open in 2011.

Competition from the westThe Great Lakes Expo Center also

was hurt by competition with the I-X Center, which brought in a showpromoter, Marketplace Events ofSolon, to run home and garden andoutdoor shows at the mammoth exhibit hall in Brook Park.

Tom Baugh, CEO of MarketplaceEvents, said the I-X Center is among

the most attractive venues in whichhis company operates.

“It was a difficult headwind (Mr.Fassnacht) was trying to make anadjustment in,” he said. “It wouldbe extremely difficult for anyone inCleveland outside of the I-X Centerto have a property that could growand be strong. The I-X’s presence inthis market is huge.”

Marketplace Events created theGreat Big Home & Garden Expo forthe I-X Center and stages 20 otherhome and garden shows around thecountry annually.

The competition for consumersand exhibitors only was likely to intensify for the expo center, as theI-X Center announced in July that itplaned to make a $25 million to $30million investment over the nextseveral years to spruce up the former tank plant, now in its 25th

year as a convention center, and tocreate new shows.

“It’s a very interesting industryright now,” said Les Gray, vice

president of Southeast ProductionsInc. of Greensboro, S.C., and presi-dent of the National Association ofConsumer Shows, a Portland, Ore.,trade group for show producers.

“The trickle-down effect of severalindependent show promoters eitherpulling back the footprint of theshows they manage or pulling outcompletely due to the lack of partic-ipation of exhibitors has had a hugeeffect on venues,” he said.

Mr. Gray said the show businessis hurt whenever consumer productscompanies trim marketing budgetsand either cut back on the numberof shows they participate in or onthe size of the booths they lease.

Mr. Fassnacht will maintain Exposition Inc.’s office in Cleveland,though it will be producing showselsewhere. The company has oper-ated shows in Pittsburgh for 27 years.

“Expositions Inc. is still a viablecompany,” he said. “I ran the expocenter, but they were two separatecompanies.” ■

Expo: Larger competitor proved too muchcontinued from PAGE 3


Signs: Big firms brainstormMooney: Melding of corporate,community banks a prioritycontinued from PAGE 1



LARGEST INDUSTRIAL PARKSRANKED BY TOTAL ACRES(1)

Rank

Industrial ParkAddressWeb site Total acres

Number ofacres

occupied

Number ofbusinesses

in park Businesses located in park Freeway accessProperty managerPhone number

1Strongsville Business and Technology ParkFoltz Parkway, Strongsville 44149www.strongsville.org/content/strongsville_business_park.asp

1,693 1,237 77 Avery Dennison, Momentive Performance Materials,Eberhard Manufacturing, C.Trac, Clark-Reliance Corp.

U.S. Route 42,state Route 82,I-71, I-80

City of Strongsville(440) 580-3118

2 Liverpool Industrial ParkInnovation Drive, Valley City 44280 900 400 8 Medina Blanking, Ohio Welded Blank, Three D Metals,

Fuserashi, MTD Products, Shiloh Industries I-71 MTD Products

3Twinsburg Industrial ParkHighland 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

4Akcan Industrial ParkMt. Pleasant Road and Mayfair Road, Green 44720www.dehoffdevelopment.com

400 250 41Diebold Corp., Belden & Blake, Cintas, LexingtonTechnologies, The Ohio Lottery, Inventors Hall ofFame, Best Supply, Aramark, Massillon Plaque

I-77DeHoff Development Co.Daniel J. DeHoff(330) 499-8153

4Interstate Commerce CenterMondial Parkway, Streetsboro 44241www.geisco.net

400 144 20Best Buy, Playtex, Chrysler, Hammer Co., Pods,Millard, Aurora Plastics, Schwan's, Classic Honda,Classic Nissan, Classic GMC, Flexalloy

I-80, I-480Geis Property ManagementJoe Perrow(330) 528-3500

6NEOCOM INavarre Road, Massillon 44646www.massillondevelopment.com

380 70 7 Ziegler Tire, Case Farms, Kraft Power, E-Tank, KendalWelding, PolyOne, Shearer's Foods U.S 30, I-77

Miller Land Inc./MassillonDevelopment Foundation(330) 833-3146

7 CAK International Business ParkMassillon 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/WackerChemical Corp., J & K Subway/Prout

I-77, state Route241

City of Green Planning Department(330) 896-6614

8Progress Drive Business ParkPearl Road and Westwood Drive, Strongsville 44149www.strongsville.org/content/progress_drive.asp

325 312 48 DeMag Plastics Group, PPG Industries, Atlantic Tool &Die, Archway Marketing, Empco



9 Emerald Valley Business ParkCochran Road and Pettibone Road, Glenwillow 44139 285 115 9 Home Depot, Stride Tool, Best Buy, Kauffman Tire,

Ris Paper, Owens & Minor, Saeco USA I-271, I-480First Industrial Realty Trust Inc.Kelli Nicoloff(513) 860-0480

10 Midway Industrial ParkDutton Drive and Midway Drive, Twinsburg 44087 269 230 32

K & M International, Production Tool, Glass EquipmentDevelopment, CEIA USA, WebMD, Polystar, DeccoAlloys, Towner Filtration

I-480, I-271 NA

11Dow Circle Research ParkSprague Road, Strongsville 44136www.strongsville.org/content/dow_circle.asp

258 249 33 Akzo Nobel, Cintas, PNC Bank Technology Center,Enterprise Holdings, Acuative, Honeywell International



12Ascot Industrial ParkState Road, Akron 44223www.ci.akron.oh.us/ed/development/indparks/ascot_park.htm

220 167 20Pneumatic Scale, Coltene/Whaledent, SpunFabAdhesive Fabrics, Coretec, Linden Industries, MainStreet Gourmet, Spectrum Plastics, Becker Pumps

State Route 8,I-76, I-77

City of AkronRita Weinberg, Brent Hendren(330) 375-2133

13Diamond Business CenterPettibone Road, Glenwillow 44142www.geisco.net

200 53 3 Superior Beverage, Mat Holdings, Winston Products I-480, state Route422

Geis Property ManagementJoe Perrow(330) 528-3500

13Frost Road Commerce CenterPhilipp Parkway and Frost Road, Streetsboro 44241www.geisco.net

200 175 22 L'Oreal, Venture Lighting, Wine Trends, AndrewsMoving, A. Duie Pyle, Seegott, Soft-Lite Windows I-80, I-480

Geis Property ManagementJoe Perrow(330) 528-3500

15Riverbend Commerce ParkColorado Ave., Lorain 44052www.cityoflorain.org/community/economic_development.shtml

199 20 3 Camaco Lorain Manufacturing, U.S. Post OfficeDistribution Center, Horizon Daycare Center

State Routes 57,611 and 254, I-90

Cresco Real EstateJoseph V. Barna, George J. Pofok(216) 520-1200

16French Creek Business ParkEast River Road, Sheffield Village 44054www.barnacaplan.com/ourproperties/detail.asp?id=137

187 12 1 ZF Trading Co.I-80, I-90, stateRoutes 301 and254

Comprehensive DevelopmentSolutions, Cresco Real Estate,Dillin Corp.; George J. Pofok

17 Geauga Industrial ParkIndustrial Parkway, Middlefield 44062 180 90 12

KraftMaid Cabinetry Inc., Mercury Plastics, PolychemDispersions, Johnsonite, Sajar Plastics, NormandyProducts, Penske


The Federal Improvement Co.David Ford

17Sidley Industrial ParkI-90 & state Route 45, Austinburg 44010www.ashtabulagrowth.com/industrialpark.asp

180 30 1 Save A Lot Interstate 90 Lu Dunlap(440) 352-9343

17York Alpha ParkYork Alpha Drive, North Royalton 44133www.northroyalton.org

180 120 108 Laszeray, Induction Tooling, Royal Wire, H & D SteelServices, May Industries, Valley Tool and Die

I-71, I-77, stateRoute 82

City of North RoyaltonThomas John Jordan(440) 237-5484

20 Sweet Valley Business Park9880 Sweet Valley Drive, Valley View 44125 160 132 75 XPedex, Dawn Enterprises, IBEW, ImaginIt, Pakrite,

Sherwin-Williams I-480, I-77CrescoSimon Caplan(216) 525-1472

21 Heritage Business Park23555 Euclid Ave., Euclid 44117 157 41 9

Eaton, Keene Building Products, TECT, CuyahogaCommunity College, COAD, North American Plastics,Pollak Foods, Babcock & Wilcox, JW Belt

I-90 Ohio Realty Advisors(330) 659-4060

22 Brunswick North Industrial Park945 Industrial Parkway North, Brunswick 44212 150 120 75

Fogg multi-tenant, Inflatable Images, DestinyManufacturing, All Construction Services, PhilpottRubber, W. W. Williams

I-71 All Construction ServicesDavid James LeHotan

22Cleveland Business Park17909-18601 Cleveland Parkway, Cleveland 44135www.chelmproperties.com

150 82 8 NA I-480, I-71 Chelm Properties Inc.(440) 349-4300

22 Midway Industrial ParkSchaden Rd,/Keep Ct./Freedom Ct./Liberty Ct., Elyria 44035 150 123 26 Sunbelt, AIT, CHP Cancer Center, Symrise, APR,

Cleveland Plastic, Carpenter Steel, Marathon SteelI-90, state Route57

Logos Realty Co.(440) 324-3550

22Quantum CentreGreenwich Road, Wadsworth 44281www.naicummins.com

150 150 13 Parker Hannifin Corp., E. C. Morris Corp., EbnerFurnaces Inc., Soprema Inc., Accel Group Inc. I-76 NAI Cummins Real Estate

(330) 535-2661

22 Quarry Lakes Business ParkQuarry Lakes Drive, Sandusky 45840 150 42 6

Encore Industries Inc., Northern Ohio EducationalComputer Associates, SCC Resources Inc., NorthCoast Cancer Care, Praxair Inc.

State Routes 2and 101

Cresco Real EstateGeorge J. Pofok, Joseph V. Barna(216) 525-1469

27 Columbia Road Industrial SubdivisionColumbia 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 ParkTaylor Parkway, North Ridgeville 44039 143 80 13

Invacare, Norlake, Wolff Brothers, Tool & DieSystems, Poppee’s Popcorn, Cuyahoga Vending, FritoLay, Rhenium Alloys

State Route 57from I-480, StateRoute 10

Logos Realty Co.Bob Graham440-324-3550

29Mills Business ParkFaircrest & Sherman Church, Canton 44721www.dehoffdevelopment.com

141 20 2 Medline Industries Inc., Old Dominion Freight Line I-77DeHoff Development Co.Daniel James DeHoff(330) 499-8153

30Akron Canton Corporate Park1525 Corporate Woods Parkway, Green 44685www.camincorp.com

140 100 76 Hankook Tire, Goodrich De-Icing, Paychex, PrudentialFinancial, Bonnot, InfoCision Management


CAM Inc.Mike J. Mockbee(330) 896-3253

30Stonegate Corporate ParkHighlander Parkway, Richfield Village 44286www.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

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee theselistings 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 ofLists are available to purchase at www.crainscleveland.com.(1) Information as of July 31, 2011.

RESEARCHED BY Deborah W. Hillyer



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Industrialparks liststays steady

There’s one not-very-exciting word— “stable” — that defines NortheastOhio’s market for industrial parks.But in this fragile economy, stable really isn’t so bad.

The top seven entries on Crain’snew list of Northeast Ohio’s LargestIndustrial Parks, ranked by total acres,are exactly the same as they were inthe 2010 list: the same seven proper-ties, same total acreage, same numberof acres occupied and same numberof businesses in the parks. They’realso in precisely the same order.

Nos. 8 and 10 on this year’s list —Progress Drive Business Park inStrongsville and Midway IndustrialPark in Twinsburg — ranked No. 9and 10 in 2010, also with the same vital statistics.

That means the only change in thetop 10 is this year’s addition of Emerald Valley Business Park inGlenwillow. The 285-acre park hasnine businesses in the 115 acres thatare occupied.

The similarities in 2011 and 2010extend beyond just the top of the list.

Of the 58 industrial parks on the2011 extended list, 49 appeared onthe 2010 list with the same figures fortotal acres, occupied acres and numberof businesses.

There are eight parks new to theextended list this year.

If you’re doing the math — and atthis point, how could you not be doing the math? — you know thatmeans there was one industrial parkon this year’s list that was on the2010 list and has some different numbers to report. That property isthe 157-acre Heritage Business Parkin Euclid, which now has nine busi-nesses, up from six in 2010.

Here are other highlights from thelist:

■ Four properties report they arefully occupied: the 150-acre Quan-tum Centre in Wadsworth, the 102-acre Valley Business Park inWestlake, the 98-acre Park 82 inStrongsville and the 68-acre PointsEast Industrial Park in Twinsburg.

■ The industrial park capital ofNortheast Ohio is … Green.

The Summit County communityhas five properties on the extendedlist. It beat out strong challengesfrom Cleveland and Strongsville,with four each. — Scott Suttell

Bedford company’s intriguing foam draws attentionBy DAN [email protected]

A small company in Bedford hasa product that amazes most observers, but it’s still looking forits primary market and application.

The product, Aeroclay, is a sort offoam made by a 2010 startup of thesame name and run by entrepre-neur Lauren Wolfe.

Made from clay, water, someproprietary additives and a freeze-drying process, Aeroclay can bemade hard or soft, stiff or flexible. Itcan be engineered to soak up waterlike a sponge, or to be hydrophobicand absorb no water at all. Thequestion is, what to do with it?

“It took us a good year to analyzethe technology and figure outwhere to start,” said Ms. Wolfe, whonow has a few markets targeted forher magic foam.

The attribute that has gained themost attention so far is Aeroclay’sability to soak up oil while not soakingup water — something that hasbrought both the Discovery Channeland National Geographic out to Bed-ford to check it out, Ms. Wolfe said.

In a real-time, five-minute video thecompany prepared, an aquarium isfilled with water and black oil ispoured on top. Then, some crum-bled Aeroclay is thrown on top ofthe oil. By the end of the video, allthe oil has been soaked up, leaving

only clean water behind when Aeroclay is fished out.

“And you can just wring it outand use it all over again to do thesame thing,” Ms. Wolfe said.

That characteristic could be agodsend to companies dealing withoil spills, and Aeroclay hopes to license it to one or more big oilcompanies for that purpose.

In the meantime, it’s pursuingother options. Aeroclay also makesgood packaging material and doesnot contain the carcinogens foundin other foams, Ms. Wolfe said,which has garnered interest fromsome big shipping companies thatcould be customers.

The drawback, if there is one, is

that Aeroclay requires freeze-dry-ing, which often is thought of as adifficult and expensive process. Butat least one international companythat makes freeze-drying equip-ment, New Zealand-based CuddonLtd., is familiar with Aeroclay anddoesn’t think scaling up the freeze-drying process is a problem.

Cuddon CEO Andy Rowe said notonly can modern freeze-drying tech-nologies handle the volumes Aero-clay might need, but he’s also con-vinced his company or one like itwill be called upon to help produce it.

“I think the likelihood of some-one taking on some of the potentialcommercial products from Aero-clay is very good, especially with

the sustainable nature of the prod-uct’s base ingredients. It is really aquestion of which product andwhen as opposed to any question onif it will go to commercialization,”Mr. Rowe told Crain’s in an emailexchange.

But the first commercial sale ofAeroclay might be for somethingfar less glamorous than cleaning upoil spills. It turns out Aeroclay alsomakes darn good cat litter, accordingto Ms. Wolfe.

If that’s its first use, that’s fine byMs. Wolfe, because she’s confidentAeroclay will find substantial uses.

“Companies are finding us,” shesaid, “and so far, we’ve done nomarketing.” ■



BRIGHT SPOTS

Retirement plans show little movement despite recent volatilityAdvisers: Experience with fluctuations plays roleBy DARLA MERCADO

Investment News

Even though the stock market’sroller coaster ride has taken somescreaming drops in recent weeks, retirement plan participants appearto have chosen to keep their handsand feet inside the cars, according to major plan administrators andrecord keepers.

At J.P. Morgan Retirement PlanServices, which administers $121 billion in retirement assets, plan par-ticipants on Aug. 8 and 9 transferredjust $833 million, which is less than0.7% of the asset base.

Principal Financial Group said6,406 of the 2.4 million participantsin plans that it administers madetransfers on Aug. 8, more than threetimes the 2,000 participants whomake a transaction on a typical day.Still, just 0.25% of plan participantstook action on the day the DowJones Industrial Average lost 5.5%.

Wells Fargo Institutional Retirementand Trust reported about $1 billionflowed into stable-value funds between Aug. 1 and Aug. 15, less than1% of the $164 billion in plan assets,exclusive of defined benefit plans,which Wells Fargo administers.

“Most vendors haven’t seen huge

Bright Spots is a weekly web featurethat highlights positive developmentsin the Northeast Ohio business com-

munity. Send information forBright Spots to managing

editor Scott Suttell [email protected].

■■ ERC in MayfieldVillage said it has made

a “major addition” toits health insurance

program with the launchof ERC Health Select.

The new program “includes anexclusive network of physician clinicsthat offer $5 co-pays and on-sitegeneric medications,” according toERC, the former Employers ResourceCouncil. Organizations also are eligiblerate reductions of up to 10%.

Earlier this year, ERC announcedit beat market averages for premiumrates for the 11th consecutive year. Italso retained 95% of its enrolledpool, which ERC characterized as“an unheard of rate” in the healthinsurance industry.

The ERC Health middle-marketprogram is designed for companieswith more than 50 benefit-eligibleemployees. It’s underwritten by Anthem Blue Cross and Blue Shield.

■■ Rad-Con Inc. of Lakewood, asupplier of batch annealing furnace(BAF) equipment and software tomanage BAF shops, is helping acustomer expand in Indiana.

The customer, Stripco Inc., saidit’s adding three annealing basesand a building large enough to morethan double the current existing annealing capacity at a plant inMishawaka, Ind.

Rad-Con is providing the purehydrogen batch-annealing equip-ment, a continuation of a 15-yearbusiness relationship between thecompanies.

Construction has begun on thenearly 10,000-square-foot additionto Stripco’s existing precision cold-roll strip plant. Production willbegin December. The expansion allows Stripco to meet the growing

demand of customers.

■■ Mobile app developer Figure 8LLC of Cleveland has launched anapp called Paint Pro for the iPad,the iPhone and the iPod Touch.

The app “makes choosing paintsimple by letting you quickly find apaint color, compare it with differentmanufacturer choices and shareyour color ideas with others,” thecompany said.

Paint Pro, priced at $1.99, allowsusers to “capture a color from a pic-ture or stored image and instantlymatch colors from thousands ofchoices,” Figure 8 said. It also “in-stantly suggests coordinating colorsand additional close-color matchesfor reference.”

■■ Kowit & Passov Real EstateGroup in Mayfield Heights said it’sbringing a Jacksonville, Fla.-basedbarbeque chain to Northeast Ohio.

Woody’s Bar-B-Q has 30 stores inFlorida and four other states and iscoming to Streetsboro this fall.

Carla Massara with Kowit &Passov represented the landlord ona 3,000-square-foot lease for a sitein Streetsboro Commons near Interstate 80 and state Route 14.

■■ LaunchHouse, a pre-seed investment fund and business accelerator in Shaker Heights, saidit has made an investment in PurusHealth LLC, the company thatmakes Good Greens Nutrition Bars.

The size of the investment wasnot disclosed. Good Greens bars“cater to a variety of different foodrestrictions because they are 100%vegan, gluten-free and have a low-glycemic index,” LaunchHouse said.

“Being a LaunchHouse portfoliocompany is beneficial to a companylike mine because I am surroundedby like-minded entrepreneurs,”said Keith Pabley, founder of PurusHealth, in a statement. “The advisers,business services and access to talented individuals also workingout of LaunchHouse has made thestartup process seamless.”

numbers of transactions moving assets out of equities into other investments,” said Robyn Credico,head of the defined contributionpractice at Towers Watson & Co. “Infact, they haven’t seen much activityat 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 fixed-income and stable-value investmentsduring the first two weeks of August,with $74 million moving Aug. 8alone. From Aug. 10 to Aug. 12,however, $13 million flowed backinto equities, according to companypresident 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 peopledecided to be conservative,” saidMichael Preisz, president of PreiszAssociates Inc. and a member of theInstitutional Retirement IncomeCouncil.

The firm manages about $300

million and oversees 100 group retirement plans, each with lessthan $5 million in assets. The threeparticipants who sought safety wereover age 55 and wanted to shiftmore money to debt.

Financial advisers and executivesat retirement plan providers saidemployees, while tending towardcaution, do not appear to be panicked. During the wild swings afew weeks ago, participants largelysought information.

On Aug. 8, call volume at retire-ment plan service centers reachedlevels set in late 2008, but “the emo-tion wasn’t anywhere near what itwas in 2008,” said Barrie Christman,vice president of retirement and investor services at Principal Finan-cial.

“If there’s anything as a silver lining,I think that (2008) has taught peoplethat these kinds of fluctuations canhappen,” Ms. Christman said.

Gary Allen, a financial adviserwith Prudent Investor Advisors,agreed. He noted that in 2008 and2009, clients realized that a systemicdownturn was taking place and nobody would be safe.

“In 2008 and 2009, we thought itwould be a death march and we wereready to hand out the flak jacketsand helmets,” Mr. Allen said. “Thesituation now is normal — it’s volatile,but that’s all the more reason to con-centrate on what you can control.”

Another possible contributor tothe lack of activity is plan partici-pants’ traditional inertia and thefact that more of them now invest intarget date funds, a popular defaultinvestment, which could makethem less likely to make changes.

“The people who go into thesetarget date funds are people who either made an active election orwere defaulted; they tend to be passive in behavior,” Ms. Credico ofTowers Watson said.

… but cash is king for someHowever, not all plan advisers are

riding out the volatility. Thoseworking with separately managedaccounts and using a tactical invest-ment approach have moved tocash. Braver Wealth Management,which manages $575 million andworks with plans under $20 millionin size, uses quantitative modelingto rotate clients into and out of equities.

Braver’s model detected volatility

in late July and moved assets fully intocash by Aug. 4, missing the massivedecline that took place days later.

“We still reside in cash,” saidDavid D’Amico, president of thefirm. “You had a few decent days,but that’s not enough for the modelto say that it’s safe to get back in.”

Randy Mowdy, an adviser withAlliance Trust Co., took a similartack, placing about $800 million intocash on Aug. 5 and staying there.

“That’s a lot of money that we’vepreserved,” he said. “Because of oureconomy today and the potentialfor another recession, the chancesare good that we’re going to go backand test those [market] lows.”

Mr. D’Amico noted that althoughthe tactical model doesn’t buy backinto the market at the absolute lowest, nor does it bail at the summitof a climb, the concept keeps planclients disciplined.

“People sell into the fear and buyback 20% higher,” he said. “Thesetactical strategies are tools adviserscan use to better manage their riskand stick to long-term discipline.” ■

Darla Mercado covers insuranceand retirement products for Invest-ment News, a sister publication ofCrain’s Cleveland Business.


distributed for the first time 800bottles of his Seven Brothers DistillingCo.’s artisan vodka to liquor storesthroughout Ashtabula, Cuyahoga,Geauga, Lake, Lorain, Portage andSummit counties. About 20 storesin Columbus also are set to receivea shipment.

“I’ve rejected so many batches,”he said. “I wanted it to be perfect.”

Mr. Suttman is among a fledglinggroup of local artisan craft distillerswho are taking advantage of Ohio’sfresh water and crops to producespirits that they hope satisfy thepalates of quality-conscious con-sumers.

Craft distilling represents a mere1% of the $40 billion spent annuallyon spirits in the United States.However, Bill Owens, president ofthe American Distilling Institute,expects that percentage to growduring the next few years.

According to the distilling insti-tute, there are 306 distilled spiritsplants in the country. That’s nearlyfive times the 68 plants in existencein 2003, when the group formed topromote a burgeoning craft distillingrenaissance. Eight craft distillersare located in Ohio.

The organization projects between400 and 450 craft distillers will belocated in the United States andCanada by 2015. Mr. Owens saidantiquated state laws are standingin the way of further growth amongcraft distillers.

Many local craft distillers agree,

lamenting that Ohio’s stringentlaws prevent them from expandingtheir businesses in much the sameway wineries and breweries have.

A bill is moving through the OhioLegislature that would ease restric-tions on craft distillers and wouldopen the market so that more spir-ited entrepreneurs could partici-pate in the burgeoning business.

Growing painsMost craft distillers in Ohio,

including Mr. Suttman in LakeCounty, hold A-3 liquor permitsthat enable them to sell their products through state liquorstores. However, only three permitsknown as A-3a permits are availablein Ohio that also allow consumersto purchase a distiller’s products onpremises.

According to current state law,only one A-3a permit may be issuedin each of the three counties withpopulations greater than 800,000 —Cuyahoga, Franklin and Hamilton.

Artisan distillers say those limita-tions stymie the ability to growtheir business.

“This is such a successful industry,like the breweries and wineries,”said Don Outterson, owner ofWoodstone Creek in Cincinnati,which holds Hamilton County’s A-3a permit. “There’s plenty of roomfor more. And the state talks aboutneeding to create more jobs?”

House Bill 243, co-sponsored bystate Reps. Ron Young of LakeCounty and Casey Kozlowski of

Ashtabula and northern Trumbullcounties, seeks to ease the restric-tion on the number of A-3a liquorpermits issued.

The bill passed the Ohio House96-0 on June 23 and next will be heardby the Insurance, Commerce andLabor Committee in the Senate. Itssession begins in mid-September.

“The high points are, it opens upthe free market so a lot more peoplecan participate, and consumers wouldbe able to sample the product onsite,” Rep. Young said. “Right now,they can purchase on site, but theycan’t taste. If you’ve never tried aproduct, it’s important to have theopportunity to sample it.”

They’ll drink to thatThe A-3a permit in its current

form also restricts the volume ofliquor a consumer can buy onpremises. The permit holder cannotsell more than one-and-a-half litersof liquor per day to the same con-sumer. Rep. Young said he’d like tosee that limit raised to nine liters.

The Ohio Department of Commerce supports the bill as itcurrently stands, said Lyn Tolan,communications director.

“It’s a nice secondary market for

farmers and the agriculture industryin Ohio,” Ms. Tolan said.

Craft distillers aren’t the onlyones who stand to gain if the law’srestrictions are relaxed.

A number of Northeast Ohiowineries also have expressed interestin distilling. They include SouthRiver Vineyard in Geneva, which already has bought the appropriateequipment.

“The wineries out here, they aregrowing,” Rep. Young said. “If youcould follow their growth and thehundreds of people they employ …boy, if craft distilleries could havethe same amount of growth, boy.”

Mr. Suttman said he would pursue an A-3a permit, should itbecome available.

“I’m excited about (the bill). Ican’t wait to expand,” Mr. Suttmansaid. “We’re ready for Phase II. I’mlooking for investors or may pursuea loan to build a local facility thatwould produce and store whiskey.

“We’d ultimately love to have 15 to20 products on the shelves,” he said.

Go with the flowA line already is forming for

Cuyahoga County’s A-3a permit.Market Garden Brewery, which recently opened in Cleveland’sOhio City neighborhood and is ownedby Sam McNulty, has applied for it; so has John Marek, who plans by mid-2013 to open Portside Dis-tillery, a 5,000-square-foot restau-rant, brewery and distillery on WestNinth Street in Cleveland’s Ware-

house District. Mr. Marek said he hopes H.B.

243 passes by the time he’s ready toopen Portside so that he’s able to sellhis premium rum (and later whiskey,bourbon, vodka and absinthe) onsite to customers.

“If House Bill 243 passes, therewill be a drastic increase in distil-leries in Ohio,” he said. “There’sbeen a huge increase in Ohio in thelast three to four years, and that willcontinue.”

Tom Herbruck, owner of Tom’sFoolery in Chagrin Falls, said hedoesn’t plan to pursue the A-3apermit, even if it becomes moreubiquitous.

“It works well for us to distributethrough the current state liquorsystem,” Mr. Herbruck said of hisoperation’s artisan applejack.“We’ve only released one batch,and that sold out pretty quickly,mostly in Cuyahoga and Geaugacounties.”

Mr. Herbruck last week was setto release 300 bottles of his secondbatch of Tom’s Foolery Applejack,which this year was awarded “bestin category” at the American Dis-tilling Institute’s national competi-tion. He also plans to begin distill-ing whiskey this fall and will beready to release his first batch ofbourbon in a few years.

“The A-3 license permits us to dowhat we want to do,” Mr. Herbrucksaid. “Our plans are to focus onquality, and to take time to enjoywhat we are creating.” ■

“There is plenty of roomfor more. And the statetalks about needing tocreate more jobs?” – Don Outterson, owner, Wood-stone Creek in Cincinnati


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Craft: New legislation aimed at easing permit restrictionscontinued from PAGE 3



By STAN [email protected]

Avalon Station, a long-stalledcondominium project next to theGreater Cleveland Regional TransitAuthority rapid line in ShakerHeights, may start rolling again after its lender gained ownership of the project from its builder,Heartland Development Co. ofCleveland.

Residences at Avalon StationLLC, a corporation formed bySouthern Financial Group LLC ofWaco, Texas, received the deed to

the property Aug. 31 from Heart-point Devco LLC, the entity thatHeartland used to develop the multimillion-dollar project at 1678Van Aken Blvd. The project sold adozen units but was left with 39 unsold condos when the markettanked in 2008.

However, negotiations betweenShaker Heights, the developer andthe lender made the transfer possible.Southern Financial agreed to pay $200,000 in disputed propertytax bills unpaid by Heartpoint Devco as residential property values plummeted.

Margaret Cannon, Shaker Heightslaw director, said the city revised adevelopment agreement to releaseHeartpoint Devco from developingan adjoining two-acre parcel, andthe developer returned the parcelto city control.

J. Gordon Priemer, chairman ofHeartland Developers, declined todiscuss in detail why he agreed tosign 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 SouthernFinancial, said gaining clear title to

the condos will make it easier to sellthem because it will not be neces-sary to receive court approval to doso.

Southern Financial was not theoriginal lender on the project. It acquired the mortgage on the four-story development last year fromPNC, which had inherited it fromthe former National City Bank. Mr.Morris declined to say how muchhis company paid for the $10 million mortgage, but he noted itbuys such mortgages across thecountry.

Liz Schorgl, an agent at Howard

Hanna’s Shaker Heights branch,said Avalon Station units carry asking prices between $108,250 fora small, first-floor unit to a fourth-floor loft with an asking price of$338,470. That is about 40% lessthan the original asking prices, shesaid.

All the suites were finished before the project foundered in the 2008 recession and housing collapse. Mr. Morris said the unitsdo not need renovations, but hiscompany plans to repaint theweathered sign on the site offeringsuites for sale. ■

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Here’s your chanceto swim with a shark■ You don’t have much time, but if you’regood at putting video together, you may geta shot at presenting your business idea to anactual shark.

If that sentence is too cryptic for you, read on.The Council of Smaller Enterprises small

business group is staging a “Business PitchCompetition” similar to the concept of theABC television reality show, “Shark Tank.”To add pizzazz to the competition, “SharkTank” panelist Daymond John — founder oficonic fashion brand FUBU — will be one ofthe judges of the COSE event, which is setfor Oct. 18 from 5:30 to 8 p.m. at Pickwick &Frolic on East Fourth Street in downtownCleveland.

Here’s where the time crunch comes in.To have a business idea considered, par-

ticipants need to provide an executive sum-mary and a two-minute video to COSE bythe deadline of 5 p.m. Friday, Sept. 23. Thetop 20 ideas will advance to secondary judg-ing, and eventually the top four businessideas will get the chance to present in frontof Mr. John and other expert panelists.

For a full list of contest details and rules,go to www.cose.org/pitch. — Mark Dodosh

Where there’s a will, there’s a way■ Local lawyers volunteering their time todraw up estate planning documents for firstresponders no longer will be doing it on bor-rowed equipment.

Using an $8,000 donation from Forest

City Enterprises Charitable Foundation,Cleveland’s Wills for Heroes program in Julybought 12 laptops, plus software and print-ers. The equipment will be put to use for thefirst time Oct. 1 during an event for Beach-wood police and fire departments.

Wills for Heroes volunteers provide doc-uments, such as wills and powers of attor-ney, at no cost to first re-sponders.

When Bruce Hennes, oneof the non-lawyer membersof the Cleveland Metropoli-tan Bar Association’s boardof trustees, learned that pro-gram coordinators plannedto raise money for equip-ment, he made a few phonecalls. Forest City’s founda-tion “immediately stepped up to the plate,”he said. — Michelle Park

Cool idea from the Monsters■ Pro sports teams always are looking forways to enhance fan and sponsor experi-ences. It’s why the Indians offer battingpractice access and kids the ability to runthe bases; it’s why the Cavaliers allow kids toshoot free throws on the court.

The Lake Erie Monsters think they’vefound another really, really personal way.

The American Hockey League affiliate ofthe Colorado Avalanche that begins its sea-son Oct. 7 is ratcheting up its marketing forits four-seat “Ice Box,” located between theteams’ benches. Single-game tickets go for$80, while five- and 10-game packages go for

$110 per seat and include free parking andPatron Club access, which covers all food,beer and wine. (Single-game seats don’t in-clude food and beverages.)

“Our goal is to always provide the mostaccessibility to our team and we think theIce Box is a great way to deliver this to ourfans,” said Mike Ostrowski, the team’s se-

nior vice president and chiefoperating officer. “This is justanother example of how webring an up-close, excitingand unique game-day expe-rience to hockey fans.”

If you’ve ever smelledgame-worn hockey equip-ment, you know the experi-ence certainly will be unique.— Joel Hammond

Executive search with a European flair■ First, Minneapolis. Now, the world.

That has been the expansion track overthe last year of Mansfield & Associates, anexecutive search firm in Cleveland.

The firm recently celebrated the one-yearanniversary of its Minnesota regional office,headed by David Bares, former manager ofexecutive talent acquisition for Best Buy.

Now, it has opened a two-person Euro-pean office in Budapest, Hungary, that is ledby Robert Mansfield, son of company pres-ident Ann Mansfield. Mr. Mansfield previ-ously worked in Hungary and Serbia for theSimonyi Consulting Center, a provider ofbusiness development services at the Uni-versity of Pecs in Hungary. — Mark Dodosh

MILESTONES

THE COMPANY: Cresco Real Estate, IndependenceTHE OCCASION: Its 20th anniversary

Founded in 1991 as a four-person real estate company, Cresco has grown into afull-service real estate provider with 25 pro-fessionals. In 2005, Cresco was selected asa strategic alliance partner with Cushman &Wakefield, the world’s largest privately heldcommercial real estate service provider.

The Cushman & Wakefield partnership enabled Cresco to provide clients with a fullrange of services globally.

Despite the recent recession, Cresco saidit “experienced its highest revenue year everin 2010.”

Go to www.CrescoRealEstate.com formore information.

THE COMPANY: The Dan Zola Orchestra, SolonTHE OCCASION: Its 50th anniversary

The big band/dance band is celebratingthe milestone with a special concert slatedfor Oct. 29 at the Springvale Ballroom inNorth Olmsted.

The evening “promises a chance to danceand dream to music from the 1930s and’40s, complete with mirror balls (and) elegantattire,” says Dan Zola, the 19-piece orches-tra’s founder and leader.

General manager John Patai says the orchestra keeps busy with 30 to 50 gigs ayear.

Visit www.ZolaBigBand.com for moreabout the orchestra.

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK SEPTEMBER 5 - 11

The top story: Energy giant Hess Corp. hasmade one substantial investment and has linedup another in eastern Ohio’s Utica Shale region,where large amounts of oil and natural gas arethought to be trapped. The New York companyagreed to acquire a 50% interest from ConsolEnergy Inc. in nearly 200,000 acres in the UticaShale area for total payments of $593 million.Hess also bought Marquette Exploration LLC andother leases in the Utica Shale area, boosting itsposition by 85,000 acres at a cost of about $750million. Appraisal activities on the MarquetteExploration acreage are planned to begin in thefourth quarter.

Benz there, done much: K. Michael Benz,president and CEO of the United Way of GreaterCleveland for the last 17 years, said he plans to

retire in June 2012. FormerKeyCorp CEO Henry L. Meyer III will lead a searchcommittee to find the replace-ment for Mr. Benz, who willbe 65 when he retires. Mr.Benz has not confined hiscommunity involvement toUnited Way. He was instru-mental in bringing the Rockand Roll Hall of Fame and

Museum to Cleveland and served as that institution’s executive director before joiningUnited Way. He also served 12 years as executivevice president of the Greater Cleveland GrowthAssociation and seven years as executive directorof the Council of Smaller Enterprises.

Trading places: Developers Diversified Realty Corp. in Beachwood and Glimcher RealtyTrust in Columbus agreed to swap two shoppingcenters that they say are “better aligned with theother’s operating platforms and strategies.” Developers Diversified will sell Glimcher itsTown Center Plaza in Kansas City, Kan., forabout $139 million, and Glimcher will sell Devel-opers Diversified its Polaris Towne Center inColumbus for about $80 million.

Ready to run: City of Cleveland law directorRobert Triozzi is resigning his post to make a runfor the Cuyahoga County prosecutor’s job. Thecurrent county prosecutor, Bill Mason, has saidhe will not run for re-election in 2012. Mr. Triozziserved 10 years as a former Cleveland MunicipalCourt judge before resigning to run for mayor ofCleveland in 2005. He lost that election to FrankJackson, but Mr. Jackson named Mr. Triozzi as hislaw director upon taking office in January 2006.

Scanning the market: The Ohio ThirdFrontier Commission awarded about $6.6 mil-lion that will be used to finance six technologydevelopment projects in Northeast Ohio. Amongthe projects are two run by the Philips Health-care Global Advanced Imaging Innovation Center, a collaboration of Philips, Case WesternReserve University and University HospitalsCase Medical Center. The center received a$1.58 million grant to improve the performanceof an existing Philips computed tomographyscanner so it could be used to diagnose moreheart problems than it can today.

This and that: Energy Focus Inc., a providerof energy-efficient lighting systems based inSolon, said it was awarded a $5 million lightingretrofit contract with what it described as “aleading southeastern energy services company.”It did not identify the company. … CohesantInc. in Beachwood said it has sold its pipe-restoration business, Curaflo of British Colum-bia, for $1.875 million. Curaflo is being pur-chased by its former founding partners, BrianLeMaire, who continued to be an employee of thecompany under Cohesant, and Stuart McNeil.


BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com

If he’s half as successful inD.C. as he was in business …■ U.S. Rep. Jim Renacci, a Republican fromWadsworth who represents Ohio’s 16th

district, is the wealthiest of the 87 freshmanRepublicans elected last year and is the 11th-richest lawmaker in Congress.

So reported The Hill in its “50 Wealthiestfor 2011” list. The publication found that 10of the 50 richest members of Congress arefreshman House Republicans.

Rep. Renacci has an estimated net worthof $35.9 million. He made his moneythrough LTC Management Services, theOhio nursing home owner and operatorthat he founded in 1985. Rep. Renacci stillhas close to $2 million in holdings tied to thecompany. He’s the only Ohioan on the list.

The Hill found the 50 lawmakers on its listthis year “are substantially wealthier thanthe class of 2010. Together,they reported a minimumnet worth of more than $1.6billion, about $200 millionmore than the lawmakers onlast year’s survey.”

The rankings include 32 Republicans and 18 Democrats.

Congratulations! You’vebought a lot of cheap homes■ You and your fellow U.S. taxpayers own 248,000 homes, the result of recordnumbers of people defaulting on govern-ment-backed mortgages, according to aBloomberg Businessweek story that quoteda Cleveland housing expert.

With even more homes moving towarddefault, the magazine reported, “FannieMae, Freddie Mac and the Federal Housing

Administration are looking for a way to unload them without swamping the alreadydepressed real estate market.” They’ve evenissued a public plea for ideas to help do this;you have until Thursday, Sept. 15, to sendideas to [email protected].

Bloomberg Businessweek said the govern-ment’s call for ideas is a sign it is delugedwith repossessions.

“It’s almost like having the captain of theTitanic go on the public address system andsay, ‘Does anybody have an idea?’” saidMark Wiseman, a former director of Cleve-land’s foreclosure-prevention program.“It’s not a confidence builder.”

Bad times bring out thebest 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 reces-sion on American families.

The Midwest is particularlyfertile ground for this litera-ture, according to Salon.com,which cited Mr. Pollock’s“The Devil All the Time,” setin Ohio; Philipp Meyer’s“American Rust,” set inPennsylvania steel country;and Frank Bill’s “Crimes inSouthern Indiana.”

Mr. Pollock worked as a driver in a papermill for most of his adult life before enrolling in the creative writing program atOhio State University at age 50. He told Salon.com that writers now are “workingwith an awareness and understanding ofthe poor and dispossessed that we haven’tseen ... since the Great Depression.”

He added, “You can’t have a small minor-ity of wealthy lording it over a vast majorityof poor without something very bad even-tually happening.”

Benz


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