cabbies driven to stall uber, lyft - crain's cleveland

By TIMOTHY [email protected]

Two popular ride-hailing smartphone apps — Uber and Lyft —launched in the Cleveland market

last week, but a handful of local caboperators hope the city puts thebrakes on the controversial services.

Local cabbies say they’ve warnedcity officials for more than a yearabout Uber and Lyft’s likely en-

trance into the market and the is-sues that, at least in their opinion,could rear their head. Because ofthe way the tech companies arestructured, they appear to falllargely outside the city’s regulatory

authority over taxi-cab services. In-stead, Cleveland — at least at themoment — considers them limou-sine services, which are regulatedby the state.

That creates an unfair advantage,according to Patrick Keenan, gen-eral manager of Americab Trans-portation Inc. in Cleveland. Last

year, Keenan said his companyspent almost $14,000 in licensingfees on his roughly 90 cabs in thecity.

$2.00/APRIL 14 - 20 2014

Entire contents © 2014by Crain Communications Inc.

Vol. 35, No. 15

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SMALL BUSINESSBainbridge Township company grows by changingfocus to food manufacturing ■■ Pages 15-18PLUS: MENTOR’S INTERNATIONAL REACH ■■ TAX TIPS ■■ & MORE

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Cabbies driven to stall Uber, LyftRide services steered by smart phone apps say it’s sour grapes

See HANLIN Page 20

See CABBIES 9

JANET CENTURY

Jimmy Hanlin hosts three shows on SportsTime Ohio, along with a weekly golf program on WKNR-AM, 850.

HE ISN’TDIFFICULTTO FINDOnly now, Hanlin’spopular golf showswill be availableacross the countryBy KEVIN [email protected]

For golf fans in NortheastOhio, Jimmy Hanlin is asubiquitous as ClevelandBrowns draft chatter, Chief

Wahoo debates or pleas for LeBronJames to return home.

Soon, Hanlin really will be every-where — or at least in 31 states andmore than 50 million homes.

Fox Sports Ohio, which purchasedSportsTime Ohio from the ClevelandIndians in December 2012, is re-branding Hanlin’s popular “Tee ItUp” show as “18 Holes With JimmyHanlin.” That program, along with“Swing Clinic,” the 30-minute showon which Hanlin gives golf tips, willbe televised this spring and summeron 10 Fox Sports regional networks.

EDITORIAL: Critics of Uber and Lyftneed to pump the brakes. Page 10

20140414-NEWS--1-NAT-CCI-CL_-- 4/11/2014 2:55 PM Page 1

Book your ad today! Contact Nicole Mastrangelo at 216-771-5158 or [email protected]

MEETINGS AND CONVENTIONS

With Cleveland’s new convention center in high gear, we’ll look at how the meeting business is changing in Northeast Ohio, and we’ll offer tips on how

to stage a successful gathering.

Issue date: May 26 Ad close: May 15 Materials due: May 20

Upcoming Editorial Feature

22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 14 - 20, 2014

Keith E. Crain: ChairmanRance Crain: PresidentMerrilee Crain: SecretaryMary Kay Crain: TreasurerWilliam A. Morrow: Executive vice president/operationsChris Crain: Executive Vice President, Director ofStrategic OperationsDave Kamis: Vice president/production & manufacturingAnthony DiPonio:Chief Information OfficerMary Kramer: Group publisher

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Vorys law firm will move downtownheadquarters to 200 Public SquareBy STAN [email protected]

After almost 30 years at One Cleveland Center indowntown Cleveland, the Vorys, Sater, Seymour andPease LLP law firm plans to move to two floors of 200Public Square by Nov. 1.

Anthony O’Malley, managing partner of the VorysCleveland office, said the firm landed at the 45-storybuilding — the one many Clevelanders still think of asBP Tower — because it wants to reconfigure its officelayout to accommodate modern law firm operationsand its busy mediation and arbitration practice.

“It’s not a lawyer sitting in his or her office anymore,”O’Malley said. “We want to add collaborative workspace, reconfigure to suit our practices as they are todayand accommodate the special needs of the mediationand arbitration practice for flexible meeting rooms.”

The firm also gained room to grow in the future,which is important because no additional downtown of-fice buildings are under construction. Although Vorysobtained future expansion rights for the balance of the15th floor from building owner Harbor Group of Norfolk,Va., it initially will occupy the 14th floor and half of the15th floor. The firm has leased 42,000 square feet, aboutas much space as it occupies at One Cleveland Center,1375 East Ninth St.

Adding the Cleveland office of the nationally recog-nized law firm, which has seven offices in the UnitedStates, including in Cincinnati, where it was founded in1909, was important to the building’s owner.

Jim Vallos, a Harbor Group managing director, saidVorys is the “ideal type of tenant for the building. Theywere looking for first-class office space. They have a na-tional presence and want to attract the best employees.We have excellent views for them at a building where weare continuing to improve the package.”

Brian Hurtuk, founding principal of the ClevelandColliers International office, said the building won thelease because its floor plate matched the law firm’sneeds. The lease means 200 Public Square now is hometo about a half-dozen major law firms.

Harbor Group shifted a tenant subleasing part of the14th floor to another floor to open up space for Vorys.The shift allows the law firm to use an existing stairwellbetween the floors that had been covered up throughthe years as other tenants downsized and moved with-in the building, Hurtuk said.

Including Vorys, the building with 1.2 million squarefeet of office and retail space is 86% leased, Hurtuk said.

O’Malley said Allegro Realty Advisors LLC of Cleve-land, which represented the firm as a tenant rep,showed it properties throughout downtown before itsettled on 200 Public Square. The firm expects to moveits 40 attorneys and 20 non-attorney staffers to its new

office by November. The Vocon architecture firm is de-signing the new office to take advantage of the windowsand give the firm a look with a blend of traditional andcontemporary features so, O’Malley said, “it won’t bestuffy or stodgy.”

The Vorys space will emphasize flexibility, in part be-cause of the variable nature of its busy mediation andarbitration practice led by James McMonagle, a formerCuyahoga County Court of Common Pleas judge.

The design will include panels that will allow the firmto create a larger conference room and several smallerones which allow clients and opposing counsel to meetprivately if they need to do so. At the same time, Mc-Monagle may have multiple cases in arbitration at onetime and shuttle between them.

“Some days we’ll have one conference room and oth-ers three,” O’Malley said. “One day we may have six andanother day nine. We did not move exclusively for that,but will take advantage of the move to add this flexibil-ity.”

Harbor Group is continuing to refine designs for up-dates to the building’s eight-floor atrium that it an-nounced last year, Vallos said. Efforts to add some newtenants to empty space on the first floor have slowedconstruction of the atrium updates, he said, but he de-clined to identify the prospects. ■

Board will advise Crain’son minority-based issuesBy SCOTT [email protected]

Crain’s Cleveland Business hasformed a minority advisory boardto provide objective, constructiveinput on minority-based issues — ahistoric weakness in Crain’s cover-age and a recent flashpoint due tothe lack of minority representationin a high-profile January feature inthe newspaper.

The impetus for the council cameafter Darrell L. McNair, presidentand CEO of MVP Plastics Inc. ofNewton Falls, a certified-minority

custom injection molder serving theautomotive, medical and industrialmarkets, contacted Crain’s publish-er/editorial director John Campan-elli in the wake of a Jan. 13 columnby Campanelli headlined, “Predic-tion: We’ll do better at diversity.”

The column noted that in a fea-ture the previous week asking 32notable community leaders tomake predictions about the econo-my, health care, education andmore for 2014, none were African-American or Asian-American, andonly one was Hispanic.

McNair said he immediately

reached out toCampanelli “ex-pressing myconcern and of-fering to assistthe publicationwith closing thisgap.” One partof Crain’s effortto close that gapis with the launch of the 11-mem-ber advisory board, comprisingmen and women representing theAfrican-American, Indian, Hispan-ic and Asian communities.

McNair

See BOARD Page 9

STAN BULLARD

The Vorys, Sater, Seymour and Pease LLP law firm soonwill occupy two floors at 200 Public Square.

20140414-NEWS--4-NAT-CCI-CL_-- 4/11/2014 11:45 AM Page 1

By STAN [email protected]

Paul Volpe is 62, in good health andlooking forward to continuing to workfor years as a planner and architect.

However, he has just completed atransition in the ownership of his CityArchitecture firm that most membersof his profession leave to fate.

He has transferred shares of the 20-person Midtown Cleveland architec-ture firm to three long-term associateswho now run the show.

“They’re the age I was when I start-ed this firm 25 years ago,” Volpe said.“It’s their time to be doing this. Whenthe time comes for me to leave — andit’s not anytime soon — this firm will

continue.”The new owners

are longtime asso-ciates that Volpewants to see con-tinue City Archi-tecture and itswork.

“I didn’t look fora buyer of the busi-ness,” he said. “I want these people toown this business, and I want to re-main a part of it.”

The oldest of the new principals isAugust Fluker, 50, who joined City Ar-chitecture 19 years ago after workingfor other firms in town. John Wagner,40, joined the firm a dozen years agofresh from a master’s program in ar-

chitecture at the University of Michi-gan. The youngest is Alex Pesta, 36,who joined City Architecture afterworking there as a co-op studentwhile getting his architecture degreeat the University of Cincinnati.

“I (interned) at four firms. After thesummer here, I knew this was the oneI wanted to join,” Pesta said. “Thatwas due to the energy at this firm andits blend of residential and commer-cial work.”

Although all four men said they allpitch in when something requires allhands on deck, they have differentskills.

“It’s one big studio,” Pesta said.Fluker handles construction docu-

ments, assigning staff and meetingdeadlines. Wagner is the most focusedon building issues as an architecturaldesigner. Pesta works on planning andresidential design.

APRIL 14 - 20, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5

INSIGHT

CORRECTION■ An April 7 CIO of the Year finalist profile of Rob Sable misstated theamount of money Sable saved Alliance Solutions Group in a year. Hesaved the company more than $100,000 in the year.

OSHA proposal causing a bit of a dustupAdministration sayssilica regulations areoutdated, but somebusinesses disagreeBy RACHEL ABBEY [email protected]

The U.S. Occupational Safety andHealth Administration is looking toupdate its 43-year-old regulations onhow much of a particular type ofdangerous dust employees can beexposed to in a traditional workday.

But opponents, including some inOhio, are raising concerns about thecost any changes would add forcompanies to carry out the proposaland whether there’s even a need forstricter standards at all.

OSHA says respirable crystallinesilica — created when products likemetal-casting molds are grinded orroadways are cut — can lead to lungdiseases such as silicosis, lung can-cer and chronic obstructive pul-monary disease.

In a fact sheet about the proposal,OSHA says the current regulations areoutdated, difficult to understand andinconsistent across industries. Theproposal, which first was introducedin August 2013, would lower the allow-able levels of crystalline silica acrossthe board, standardize the calculationand require medical monitoring foremployees exposed to high levels.

The amount employees are subject-ed to can be mitigated by measuressuch as increasing ventilation or usingwater while cutting materials. OSHAestimates the new regulations wouldprevent 688 deaths and 1,585 silica-re-lated illnesses every year.

But not everyone agrees withOSHA’s assertion — or that the cur-rent levels are even problematic.

Clearing the airRuss Murray, executive director of

the Columbus-based Ohio Cast Met-als Association, said his industry hasspent “tens of millions of dollars clean-ing up foundries” since the 1960s.

REBECCA R. MARKOVITZ

CONTRIBUTED PHOTO

City Architecture renovated the Park Lane Villa apartments inCleveland. To view a photo gallery of some of the firm’s bestwork, go to www.crainscleveland.com/cityarchitecture.

Developing an ideal exit planVolpe transitions ownership of ClevelandArchitecture to three longtime colleagues

See DUSTUP Page 22

See PLAN Page 21

Volpe



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Crain’s like you’ve never seen it.

McIntyre is new editor of Crain’sBy JAY [email protected]

Elizabeth McIntyre is the new ed-itor of Crain’s Cleveland Business.

She replaces Mark Dodosh, whojoined Crain’s as managing editorin June 1985 and was named editorin October 1988.

“Anyone whohas worked along-side Elizabethknows she is afountain of ideas,a brilliant editorand a leader whoinspires a staff likeno one I know,”said John Campanelli, Crain’s pub-lisher and editorial director.

McIntyre, who starts today, April14, had been vice president of com-munications and public relations atthe National Association of CollegeStores in Oberlin. She said she islooking forward to returning to anewsroom.

“I finally realized that I still haveink running through my veins,” shesaid in a telephone interview.“When this opportunity presenteditself, it was such a fabulous oppor-tunity to work with a staff at Crain’s,

who are extraordinary journalists,and to partner with John Campan-elli, who I greatly admire as a jour-nalist and a person.”

Campanelli and McIntyreworked together at The Plain Deal-er for more than a decade.

Campanelli said he and McIntyrewill be reshaping Crain’s into a 24-hour-a-day operation and “a brandthat will provide information andnews over all media.”

For McIntyre, it’s a return to a pro-fession that represents “the way I di-rected myself from second grade on.”

“It was a once-in-a-lifetime op-portunity to get back into journal-ism,” she said. “The very thought ofbeing back in a news operation andnewsroom again is where I belong;it’s where my heart is.”

Campanelli praised Dodosh andthe key role he played in makingCrain’s what he said was the leaderin business and economic news inNortheast Ohio.

“Soon after Crain’s started anduntil today, the reason Crain’s hasbeen a success is due in large partto Mark’s leadership, journalismtalent and skills,” Campanelli said.“We owe him a lot.”

McIntyre, a graduate of Bowling

Green State University, spent 20years at The Plain Dealer, starting asa copy editor in 1990. Over the nexttwo decades, she took on added re-sponsibilities in the newsroom.

She served as graphics and de-sign editor and assistant managingeditor before being named deputymanaging editor in 2007. In thatrole, she directed the news opera-tions of the Metro, Business, Sportsand Features departments.

She left The Plain Dealer in No-vember 2010 and joined the Cleve-land Foundation as public relationsofficer, overseeing the foundation’swebsite, advertising and donorcommunications programs beforejoining the college stores associa-tion in 2013.

McIntyre started her career injournalism as a copy editor at TheMorning Journal in Lorain.

A Youngstown native, McIntyreis married to Plain Dealer colum-nist Mike McIntyre, who also hosts“The Sound of Ideas” on 90.3WCPN. The McIntyres met at TheMorning Journal and married in1991 after both had moved to ThePlain Dealer. They live in RockyRiver with their son, Aidan, age 16,and daughter, Maura, age 13. ■

McIntyre

it union and bank clients and grow-ing its insurance premium underadministration by nearly one-third.

Effective April 1, Selman & Co.closed acquisitions of the businessand assets of Association & SocietyInsurance Corp., or ASI, out ofRockville, Md., and of the life andaccident insurance administrationbusiness of MAI Services Corp. inCuyahoga Falls.

Terms of the deals were not dis-closed.

Selman & Co. issues policies, billsand collects premiums, and performscustomer service between insurancecompanies such as Aetna or Hartfordand members of associations, cus-tomers of financial institutions andemployees through employers.

The ASI deal nearly doubled Sel-man & Co.’s staff to 150 from 85.Both acquisitions increased its in-surance premium under adminis-tration by nearly 30% to $155 mil-lion from $120 million.

Through its deal for ASI, also athird-party administrator of insur-ance plans, Selman & Co. adds aWashington, D.C.-area office andalso can leverage the reputation and“well-established presence” ASI hasin serving retired veterans and theeligible dependents of veterans whoare disabled or who died in the lineof duty, said David Selman, presi-dent and CEO.

“They’re the largest player in theniche,” he said. “(We) hope to learnfrom them and make our businessstronger. We’ve never operated twooffices before, so this is exciting.”

All of ASI’s 65 employees havebeen hired, according to Selman,whose father bought a business andrenamed it Selman & Co. in 1980.Selman said he casually ap-proached the leaders of ASI about apotential deal roughly a year ago.

“I felt that they occupied a spacesimilar to Selman in that they werelarge enough to operate very profes-sionally and small enough to havethe flexibility, the ability, to be nim-ble and compete with much larger

competitors,” hesaid.

“The cost oftechnology andcompliance areincreasing in theinsurance busi-ness,” he added.“So it’s more andmore difficult forsmaller businesses to make those in-vestments. We think that Selman hasbeen particularly well positioned bybeing large enough to act like a bigcompany and small enough thatwe’re not very bureaucratic.”

As for ASI, which basically sellsone product designed for retiredmilitary, joining Selman & Co. af-fords it more diversification, saidEdward Singer, executive vice pres-ident for ASI.

“There is a tremendous opportu-nity in being a niche, (but) there’salso a lot of downside to it,” he said.“If anything happens, you don’thave anything besides what you’redoing, so I think joining a companythat is much more diversified is avery good thing.”

Via its other deal for a piece of thebusiness of MAI Services, Selman &Co. becomes the administrator forroughly 60 credit union and 100bank clients with which it does notalready work, improving its positionin that market it serves, Selmansaid. He estimated Selman & Co.works with 800 credit unions na-tionwide and said it also works withlarge banks, including KeyBank.

MAI continues to do business asa broker of property and casualtyand life and health insurance pro-grams for credit unions and com-munity banks and their membersand customers. Selman & Co. nowwill perform the back-room insur-ance administration MAI’s peoplehave done historically, Selman said.

The ASI and MAI transactionsbring to 10 the number of acquisi-tions Selman & Co. has closed in its34-year history, Selman said. Theywere its first since 2011. ■

By MICHELLE PARK [email protected]

Through a pair of acquisitions thismonth, a Mayfield Heights-basedmarketer and administrator of lifeand health insurance products isbreaking into serving military re-tirees, expanding its number of cred-

Selman expands via acquisitions

Selman


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By JAY [email protected]

The biomedical industry hasbeen the fastest-growing sector ofthe Northeast Ohio economy in the21st century, with the value ofgoods and services produced bybusinesses in the sector growing by59%, and experts and observers be-lieve it has more room to grow.

The only thing holding back enthu-siasm, however, is that so far thegrowth has come without any growthin biomedical jobs, according to themost recent report on the regionaleconomy released Sunday, April 13,

by Team Northeast Ohio, the region-al business attraction nonprofit.

If the region can grow employ-ment in the biomedical sector,most likely by improving produc-tion processes for medical devicesin ways that reduce the cost ofmanufacturing, at least one re-searcher believes that could createa new wave of high-paying manu-facturing jobs for Northeast Ohioby keeping production work local.

“The United States hasn’t reapedthe benefits it should because somuch of the production (of medicaldevices) has moved offshore,” saidRoss DeVol, chief research officer at

the Milken Institute in Santa Mon-ica, Calif., where he focuses on jobcreation, health and access to cap-ital access.

“A real competitive advantage ofNortheast Ohio is, given the exper-tise in refining production process-es and improving efficiencies, ifyou can find a way to bring costsdown (on making medical de-vices),you’re talking about creatinghigh-quality, middle-class jobs,”DeVol said. “Northeast Ohio has areal opportunity there.”

Team NEO’s quarterly economicreview reports on basics such as jobcreation and unemployment, but

this particular review highlights thebiomedical industry and says that700 biomedical companies inNortheast Ohio now employ 33,000people — about the same numberthat were employed in the industryin 2000, when the region had only300 biomedical companies.

Jacob Duritsky, Team NEO’smanaging director of research, saidthat lack of job growth is a result ofthe increasing productivity in all ar-eas of manufacturing, including themedical device sub-sector, which isa key part of the region’s biomed-ical industry.

That can change, though.

Bo Carlsson, an economic pro-fessor at Case Western ReserveUniversity, agrees with TeamNEO’s assessment of industrygrowth without jobs in recentyears. But he, too, believes that jobgrowth will come. He sees youngmedical device companies, whichmay not yet have regulatory ap-proval for the sale of their new de-vices, getting that approval and hir-ing as they start production.

“We may see a different picturegoing forward because there are somany new applications coming for-ward,” he said.

Crain’s last week.The most significant change Gas

Natural made, according to Os-borne, was the halting of gas pur-chases by its utilities through its af-filiated marketing company.

“Inflated” fees paid to an affiliatecompany for natural gas purchaseswere one concern raised in the Nov.13 opinion and order of the PUCOinvolving two Gas Natural affiliates:Northeast Ohio Natural Gas Corp.and Orwell Natural Gas Co., both lo-cal distribution companies thatserve portions of Ohio.

The PUCO regulates investor-owned utilities in the state. Its orderseveral months ago followed what ittermed an “unprecedented” recom-mendation by commission staff toconduct an investigation of North-east, Orwell and all affiliates, andcited concerns about the compa-nies’ internal controls, the proprietyof their executive compensationsystem and alleged self-dealing bymanagement, which includesmembers of the well-known Os-borne family of Mentor.

Instead of purchasing through itsaffiliate, Osborne said “our utilitiesare now purchasing gas directly”from producers and gas marketingcompanies.

That bypasses “possible relatedparty mark-ups and fees on thisgas,” according to the company’sfiling in late March. Gas Natural alsohas adopted procedures that ensurethat local production gas purchasedby its utilities must come from “un-related, third-party pipelines atcompetitive prices and withoutcommission.”

Other steps prompted by the reg-ulator’s order include Gas Natural’shiring of a new corporate controller,a new controller at the company’sOhio utilities and two new general

accountants — enhancements to itstalent “to provide timely, accurate,and transparent reporting to thePUCO,” Osborne wrote in an email.

And, in another move to ensure atransparent relationship betweenits utilities and the PUCO, Gas Nat-ural retained Cox Consulting GroupLLC to provide it training on stan-dard regulatory filings and advicefor regulatory matters.

“Some of the requirements in thePUCO order represented differ-ences in interpretation and under-standing between our utilities andPUCO,” Osborne wrote. “We havesince made changes to our proce-dures and internal controls to be incompliance with the PUCO order.

“Gas Natural Inc. recognizes thatgrowth does not consist solely ofadding customers and putting pipein the ground,” he added. “Weneed to be cognizant of our growingresponsibilities to our regulatoryagencies, financial partners, in-vestors, and, most importantly, ourcustomers. To achieve that balance,we are enhancing our internal ac-counting systems, strengtheningour control environment, and in-creasing transparency with newleadership and a new culture that istransforming our delivery and re-porting systems.”

Competence examinedIn related news, on April 2, the

Public Utilities Commission of Ohioissued a request for proposal to findan auditor to conduct the investiga-tion of Northeast, Orwell and relat-ed companies.

The third-party auditor is to ex-amine the corporate separation be-tween the companies and affiliates,their systems for compensatingtheir employees, the reporting oftransactions between them, theirmanagement structure and their in-ternal controls.


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Gas Natural makes adjustmentsIn filing, company says there were differenceswith PUCO ‘in interpretation and understanding’By MICHELLE PARK [email protected]

In the months since the PublicUtilities Commission of Ohio or-dered an investigative audit of twosubsidiaries of Gas Natural Inc. andall affiliates, the Mentor-based com-pany has made changes to its proce-dures and internal controls, retaineda firm to consult it on regulatorymatters, made four hires to improveits reporting and underwent PUCOtraining.

So said the company in its annualreport with the Securities and Ex-change Commission, and GregoryOsborne, who became Gas Natural’spresident and chief operating officerin November, in an interview with

See ADJUSTMENTS Page 21

Team NEO: Biomed sector’s hot, but job growth lags

See JOBS Page 19


torial company serving medicalbuildings, manufacturing facilities,schools, retailers, financial institu-tions, restaurants, churches, gov-ernment agencies and more.■ Margaret Wong, founder of Mar-garet W. Wong & Associates Co.LPA, a firm nationally and interna-tionally known for its expertise inimmigration and nationality law.

The cringe factorCampanelli said a look through

the pages of Crain’s reveals that“the proportion of faces you seedoesn’t match the region or thebusiness community” in its racialmakeup. For instance, the lack ofracial diversity in the Jan. 6 predic-tions section “was noted immedi-ately, and (many readers) cringed.”

The advisory board is a step to-ward addressing that issue by help-

ing Crain’s identify trends, peopleand businesses in Northeast Ohio’sminority community that deservecoverage, McNair said. Campanellisaid the board will help Crain’s re-porters and editors do a better jobof networking in the minority com-munity.

McNair, a subscriber to Crain’sand two other Crain Communica-tions Inc. publications, said flatlythat Crain’s Cleveland Business “isnot a regularly read publication inthe minority community due to thelack of articles that appeal to thataudience.” The publication, hesaid, “has taken a more traditional,corporate view” of economic life inNortheast Ohio, and the board aimsto advance the idea that “there’smore to it than that.”

About 2,500 additional copies ofthis April 14 issue of Crain’s will bedistributed, at no charge, to minor-

ity-owned businesses and church-es in minority communitiesthroughout Northeast Ohio.

Campanelli said a more compre-hensive approach to covering theregion will improve the “quality,scope and depth” of Crain’s weeklyprint issue and its website.

“Any business person of any back-ground should be able to look toCrain’s as their publication for busi-ness,” he said, adding that Crain’sshould be “a trusted source of infor-mation, and a mirror, too.” ■


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Board: McNair hopes to help publication become more ‘inclusive’The advisory board’s goal, Mc-

Nair said, “will be to enlightenCrain’s on the contribution that mi-nority and women-owned busi-nesses deliver to Northeast Ohio.”He said the board “will look to en-gage with Crain’s on exposing theopportunities and challenges thatconfront these businesses, thus po-sitioning Crain’s as a catalyst forfostering an environment that is re-ceptive to inclusive activities inNortheast Ohio.”

McNair is the immediate pastchair of The Presidents’ Council, thelargest African-American economicdevelopment organization in Cleve-land. Under his leadership, the or-ganization helped secure equitableinclusion for minority businessesfor projects including the Horse-shoe Casino Cleveland, the Cleve-land Convention Center and vari-ous expansions at UniversityHospitals.

In addition to McNair, theboard’s members are as follows:■ Montrie Rucker Adams, presidentand “chief visibility officer” of Visi-bility Marketing Inc., a public rela-tions firm. ■ Luis Cartagena, business advis-er/strategic planning for the MBDABusiness Center-Cleveland, whichassists minority-owned businessesin gaining access to developmentopportunities, capital and financialmanagement.■ Samir D. Gautam, a JPMorganbanker who is a trustee and chair ofthe Development Committee at The

Presidents’ Council Foundation.■ Michael J. Houser, an educationspecialist with the Boys and GirlsClub of Greater Cleveland and a for-mer campaign staffer for U.S. Sen.Sherrod Brown.■ Pradip Kamat, who founded In-dus International Inc. in 1992 tohelp clients with business develop-ment in India. He formerly held ex-ecutive positions with SwagelokCo., Keithley Instruments Inc. andAllen-Bradley.■ Adrian Maldonado, owner ofAdrian Maldonado & Associates, anMBE firm specializing in variousfields of construction and construc-tion management.■ Kimberly Martinez-Giering, a vet-eran of the transportation industrywho is president and owner of KLNLogistics Corp. (dba AIT World-wide) in Middleburg Heights. Sheformed the company in 2005.■ Michael Obi, chairman and CEOof Spectrum Global Solutions, whichhelps companies improve perfor-mance and grow their revenuethrough operational excellence.■ James Vaughan Jr., president andCEO of JDD Inc., a full-service jani-

continued from PAGE 4

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By STAN [email protected]

The sale of Independence SquareShopping Center, a neighborhoodshopping center in the middle of In-dependence, marks the end of an-other chapter in Northeast Ohioreal estate.

When Solon-based Carnegie Cos.paid $4.9 million on April 1 for the64,000-square-foot center, the sell-er was Pepper Pike-based MarottaCorp, according to Cuyahoga Coun-ty land records. Before VincentMarotta and his business partner,the late Sam Glazer, became knownas the developers of the Mr. Coffeeautomatic drip coffee maker, theybuilt homes and shopping centers,among them Independence Squarein 1961.

Charles Marotta, the son of Vin-cent Marotta and a principal of thefirm now known as Marotta Corp.,said, “It’s really the last commercialbuilding the family owned. This hasbeen a great building for us, but itwas time to turn the page. Otherthan that, we still have land for saleon Miles Road in Bedford Heights.”

Charles Marotta said his fatherused the same crews to build Inde-pendence Square that he used tobuild other centers sold earlierthrough the years, such as VillageSquare Shopping Center in Beach-wood, Richmond Square Mall inRichmond Heights and Great LakesMall in Mentor.

The 36 acres that Marotta has forsale in Bedford Heights was the land

beneath Mr. Coffee’s onetime factory.

The elder Marotta is 90 and ingood health, Charles Marotta said.

The property also has expansionpotential because of its location,said Terry Coyne, executive manag-ing director of Newmark GrubbKnight Frank, who handled the salewith Newmark Grubb colleagueDavid Hollister, a managing direc-tor.

Coyne and Charles Marotta bothsaid they had multiple bidders forthe property. Coyne noted there ispotential upside because the 80%occupied shopping center at 6511Brecksville Road is next to a 16-acreparcel with a closed middle schoolon it that the city of Independenceowns and hopes to see developed.

Independence Mayor GregoryKurtz said in an email that Carnegiehas told the city that it is still devel-oping its plans for the just-acquiredproperty. The city has discussed themiddle school property withCarnegie, Kurtz said.

For its part, Carnegie is evaluat-ing its next steps at the property.Paul Pesses, Carnegie president,said in an email, “We are reviewinga number of options related to thisacquisition, but haven’t solidifiedanything in particular at this time.” ■

Independence Squareis sold for $4.9 million

ON THE WEB Story from: www.crainscleveland.com


Fly-over country, mypatootie. The fools on thecoasts, with their

$5,000-a-month mortgages,three-hour traffic jams and11% state income taxes, arebeginning to wise up.

Last week I had the honor ofmoderating a panel of venturecapitalists at JumpStart’s An-nual Northeast Ohio Entrepre-neur Expo. On stage were Jay Katarincic,managing director of Draper TriangleVentures; John McIlwraith, managing di-rector of Allos Ventures; Ray Leach, CEOof JumpStart; and Mark Kvamme, co-founder of Drive Capital. Together, theyrepresent more than $1 billion in capital.(I had $11 in my wallet … and a validat-ed parking pass.)

The topic was “Attracting Capital Be-tween the Coasts.”

The sad reality is despite our greatideas, hardy work ethic and Midwestern“mensch-iness,” venture capital contin-ues to be funneled toward the coasts. Sil-icon Valley companies got more than$11 billion in VC funding in 2013. Com-panies located in the entire Midwest?

$1.1 billion.Startups hatched and

based in our bucolic region of-ten have to pack the wagonand go west or east to get thecash they need to grow andthrive. It’s a terrible cycle thatpushes tomorrow’s employers— and a staggering amount ofpotential jobs — away fromthe places that need them themost.

But that was the story. Things arechanging. The great minds and deeppockets on the panel are based in Ohioand Pennsylvania, and their funds arededicated to Midwestern startups. Theyrealize that there are sensational oppor-tunities and ideas here. (The expo at-tracted more than 110 hungry local en-trepreneurs and more than 900 people intotal.) The cost of real estate, talent, busi-ness services — all cheaper in the Mid-west. With the cloud ending the need forvast tech infrastructure, startups cannow be based anywhere. Why not here?

But while we wait for the investors’cash to make the smart move and arrive,we need to change our thinking, too.First, the panel suggested — and we hear

this all the time — stop being our ownworst enemies. No more excuses and di-minishing our area.

Also crucial: We in the Midwest needto revisit our mindset of “failure.” Weview it as shame, ignominy, an “F” onthe report card. In Cali, it’s different.Kvamme, who moved to Columbus fromSilicon Valley, spoke eloquently abouthow entrepreneurs out west wear theirfailed ventures and dead businesses asbadges of honor.

“You tried something,” he said. “Youwent for it. … The first company I start-ed was an unmitigated disaster, but ifyou don’t take any risks, you don’t getany reward.

“People in Silicon Valley in particularreally focus more on growth, but withmore growth comes more risk,” headded. “You learn a lot more on the waydown than the way up. All the success Ihad after my company crashed was be-cause of the things I learned with my firstfailure.”

Kvamme’s second company wentpublic.

So unless your business is skydiving,failure is indeed an option. It also mightbe a rite of passage. ■


Need a lift?U

ber and Lyft, ride-sharing services we’veheard about from the cool kids formonths, finally pulled into Cleveland lastweek.

If their arrival here is like their entrances in othercities, they will have some folks trailing right behind, tailgating at an unsafe distance: city governments and an establishment unwilling toembrace a new sharing economy.

Hours after Uber and Lyft announced their arrivals here, news broke that the city of Columbushad sued Uber, which launched in the state capitalin February. The lawsuit claims the service is essen-tially an unlicensed jitney operation that’s puttingpublic safety as risk because the city hasn’t inspect-ed Uber cars or licensed Uber drivers. (Uber andLyft do not own cars. Drivers use their own vehiclesand work the hours they want, with the companies’mobile apps merely matching people who needrides with drivers’ empty seats.)

The ride-sharing ventures are facing legal challenges in a number of cities as established taxicompanies see their territory invaded by (often)cheaper, cleaner and cooler alternatives, and as law-makers see their taxes and license fees threatened.

Like the parent of a 16-year-old, it’s as if the establishment is pressing on an imaginary brakewhile riding shotgun, trying to stop a newbie fromdriving — and growing up — too fast.

Problem is, the companies cannot be stopped. Weare experiencing a sharing economy revolution.Airbnb, a service that lets people rent their emptyrooms, booked 6 million guests in 2013. TaskRabbitlets folks outsource household chores. StoreAtMyHouse allows people to rent their basement or unused parking spot. DogVacay letsanyone become a dog sitter. There are scores of examples, with more debuting all the time.

This wave is empowering individuals, creatingjobs, boosting competition and lowering prices —the fruits of open markets.

In many ways, this new economy is like sproutinggrass. We see real potential for a sprawling lawn —lush and thick. So instead of stomping on or cuttingthe seedlings in a quest to tax and control, citiesneed to fight the urge to intervene. They must allowcompanies like Uber and Lyft to grow. In fact, we’dlike to see local lawmakers embrace the likes ofUber and Lyft and work with them.

One of the many beautiful things about these newstartups is that, unlike the jitney operations of old,they rely on online reviews and feedback to get customers. Drivers already are screened and insured, and their vehicles inspected. These days,the companies cannot afford to do otherwise.

We’re not saying these ventures should remainstealthy forever. Once they are established, theymust contribute to infrastructure and public services with taxes or, perhaps, a new licensing system that doesn’t cripple competition.

Finding a taxi in Cleveland, often a tricky endeavor, got easier last week. As the sharing economy grows and creates jobs, let’s have the vision and patience to not get left at the curb.

FROM THE PUBLISHER

JOHNCAMPANELLI

Startups can be strong right here

Re: Cleveland cleanup needed for GOP in 2016■ Before we get a big convention, are weready?

The city is a dump, and it needs a goodcleaning! Take a ride from the airport onthe train to Tower City and then look atthe trash and dumpy buildings!

Why doesn’t RTA use the Muni Lot asa hub? Park there for $5 and take differ-ent buses to different venues, like a par-ty bus to the Flats, or a wrapped bus forPlayhouseSquare.

Plant lots of flowers along the busroutes. Check if the hotels are clean andthe staff knowledgeable about Cleve-land.

We have great minds in Cleveland,and they are sitting idle! Everybody hasto work together and not let greed in theway! — David Jesse

Re: Underwhelming gambling returns■ Gaming is a trash industry and every-body but casino advocates knew it.

Business groups like the GreaterCleveland Partnership that supportedthe statewide enabling ballot issueshould have known better. Independentstudies by universities showed that gam-ing has little long-term positive econom-ic impact. — 174745

■ States should realize that the house al-ways wins. If they wanted bigger rev-enues they should have written clauses

OPINION

PUBLISHER/EDITORIAL DIRECTOR:John Campanelli ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

See WEB Page 11

TALK ON THE WEB

Reader responses to storiesand blogs that appeared on: www.crainscleveland.com

POLL POSITIONSWhat do you think Cleveland's

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Vote in the poll each week at:CrainsCleveland.com

20140414-NEWS--10-NAT-CCI-CL_-- 4/11/2014 9:43 AM Page 1


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into the contracts that the casinosmake bigger payouts and give bet-ter odds to gamblers. Then it wouldbe a win-win for everyone — thecasinos, the state and the gamblers.

— EscapedLorain

■ The Horseshoe and Caesar’s can-not expect the public to continue tocome back with no hope of win-ning, let alone breaking even. $10free slot play and free buffets (withtwo-hour wait times) just doesn’tcut it. Sorry. — 171783

Re: MetroHealth’s county support■ The taxpayers’ support of Metro-Health is not in question. We ap-preciate and value every dollar wereceive. As a matter of fact, I firmlybelieve that as good stewards weneed to work diligently to reduceand even eliminate the operationalsupport from taxpayers. However,

the moniker “taxpayer subsidized”does not tell the whole story.

Crain’s health care reporter Tim-othy Magaw is correct to report thatMetroHealth’s finances are on sta-ble ground. However, did you knowthat if MetroHealth had the samepercentage of patients with com-mercial insurance as the other ma-jor academic medical centers in theregion do, the annual operating in-come would reach $100 million? Orthat if MetroHealth weren’t here,the cost of healthcare in the regionwould increase?

These are just some of the rea-sons that many feel that the term“taxpayer subsidized” does not dojustice to what MetroHealth doesfor or what it means to the region.— Akram Boutros (Boutros is pres-ident and CEO at The MetroHealthSystem.)

■ Over the last couple of decades,counties all over the United Stateshave sold off county owned medical

facilities. Operating these institu-tions became totally outside theability of counties to support them.

I support the role of MetroHealthsince it is the Level One TraumaCenter for Northeast Ohio and isthe health institute of “last resort”for the uninsured. However, thenew health care law might impactthat greatly.

The real question is where themoney will come from for a $400million to $500 million facilitiesproject. We need to get a task forceto look at MetroHealth’s role in thefuture of health care and how is itpaid for. — Neil Dick

Re: Tressel’s chances for Akron presidency■ What does “show cause” evenmean? It’s kind of nonsensical,when you think about it.

University of Akron: we havecause to hire him

NCAA: OK, go ahead. — rayy

CONTRIBUTED PHOTO

MetroHealth CEO Akram Boutros says the hospital system needs to “work diligently to reduce and even eliminate the operational support from taxpayers.”

Web: Horseshoe needs more winners continued from PAGE 10

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New photography studiocould be attractive sitefor local food businessesBy KATHY AMES [email protected]

Two food photographers with acombined 32 years of experienceare launching a 6,000-square-footboutique studio dedicated solely tocommercial food photography forlocal and national food-relatedbusinesses.

David Hagen and Andrew Burklehave formed BurkleHagen Photog-raphy, located at 3500 Payne Ave.,on the fourth floor of the old MilkFactory Building in Cleveland’sMidTown neighborhood. The duo— who will be working with localfood stylists — are retrofitting thespace to accommodate a commer-cial kitchen, walk-in-pantry, sixshooting stages, a shower, clientseating, conference room, officesand a custom-built prop area.

“Unlike self-contained studios inChicago and New York, which havelimited space and often have to rentprops, we’re able to store a wholerange of items, like dishes and glass-ware,” Burkle said.

The commercial kitchen featurestwo double farm sinks; two five-burner stoves; two double-wallovens; two commercial-grade refrig-erators and freezers; a microwave;and black granite countertops.

Two, 4-foot-by-10-foot formerbowling alley floorboards functionas the kitchen’s islands. A woodenfloor supported by a spongy basemakes it easier for stylists and pho-tographers to be on their feet duringlong days of shooting.

Reclaimed material, from tablesto doors, comes from Old SchoolArchitectural Salvage in Cleveland’sFlats neighborhood. Three sets of 8-foot-by-12-foot windows face westtoward downtown, providing natur-al night and a full vista of the city’sskyline.

“We love this neighborhood be-cause it’s surrounded by such greatrestaurants and food businesses,and we have this incredible view,”Hagen said.

The studio currently is in conver-sations with some local food indus-try giants and local chefs, Hagensaid. A May 3 open house isplanned.

Both Hagen and Burkle indepen-dently have worked for some of thenation’s largest brands and notablechefs, including J.M. Smucker Co.,Nestle, Vitamix, the National PorkBoard and Kellogg’s. Hagen is a for-mer photographer for Cleveland-based Kalman & Pabst PhotoGroup. Burkle most recently ownedhis own studio in Chicago. ■

Anchor Industries is growingBy DAN [email protected]

Anchor Industries is expanding inSolon, where it has received ap-proval to construct a 50,000-square-foot manufacturing and warehousebuilding, according to city zoning of-ficials.

Anchor produces aftermarket en-gine and transmission mounts, aswell as support bearings, strutmounts and other products for botholder and late-model cars. It sup-ports a full line of automobiles, in-cluding most brands made in theUnited States, Asia and Europe.

An Anchor official said the compa-ny was not yet prepared to discussthe details of the project or its ulti-mate end use.

Solon economic development di-rector Peggy Weil Dorfman an-nounced in her April newsletter toresidents that the city had approvedthe project. The plan was approvedat the end of last year, she said. Doc-uments with the city’s zoning de-partment indicate the building willbe used for manufacturing, ware-housing and distribution.

Though Ms. Dorfman said she didnot have details on Anchor’s specif-ic plans for the building, she notedthat the company already is a signif-icant contributor to the city’s econ-omy and that she is glad to see itgrow there.

“That’s a sizable facility,” Dorf-man said of the proposed new con-struction. “It’s very good to see aSolon business doing well and grow-ing.”

Zoning officials say the project willbe built by Geis Cos. Geis in 2012constructed a similar, 50,000-square-foot building for Anchor on

the same site, 30775 Solon Industri-al Parkway, they said. Anchor didnot receive any special tax incen-tives or other subsidies for its ex-pansion, Dorfman said.

As for the construction of the newbuilding, a date has not been set,but city officials think it will beginfairly soon.

“Usually if someone has a siteplan approval the project follows inshort order,” Dorfman said.

The project is just the latest de-velopment in a busy period for thecity and Dorfman. Nestle is expand-

ing in Solon with a 144,00-square-foot building, and cosmetics makerCosmax USA has purchased andwill take over a 338,000-square-footmanufacturing building formerlyowned and operated by L’OrealUSA.

Economic development activity“comes and it goes, but actually thisyear has been a little on the busyside” Dorfman said. “The Nestleproduct technology center is wellunder way and Cosmax should be moving in sometime later thisyear.” ■


There’s a certain amount ofpomp and circumstancethat is due the first graduat-ing class of Edwins Leader-

ship and Restaurant Institute.

The 29 graduates of the six-month classroom and training pro-gram can be credited for bolsteringmonthly sales to an average of$130,000 beyond the original fore-cast of $100,000 at the nonprofit’sShaker Square French eatery.

The students are landing jobs inthe kitchens and at the front of thehouse at venerable local eateries,such as Greenhouse Tavern, RedThe Steakhouse, Moxie, Wil-leyville, Hodge’s, Melt Bar &Grilled and so on. Two students re-cently returned from Chicago,where they completed apprentice-ships at award-winning restaurantsGT Fish & Oyster, and Grace.

But the real success is the turn-around these former prisoners havemade in their lives, said founderBrandon Chrostowski.

“I’m extremely proud of these in-dividuals. We started with thiswrecking ball mentality to get thisproject off the ground, and in themiddle of it all are these huge trans-formations these people havemade,” Chrostowski said. “It’sworking. It shows there is hope af-ter prison or jail, and it’s radiatingnow on a larger scale.”

The inaugural graduating class ofEdwins — a hospitality center train-ing ground for individuals seekingsuccessful re-entry into the profes-sional world — have spent 30-plushours a week since Nov. 1 learningthrough coursework and hands-onexperience all aspects of running arestaurant, from prep work andpastry to hosting and management.

But, as with any startup, there’s alearning curve and period of adjust-ment.

Edwins’ initial class size was clos-er to 60 students, though a dimin-ished count was expected. Still,Chrostowski is recalibrating severalaspects of the program, includingscreening program candidatesmore carefully, to improve studentretention.

“We projected 50% to 60% attri-tion, but we want to reduce that tocloser to 30%,” he said. “We’ll begrinding them during the interviewto make sure they’re committed tothis program. We want to get downto the core of who they are andmake sure they want it.”

He also plans to enroll eight stu-dents on a rotating monthly basis,instead of beginning with one larg-er class all at once, to connect moreintimately with students in theclassroom.

If sales at the restaurant — whichhas quickly gained a foothold as akey player in Cleveland’s culinaryscene for its top-notch service andcuisine — are any indication, the

nonprofit is delivering on its socialmission.

The operation’s eatery is trend-ing toward $1.5 million in sales bythe end of its first year, surpassingChrostowski’s initial projection ofabout $1 million.

“I always under-project andover-deliver, but we’ve just beenkilling it,” he said, noting that de-spite healthy sales, the restaurant’slabor costs are higher than at for-profit peers.

“Labor usually represents 25% ofour costs, but here, it accounts forthe mid-30s because we have sevenor eight times the average amountof staff” with about 50 employees,including the students and sevenmanagers.

“I’ve been going seven days, 110hours a week,” he said. “I was justable to give some of my managerssome days off.”

Edwins’ restaurant sales subsi-dize the nonprofit’s mission.

The nonprofit prior to its launchraised $300,000 through a combi-nation of various entities, includingCleveland Foundation, RPM Inter-national and Fairmount Mineralsas well as individual donations.Chrostowski said he plans to con-tinue fundraising for more specificinitiatives, such as hiring addition-al instructors and helping subsidizestudents’ apprenticeships abroad.

“This has just been an incredibleexperience for everyone involved,”he said.

Local news■ Fat Head’s Brewery is makingsure the remaining empty space inits 22,000-square-foot productionfacility in Middleburg Heights does-n’t go to waste.

The North Olmsted-based brew-er is purchasing seven, 170-barrelfermentation tanks, which willbring to 23 its total tank count. Theadditional equipment will beef up

annual craft beer output by increas-ing from 13,000 to about 20,000 thenumber of barrels of beer it pro-duces. Plans call for another 28,170-barrel tanks over the next fouryears, which would nearly triplecurrent production capacity toabout 34,000 barrels.

The brewery has a strong pres-ence in Northeast Ohio, thoughsupplies in limited amounts its craftbeer to markets in Indiana, westernPennsylvania and Florida.

“Our distributor is saying we’renot supplying enough beer in thepipeline, and we need to get morebeer out to people,” brewer and co-owner Matt Cole said. “We’re grow-ing really fast.” Fat Head’s also isplanning later this year to open abrewpub in Portland, Ore., and hasplans to penetrate markets alongthe West Coast.

■ St. Vincent Charity Medical Cen-ter is providing a $10,000 sponsor-ship for the Downtown FarmersMarket’s 2014-15 season to bolsterits visibility.

The farmers market will be rollingout a new branding and marketingcampaign that will focus on its pro-ducers and farmers, includingMelissa Khoury of Saucisson, a bou-tique butchery, and Hunter Harlorof milk maker forty.one.

“This partnership will allow us toconnect more people to farm-freshfood and continue doing our part togrow a regional food economy anda healthier Cleveland,” said AshleyShaw, market manager.

The market operates from 11a.m. to 2 p.m. every Friday at the5th Street Arcades. Its summer sea-son begins June 13 at Public Square.

■ Chris Hodgson nabbed Food andWine’s award for the People’s BestNew Chef of the Great Lakes region.Hodgson is a pioneer of the localfood truck movement and achef/consulting partner with Drift-wood Restaurants. ■


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James Gaines (top) and Dylan Wilkins are part of the inaugural graduating classof Edwins Leadership and Restaurant Institute.


SMALL BUSINESSINSIDE

APRIL 14 - 20, 2014 CRAIN’S CLEVELAND BUSINESS 15

17 ESOPS SHOULDBE PART OF SUCCESSIONDISCUSSIONS

Hunger to growfeeds new focusEntrepreneur’s appetite for challenges takesher from catering to food manufacturingBy SHARON [email protected]

D ianna Dunlevy-Seufer neverwanted status quo. Other-wise, she might still be a

home-based caterer serving a North-east Ohio market.

Instead she chose, in 2004, to ex-pand the then 4-year-old cateringbusiness named d’marie Inc. to in-clude wholesale food manufacturing.

“I love the energy of the startup. It’sthe unknown,” she said. “I can’t sitstill. It’s ‘so, OK, we got this all figuredout. What’s my next challenge?’”

Dunlevy-Seufer closed the d’mariecatering business in 2011. However,the d’marie name — a play on thefounder’s first and middle names —continues with food manufacturing asthe primary focus.

Today, the Bainbridge Townshipbusiness produces frappe vino mix,triangle chips, dip mixes, bacon sea-sonings, pancake and waffle mix andevent-themed food bags — in all, 18products ranging from $5 to $25. Anational customer base is servedthrough 500 direct-to-consumer foodshows and special events each year,in addition to wholesale channels andonline sales; export opportunities arebeing considered.

Frappe vino, a frozen wine andcocktail slush mix, the company’s topseller, is sold locally at The Winery atSpring Hill of Geneva, Olympia Candyof Strongsville and Mustard SeedMarket & Café of Solon.

In 2000, the catering business’sgross sales were about $100,000, Dun-levy-Seufer said.

While declining to discuss specif-ic 2013 gross sales, she indicatedthat the food manufacturing busi-ness sold 220,000 units up from7,000 units during 2004’s firstfull year of manufacturing. Lastyear’s gross sales, she said, re-flect a 495% increase in growthfrom 2004.

A beginning foodieClearly, Dunlevy-Seufer was a food

trade neophyte when she launchedthe catering business in 2000. Thatbusiness start followed years of sellingWebMD portal subscriptions tophysician practices, pitches that com-bined catered meals and sales presen-tations. Over time, she jokes, hermedical audience was “more interest-ed in lunch” than her message.

Following a WebMD merger withanother vendor and her eventual lay-off, Dunlevy-Seufer explored businessownership, one that would supportpersonal life changes including a re-cent divorce and a desire to be withher then 7-year-old daughter. She en-joyed cooking and recalled the mealsthat pharmaceutical company repre-sentatives — her future clientele —had used to market physician prac-tices.

Using funds from her severancepackage, she spent $2,500 to start the

■ How do you define a startup?“I define a startup as someone who’s

got an idea and they’re trying to run withit …I felt like a startup for probably agood three to four years. Then, when we

started another product it made mefeel like a startup all over again. Wherewe are with the manufacturing, I don’tfeel like a startup anymore,” said Dianna

Dunlevy-Seufer.

■ What have been your growingpains? “For us, first and foremost, issurrounding yourself with the right people whether they be employees or contracting with vendors. I need the right team in place. If you don’t have theright people in place then it causes somany issues. The biggest growing pain is getting the right people at the right time in the right place.”

■ What are the building blocks for business growth? “… Listening toyour customers. That is key and why westay involved in the field and hear what’s going on, so we can continue to buildupon what we’ve started. We try to bevery good listeners — to our cus-tomers, employees and representatives— and be open. And, the beauty of being a small company is we can act onit.”

■ What is the next big challenge? “… Success is progression and alwaysgrowing. I want to keep growing. I wantto keep challenging myself. I’m looking at different opportunities. There’s somuch we can do I just need to decidewhich (opportunity) we go after.”

This year, Crain’s Cleveland Business is focusing on small businesses and their

second-stage journeys. The stories focus onsmaller entities that have moved beyond —or are trying to move beyond — the startup

phase. If you have a suggestion for a businessor topic related to second-stage growth,

contact Amy Ann Stoessel [email protected].

Mentor aims to open up a whole new world City hires internationaltrade administrator tohelp its companies sellmore products globally By CHUCK [email protected]

B lasphemy!Kim Holizna has spoken to a few com-panies in Mentor that have turned

away people who have contacted them out ofthe blue, wanting to buy their products.

The reason? Those hot sales leads camefrom other countries.

“People have come up and flat out told me,‘I gave those away.’ What? They gave businessaway,” she said.

Her job is to make sure that never happensagain within the city limits of Mentor.

The city hired Holizna as its first interna-tional trade administrator back in December.Since then she’s been on a mission to meetwith “each and every business” in Mentorthat might have an exportable product. Andthere could be a lot of them: There are morethan 200 manufacturers in the city.

Some are small companies that have nev-er sold a product outside the United States.But even midsize manufacturers often needhelp getting certification for products sold inthe European Union, forming joint venturesin China or navigating the tax system inBrazil.

Holizna has experience with such matters.She has spent almost 20 years helping othercompanies do business in other countries.Most recently, she served as director of theInternational Trade Assistance Center’sNortheast Ohio office at Kent State Universi-

ty, covering six counties in the region.Though she has worked with companies in

Mentor before, now she can give them all hertime and attention. Those two resources arecritical: Getting the owner of a small compa-ny to the point where he or she is comfortabledoing business overseas can involve a lot ofhand holding, according to Holizna, who alsospent several years at Day-Glo Color Corp., aCleveland company that sells fluorescent pig-ments all over the world.

“You’ve got to slowly get into these compa-nies one by one,” she said.

She’s also working with somewhat largercompanies that have done some exporting.One of them is Buyers Products Co., which fo-cuses mainly on making parts and acces-sories for trucks and trailers.

That company, based at 9049 Tyler Blvd.,has seen its international sales “grow consis-tently, year after year,” according to Dan Do-err, director of new product development.

Today, Holizna is helping Buyers Productsapproach foreign markets in a more sophis-ticated way. For instance, the company al-ready works with distributors in several coun-tries, but Doerr said he doesn’t “know if, inevery case, we found the best distributor.”The company ended up in those relation-

See HUNGER Page 16

See MENTOR Page 17

SHARON SCHNALL

Dianna Dunlevy-Seufer, owner of d’marie Inc.

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catering business; one full-timeemployee was hired.

Meals were prepared from ashared, rented space at a nearbycommercial kitchen housed in aBainbridge Township church;other operations were handledelsewhere.

“Your warehouse is yourdining room. Your office isyour car. It’s chaotic to jug-

gle it all, but when you’resmall, you do it,” Dunlevy-Seufer

said.Early on, she created seasoned

triangles to accompany thecatered sandwiches, salads andwraps.

“It’s not quite a chip and it’s notquite a cracker,” she said, describ-ing the triangle’s consistency asakin to layers of pie crust or phyllodough.

Soon, physicians’ spouses andsecretaries were contacting herwith triangle orders for showersand graduations.

Relocation and consolidationbecame necessary not once, buttwice.

One door closes, another opens

In 2005, d’marie moved to aleased 4,000-square-foot space inBedford; the $100,000 relocationcost was self-funded.

By 2008, the catering businesswas not thriving, Dunlevy-Seufersaid, because of the recession,pharmaceutical company budgetcuts and regulatory and in-houserestrictions on physicians receiv-ing catered meals from pharma-ceutical companies.

Meanwhile, d’marie’s foodmanufacturing endeavors contin-ued to grow: more offerings hadbeen added to the product portfo-lio and the company’s reach hadextended across the country. Ulti-mately, by 2011, the focus wastransitioned entirely to food man-ufacturing and the catering busi-ness was closed.

“She was going through a bigshift. She realized the cateringbusiness was going away,” said DebMazzaferro, a specialty food indus-try coach and consultant based inSarasota, Fla. “She was going awayfrom being the caterer to being thiswholesale direct business. She wasre-creating the business … Dianatransitioned into something rele-vant. She was insightful.”

Mazzaferro has provided coach-ing and consulting services to d’-marie since 2007. Prior to estab-lishing her consulting practice, in2001, Mazzaferro had more than20 years of direct sales and mar-keting experience in the food in-dustry.

Dunlevy-Seufer credits coach-ing as critical toward stewardingbusiness growth — literally so.When, for this latest move, fromBedford to Bainbridge Township,she targeted a 7,500-square-foot-space, coaching led to consideringa 10,000 or greater square footspace to avoid prematurely out-growing that next space.

In 2011, d’marie landed in thecurrent 14,000-square-foot leasedlocation; 10% of the space is allo-cated to Chagrin Valley Kitchen, acooperative kitchen she estab-lished. The move, cost about$200,000, and was, again, self-funded.

Moving sooner than laterFrom experience, Dunlevy-

Seufer advises other growing foodbusinesses to acknowledge whenrelocation is necessary. She hadbeen “too close to the business” tosee that remaining in the originallocation was inefficient. A properfacility allows for storage, parcelpickup and selling the product notonly in quantity but easily from aloading dock.

“Everybody is afraid to pay rent,but once you do it, you see howmuch easier everything becomes,”she said. “… You can buy suppliesbigger and more cheaply. Youdon’t run out of supplies during anorder. You don’t realize you’rewasting your time.”

The latest space accommodateslarger, more complex equipment,but also reflects a learning curve,with new suppliers and vendorsand training regarding the quirksof specialty equipment. National-ly, 15 food dealers sell the productat shows and to regional accounts.

Locally, 12 employees, includingDunlevy-Seufer, work year-roundat company headquarters and arejoined by another eight prior tothe holiday season.

Mark Seufer, who is married tothe company’s founder, joined thebusiness full time in 2007, andmanages sales and operations aswell as equipment maintenanceand employee training. For herpart, Dunlevy-Seufer focuses on vi-sion, social media initiatives, creat-ing new products and brandingand sales. And by temperamentshe will seek out more “growth andgetting to the next level.”

“I need to look for the next chal-lenge,” she said. “I need some-thing to stir the pot a little bit.”

Hunger: Coach plays key rolecontinued from PAGE 15


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ships through happenstance:Those distributors were the oneswho reached out to Buyers Prod-ucts. Now the Mentor companyaims to find the best distributorswho truly understand the com-plexities of doing business in aparticular country, Doerr said.

Holizna also connected Buy-

ers Products with a consultantwho is scheduled to meet withthe company later this month totalk about the process of gettingproducts certified in the Euro-pean Union.

She also organizes eventsabout topics related to interna-tional trade. For instance, last

week a Brazilian lawyer who of-ten works with Baker Hostetlerin Cleveland talked to about adozen Mentor-area executivesinterested in doing business inthat country.

The event also was a greatchance “to rub elbows withother companies in the area

who have gone abroad,” Doerrsaid.

Holizna, who receives helpfrom her colleagues in the city’seconomic development depart-ment, also is tasked with helpingattract more foreign investmentto Mentor.

The city wanted to hire some-

one with a focus on internation-al trade because manufacturersform “the heart” of the Mentoreconomy, according to citymanager Ken Filipiak. Theymake a lot of high-tech, high-value machines and medical de-vices that “are ideal for export,”he said. ■

ESOPs can be part of succession strategyI

n the six-year period ending in2012, taxpayers were reluctantto structure transactions to de-fer taxes because tax rates were

very low (especially on capitalgains).

Why defer taxes if rates are onlygoing to increase? As of last year,the highest tax rate on most capitalgains rose to 23.8% (which includesthe additional tax on investmentincome).

This rate is more than 50% high-er than rates were in 2012. Manyobservers think it is very unlikelythat these rates will be going upanytime soon. This may, therefore,be a good time to once again con-sider techniques for deferring tax-es, especially on significant trans-actions such as the sale of acompany.

Driven in part by the current taxrate structure, many business own-ers are considering employee stockownership plans (ESOPs) as part oftheir succession plan.

The basic mechanics of an ESOPare relatively straightforward. Thecompany forms an ESOP, which isessentially a qualified retirement

plan. It is similar in many ways toa 401(k) or profit sharing plan, ex-cept that its primary asset is stockof the sponsoring company.

The ESOP contracts to purchasestock of the company from one ormore selling shareholders at a pricedetermined by a qualified ap-praisal. In order to effectuate thepurchase, the company often willborrow the necessary funds from aqualified lender (i.e., a bank or oth-er lending institution).

This is called a “leveraged” ESOP.The company immediately lendsthis money to the ESOP, and theESOP uses the money to pay thepurchase price to the shareholdersfor the acquired shares.

There are many benefits to usingan ESOP to acquire shares in aclosely-held company. First, theESOP essentially creates a marketfor a minority interest in the com-pany. While many ESOPs areformed to purchase at least a 30%interest in the sponsoring compa-ny to take advantage of the tax de-ferral described below, there is nominimum percentage that theESOP can purchase.

Selling a minority interest in thecompany to an ESOP can allow thecurrent shareholders to maintaincontrol of the business and remainemployed by the company.

There can also be significant taxbenefits to the shareholders. If thecompany is a C corporation, as longas the ESOP owns 30% or more ofthe company shares after the ac-quisition, the selling shareholderscan generally defer the income taxon the gain from the sale of thestock.

Provided the proceeds receivedby the selling shareholders arerolled over into “qualified replace-ment property,” no tax is due onthe sale of the shares to the ESOP.

Selling shareholders can transferthe qualified replacement propertyby gift or upon death without trig-gering the deferred gain.

This allows a business owner todiversify his or her investment inthe closely-held business withouttriggering any gain, and complete-ly eliminating the gain if the quali-fied replacement property is helduntil the shareholder’s death.

There are also benefits to thecompany. From a tax standpoint,the company will get a tax deduc-tion for the interest paid to thelender and for an amount equal tothe principal payments, generallynot in excess of 25% of the eligiblecompensation of ESOP participants.

Another reason to consider anESOP is to create a stock-based re-tirement plan for employees to re-place or supplement existing plans.

Many business owners like theidea of employees thinking ofthemselves as owners of the com-pany, but do not like the idea of giv-ing employees voting rights, hold-ing shareholder meetings, andentering into shareholder agree-ments with the employees to buy

back the stock upon termination ofemployment.

An ESOP can eliminate many ofthese concerns because, like othertypes of qualified plans, ESOPs pro-vide the employees with a benefi-cial ownership interest in the equi-ty of the company but generallywithout the voting and other rightsof a shareholder.

An ESOP will not work in everysituation. Having a sufficient num-ber of employees with relativelylow turnover is important. Mostcompanies implement an ESOPwith borrowed money, meaningthe company needs to have suffi-cient capacity for additional debt.

Also, the costs of setting up andmaintaining an ESOP are not in-significant, and an experiencedteam of legal and financial profes-sionals is critical to the successfuladoption and operation of anESOP. Despite these concerns, anESOP should be a part of the dis-cussion for any business ownerconsidering succession planning. ■

Grassi is president of McDonaldHopkins LLC.

CARLGRASSI

TAX TIPS

Mentor: Attracting foreign investment to city also a focus

Holizna


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A helpful push to get your head in the gameSpecialized field of psychology helpingathletes overcome performance anxieties By SHARON [email protected]

L ittle did psychologist Dr. JackJ. Lesyk know that when hewas contacted by the mother

of a figure skater who was experi-encing anxiety during competition,it would open up a specialized fieldof practice to him.

The year was 1981, and the then-teenaged skater was Mark Lang.

“If you’re training to your optimallevel and achieving your practicegoals, if there’s a drop-off (at com-petitions), you know there’s anxi-ety,” said Lang, a former Ice Ca-pades performer and now a KellerWilliams real estate agent workingout of the Crocker Park-GreaterCleveland West office.

Lang ended up being Lesyk’s firstsport psychology client — and thestart of the psychologist’s 30-plusyears in a field that has been grow-ing in both interest and under-standing.

Today, the Association for Ap-plied Sport Psychology, a 1,900-member international associationfounded in 1986, lists 10 Ohioans,four from Northeast Ohio, as certi-fied consultants.

Lesyk, who is a past president ofthe association, has witnessed hissport psychology-based client pop-ulation increase from 40% of his to-tal in 1994 to 75% in 2000. So muchso, he finalized a decision last yearto stop accepting clinical referralsreflecting general concerns and in-stead concentrate on sport and per-formance clients.

His Beachwood practice, theOhio Center for Sport Psychology,recently expanded beyond the ath-letic community to serve otherclientele — including musiciansand executives — who are dealingwith performance issues unique totheir professional environments.

An estimated 90% of the athleteswho see him “want to learn how torelax in high-pressure situations,”

he said.Lang, who also works as a figure

skating professional, includingcoaching and choreography, saidsport psychology helped him gofrom being anxiety-riddento highly competitive.

“(Sport psychology)turned (it) completelyaround,” he said. “It wastaking those (anxious) mo-ments and not being wor-ried but being excited. ... Iloved to skate but I couldn’tfigure out why I had theanxiety. It was just like conqueringthe problem.”

Pathway to practicingPractitioners, like Lesyk, arrive to

this specialized arena via differentpathways.

Lesyk, who previously worked as aclinical psychologist, first at statepsychiatric hospitals in NortheastOhio and then as a private practi-tioner, first was exposed to sportpsychology training during a 1983conference offered by the U.S.Olympic Committee.

“I did not use the term sport psy-

chologist for a number of years,” hesaid. “I wanted to be cautious. Iwanted to have substantial creden-tials before I used that name.”

Lesyk is the author of “Develop-ing Sport Psychologywithin Your Clinical Prac-tice: A Practical Guide forMental Health Profes-sionals.” He recalls in theearly 1980s, “maybe 10”sport psychology bookswritten by professionalsfor professionals — hard-ly household vernacular.

“It was hard to get established,”said Lisa Fender-Scarr, an owner ofSummit Therapy Group of Akron.

“There weren’t academic pro-grams to become a sport psycholo-gist. Now there are some programsbut they are limited ... you have todevelop it yourself. You have to goout and seek your training whereasin a regular psychology program,those internships are already plant-ed in the community.”

Fender-Scarr’s 1998 University ofAkron doctorate is in counselor ed-ucation and supervision; now aclinical counselor, 25% of her prac-tice represents athletic concerns.She designed her way into the spe-cialty, around 1986, after taking anundergraduate physical educationcourse called “The Psychology ofCoaching.”

That Kent State Universitycourse, she said, helped address herown emotions regarding sustaininga sport injury and terminating agymnastics career; the course alsotook her education and career in anunintended direction.

“It was so new; you could createyourself to be an expert in the field,”she said.

Client referrals now come fromuniversity faculty, coaches at gymsand an online Psychology Today list-ing.

Her sport psychology practicesegment has a primary focus ongymnasts, but also serves runners,wrestlers, football, baseball andsoccer players, swimmers and mostrecently, a riflery client.

“To sustain your business youhave to go out and seek the athleticenvironments. ... It’s about pursu-

ing different athletic teams andsports.

“You have to go to the people ifyou want to attract them,” Fender-Scarr said.

Understanding theathletic culture

An athletic background is not anabsolute prerequisite to being asuccessful sport psychologist but itcertainly helps.

“It’s someone who has a goodunderstanding of the (sport) culture— the distinct pressures athletes ex-perience,” said Darla Sedlacek, apsychologist since 2001, specializ-ing in sport and performance psy-chology and owner of TransformSport and Fitness Services of Lake-wood.

In addition to serving a clientpopulation that is two-thirds athlet-ic concerns, Sedlacek also is a certi-fied personal trainer.

A fitness studio is on the premis-es of her practice’s headquarters.

A lifelong athlete and avid run-ner, she participates in ultradis-tance marathon events — her nextevent will be a 100-mile summertrail run. Other pastimes includemartial arts training, strength train-ing and yoga.

One “tool” she teaches is “self-talk.” Athletes need to becomeaware of the “thoughts and chatter”occurring in their heads. “The taskis to observe it, recognize it and letit go; the emphasis is not to turn itinto the positive but make it a neu-tral,” she said.

Lesyk — who developed a pas-sion for sports through running andmarathon participation — teachesclients such techniques as how torelax under pressure; mental visual-ization; progressive relaxationbiofeedback; and how to self-mon-itor.

Mindfulness, he said, leads tocontrolling attitude and effort, mak-ing better choices and ultimatelyexperiencing pride regarding anoutcome.

“A lot of what we practice insports psychology goes beyondsports and helps them to optimallyfunction in other areas of their livesas a whole,” Sedlacek said. ■

Lesyk

18 CRAIN’S CLEVELAND BUSINESS SMALL BUSINESS APRIL 14 - 20, 2014



Cabbies: Ride services are focusing on tech

REBECCA R. MARKOVITZ

A view of the Uber app on an iPhone as someone waits for a driver to complete a pickup.

He doesn’t have an issue with thecity’s regulatory oversight, but hesaid it also should apply to Uberand Lyft.

“It’s an expense we can’t affordto take if our competition doesn’thave to,” Keenan said. “We’ve al-ways embraced competition, butit’s always been a level playing fielduntil lately.”

Company officials for Uber andLyft chalk up concerns likeKeenan’s to nothing more thansour grapes. James Ondrey, aCleveland native and Uber Ohio’sgeneral manager, said the taxi in-dustry is “failing consumers” andhis service will “alleviate all of thepain points we hear people talkingabout,” such as cabs’ cleanliness,timeliness and overall conve-nience.

That said, ride-hailing apps likeLyft and Uber haven’t come with-out criticism. Some have ques-tioned their safety and accusedthem of price gouging during timesof high traffic and inclementweather. Last Wednesday — theday Uber went live in Cleveland —the city of Columbus sued the com-pany, claiming the service is an un-licensed operation that’s puttingpeople at risk because the city has-n’t inspected Uber cars or licensedUber drivers. Uber, which operatesin more than 85 cities worldwide,launched in Columbus late lastyear.

Cleveland City Councilman Mar-tin Keane, chairman of the coun-cil’s aviation and transportationcommittee, said the city has beenstudying the issue for some time.But now that the services have gonelive, he expects the city to take acloser look.

“It’s just something we have to

take a hard look at. We have been,but now we’ll take a closer look … Ifit’s apparent there is some non-compliance, absolutely the city hasto take action,” Keane said. “It’svery important for the city, to thevisitors and those who use theseservices to be treated with respect.”

Mustache loveLyft and Uber characterize them-

selves as tech companies ratherthan transportation companies, asthey don’t own the cars or employthe drivers. The drivers are inde-pendent contractors looking for ex-tra income.

With both apps, riders don’t haveto physically flag down a cab orfumble with cash given that theircredit card information is alreadyon file. Instead, with a few taps of abutton, a ride is reserved and a carshould arrive in a matter of min-utes.

In Uber’s case, it’s typically a lux-ury black sedan or SUV steered byfull-time livery drivers with com-mercial drivers’ licenses looking forextra cash when their schedules arefree. The company also boasts itslower-cost, more casual uberX ser-vice, whose drivers use their ownvehicle — think Honda Accord orToyota Prius — to cart folks aroundtown.

Lyft’s service more so resemblesthe uberX option, but its drivers’cars don fuzzy pink mustaches ontheir grilles. In Angelica Gagliardi’scase, that mustache dresses a seafoam green Hyundai Tucson.

Gagliardi is one the founding dri-vers of Lyft’s Cleveland operation.By day, the Parma resident is afourth-grade teacher in Clevelandcity schools. Lyft’s other local dri-vers include Case Western Reserve

University medical and dental stu-dents, a U.S. postal worker and achef all looking for extra cash.Cleveland is Lyft’s 31st market.

“I know a couple of people whouse Lyft or driven with it in differentcities, and they had nothing bad tosay about it,” Gagliardi said. “I sawads that it was coming to Cleveland,and I knew I’d love to have secondjob but didn’t always have time be-cause I’m a teacher.”

Safeguards in place?Both companies say drivers con-

nected through their apps undergoextensive background and drivinghistory checks. Still, those safe-guards haven’t exactly satisfied allof Lyft’s and Uber’s critics.

Asked about his thoughts on thecompanies, Brian McBride, whosecompany operates Yellow Cab,Zone Cab and Westlake Cab in theCleveland area, pointed to a wrong-ful death lawsuit filed in Californiaby the family of a 6-year-old girlkilled by an Uber driver on NewYear’s Eve in San Francisco.

McBride also suggested the dri-vers often don’t carry the proper in-surance.

“This is all going to shake out,but the problem is getting peopleexcited ahead of time to lay theframework to protect the public,”said McBride, chairman of Cleve-land’s United Garage and ServiceCorp.

McBride admits any potentialpushback by the city could result inan immediate backlash via socialmedia from the apps’ fervent fanbase.

“Every time this happens, a virtu-al mob appears and pummels thepoliticians,” McBride said.

Get a move on itLyft and Uber no doubt

drummed up a significant amountof buzz on social media when theylaunched.

Uber’s Ondrey said NortheastOhioans have been clamoring forthe service on social networks anddownloaded the app well beforethe service was available in thearea.

“With the continued desire offolks to return to the urban core inCleveland and all the fun thingsthat they can do around the cityand surrounding neighborhood,Uber will make it easier to dothose,” he said. “It’s going tochange the way Clevelanders movearound their city.” ■


Jobs: Slowand steadycould workwell for theindustrycontinued from PAGE 8

Last Thursday, reporter TimothyMagaw took an Uber ride fromCrain’s downtown Cleveland of-fices on West St. Clair to Cleve-land Pickle on Euclid Avenue tograb lunch.

After a few taps to his iPhone’sscreen and a brief, 10-minute wait,the sleek Lincoln Town Car arrivedin style. His driver, Tariq Fares,opened the door and was courte-ous as can be. Of course, Magawchose the more luxurious Uber of-fering for his quick ride to grab asandwich.

The cost of the roughly one-miletrip? $12, but Uber picked up thetab because of an introductory offer.

For more on Crain’s maiden Uber voyage, check out CrainsCleveland.com for a video explaining the app.

MORE ONLINE

“From the producer side, it meansa great business opportunity; that’swhere Northeast Ohio comes in,”Carlsson continued.

Sustainable businessesThe biomedical industry has two

other sub-sectors: research and de-velopment and the pharmaceuticalbusiness. But the medical devicesub-sector is biggest.

“As a share of the total, medicaldevice manufacturing, in terms ofoutput, has grown the most out ofthose three elements of the biomed-ical industry,” Duritsky said. “Thatmakes sense because a lot of theR&D work and lab work is spun outof the hospitals and med devicemanufacturing is benefiting a lotfrom that research.”

Among the major firms in the bio-medical sector are Elyria’s InvacareCorp. and Philips Healthcare inHighland Heights, both of whichmake medical devices, and SterisCorp. of Mentor, which makes infec-tion prevention systems.

The Team NEO review estimatesthe biomedical sector of the gross re-gional product, or GRP, has grownfrom $3.5 billion in 2000 to $5.6 bil-lion in 2014. GRP is a measure of themarket value of all final goods andservices produced in an area in aparticular year. Moody’seconomy.com provides Team NEOwith the data for its quarterly reviewsof the economy in 18 counties inNortheast Ohio.

Importantly, the industry largelyhas avoided the ups and downs ofother sectors of the regional econo-my.

“This is a sustainable industryhere that has grown the right way,”Duritsky said. “It hasn’t been boom-bust. It’s been really smart, thought-ful, incremental decisions that havegrown it.”

2.1% growth forecast for 2014More generally, the quarterly re-

port pegs total employment in theregion at 1.89 million at the end ofthe third quarter of 2013, the latestdata available. That marked the 13thconsecutive quarter of growth,though jobs increased by only 9,900positions between the third quarterof 2012 and 2013.

Given that modest growth, unem-ployment held steady, at 7.1%, onlyslightly lower than the national rateof 7.3%.

Moody’s expects the regionaleconomy to grow by 2.1%, to almost$200 billion, in 2014. That gets theGRP to within about $2 billion of itspre-recession high of 2005. Moody’sreports the regional economy grewonly 0.4% in 2013, lagging the broad-er U.S. economy, but Duritsky con-siders that an early estimate that willbe revised upward as data estimatesbecome more solid.

The report also notes employmentgrowth in the service, manufacturingand construction sectors. ■


The total reach of the 10 FoxSports affiliates — which includethe New York-based YES Network,Fox Sports San Diego, Fox SportsArizona and Sun Sports (Fox’s re-gional network in Florida) — spans135 designated market areas. “18Holes” and “Swing Clinic” will airin 13 of the nation’s 25 largest des-ignated market areas.

“When Fox bought STO, I was re-ally nervous,” said Hanlin, who alsoowns three golf courses in Ohio, co-hosts a Saturday morning show onWKNR-AM, 850, and is the men’sand women’s golf coach at NotreDame College in South Euclid.

Hanlin’s worry turned to excite-ment when Mike Roche, director ofprogramming for Fox Sports Ohioand SportsTime Ohio, sent a sam-ple of Hanlin’s “Tee It Up” show toTim Ivy, director of programmingat Sun Sports.

“Tim Ivy would ask me to pick upone of his high school footballgames,” Roche said of the program-ming that is often shared by Fox’sregional networks. “So we would dothat and I would say, ‘Hey, we havethis golf show.’ ”

Ivy’s reaction, according toRoche: “Wow, this is really good.”

New name, more road trips“Tee It Up,” once an all-Ohio pro-

gram on which Hanlin and his long-

time production partners, Willough-by-based BMA Media Group, wouldplay a course and show some of thenearby area’s best attractions, wasexpanded in 2013.

Roche said the show was “tested”on four Fox Sports regional net-works last year — Sun Sports, SportsSouth, Arizona and San Diego. Theresponse was so positive that Foxelected to more than double theprogram’s reach in 2014 — and giveit a jazzed-up new name.

Hanlin said he has been workingwith the “same six or seven guys” —his team, as he calls them — since“Tee It Up” debuted on SportsTimeOhio in 2006. The group, whichworks on a freelance basis for FoxSports Ohio, includes friend DeanCummings, the show’s producerand editor.

Hanlin — in case he wasn’t busyenough — coordinates the travelplans, which are much more exten-sive than past trips around theBuckeye State. The owner of LittleMountain Country Club in Con-cord and StoneWater Golf Club inHighland Heights said his goal is toeventually shoot an “18 Holes”episode at a golf course in proxim-ity to each Fox Sports regional net-work on which his show appears.

That probably won’t happen thisyear, Hanlin said, but he and hiscrew will be all over the country forthe program’s 13-episode run in2014.

The shoots, which used to takeone or two days, have turned intothree-, four- and five-day trips.

To accommodate the show’sbroader focus, “Tee It Up” changedits format in 2013. In past years, theshow would focus on Hanlin andco-host Carling Nolan — a 2010winner of the Golf Channel’s “BigBreak” who joined “Tee It Up” in2011 — playing a golf course’s sig-nature hole and feature footage ofthe rest of the course.

“Now, we actually show all 18holes of the golf course,” Hanlinsaid. “A lot of the places we’re goingto are large resorts with a lot moreto shoot than a Little Mountain or apublic golf course in Ohio. Theseplaces have spas and tennis courtsand huge hotels.”

“When we go to these places,”Hanlin said, “we’re really trying toshow the whole experience.”

Indians get into the swing“18 Holes” will debut on Sport-

sTime Ohio on Wednesday, May 7,following the station’s broadcast ofthe Indians’ 7:05 p.m. game againstthe Minnesota Twins. The firstepisode of 2014 will feature IndiansAll-Star second baseman Jason Kip-nis and recently demoted reliefpitcher Vinnie Pestano, who lastmonth drove from the Tribe’sspring training home in Goodyear,Ariz., to meet Hanlin at SunRidge

Canyon Golf Club in Fountain Hills.“They drove like an hour and 15

minutes to come down and do ashow — I kind of told them it was45 minutes,” Hanlin said of Kipnisand Pestano.

The good-natured Indians play-ers matched Hanlin’s signatureflashy wardrobe piece for piece.

Pestano wore a sweater vest overa short-sleeved golf shirt, completewith a bow tie and plaid pants. Kip-nis was more understated — with awhite collared shirt and light plaidpants.

“They were hilarious,” Hanlinsaid. “They tried to outdress me.”

Hanlin’s attire sometimes over-shadows what Roche describes as adown-to-earth personality whowon’t hesitate to give a golf tip toanyone — anywhere.

“One thing I don’t think peopleunderstand about Jimmy is howgood of a teacher he is,” said Roche,the Fox Sports Ohio and Sport-sTime Ohio programming director.“It’s one thing that he’s on air anddoes things like that, but he hasn’tforgotten where he came from.”

Said Hanlin, laughing: “I givemore free golf lessons than any hu-man being in the entire world.”

Roche turned that Hanlin traitinto yet another program.

During the early days of Sport-sTime Ohio, Roche, in an effort topromote “Tee It Up,” would takeHanlin to a local golf course andask him to give a brief pointer oncamera.

“He had 26 seconds to do a quickgolf tip, and that was the promo

campaign that year for STO,”Roche said.

Last year, “Swing Clinic” airedfor the first time, and this year itsseven episodes also will be shownin more than 50 million homes.

Helping handsHanlin’s third SportsTime Ohio

program, “The Golf Zone With Jim-my Hanlin,” a Sunday night viewercall-in show, will expand from oneto two hours on April 20. His ESPNCleveland radio show is also twohours, making it difficult to find aday during the spring and summerin which he isn’t on the air.

“And at some point, I have toshow up at my golf courses,” hesaid.

With his schedule even morehectic, Hanlin said he will focus onthe day-to-day management of Lit-tle Mountain, and let the generalmanagers at StoneWater and Cum-berland Trail Golf Club (located inPataskala, 20 miles east of Colum-bus) manage those facilities.

When he’s not filming a show,taking calls on ESPN Cleveland ormanaging one of his courses, Han-lin is spending time with his 9- and6-year-old sons. Their names —Hogan and Palmer — are fitting fora father who devotes so much of histime to promoting the game andthe courses on which it’s played.

“The freelancers (his productionteam) are great. They do a lot of thework,” Hanlin said. “And the samefor the guys at my golf courses — orI’d be in trouble.” ■


COMMERCIAL CONTRACTORSRANKED BY 2013 REVENUE

Rank

CompanyAddressPhone/Website

Local revenue2013

(millions)

New localcontracts 2013

(millions)

# of localprojects started

2013

New corporatecontracts 2013

(millions)

# of corporateprojects started

2013

FTE employees asof 4/1/2014

LocalCorporate

Yearfounded Top local executive

1Gilbane Building Co.950 Main Ave., Suite 1410, Cleveland 44113(216) 535-3000/www.gilbaneco.com

$304.2 $123.2 7 $3,318.7 319 512,527 1873 Scott Orr

vice president

2Cleveland Construction Inc.8620 Tyler Blvd., Mentor 44060(440) 255-8000/www.clevelandconstruction.com

$270.2 $39.9 6 $219.2 42 90890 1980 Jon D. Small

president

3Turner Construction Co.1422 Euclid Ave., Suite 1400, Cleveland 44115(216) 522-1180/www.turnerconstruction.com/cleveland

$229.0 $389.0 78 $9,500.0 1,350 905,298 1902 Jason Jones

general manager

4Donley's Inc.5430 Warner Road, Cleveland 44125(216) 524-6800/www.donleyinc.com

$204.2 $140.0 33 $188.0 57 70150 1892 Malcolm M. Donley

president, CEO

5The Ruhlin Co.6931 Ridge Road, Sharon Center 44274(330) 239-2800/www.ruhlin.com

$199.5 $114.0 20 $168.5 36 180370 1915 James L. Ruhlin

president, CEO

6The Austin Co.6095 Parkland Blvd., Cleveland 44124(440) 544-2600/www.theaustin.com

$137.5 $97.4 6 $201.3 11 72160 1878 Michael G. Pierce

president

7Geis Construction10020 Aurora Hudson Road, Streetsboro 44241(330) 528-3500/www.geis.us

$127.6 $179.6 82 $229.5 106 7780 1967 Gregory Geis

CEO

8Fortney & Weygandt Inc.31269 Bradley Road, North Olmsted 44070(440) 716-4000/www.fortneyweygandt.com

$82.5 $18.0 48 $72.9 156 79120 1978 Robert L. Fortney

president

9Shook Construction Co.10245 Brecksville Road, Brecksville 44141(440) 838-5400/www.shookconstruction.com

$76.0 $48.5 5 $184.4 43 46205 1926 Chris Halapy

executive vice president

10Panzica Construction Co.739 Beta Drive, Mayfield Village 44143(440) 442-4300/www.panzica.com

$57.6 $105.1 28 $105.1 28 7575 1956 Anthony M. Panzica

owner, president, CEO

11Infinity Construction Co.18440 Cranwood Pkwy., Warrensville Heights 44128(216) 663-3777/www.infinityconstruction.com

$57.6 $37.6 39 $37.6 39 4848 1997 Charles A. Izzo

president

12Continental Building Systems23240 Chagrin Blvd., Suite 400, Beachwood 44122(216) 454-2500/www.continental-buildingsystems.com

$39.0 $24.3 8 $196.1 58 12114 1984 Rick Adante

project executive

13C.T. Taylor5802 Akron-Cleveland Road, Hudson 44236(330) 656-9353/www.cttaylor.com

$31.0 $41.0 36 $41.0 36 2525 1971 John Hitchcock

president

14John G. Johnson Construction Co.8360 E. Washington St., Chagrin Falls 44023(440) 543-9856/www.johngjohnson.com

$22.0 $22.0 23 $22.0 23 2222 1943

Marty Weber, president,owner; Mike Weber, vicepresident, owner

15Drake Construction Co.1545 E. 18th St., Cleveland 44114(216) 664-6500/www.drakeconstructionco.com

$20.3 $25.5 59 $25.5 59 4747 1954 Steve Ciuni

president

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.

RESEARCHED BY Deborah W. Hillyer

Hanlin: New shows begin next month continued from PAGE 1



Proposals are due by May 7, thesuggested start of the audit is June2014, the investigation and reportpreparation are scheduled for Junethrough December, and the audit re-port is due Jan. 5, 2015.

Per the RFP, the PUCO will selectand direct the work of the auditor. Thecompanies will bear the costs of theaudit, bids for which “shall not exceed$200,000,” including cost of travel.

The commission expects the auditreport to contain the auditor’s opin-ion as to the competence, capabilityand autonomy of the management ofthe companies, including their boardof directors, to operate the public util-ities in accordance with acceptablebusiness practices, commission rules,orders and Ohio statutory require-ments, according to the RFP.

“…The companies and affiliatesshall provide any and all documentsor information requested,” the com-mission stated. “The auditor shallimmediately notify staff if there areany delays in obtaining requested in-formation.”

If any delay is determined to beunwarranted or unjustified, thecompanies and/or affiliates may besubject to legal action, it stated.

Moving forwardAlso revealed in Gas Natural’s an-

nual filing is that the board of direc-tors on March 26 formed a specialcommittee comprised of three inde-pendent directors to investigate alle-gations contained in a letter receivedfrom one of its shareholders.

The letter demands that the boardtake legal action to remedy allegedbreaches of fiduciary duties by theboard and certain of Gas Natural’s ex-ecutive officers in connection with theorder and opinion issued by the PUCOon Nov. 13, the company stated.

The special committee is to inves-tigate, evaluate and determine theposition Gas Natural will take withrespect to the letter.

Osborne said company executivesare precluded from answering ques-tions — among them, who sent the let-ter and what legal action is demanded— given the ongoing investigation.

“All I can say … is that we areworking diligently to resolve the is-sues at hand and put them behindus,” Osborne wrote.

In the meantime, Gas Natural isexecuting its growth strategy, whichincludes a targeted growth of its cus-tomer base of 4% to 5% a year. Withless than 30% natural gas penetra-tion, Maine and North Carolina areconsidered Gas Natural’s twoemerging markets, Osborne said.

He also noted that the companyhas been investing in its SpelmanPipeline in Ohio to strengthen itsfoothold in the Utica shale region,and continues to seek acquisitions,including smaller utilities it couldhelp to expand. ■

Adjustments:Board formscommittee to investigatecontinued from PAGE 8

“All I can say ... is that weare working diligently toresolve the issues at handand put them behind us.”

– Gregory Osbornepresident and COO, Gas Natural Inc.

Plan: Firm expects 2014 revenues to exceed last year’s $4.3M

It takes timeVolpe likes to emphasize the continuity of the

firm, and that its focus on rebuilding the city isthe same today as in the past.

However, things are very different from 1990when he launched the firm with a name similarto his now-prior job, that of “city architect” in theGeorge Voinovich administration.

He used his savings and retirement nest eggfrom the Public Employees Retirement System tolaunch the business. The first office was in a Vic-torian home-turned-offices on Prospect Avenue,where Volpe and his associates painted the wallsthemselves.

The firm did not yet have its first assignmentwhen it opened. Last year, it booked $4.3 millionin gross revenues, a number it expects to exceedthis year.

This City Architecture is on the third floor of acontemporary office building it designed adecade ago at 3636 Euclid Ave., just a few blocksfrom its first and second offices.

It just finished construction drawings for aproposed $36 million expansion of LubrizolCorp. in Eastlake that will add, if it gets final cor-porate approval, 90,000 square feet to the chem-ical and oil-related products company’s head-quarters. City Architecture has won more than200 local and national architecture and otherprofessional awards.

It also is overseeing a streetscape project onMain Street in Painesville and has done a designfor the transient marina that the city of Clevelandsoon will start building at downtown’s NorthCoast Harbor. The short-term marina is part of alakefront master plan City Architecture did forthe city of Cleveland during the administrationof former Mayor Jane Campbell. The firm also isworking on a planned Marriott Corp. hotel atNorth Park Plaza in Akron next to the 10-year-oldNorth Plaza Lofts.

“This is not like a shopping center where youbuild it overnight. We do a plan and see it cometogether piece by piece over time, Volpe said. “Ittakes 10 years. Sometimes 15.”

Public, private sideCity Architecture has a 50-50 balance of pub-

lic and private work it maintained since the out-set.

“We didn’t go after public work in 2008 whenthe commercial market dried up,” Volpe said.“We’ve always gone through the process of ap-plying, interviewing and presenting plans to behired. It’s very different from the private sidewhere someone says, ‘I like your work. You arehired.’ We have both.”

Pesta said, “We stayed flexible. We see urbandesign as the thread that ties the city together.The people and how they live are what is impor-tant to us.”

A mainstay of the firm is designing streetscapes,

he said, and it has in its portfolio projects thathelped turn around areas as varied as the Coven-try commercial district in Cleveland Heights.

“We also did a plan that took Detroit Avenueand West 65th Street,” Pesta said. “After it wasrepositioned as an arts district it became the Gor-don Square area.”

Incredible as it sounds today, City Architecturestarted designing townhouses when the feelingwas that they would not go in Cleveland and in-ner-ring suburbs.

“We designed 10,000 housing units. Seventypercent of them were built,” Volpe said. Howev-er, success breeds its own problem: Volpe oftensays the residential work outshines its work de-signing office buildings and even factories.

‘It’s all of us’Although it would be easy to paint Volpe’s

ownership transition plans as a case of the babyboomers starting to make way for the next gen-eration of architects and planners, experts seethat starting to occur for a different reason thanthe principal or principals’ ages.

Hank Reder, an architect-turned-lawyer inChesterland who focuses on construction litiga-tion and is a past president of the Cleveland andOhio chapters of the American Institute of Archi-tects professional group, said the downturn leftsome senior architects out of work or their nestegg dwindling because they used it to keep theirfirms afloat.

Now, he said, there is more of a tendency to

seek transitions and consulting arrangementsbecause the architecture business was so un-steady for so long. He considers it a change in theway practitioners approach their business, al-though most will continue producing designs aslong as age allows them to do so. During thedownturn, senior practitioners frequently set upshop on their own because finances were tootight to plan transitions, he said.

“This is really the way to do it,” Reder said. “Onekey is to transfer the goodwill of the founder to thesuccessors. Another key is to give successors timeto develop face time with key clients.”

Lillian Kuri, director of architecture, urban de-sign and sustainable development at the Cleve-land Foundation, said City Architecture’s focusand investment in remaking the city of Clevelanddistinguishes the firm.

“It’s an important institution and not just afirm involved in the region,” Kuri said. “What Ilove about the thought of this is that it’s really im-portant for Cleveland business as a strategy to re-tain young people and jobs. It’s cool (Volpe) isproviding a runway for them to be successful.”

Volpe said making it through the downturn didshape his desire to plan for the future of the firm.

“People may say it’s a Paul Volpe design. Thereality is that it’s all of us,” Volpe said. “They’llhave the responsibility. I want to work withclients and do designs.”

Asked who calls the shots in case of a businessdispute, all four men answered simultaneously:“All of us.” Then Wagner added, “One vote foreveryone.” ■


JANET CENTURY

Paul Volpe, second left, completed a transition in the ownership of his City Architecture firm to, from left,August Fluker, Alex Pesta and John Wagner.



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He thinks most meet the currentlevels, but they have to work hard at it.He’s concerned the proposed regula-tions could devastate foundries finan-cially, as the plan puts an emphasis onengineered solutions — such as ven-tilation systems — over the use of per-sonal safety equipment. In areaswhere respirable crystalline silica cre-ation is most prevalent in foundries,like a cleaning room where workersare grinding a mold, companies turnto products like respirators, he said.

“It’s not pristine,” Murray said ofthe foundry industry, “and it neverwill be.”

Crystalline silica can be found inprocesses used in a variety of indus-tries, from construction to metalcasting to concrete, brick and glassproduction, all of which would besubject to the proposal.

According to a Bureau of LaborStatistics report from May 2013,Ohio had 161,190 construction em-ployees and 485,370 productionworkers, although not all would beaffected. Some that could be are the1,790 foundry mold and coremak-

ers, the 1,120 dental laboratory tech-nicians and the 2,930 brickmasonsand blockmasons listed.

The proposal would lower thepermissible exposure limits, mea-sured in micrograms of silica per cu-bic meter of air (μg/m3), for crys-talline silica in construction,maritime and general industries.

Currently, the limit for quartz,which OSHA calls the most com-mon type of crystalline silica, is setat the equivalent of 250 μg/m3 forthe construction and shipyard in-dustries and 100 μg/m3 for generalindustry in an eight-hour work day.

Two other types of silica, cristo-balite and tridymite, have limits thatare half of that. The proposed ruledrastically would cut the allowablelimit to 50 μg/m3 for all of the abovegroups and materials, averaged acrossan eight-hour day. That’s the lowestlevel that OSHA believes is technolog-ically feasible. Companies would berequired to begin monitoring the lev-els once they reached 25 μg/m3.

Vincent Norwillo, a partner withGonzalez, Saggio & Harlan LLP inCleveland, said OSHA and employ-ers and contractors want to protectworkers, but he’s heard concernsabout the proposed levels.

“Employers are saying, ‘You

haven’t shown us there’s any magicto the 50,’” he said. He said he thinksit will be difficult for employers toreach those levels, that the costshave been “grossly underestimated”and that the science behind the lev-el hasn’t been made clear.

Focus on enforcementJoseph Brennan, an associate attor-

ney with Fisher & Phillips LLP’s Cleve-land office, said that overall, peopleare asking why the proposal is comingup now. Since 1968, the rate of lungdiseases related to silica has droppedby 90%, he said. He questionedwhether a stronger standard wouldhelp with the remaining cases or ifstronger enforcement of the currentstandard is what’s needed.

The enforcement question is crit-ical. Ken Kudela, director for theOhio-Kentucky Administrative Dis-trict Council of Bricklayers and Al-lied Craftworkers in Hudson, be-lieves a stricter standard isnecessary. He knows it will add ex-tra costs or burdens to contractors,but said something needs to bedone to stem the deaths from dis-eases like silicosis.

But even Kudela notes that en-forcement of the levels is the key. FredHubbard Sr., secretary treasurer for

the council, said OSHA has a lot ofstandards, but they seem to only goafter the biggest contractors. If a mea-sure is going to impose a lot of costsonto work sites, it needs to be en-forced across the board, he said.

And some employers think thatcost could be significant.

Bradley Belden, director of supportservices at the Belden Brick Co. in Can-ton, estimates that the proposed regu-lations would cost the 425-employeecompany hundreds of thousands ofdollars to meet the new regulations.The company already takes care to re-duce the levels of crystalline silica em-ployees are exposed to, using dust col-lection methods to keep its plants inSugarcreek clean and by having em-ployees use dust masks in the areaswhere the methods can’t be used.

“We just don’t think it’s going tobe a cost-effective solution to aproblem we don’t even think exists,”Belden said.

When the dust settlesBoth the Ohio Cast Metals Associ-

ation and Belden Brick submittedformal comments to the federal gov-ernment sharing their concerns onthe proposal.

They’re not alone. As of April 9,there were close to 2,000 comments

received on the docket. Public com-menting closed in February, andOSHA wrapped up public hearingson the proposal on April 4 afterabout two and a half weeks ofscheduled hearings.

OSHA is still accepting final com-ments from those who signed up totestify at the hearings. Typically, OSHAwill then analyze the written com-ments and testimony, update its pro-posal and get any necessary govern-ment approvals. A timeline for thisproposal was not available on OSHA’swebsite, but information on its rule-making process suggests a final deci-sion would be at least two years out.

While OSHA estimates that thecost could be significant overall at$637 million annually, the majorityof which would be incurred by con-struction-related companies, it ex-pects that average employers wouldspend just about $1,242 each year tomeet the regulations.

Murray of the Ohio Cast Metal As-sociation doesn’t agree with those es-timates. While he declined to namethe company, he shared that a large,local foundry had spent about $1 mil-lion to meet the current guidelines.

“This thousand dollar number isinfuriating because it’s so absurd,”he said. ■

Dustupcontinued from PAGE 5


COMPANY: Surgical Theater LLC,ClevelandPRODCUT: Surgical Navigation Advanced Platform

Surgical Theater LLCsays the Surgical Navigation AdvancedPlatform, or SNAP, “integrates with oper-ating room technologyto provide advanced 3D capabilities and augmentedreality, allowing surgeons to enhance their surgery performance.”

SNAP provides neurosur-geons “unique virtual-realityguidance to determine thesafest and most efficientpathway to remove cerebral tumors and treatvascular anomalies,” according to SurgicalTheater.

The product, currently being consideredfor Food and Drug Administration clearance,was on display for the first time last week atthe American Association of NeurologicalSurgeons’ annual meeting in San Francisco.

SNAP enables surgeons to “execute theirsurgery plan while in the operating room utilizing a patient’s CT/MRI scans, allowingenhanced accuracy and efficiency,” accordingto the company. It also provides features thatallow surgeons to see behind arteries andother critical structures.

Clearance by the FDA is expected mid-year, Surgical Theater says.

Dr. Joshua Bederson, chairman of the neurosurgery department at Mount Sinai Hospital in New York City, who was involvedin SNAP’s design, said its augmented realityfeatures “allow for accuracy to be maintainedthroughout the procedure and for simulationof all phases of complex surgeries.

For information, visit www.surgicaltheater.net.

Investor relations vet Mabeeis definitely back in the game■ Last July, Keith Mabee retired from Dix &Eaton. “It was just time to write the nextchapter,” he said.

Mabee started penning that chapter lastweek: He’s now group president for corporatecommunications and investor relations forFalls Communications in Cleveland.

Mabee had worked forDix & Eaton since 1997.Prior to that, he didcommunications and/orinvestor relations for atrio of companies over a15-year span.

It’s particularly inter-esting to deliver suchservices today, he said.

“At the board level, stocks are valued moreand more on how a company’s governedand how they execute not only business buttheir relationships with all stakeholders,” hesaid. “Shareholder activism is picking upagain. I think it’s going to be a heady two orthree years now.

“It’s an exciting time for somebody likeme to hopefully become a trusted adviser toboards and senior management teams thatare going to have to face into this environ-ment,” Mabee added.

Mabee was president of Dix & Eaton formore than a decade, then vice chairmanand finally a consultant through July 2013. Itwas Rob Falls, president and CEO of FallsCommunications, who approached himabout returning to full-time work.

“Our clients really are wanting more and

more corporate work,” Falls said. “They wouldlike more in-depth strategy and somebodywho has been on the corporate side and understands what it’s like. So Keith … is atremendous, tremendous gain for us.”

Also last week, Falls Communicationssigned a lease that adds 5,000 square feet toits existing 21,000, Falls said.

— Michelle Park Lazette

Kids use kits to helpadvance 3D printing■ Applied Systems & Technology TransferLLC in Youngstown, which calls itself AST2,wants schools to be able to have access toaffordable, easy-to-fix 3D printers.

Enter the INVENT3D printer, a kit thatstudents can assemble on their own. According to the company’s news releaseabout the new product, the assembledprinters are designed to work with AST2’sSTEM education program.

Jack Scott, president of AST2, said the firstkits are slated for use in summer camps inTexas and Pennsylvania.

But it’s not just the students getting theirhands on such a kit who are learning fromthe experience. The kits themselves are beingmade by students in an after-school programat Choffin Career & Technical Center in theYoungstown city school district. Scott saidfour students are using 3D printers, CNCmachines and laser-cutting machines tomake the parts in the kits and are gettingpaid $13.50 an hour for their work.

Joe Meranto, director of career technicaland adult education at Choffin, said the collaboration has been a “good marriage”

and that the program gives the studentsmaking the kits real-world experience in themanufacturing industry.

— Rachel Abbey McCafferty

Dollar Bank invests ineducated homebuyers■ In its 15th year, a Dollar Bank workshopthat aims to inform mothers who seek mort-gages drew its largest crowd in Clevelandthis March, Dollar Bank executives reportedlast week.

Some 300 people signed up for the Mort-gages for Mothers program at the WolsteinCenter at Cleveland State University onMarch 29, said Dorothy E. Curtis, assistantvice president for community developmentfor Dollar Bank. The event is offered annu-ally in both Cleveland and Pittsburgh, wherethe mutual bank is headquartered.

At this year’s workshop, Curtis said 176participants enrolled in Dollar Bank’s CreditEnhancement Program, a free service thatanalyzes first-time homebuyers’ credit andsets up a strategy for improving their credit.

“We are trying to make sure that we secure the communities in which we servewith well-educated homebuyers,” Curtissaid. “The program is not just to get an indi-vidual in a home. We want to make sure thatthey stay in the home.”

The workshop also is not just for mothers,Curtis noted. A part of Dollar Bank’s Com-munity Reinvestment Act programming, theseminar is open to men and women. It’s tar-geted to single mothers because “we findthat … they are the ones who buy homes theleast,” Curtis said. — Michelle Park Lazette

WHAT’S NEW

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK APRIL 7 - 13

The big story: University Circle Inc. said it’sworking with prominent Cleveland-area devel-opers Mitchell Schneider and Sam Petros tobuild a $130 million residential high-rise on a siteoccupied partially by the Children’s Museum ofCleveland. The project is dubbed “One Univer-sity Circle.” Preliminary plans call for a buildingof 25 to 28 stories with about 280 units rangingin size from 720 square feet to a 4,200 square footpenthouse. Work is expected to begin in summer2015 on the project. University Circle Inc. isworking with the museum to identify anothersite for the institution.

Around the block: Downtown Cleveland’s14-floor Hampton Inn changed hands on April 7for $19.8 million, according to Cuyahoga Countyland records. The buyer is an investor groupcalled “Black Sapphire C Cleveland 2014 Inc.”that was incorporated Jan. 9 in Wilmington, Del.The seller was 1460 Ninth Street Associates Lim-ited Partnership, an affiliate of Raleigh, N.C.-based Concord Hospitality Enterprises Inc., ahotel development, ownership and manage-ment firm that was based in Cleveland until2003. The 194-room hotel is on the northwestcorner of Superior Avenue and East Ninth Street.

Sharing expertise: The Cleveland Clinic’sBariatric and Metabolic Institute will lend its expertise to Doctors Hospital at Renaissance, a530-bed physician-owned health system in Edinburg, Texas. The affiliation is the first for the Clinic’s bariatric program. The Clinic’srenowned heart and vascular program has affil-iated with 22 programs across the country, withthe most recent being Susquehanna Health, afour-hospital system in north central Pennsylva-nia. In these arrangements, the Clinic works as aconsultant of sorts and collaborates with part-nering institutions on complex medical casesand shares its research, care protocols and othertools.

Quite a jump: It turns out the Maltz familywas more generous than originally believed. Milton Maltz and his wife, Tamar, announcedApril 9 that they and their family’s foundationcontributed $30 million in total toward CaseWestern Reserve University’s $64 million per-forming arts center project. The Maltz Founda-tion originally agreed to commit only $12 milliontoward the project of transforming the historicTemple-Tifereth Israel off University Circle intoa state-of-the art performing arts space.

Next in line: Progressive Corp. said chief financial officer Brian Domeck intends to retireafter the company’s annual meeting May 2015and will be succeeded by John Sauerland, whocurrently is president of the auto insurer’s Personal Lines Group. Domeck will continue toserve as CFO through early 2015, when the May-field Village-based company’s 2014 financialstatements will be completed and certified.

On your radar screen: The 39th ClevelandInternational Film Festival presented by DollarBank will be held March 18 -29, 2015, at TowerCity Cinemas and select neighborhood screen-ing locations. The film festival has grown by178% since 2003, and it welcomed 97,804 filmenthusiasts this year. More than 350 films origi-nating from more than 60 countries are show-cased during the annual spring arts tradition.This is the festival’s 38th year.

Talk about it: Case Western Reserve Univer-sity announced it will assume management ofTown Hall of Cleveland, which bills itself as thenation’s longest consecutive-running speakerseries. The programming will move from Play-houseSquare to Case Western Reserve’s newTinkham Veale University Center, which opensin August.


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

Do tell■ Big-data companies know a lot aboutcustomers, but they’d like to know evenmore. That’s the thrust of a Wall Street Jour-nal story that included information from aCleveland Clinic spinoff, Explorys.

The Journal said big-data firms nation-wide “already collect loads of informationabout their customers and suppliers — butthat has only whet their appetites for evenmore. Some retailers want to see what cus-tomers buy from other stores, for instance,while health providers want a real-timerundown on their patients’ vital stats to getan early warning about potential healthproblems.”

The section on Explorys, which createssoftware for health care companies to store,access and make sense of their data, washeadlined, “Taking Patients’ Pulse.”

Explorys “holds a huge trove of clinical,financial and operational information —but would like access to data about patientsat home, such as their current blood-sugarand oxygen levels, weight, heart rates andrespiratory health,” according to the story.

Set apart■ Cleveland and Akron are among the U.S.cities where “the rich are most segregatedfrom everyone else,” according to an analysison TheAtlanticCities.com.

Richard Florida wrote the piece based onhis Martin Prosperity Institute colleagueCharlotta Mellander’s use of an “index of dissimilarity” developed by sociologistsDouglas Massey and Nancy Denton. The index, he wrote, “compares the distribution

of a selected group of people with all othersin that location. The more evenly distributedthe wealthy are across tracts compared to therest of the population, the lower the level ofsegregation (the Dissimilarity Index rangesfrom 0 to 1, where 0 reflects no segregationand 1 reflects complete segregation).”

Tables in the analysis show the 10 largemetro areas — those with 1 million or morepeople — where the wealthy (defined ashouseholds with annual income of $200,000or more) are the most and least segregatedfrom other economic groups.

Cleveland-Elyria-Mentor ranked No. 5 onthe list of most geographically segregatedmetros, with a Dissimilarity Index of 0.56.No. 1 on that list is Memphis, at 0.582. Look-ing at all the United States’ 350-plus metros,Cleveland is No. 13 overall in income isola-tion, and Akron is No. 18.

Real progress■ The number of premature births and chil-dren’s hospital visits for asthma “droppedsignificantly in parts of the United States,Canada, and Europe barely a year after theyenacted smoking bans,” The New YorkTimes reported in a story that quoted aMetroHealth doctor.

An analysis reported in The Lancet “com-bined the results of 11 studies encompass-ing more than 2.5 million births and nearly250,000 asthma attacks,” The Times said.“Experts called it the best evidence to datethat legislation creating smoke-free publicplaces and workplaces improves children’shealth, even in the womb.”

The results are “very impressive,” said Dr.Brian Mercer, chairman of obstetrics andgynecology at MetroHealth Medical Center,who noted that half a million American babies are born prematurely each year.

“If you could prevent 10 percent, you’dprevent nearly 50,000 premature babies inthe U.S. alone each year,” said Mercer, whowas not involved in the study.

Mabee


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