crain's cleveland business

By TIMOTHY [email protected]

A changing of the guard is instore for the leadership at the hard-pressed, 175-year-old MetroHealthSystem, and Cuyahoga County Executive Ed FitzGerald is likely tohave his fingerprints all over thetransition.

Over the next two years, Mr.FitzGerald plans to replace threemembers whose terms are expiringon the 10-member board of trusteesfor the county-subsidized healthsystem. Those appointments wouldbe on top of the two picks Mr.FitzGerald has made since takingoffice last year.

Mr. FitzGerald also expects that

he and other county officials willbe, as he put it in an interview withCrain’s Cleveland Business, “con-sultative” partners in the nation-wide search for the replacement forMetroHealth CEO Mark Moran,who announced last month hewould step down from the post oncethe board named his successor.

$2.00/JANUARY 9 - 15, 2012

Entire contents © 2012 by Crain Communications Inc.

Vol. 33, No. 2

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SMALL BUSINESSExploring the benefits and potential pitfalls ofbusiness partnerships ■■ 3PLUS: GETTING AHEAD ■■ TAX TIPS ■■ ADVISER ■■ & MORE

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FitzGerald to put his stamp on MetroHealthCounty boss faces new board appointments, CEO choice head on WHO’S COMING AND GOING?

A look at MetroHealth’s trusteesand when their terms expire:

■■ Polly H. ClemoAppointed: 1995/Ends: 2015■■ Ronald Fountain, chairmanAppointed: 1997/Ends: 2013■■ William Gaskill, vice chairmanAppointed: 1980/Ends: 2012■■ Thomas M. McDonaldAppointed: 2008/Ends: 2014■■ Terry Monnolly

Appointed: 2005/Ends: 2016■■ John M. MossAppointed: 2010/Ends: 2016■■ Donna Kelly RegoAppointed: 1983/Ends: 2013■■ J. B. SilversAppointed: 2011/Ends: 2017■■ Charles Spain Jr.Appointed: 1990/Ends: 2014■■ Vanessa L. WhitingAppointed: 2011/Ends: 2017

Former JumpStartaide joins chorusof nonprofit critics

Westlake may change water works Cleveland is butting heads with the western suburb as it

considers leaving the city’s water system. PAGE 3ALSO:■ Energizer’s local unit is making more

consumer products. PAGE 6■ Cohen & Co. takes more space for

growth. PAGE 7

INSIDE

THE OTHER

MR. FIX-IT

JANET CENTURY PHOTOS

ABOVE: Karl West, director of the Cleveland Clinic’s Medical Device Solutions unit, runs the hospital system’s mechanical prototype shop. BELOW: Mr. West holds an aortic valve with calcification created by the shop’s Connex 3D printer.

Out of view of patients,docs, Clinic shop allowsfor tool rehab, new idea

development

By DAN [email protected]

Surgeons and other doctors who perform miracles get most of thelimelight at the Cleveland Clinic,but in the basement of its main

campus, a crew of machinists, fabricators,engineers and researchers does impressivework, too — though mostly on steel andplastic, as well as the occasional humanbody part.

Unknown to most, the world-renownedhospital and research institution has a fullmachine shop and other manufacturing-related rooms housed below its medicalbuildings near University Circle. The shopgives the Clinic the ability not only tomake, modify and repair tools for its own

See FIX Page 8

See METRO Page 17

See JUMPSTART Page 4

AxioMed co-founder takes issuewith group’s board makeup, staffingBy CHUCK [email protected]

A former employee of JumpStart Inc. has joined thecritics of JumpStart.

Chuck Birchall Jr., co-founder of AxioMed Spine Corp.of Garfield Heights, last week sentJumpStart a six-page-long list of criticisms and recommendations regarding how the Cleveland-basednonprofit that assists and invests inyoung companies could save moneyand provide better services to entre-preneurs.

Mr. Birchall, who spent more thanthree years as an entrepreneur-in-residence at JumpStart before the

nonprofit eliminated his position about a year ago, is oneof a handful of local entrepreneurs who have criticizedJumpStart publicly over the past year. However, he is the

Birchall

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The University of Akron isn’t going to let a steep pile ofdebt stop the school fromcontinuing to develop its

campus and the blighted areas surrounding it, as it plans to useother people’s money to make cap-ital investments happen.

The university has dabbled in thepublic-private partnership arena inthe past to finance capital projects,but administrators expect the numberof such deals to ramp up in coming

years given the school’s lofty debtload — about $425 million — and itsdesire to continue to build to accom-modate further enrollment growth.

“We don’t want to lose that momentum, and we have otherstrying to catch us because they seeour formula is working,” said TedCurtis, the university’s vice presidentfor capital planning and facilities.“There’s a point in borrowing wherewe still have the demand, but you runout of funds, so now we’re leaningheavily toward public-private part-nerships.”

JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“The (Cleveland)Clinic is really pushingthe envelope as far asfolding in prototypedevelopment andproduct developmentactivities into theircommercialization effort.”— Mark Coticchia, founder, Red Wind Innovations. Page One

FEATURES Classified .....................18Editorial .......................10Going Places ................12List: Northeast Ohio’s

Top SBA Lenders ......16Personal View...............10

Pressurerising inWestlakewater warCleveland disputingwest ’burb’s estimateon costliness of exitBy JAY [email protected]

The city of Cleveland is raising thestakes as it watches the city of Westlakemove to disconnect its water hose fromCleveland’s spigot and re-connect toAvon Lake.

Cleveland is casting doubt on the financial and engineering estimates thewestern suburb is relying on to substan-tiate its plan to switch water suppliers.It’s also raising legal issues that, if sustained, would add substantially toWestlake’s cost of a move.

A departure would be a blow toCleveland’s Division of Water, whichhas excess capacity in its system and isworking to overcome critical customerservice failures that angered public officials and residents across the 70communities it serves.

Westlake has been mulling a switchsince at least 2008, when the city ofCleveland announced a four-year rateincrease phase-in that would boost thecost of water 35%. In addition, its resi-dents have complained about botchedbilling and poor repair service.

In a telephone interview last Wednes-day, Jan. 4, Westlake Mayor DennisClough said his city also would like water mains replaced or rehabilitatedwhen Westlake makes major repairs ofstreets. He’s annoyed when a freshly repaired street is torn up after a waterline breaks. Cleveland’s Division of Water, like most utilities, is reluctant toreplace equipment before the end of itsuseful life.

The tentative plan is for Westlake tobuy water wholesale from Avon Lake.Westlake would handle billing andmaintenance on its own.

Westlake’s consultant, HNTB Corp.of Kansas City, Mo., hasn’t offered anew rate schedule for Westlake’s sale ofAvon Lake water to its residents. But whenasked if maintaining its own water distribution system would result in rates higher than what Cleveland nowcharges, Mayor Clough said, “We don’tanticipate that.”

Westlake is relying on its consultant’s

See WATER Page 6

See DEBT Page 7

DEVELOPMENT,DESPITE DEBT

THE UNIVERSITY OF AKRON

The University of Akron plans to extend its public-private partnership strategy for upgrading its residence halls —like it did at its Exchange Street project, above — to its academic buildings. The interior of Leigh Hall (below), a 1940s-era building, already has been renovated with state-of-the-art classrooms and equipment.

In lieu of borrowing, University of Akron hopes to expand recentspate of public-private deals to continue on-campus momentum

Industrialreal estatevacanciesinch downOffice market, though,sees slight uptickBy STAN [email protected]

Flat.Despite big events that ranged

from the sale of the closed Chryslerstamping plant in Twinsburg tocompanies gobbling up large chunksof space at the 200 Public Square office building in downtown Cleve-land, that one word sums up the con-dition of Northeast Ohio’s industrialand office markets in 2011 versus2010.

Such is the picture gained fromGrubb & Ellis Co.’s just-released report on those two markets.

For the first time in three years,the report shows, vacancy declined inNortheast Ohio’s industrial market,to 11.9% as of year-end 2011 from12.8% at the end of 2010. By contrast,the vacancy rate of the office marketinched upward, to 21.9% at the endof 2011 from 21.6% a year earlier.

Much of the progress on the industrial front camefrom a shrinkage ofthe market due todemolition of mas-sive old factories.That space was allempty, so it ac-

counted for a sizable amount of the7% drop in vacant industrial space,to 36 million square feet at the end of2011 from 39 million a year earlier.

However, due to the industrialmarket’s massive size, Grubb & Ellisreports the amount of rentable industrial space was down a littleless than 1%, to 301 million squarefeet from 303 million.

A pickup in industrial propertytransactions last year along with thesmaller size of the market combinedto reduce the vacancy rate, said TerryCoyne, executive vice president atGrubb & Ellis’ Cleveland office.

“Manufacturing is still strong here,”Mr. Coyne said, citing a plethora ofbuildings in the region bought bymanufacturers to expand.

“We’re not back to normal, butgetting close to it,” he said. “Banks are making real estate loans andcompeting for real estate dealsagain. Liquidity is like oxygen in this

See VACANCIES Page 16

“That’s really stronggrowth in this profession. Virtually all of that growth is internal growth. Wedidn’t do any big acquisitions.”— Randy Myeroff, presidentand CEO, Cohen & Co. Page 7

“They fail to considerwhat happens whenthe honeymoon isover.”— Frank Manning, attorney,Manning & Manning Co. LPA inMentor. Page 13

“People really do getstuck a lot. … Theydon’t see what else ispossible.”— Sunny K. Lurie, CEO ofBeachwood-based Fast FocusCareers. Page 14 CORRECTION

The Dec. 19 list of Largest PrivateSchools reported incorrect high schoolenrollment numbers for HawkenSchool and Cuyahoga Valley Christ-ian Academy. The correct enrollmentnumbers are 429 and 645, respectively.

INSIDE: Acloser lookat Grubb andEllis statistics.Page 16


44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012

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first to have worked for JumpStart,which will receive from the state ofOhio 43% of its $13.8 million budgetfor the fiscal year that ends nextJune 30.

Mr. Birchall’s recommendationsecho criticisms of JumpStart thatthree area entrepreneurs made lastApril in a lengthy series of emailsthey forwarded to business leadersand politicians throughout North-east Ohio. For instance, Mr. Birchallsaid JumpStart should place moretechnology entrepreneurs on itsboard, spend less on marketing andon salaries for its management team,and revamp the way it measures itseconomic impact in Northeast Ohio.

Public criticism — which sinceApril has continued on blogs and inthe comment sections of online newsstories, often in the form of anony-mous posts — hasn’t convinced Jump-Start CEO Ray Leach to make signif-icant changes to the organization.

Mr. Leach said one reason why isbecause none of JumpStart’s finan-cial backers, including the state ofOhio, have suggested it changecourse. And the funders, he said,are making informed decisions.

According to Mr. Leach, Jump-Start regularly submits to the statethe number of hours its employeesspend working with young tech-nology companies in the region, thenumber of dollars the group has invested in area startups and thenumber of new dollars — be they inthe form of sales, investments orgrants — that those companies bringin after working with the nonprofit.

Similar organizations that receivemoney from Ohio’s Third Frontiereconomic development programsubmit the same information to thestate. The data play a big role inhow private consultants rank grantrequests those organizations sub-mit to the Third Frontier, Mr. Leachsaid.

“When scored against everyoneelse in the state, we rank No. 1 andhave for the last five years,” he said.

Board makeup targetedJumpStart encouraged Mr. Birchall

to leave because it was planning tohave an affiliated organization, theYoungstown Business Incubator,provide more services to informa-tion technology companies on behalfof the nonprofit, Mr. Leach said.

Mr. Birchall, who worked with ITcompanies at JumpStart, said hedoes not hold a grudge against theorganization, adding that the groupeven helped him look for other opportunities. He acknowledges inhis document that JumpStart alsoturned him down last year when heapplied to receive an investment forSports Director Online LLC , a soft-ware company he started.

Besides helping start AxioMed,Mr. Birchall was an executive atspinal implant maker AcroMed Corp.of Cleveland, which was acquiredby DePuy Inc. for $325 million in1998. He also served as a part-timechief financial officer for Cleveland-based eBlueprint Holdings LLC,helping sell the electronic blueprintcompany to American ReprographicsCo. for an undisclosed price in 2007.

Mr. Birchall said if he could makeone change at JumpStart he wouldadd to its board more technologyentrepreneurs, early stage tech in-vestors and people with expertise inthe fields that are the group’s focus.

“A good, solid board would addressall the other issues,” he said.

Mr. Leach and JumpStart chairmanDoug Weintraub, both of whomhave started and sold companies oftheir own, agree that only a few ofthe 21 people on JumpStart’s boardhave started technology companies.There are a total of 10 entrepre-neurs on the board, when includingthose who have formed companiesin other industries. Three boardmembers are investors and eightare considered “functional experts”who provide advice in areas such asfinance, accounting and communityengagement, according to informa-tion from the organization.

“People have different interpre-tations on what it is to be an entre-preneur,” said Mr. Weintraub,adding that JumpStart also wantsthe board to reflect the broaderNortheast Ohio community.

Many tech entrepreneurs don’twant to join the board because theyare too busy running businesses orbecause doing so would preventthem from receiving money fromJumpStart, Mr. Leach said.

Now’s the timeMr. Birchall said JumpStart has

too many layers of management andspends too much on marketing. Theorganization has 46 employees, including seven who work mainlyoutside the region as part of a busi-ness development effort supportedby federal grants. JumpStart has sixmarketing positions. One employeeworks in marketing part time.

“They have a bigger marketingteam than (AcroMed) had for a $100million company,” Mr. Birchall said.

Mr. Leach says JumpStart hasgrown only because the state and itsother funders have asked it to domore, which includes getting the wordout about JumpStart, affiliated groupsthat provide entrepreneurial servicesand the companies they serve.

JumpStart’s responsibilities maygrow again this year: The ThirdFrontier program has increased byabout 30% the amount of money itwill award through its Entrepre-neurial Signature Program, whichfunds programs for entrepreneurs.JumpStart, the hub through whichall Northeast Ohio organizations re-ceive that money, is putting togethera grant application this month tosecure money from that program.

And if anyone knows of a betterway to serve entrepreneurs trying to start technology companies, they’rewelcome to become one of themany groups that will join Jump-Start’s application, Mr. Leach said.

“If they have an idea … if therewas ever a time to bring it, it’s now,”he said. ■

JumpStart: Board needs tech expertisecontinued from PAGE 3

Critic(s) works hard to make pointsBy CHUCK [email protected]

If you’ve ever read negative online comments about JumpStartInc., Mike Burkons may have hadsomething to do with it.

Mr. Burkons, a local entrepreneurand an outspoken critic of Jump-Start, is not the only member of theregion’s business community tocriticize the nonprofit online, buthe easily is one of the most active.

Not all the comments are underhis own name, however. Mr. Burkonshas admitted that he has anony-mously posted critical commentson CrainsCleveland.com, Cleveland.com and Tech.MN, a technologyblog in Minnesota, where Jump-Start is helping economic develop-ment groups create a plan to boostentrepreneurship in that region.

He occasionally has used multipleanonymous names to comment ona single news story or blog item. In

those posts, he sometimes wouldwrite that he agreed with previouscomments that he made under another name, making it look likemultiple people held the samepoint of view. All three websiteshave removed at least some of Mr.Burkons’ comments.

Mr. Burkons also recruits othercritics of JumpStart and encouragesthem to post comments on blogs andnews stories about the organiza-tion, which gets nearly half its moneyfrom the state of Ohio. Some of thosecomments are anonymous, too.

Mr. Burkons — who foundedCharitee Golf LLC, a small businessin Shaker Heights that provides avideo monitoring service designedto help golf courses award prizes topeople who get a hole-in-one orwin a closest-to-the-pin contest —said he would respond to the postingissue only if Crain’s agreed to include his entire quote. Here it is:

“As for posting under different

names, I guess my poor writing iseasy to spot. In some instances it isbecause Cleveland.com will takedown a post and if written under adifferent name it will stay up. Othertimes it is to keep some anonymity.The group we are trying to shedtransparency on has a state-funded$13 million budget allotting muchof it to support a large number ofmarketing and PR professionals aswell as interns.

“Jumpstart’s marketing and PR efforts used to be larger until thosepesky anonymous bloggers publiclyquestioned if this was an effectiveuse of our tax dollars. Here is a solution … if Jumpstart gives us half ofthe funds used to support their mar-keting and PR efforts, I will alwayspost under Mike Burkons. With somany resources dedicated towardsdefending and promoting them-selves one would think they wouldaddress the content of the criticisminstead of the source?” ■


estimate that it would cost between$17 million and $19 million toswitch water service from Clevelandto Avon Lake Municipal Utilities.

However, Cleveland hired its ownconsultant, Arcadis US, an arm ofDutch consulting firm Arcadis NV,and the results were quite different.Arcadis came back with a cost estimate of at least $47 million tomake the switch and an even higherestimate if Cleveland were to arguesuccessfully in court its interpreta-tion of the 21-year-old legal agree-ment between the two cities.

“The more we looked at this, themore we were concerned about the (switch of service Westlake) proposed,” said Cleveland chief operating officer Darnell Brown. Hesaid Westlake’s proposed plan “isfraught with a number of risks to thecustomer base it would serve.”

The biggest difference betweenthe HNTB and Arcadis analyses arethe cost for a water storage systemand for the cost to reroute waterlines to suburbs around Westlake.HNTB estimated those costs at $2.1million and $3.7 million, respectively;Arcadis put them, respectively, at$11.2 million and $15.6 million.

Those higher figures, Mr. Brownsaid, would result in Westlake waterrates at least 18% higher than therate Cleveland now charges West-lake residents.

While the two consultant studiesanalyze costs and engineering options, part of the dispute stemsfrom the differing expectations ofboth sides. Westlake is an affluentcommunity that expects premiumservices. Cleveland’s Division ofWater serves 1.5 million customersin 70 communities and must providea service that is affordable to all.

Going against the flowWestlake’s proposed move would

go against the tide of a nationaltrend, and mayors in neighboringcities are watching this rift to seehow to best serve their own residents.

Neither Michael Arceneaux, deputyexecutive director of the Washing-ton, D.C.-based Association of Metropolitan Water Agencies, norThomas Laughlin, editor of Water-works magazine, could recall a similar situation. Both said thetrend in the water business is for aconsolidation into larger systems,not away from them.

“I know instances of smaller sys-tems connecting to larger suppliers,”Mr. Arceneaux said. “I’ve not heardof going in the other direction.”

The mayor of North Olmsted,Kevin Kennedy, is watching the trailWestlake is blazing so he can decideif his community should follow suit.In 2008, North Olmsted considereda feasibility study for a switch of

water suppliers but backed off anddecided to watch Westlake’s effort.Now, he says, if Westlake makes themove, “We could soon follow. We’lllook at any option.”

Bay Village Mayor Debbie Suther-land rejects a switch for her community but is concerned about potential added costs for her suburb’splumbing should Westlake rerouteits pipes, because the two cities’ water pipes are a maze of intercon-nections.

“I am not interested in making amove,” she said. “Cleveland is notgoing to let them get out (without alegal fight). In this environment, Idon’t see an overall benefit to thecity of Bay Village.”

Common ground?But there might be an option that

both sides might find acceptable.“I would hope that the city of

Westlake would be able to enter intoa wholesale purchase agreementwith Cleveland,” said Westlake citycouncilman Edward Hack. That way,Westlake would go ahead and set upits own water department to handlebilling and maintenance but buy itswater wholesale from Cleveland.

Mr. Brown has said Clevelandmight agree to that setup.

That solution would avoid a costlylegal fight over exactly what costsWestlake would be responsible for ifit were to leave the Cleveland system.

The two cities are interpretingdifferently a clause in their serviceagreement that may or may not require five years’ notice beforeWestlake can terminate the agree-ment.

Mr. Brown said the five-year notice clause continues in force;Mayor Clough said the city believesthe five-year notification require-ment ended 10 years after the 1990water service agreement was signed.

Cleveland also argues that Westlake would be obligated to paymillions of dollars, as much as $39million, for what it calls strandedcosts — the cost of water mains andpipes paid for with bonded debt thathas not yet been fully recovered.

Bay Village’s Mayor Sutherland iswatching that aspect as well.

“I think there would be somecosts,” she said. “Why should we, BayVillage, have to pay for the installa-tion of (new lines) if Westlake wantsto pull out?” ■

“I know instances ofsmaller systems con-necting to larger suppliers.I’ve not heard of going inthe other direction.” – Michael Arceneaux, deputy executive director, MetropolitanWater Agencies

why Energizer, which alreadymakes LED flashlights, decidedto start developing more prod-ucts that use the technology.

LEDs, which are essentiallycomputer chips that emit light,are more expensive than incandescent bulbs, but theyalso are more efficient and lastlonger.

They are more versatile aswell. For instance, Energizer’saccent light looks like a new-age lamp that uses four rectan-gular plastic panels instead of afabric lampshade. However,there’s no bulb in the middle.Instead, light emits from thepanels themselves. The usercan turn the light on or off andcan control its intensity bytouching the base.

“LED technology has enabledus to get into form factors and product designs that we neverthought of 10 years ago,” Mr. Mazzolasaid.

The initiative also gives the com-pany the chance to capitalize on thegrowing demand for LED products.That demand is driven in part by theU.S. government and other coun-tries that are passing regulationslimiting sales of incandescent bulbs,said Ms. Bannister, who is leadingthe new product initiative.

Ms. Bannister said the company is“very satisfied” with sales of the newlineup so far, though she declined togive sales figures.

Energizer plans to learn from thisfirst product launch and will expandits lineup of stationary lighting prod-ucts “based on what works,” Ms.Bannister said.

“We have no interest in gettinginto this and getting out of it quickly,”she said. ■


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Energizer Westlake unit sees the light

By CHUCK [email protected]

The lighting products divi-sion of Energizer Holdings Inc.has moved beyond flashlights.

The big battery maker sincelast August has released severalproducts designed to give thecompany a foothold in a newmarket: lights designed to stayin one place.

So far, the St. Louis-basedcompany has released a desklamp, an under-cabinet light,an accent light, two electriccandles and a nightlight. Eachone was developed by the com-pany’s research and developmentcenter in Westlake, which employsabout 400 people.

The lineup of consumer productsis just the beginning of Energizer’sforay into the stationary lightingmarket, according to Tony Mazzola,director of technology for Energizer’slighting products division.

“You will see more,” said Mr. Mazzola, who works in Westlake.

The move represents a big changefor Energizer. The company —which can trace its roots to 1896 —commercialized the world’s firstflashlight more than 100 years agoand has sold them ever since.

It wasn’t until 2009, however, thatEnergizer released its first stationarylighting products. First came a seriesof fixtures that ran on rechargeablebatteries, which are no longer beingmanufactured but helped the com-pany “test the waters” in the space,said Anne Bannister, general manager

of strategic ventures at Energizer. Thecompany followed that up in 2010 byreleasing through Target a nightlightequipped with a motion sensor.

The six products that Energizerjust released, which includes a dif-ferent nightlight, are available exclu-sively through Amazon.com, thoughthe company aims to sell them instores eventually, Mr. Mazzola said.They range in price from $15 to $80.

Each one uses light-emitting diodetechnology, which has improved andbecome more affordable over thepast several years. That’s a big reason

MARC GOLUB

Energizer’s lighting products divisionin Westlake is expanding its productline beyond its traditional line of flash-lights. “LED technology has enabled usto get into form factors and productdesigns that we never thought of 10years ago,” said director of technologyTony Mazzola.

Company expandsconsumer products

Water: Cost reportsfrom consultants differcontinued from PAGE 3

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Debt: Rating agencies keepwatchful eye on finances


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Until now, public-private partner-ships involving the university hadbeen reserved for student housing.The university, for example, in 2004developed a $22 million residentialcomplex with Signet Enterprises, anAkron-based developer. Likewise,Signet is building a $35 million, 520-bed residence hall on 1.2 acres ofUniversity of Akron property onGrant Street.

This time, however, the universityis courting developers to create newacademic buildings because severalof the school’s current teaching facil-ities are nearing the end of their useful lives — a problem facing manyof the region’s colleges and universi-ties. Mr. Curtis said such buildingswould be financed and constructedby outside developers on Universityof Akron property and leased back tothe school over 20 or 30 years.

Though he couldn’t provide de-tails about the prospective partner-ships, Mr. Curtis said such arrange-ments are the best way to continuemuscling up the urban campus toattract students without risking theuniversity’s fiscal health.

When Mr. Curtis arrived in 1998,enrollment at the University of Akronhovered around 21,000. Last fall, enrollment was 29,699 — an increasehe attributes to the campus’s dra-matic facelift over the last decade.

“What I like to say is that we’vedeveloped a new architectural wel-come mat,” Mr. Curtis said about theschool’s capital investments.

A decade of debtUnder the watch of president Luis

Proenza, the University of Akronhas added 21 new buildings, under-taken 18 major additions or renova-tions and created 34 acres of greenspace — all at a staggering cost of$626 million.

While those lofty investments havetransformed the campus, they’ve alsoplaced the university among the mostdebt-laden in the state, according tothe most recent figures availablefrom the Ohio Board of Regents.

The university’s debt load is themain driver in the school’s pursuitof creative arrangements with devel-opers to continue the campus over-haul because, as Dr. Proenza put it,there’s still plenty to be done.

“I don’t see a point where we’llstand still,” he said, “but how fastwe’ll develop (new buildings) de-pends on the rate of growth for theuniversity.”

The school’s plan to revamp someof its academic buildings via leasearrangements with private developersis a far cry from that of its main rival,Kent State University, which lookedto finance the overhaul of a numberof its academic buildings through a$210 million bond sale that wouldbe repaid by a slew of student fees.That bond sale, which has beenstonewalled by state lawmakerswho are concerned about rising col-lege costs for students, would haveadded significantly to Kent State’sdebt load, which sits at about $326million.

Though the University of Akron isshying away from the bond marketfor now, it’s still keeping a watchfuleye on its debt obligations. So isMoody’s Investors Service, which hascautioned the University of Akron inrecent years about its mounting debt.Last spring, the credit rating agencynoted that the chances of a rating up-grade were unlikely in the near termand that more borrowing could pushthe university’s rating downward.

The old double-edged swordWhile Fitch Ratings assigned the

University of Akron a stable outlook,the school is the only public univer-sity rated by Moody’s that carries anegative outlook. The University ofCincinnati and Ohio State University,the two universities carrying moredebt than the University of Akron,both are assigned stable outlooks.

Also, the Ohio Board of Regents,which assigns a score determiningthe fiscal health of each publichigher education institution, assignedthe university one of the lowestscores among four-year colleges anduniversities — a 3.3 out of 5 for fis-cal 2010. That score ties the schoolwith the University of Cincinnatiand makes Central State Universityin Wilberforce as the only institu-tion worse off than Akron.

State officials still are hammeringout the final numbers for fiscal 2011,which ended June 30, but Universityof Akron officials expect their fiscalhealth score to rise modestly to 3.6.

“We are on the high end relative toother universities in Ohio” in terms ofhow much debt the school carries,said David Cummins, the Universityof Akron vice president for financeand administration and chief finan-cial officer. “You have to be careful.It’s a double-edged sword. You canuse debt in a way to significantlytransform the campus, but you haveto manage it well.” ■

continued from PAGE 3

To house new hires, Cohen to expand at U.S. Bank buildingAccounting firm applies new ‘touch’; revenue growth outpaces othersBy MICHELLE [email protected]

Cohen & Co. needed more spacebefore its current growth spurt.

By next June, the regional accounting firm expects to add 45 to50 employees, which would be anincrease of about 20% from its existingstaff of 230, said president and CEORandy Myeroff.

The firm already has extended offers to the new hires, and it’s pos-sible another five to 10 will be hiredby June, too, Mr. Myeroff said.

To handle the newstaffers and to better accom-modate current employees— some of whom areworking in cubicles, butwould have offices if therewas space — Cohen & Co.is finalizing an agreementfor more space at its Cleve-land headquarters in theU.S. Bank building. The plan is tooccupy a total of 38,000 square feet,up about 65% from 23,000 squarefeet at present, Mr. Myeroff said.

Renovations to the additional space,

and furniture for it, are pro-jected to cost about $1.5 million. The company’scurrent lease expires in2013, but the firm will commit to its downtownlocation for another 10years, Mr. Myeroff said.

Cohen executives expectto conclude the current

fiscal year, which ends Jan. 31, 2012,with revenues 14% higher than thosein the previous fiscal year. That growthis evenly divided among the firm’s tax,attest and consulting services.

“That’s really strong growth in thisprofession,” he said. “Virtually all ofthat growth is internal growth. Wedidn’t do any big acquisitions.”

‘You guys are everywhere’Mr. Myeroff said Cohen positioned

itself for the growth it’s posting todayvia a “culture” instituted seven or eightyears ago. He said the firm began requiring all its employees to have acertain number of “touches,” whichrange from meetings with clients towriting an article and public speaking.

“The growth we see today is reallya result of that discipline,” Mr. Myeroffsaid. “It’s a result of all of our peoplebeing committed in terms of raisingthe bar. We have been told more

times in the past two or three years,‘You guys are everywhere.’”

Also, the firm four or five yearsago moved away from exclusivelycharging by the hour, improving clientsatisfaction and affording the firm acompetitive advantage when it bids fornew work, Mr. Myeroff said.

Year-over-year revenue growth of14% is pretty exceptional, saidClarke Price, president and CEO ofThe Ohio Society of CPAs in Dublin.

“That’s a growth rate that is out-stripping the majority of firms,” Mr.Price said. “A lot of firms are sayingthey’ve had very good years, but thereare also a lot of firms that are saying,‘Boy, it’s really tough out there.’”

Mr. Price doesn’t discount theimpact a strategy requiring everyoneto have “touches” can have.

“This is a highly competitivebusiness and a very difficult envi-ronment and a firm that says, ‘Weare going to reinforce to our clientsand others the personality of ourfirm,’ I think (that) is a very strongmarketing strategy that could leadto that sort of growth,” he said.

No plans to supersizeNot all of Cohen’s growth has

come from existing operations.Cohen in November opened an

office in Milwaukee, bringing its total offices to nine, and last Februaryacquired The Lipson Group Inc., a

Cleveland firm focused on tax, financial and estate planning for affluent families, in a deal thatadded a couple people and a “littlebusiness,” Mr. Myeroff said.

He is confident Cohen will makemore than one acquisition over thenext several years.

“We think that there are some greatfirms in the region where the mathwill be one plus one will be some-thing much larger than 2,” he said.

Is the aim to build Cohen into asuper-regional firm — a firm with1,000 or more employees?

“No, no, no, absolutely not,” Mr.Myeroff said. “We love servicing themiddle market. We love servicingprivate companies.”

About 75% of the company’s newhires are young professionals, while25% are experienced lateral hires,including Pete Constantino, who recently joined Cohen from Ciuni &Panichi, a smaller firm where heworked for more than 25 years.

Asked why he joined Cohen, Mr.Constantino said, “It’s just gettingharder and harder for smaller firmsto keep adding services. A lot of theclients I was dealing with were grow-ing, and I could see they neededadded services.”

There’s more specialization at Cohen, he said, and its Florida officesafford him proximity to clients wholive there part time or year round. ■

Myeroff



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doctors, but also to take doctors’ideas and turn them into new med-ical devices.

“We are a design group that inte-grates and works with the physiciansto develop their ideas — and notjust physicians, but anyone withinthe Clinic,” said Karl West, directorof the Clinic’s Medical Device Solu-tions unit.

For example, a Clinic surgeon recently came up with an idea for anew stent that could be used inheart surgery. Taking the technicalequivalent of a cocktail-napkin design, Mr. West and his staff turnedit into three-dimensional drawingsand, eventually, a stent that theClinic can use internally and possi-bly can market to other hospitalsand surgeons, Mr. West said.

Over in the machine shop, machin-ists such as Anthony Shawan workon prototypes for new devices,though they also do more mundanework that is just as critical to patientoutcomes, if not more so.

“Sometimes, things break duringsurgery,” Mr. Shawan said. On morethan one occasion, Mr. Shawan said,he has repaired or altered a surgeon’s tool while an operationwas under way — a task that requires a faster turnaround thaneven the most efficient automakersdemand of their suppliers.

“We’ve done stuff in less thanhalf an hour, including machiningand sterilization. We’re literallyrunning,” Mr. Shawan said.

A model of efficiencyAll told, 32 people work in Mr.

West’s unit. They’re a mix of seasoned machine shop veteransand tech-savvy, fresh-faced collegegraduates, and they perform anequally diverse set of tasks.

In one room, subjects with reflec-tive markers at strategic points ontheir bodies provide data for a “gaitlab,” where computers take the information and technicians trackand model a patient’s movements.Using computer modeling, the labworks with patients suffering fromneurological conditions or withamputees. It not only helps to research conditions such as multiple

sclerosis but also to design betterprosthetic devices. The modelingsystem even conducts analyses onthe throwing motion of baseballpitchers and golfers’ swings.

In another lab, researchers andengineers work with a special metal called Nitinol, a relatively newalloy that has amazing abilities whenit comes to elasticity and shapememory. The metal is non-reactivewith body tissues and extremelyflexible, but it’s also “springy,” Clinicresearchers say, and that qualitymakes it perfect for devices such ascardiovascular stents, in which it’sused to make a flexible frame tohold open blood vessels.

Next door, a computer bio-modeling lab would look familiar toanyone who has used a computer-aided design (CAD) system, exceptthe Clinic uses its system to work withmore than just metal and plastic.

For instance, technicians canwork up a three-dimensional modelof a human heart, complete withthe plaque that’s found in the bloodvessels via medical imaging tech-nology. Mr. West said they then canprint out their model using a 3-Dprinter. The result is a life-sizemodel of a patient’s heart, with theplaque a surgeon needs to removehighlighted in a different color thanthe healthy tissue.

“They know it, because they seeit in 3-D before they even go in (forsurgery),” Mr. West said.

Parts put to workIn another section of the unit,

researchers test artificial joints,spinal implants and other mechan-ical devices that go into the humanbody. Those devices must be testedthe same way auto parts are tested,which means they must be putthrough wear and tear as close aspossible to what they would be sub-jected to in the real world.

In the realm of prosthetics andimplants, such work is messy.

Technicians spend a good deal oftheir time preparing real humanfeet, shoulders and other cadaverparts so they can have the devicesattached to them and then be driven by robots to mimic thestresses a live human body would

impart. While an auto suppliermight have a robot compressing ashock absorber hundreds of thou-sands of times to test its perfor-mance, the Clinic’s robot flexes anartificial joint over and over againfor the same reason.

And, of course, there’s the machine shop, where Mr. Shawanand his crew of eight work on a little bit of everything, from producingtools and fixtures for the Clinic’suse on its own patients to manufac-turing the bits and parts that allowthe other parts of the Medical Device Solutions unit to function.

The payoff for the Clinic takesmany forms. Immediate access torepair and fabrication work formedical tools and devices is a benefit that’s tough to value in dollars;other efforts within the unit providethe Clinic with more direct financialand strategic benefits, such as newpatents and research grants. For instance, some of the Clinic’s workon Nitinol is financed by a $3 milliongrant from Ohio’s Third Frontierprogram.

Setting the paceThe existence of a hospital-based

operation with all the research, design, testing and fabrication capabilities that a medical devicemanufacturer might have is a smartstrategy for the Clinic, said MarkCoticchia, founder of Red Wind Innovations, a Cleveland firm thatadvises universities, hospitals andothers on economic developmentopportunities centered aroundmedical technologies.

As the former vice president ofresearch for Case Western ReserveUniversity, Mr. Coticchia adminis-tered federal grants from the National Institutes of Health, including some that went to theClinic, and he’s familiar with thescope of activities in which theClinic engages.

“The Clinic is really pushing theenvelope as far as folding in proto-type development and product development activities into theircommercialization effort,” Mr.Coticchia said. “I’m not aware ofany other hospital entity that’s takenit as far as the Clinic has.” ■


Fix: Shop offers Clinic many advantages

Export to Nigeria? Yep, it’s safeNorth Olmsted groupaims for better accessto African countryknown for scammers

the actions of a few, he said.“We want Nigeria to be known for

the good things,” said Mr. Kareem,a native of Nigeria and the owner of two North Olmsted companies,Biotronics Inc. and Tech-Consultants.org.

Launched last March, the chamberhas received calls from U.S. busi-nesses as far south as Florida, according to Mr. Kareem, who saidan Atlanta business owner attendedthe chamber’s International Trade& Investment Summit at QuickenLoans Arena last month.

This summer, the chamber willhost a week-long program in Nigeriathat will conclude with a reversetrade mission, through which agroup of Nigerian business peoplewill travel to the United States formatchmaking with companies here.

Susan Whitney said she and herstaff at the U.S. Commercial Servicein Cleveland, an agency of the U.S.Department of Commerce, supportthe local effort. Her organization

helps businesses determine theirbest overseas markets, and also pro-vides legitimacy checks on buyers,which helps to guard against thescams that have contributed toNigeria’s notoriety.

“We think it’s a great thing,” Ms.Whitney, office director at the Commercial Service, said of theNigeria-USA chamber. “Nigeria is agreat country to export to.”

As with any country, though,Nigeria is not right for all compa-nies. It’s particularly lucrative forcompanies in the oil and gas industry— something Pipe Line Develop-ment Co. in Westlake knows first-hand.

The company, which makes repairproducts for pipelines, has been exporting to Nigeria since 1984,with up to $4 million of product exported there annually, said KimSmith, marketing manager.

“It’s a great place to do business,but first you must do your home-work,” Ms. Smith said. ■

By MICHELLE [email protected]

A North Olmsted group is bent onboosting exports between here andNigeria.

The Nigeria-USA Chamber ofCommerce aims to help Americanbusinesses sift through trade issuesand identify business opportunitiesin the African country, and vice versa.

“Whenever people hear the word,‘Nigeria,’ all they ever think aboutare the negative things that come outof Nigeria — scams, insurance,” saidLee O. Kareem, chamber presidentand CEO and one of the group’s fivefounding members. But those are


Regular readers of this columnknow I often criticize the anticsthat foul the political systems inour city, region, state and nation.

It’s often based on my concern that wehave too many people in office becauseit’s their job and not that public serviceis their calling.

That said, I found PresidentObama’s visit here last weekgave me a moment to reflect onpolitics in a more complicatedsense.

Clearly, this was a campaigntrip, with the president appearingat a rally at Shaker Heights High with Richard Cordray, hischoice for America’s first consumer-finance watchdogand a native son (and formerOhio attorney general). Using the powerof a “recess appointment,” the presidentinstalled Mr. Cordray, who’s been keptfrom starting his work by Republicans inthe Senate upset with the composition ofthe agency he’ll be leading.

This is where it gets complicated.First, it’s clear Americans need to

know we will never again be led to thebrink of wholesale financial collapse bya few greedy individuals and financial institutions. That’s what inspired the law creating the Consumer FinancialProtection Bureau — the agency Mr.Cordray was picked to lead — in the firstplace.

It doesn’t take a financial engineer to understand thatwidespread mortgage fraudwas perpetrated by cheats andthen magnified by financial institutions eager to turn massivenumbers of home mortgages —many of them held by folks whowere never qualified to borrowat such levels — into tradeablesecurities.

Now, cities such as Clevelandand Detroit are wasting money theycan’t spare in an effort to tear down fore-closed and abandoned houses in orderto save deteriorating neighborhoods.

Congress passed this law creating theconsumer finance protection agency,but Republicans in the Senate don’t likehow it was structured, claiming it gives

too much unchecked power to an indi-vidual. Most have no problem with Mr.Cordray, understanding his reputationas a solid attorney general and publicservant.

But because they couldn’t muster thevotes to change what the law made pos-sible, they’ve been conducting phony“sessions” of the Senate in which ahandful of members appear in order tosound a gavel and then end the sessionminutes, if not seconds, later. The goal isto stop the president from making an appointment during the typical holidayrecess.

They have some valid concerns, butthe place to have dealt with them wasduring the legislative sessions aroundthe Dodd-Frank Act that created thisagency, not now. Dodd-Frank was an attempt to avoid future crises, much likethe Glass-Steagall Act of 1933, enactedafter the Great Depression.

So the courts now will decide the issue, and it won’t likely be resolvedsoon. In the meantime, here’s hopingthat Mr. Cordray is able to do the workfor which he is so sorely needed. ■


Real dealT

he new year is a great time for investors toassess which assets to keep in their portfoliosand which ones to dump. It’s good to knowthat Cuyahoga County finally appears ready

to go through the same process with the dozens of buildings that it owns and leases to house its personnel.

For years, members of the old county Board ofCommissioners talked about consolidating in fewerbuildings the offices that various departments ofcounty government occupy. However, that’s aboutas far as the commissioners ever got — oh, exceptfor their questionable purchase in 2005 of the oldAmeritrust headquarters in downtown Cleveland. Youknow, the complex with the empty, 28-story officetower, the floors of which are too small to house efficiently a multi-story tenant such as the county.

A dubious and costly move, that one — the kindthat contributed to voters finally giving the boot tothe old guard of county leadership by creating a newform of government based on a single executive andan 11-member council.

Now, only a year after assuming office, county Executive Ed FitzGerald and council members haveset the table for a serious reduction in the county’sreal estate costs thanks to a third-party evaluationof the government’s space needs.

Allegro Realty Advisors Ltd. late last month deliv-ered to county officials a report that indicates thecounty could save $91 million by exiting 22 buildings,or one-third of the properties it now occupies. Aspart of its report, Allegro recommended the countysell both its 57-year-old administration building,which sits across from the under-constructionCleveland Medical Mart and Convention Center,and the aforementioned Ameritrust complex, whichwas deemed to be unfit to serve as the county’s newHQ after $40 million was sunk into the property.

Any consolidation of the county’s operations likely will take years to execute. However, the returnon investment for the $220,000 the county paid Allegro for its report could be tremendous — andmakes an outsider wonder why county leaders of thepast never undertook such a comprehensive review.

Thankfully, the old regime is gone and the newleadership that has replaced it is transfixed onbringing down the cost of government rather thanlining landlords’ pockets with county dollars. It continues to be a change for the better that’s off to apromising start in 2012.

Good for GAR

Rob Briggs will be a tough act to follow after15 years as president of the GAR Foundation.However, the baton of leadership is passinginto capable hands with the ascension of

Christine Amer Mayer as head of the Akron-basedfoundation.

We tip our hat to Mr. Briggs, who also has been aforce behind the collaborative foundation initiativeknown as The Fund for Our Economic Future, andwish success to Ms. Amer Mayer.

FROM THE PUBLISHER

PERSONAL VIEW

BRIANTUCKER

About time to let Cordray do his job

By DR. TIM KOWALSKI

Businesses that produce paint orprovide legal services neverplanned to be at the nexus of efforts to fix a health care system

in need of a makeover. But as employers,that’s where we find ourselves. As thebiggest purchasers of private health insurance, we’ve got a big stake in makinghealth care work like we all want it to.

Economists will tell you that Americans’reliance on employer-sponsored healthinsurance was an accident of history. Itbegan with wage controls imposed in1942, as the country was consumed bywar production. Because fringe benefitswere exempted from government caps,employers started offering health insur-ance to compete for scarce labor. Otherarcane developments, including subsidies

for employers’ health insurance purchases,fashioned employers’ foundational rolein our health system.

For most members of Health ActionCouncil Ohio, the region’s business groupon health for self-insured public and private employers, the business of pro-viding efficient and effective health careis not a core competency. But as HarvardUniversity’s Dr. David Blumenthal soplainly put it in a 2006 paper publishedin the New England Journal of Medicineon the development of our employer-based system, “He who pays the pipercalls the tune.”

As employers, we know we’re payingever-rising health care costs for services

that too frequently don’t deliver the value and outcomes we need. We wantcare that focuses on health, not sickness;that is safe and coordinated; that is laser-focused on the needs of our employeesand their families; and that optimizes thevitality of our workers and their focus ontheir jobs. And we want this at a price thatdoesn’t continue to blunt the economicvitality of our employees’ families andNortheast Ohio.

Employers have tried to tackle the costissue for more than 20 years. We spurredhealth plans to create managed care inthe early 1990s; to pay physicians forcare that meets benchmarks for quality;and to contract with so-called ‘diseasemanagement’ vendors with call centersthat dial up enrollees who are pegged tobe at risk of an avoidable hospitalization,

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

Dr. Kowalski is chief medical officer of Progressive Insurance and president of theHealth Action Council Quality Forum.

See VIEW Page 11

Prioritize value, not volume, in health care



CAROL QUIGLEYLyndhurstI’m less excited because I don’t thinkmy choices are ... so far, I’m not impressed, that’s all.

MARY BORUCKIStrongsvilleNo, (less excited) because the candidates suck. Get somebody inthere who’s going to do somethingfor the country and not give all themoney away.

SHELBY CREAGERClevelandI guess I’m less excited — becausethe last election was my first yearvoting in a presidential election. Also,last time everyone was very excitedabout change. There was obviously ahuge marketing campaign making usmore excited about change, butthere was a lot more hope that therewas going to be major change.

NORENE VAN LEERShaker HeightsI’m more nervous about voting because I would hope that we havethe same amount of drive to get people out to vote like we did in2008. I don’t want to see it go down;I want to see voter participation goup.

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

THE BIG ISSUEAre you more or less excited about voting in this year’s presidential election than you were in 2008, and why?

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among other approaches, all withvarying degrees of success.

Still, we have continued to payfor volume rather than value —something we typically avoid inother facets of our businesses.Rarely have we joined forces to useour purchasing weight to impact asingle health care market. Now, 70years after employers first took onhealth insurance, we have a uniqueopportunity to come together andcall the tune in Northeast Ohio.

By Jan. 17, 2012, Northeast Ohiowill be nominated by virtually allthe region’s health plans to be selected as one of a handful of com-munities to participate in a federal

program that could bring $40 million to $60 million annually tothe region. These federal dollars,from the Center for Medicare andMedicaid Innovation, would helpcapitalize implementation of thePatient Centered Medical Home, ahealth care delivery model that inother communities has reducedcost and improved care for patientsof primary care practices.

As employers, we’ll be able toleverage federal dollars to get thehealth care we want and the valuethat will benefit our companies, our employees and the regionaleconomy.

To respond to this opportunity,we have been working together and

with an organization called BetterHealth Greater Cleveland, a regionalalliance of purchasers, payers andproviders that has led the effort tocoordinate with health plans thatdo business in Northeast Ohio.

Thanks to Better Health’s estab-lished programs, we have the infra-structure we need to succeed. BetterHealth reaches more than 500 primary care providers in 50 prac-tices of 10 health systems, whichhave demonstrated improvementin care and outcomes for more than120,000 people with chronic condi-tions. Its leadership in health infor-mation technology — an essentialtool in providing coordinated andpatient-focused care — has drawn

the attention of the U.S. Secretaryof Health and Human Services, thefederal agency that oversees federalhealth care programs.

How can you help us harmonizeour tune? Write your health plan totell them that you expect their support for Northeast Ohio in itsComprehensive Primary Care Ini-tiative proposal. Together, we canreward value over volume, qualityoutcomes over treatment of inci-dents and provide optimal vitalityfor our employees and our commu-nities in Northeast Ohio. We canuse our accidental influence inhealth care to purposefully chart afuture of better health and lowercosts. ■


View: Funding available for new health care model

Brunswick outfit hopes tiny parts lead to big thingsPrecision Made Products’ new metal injectionmolding method has potential in med device field

By DAN [email protected]

Majid Daneshvar’s efforts to build a medical device company inBrunswick are bearing fruit, the inventor says, as he hires peopleand works his way into supply chainswith his metal injection moldingtechnology.

“Our name is starting to getaround,” Mr. Daneshvar said.

Mr. Daneshvar’s company, Preci-sion Made Products, is still small —only 18 employees — but he said it’sgrowing and that its technology hasthe capability to make a big splashwith tiny parts, especially in the fieldof medical devices. Mr. Daneshvar,a polymer chemist by training, saidhe has come up with advances inthe field of metal injection moldingthat allow him to do things his competitors can’t.

Metal injection molding, knownas MIM, involves mixing powderedmetals with other agents, such as apolymer, and then molding themixture into shapes the way other

manufacturers mold plastic. Onceparts are cast they are put into high-temperature ovens for a processcalled sintering, in which the metalparticles fuse together to form aprecise and durable part. It can bedone with steel, titanium or a hostof other metals.

Metal injection molding isn’tnew, but Mr. Daneshvar said he hasdeveloped a formula and processthat enable him to do it differentlyand better than his competitors.More specifically, he said, he canmake parts that don’t shrink asmuch as other MIM parts duringthe sintering process. And, he said,he can take two “green” partsstraight from the molds, put themin the oven together, and sinterthem into one, seamless part.

The technology was impressiveenough that Precision Made Prod-ucts early this year won a NationalScience Foundation grant for$150,000 to further develop it. Jim McGuffin-Cawley, chairman of Case Western Reserve University’s Materials Science and Engineering

department, who has worked withMr. Daneshvar, has lauded the newprocess for its engineering flexibility.

A reduction in shrinkage allowsPrecision Made to produce parts totighter tolerances than companiesusing other MIM methods, Mr.Daneshvar said. The ability to co-sinter parts, on the other hand,opens up the possibility of producingparts that were either too expensiveto make with other methods, orwhich couldn’t be made at all.

For example, Precision Made canmake a tiny metal part with chan-nels, reservoirs or other engineeredspaces inside, where it would be impossible to do traditional ma-chining. It does so by casting twoparts with half of the desired chan-nels and cavities in each one, Mr.Daneshvar said. When they are sintered into a single piece, thatpart then has those features on theinside.

Mr. Daneshvar greets visitors witha plethora of parts, some of them sotiny they easily fit on a fingernail,demonstrating how the process canmake components for equipmentranging from firearms to dental instruments.

Mr. Daneshvar is tight-lippedabout both his processes and his

customers, but one of the parts herecently displayed was for use in endoscopes, and he confirmed thecustomer for it was Mentor-basedUS Endoscopy.

US Endoscopy has been in high-growth mode in recent years, andalways is looking for better ways tomake its products, said its chief operating officer, Tony Siracusa.

Mr. Siracusa said it’s too soon tosay how well Mr. Daneshvar’s partswill work for his products — the twocompanies still are working on development. But the technology’spromise was enough to spark USEndoscopy’s interest, especially because it was coming from a localcompany, Mr. Siracusa said.

“We are working with Majid toleverage their technology into oursmall but precise components,” Mr.Siracusa said. “We always strive to partner with our local suppliersfirst.”

Mr. Daneshvar not only wouldlike to count US Endoscopy amonghis customers, but would like to emulate the company outright, hesaid, noting that he, too, would liketo identify and make completeproducts that he can bring to market.

“I don’t want to just make partsfor others, he said. ■


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GOING PLACESJOB CHANGESEDUCATIONMUSIC SETTLEMENT: Theresa A.Schneider to manager of annual giving.NOTRE DAME-CATHEDRAL LATINSCHOOL: Keven S. Krajnak to major gifts officer. UNIVERSITY OF AKRON: JuditPuskas to the Austin Chemical Co.Chair holder, College of Engineering.

ENGINEERINGURS CORP.: Brandon Davis to director, industrial manufacturing, Industrial Process Group.

FINANCECHASE: Chet Shedloski to vicepresident and banker for communitydevelopment real estate lending,Ohio, Kentucky and West Virginia.FIRSTMERIT CORP.: Joseph J.Varckette and Brian E. Wells tovice presidents, business banking.

FINANCIAL SERVICEBRUNER-COX LLP: Laura A. Kingto tax director; Tamara A. Lukes toassurance services supervisor;Robert M. Ryan to tax manager;Erin M. Simone and Francis A.Turocy to assurance services seniorassociates; Jason A. Wahl to tax supervisor; Heather L. Ackermannand Kyle A. Bowers to assuranceservices associates; Jesse P. Keppleand Manbir Sidhu to tax associates.CORRIGAN KRAUSE: Michael D.Toncar to controller; Samantha VanArnhem to firm administrator;Patrick J. Lang to associate. PEASE & ASSOCIATES INC.:Jennifer Barnes to partner; TinaMoore to vice president, operations;Matt McGowan, Joe Rokas andKathleen Moran to supervisors; WillFugate, Dan McGoun, JessicaSokol, Daniel Papadelis and LaurenYurcak to senior accountants; Allison Parsons to office manager.RETIREMENT SOLUTIONS: JoyceFilipiak to associate financial consul-tant.

SS&G HEALTHCARE SERVICESLLC: Erline C. Franks to associatedirector; Andrea Driscoll, Cheryl L.Chianello, Robert Hague and SondaKunzi to senior managers; JanLasker, Kimberly Ivery, LindaFalkenstein and Tamiya Williamsto senior consultants; Larry Bittingand Mark Parmelee to IT senior associates; Arlene Kelly and

Jennifer Ashbee to senior billingmanagers; Jessica Roe to seniorcredentialing specialist; Jennifer Dimassa to coder II; Amanda Still-man, Joan Bible, Barbara Hutzell,Karen McArthur, Beverly Klimas,Kristine Woodcock, Bonnie Esh-baugh, Linda Anderson, CarolineUrgo-Licursi, Lynnette Szabat,Christina Gasser, Ranita Mitchell,Christina Mathis, Renee Genet,Denise McCartney, SamanthaLaslo, Diane Clare, Shelli Kelling,Doreen Meredith, Sue Panek,Heather Hoza, Susie Gatian,Jeanette Danczak, Virginia Neff,Jennifer Matozel and WendyHerchek to senior billing specialists.

GOVERNMENTCITY OF CLEVELAND: JamesDeRosa to commissioner of real estate.

HEALTH CAREUNIVERSITY HOSPITALS AHUJAMEDICAL CENTER: Susan V. Juristo president.

LEGALBELKIN GARFIELD LLC: William K.Smith to of counsel. GALLAGHER SHARP: Jeremy V.Farrell and Justin L. Monday to associates.MEYERS, ROMAN, FRIEDBERG &LEWIS: Steven P. Dlott to partner.SHIFRIN NEWMAN SMITH INC.:Christopher N. Godios to partner. TAFT STETTINIUS & HOLLISTERLLP: Philip R. Bautista to partner.THOMPSON HINE LLP: DeborahZ. Read to managing partner.

MARKETINGADCOM COMMUNICATIONS INC.:Caroline Evans to associate art director; David Sponseller to seniordigital production artist; DanielSanek to assistant account executive.DONER: Gretchen Hentemann tovice president, brand leader.HITCHCOCK FLEMING & ASSOCI-ATES: Kelly Wanstrath to senior research manager; Lauren Reed tosenior account planner; JenniferKeenan to agency administrator.KAREN SKUNTA & CO.: JenniferTeeter to client services and businessmanager.

NONPROFITLEGAL AID SOCIETY OF CLEVE-LAND: Tom Mlakar to deputy director

of advocacy; Julie Robie to managingattorney, consumer practice; AnneSweeney to managing attorney, community engagement.WESTERN RESERVE HISTORICALSOCIETY: Clio to digital curator.

UTILITYFIRSTENERGY NUCLEAR OPER-ATING CO.: Vito A. Kaminskas tosite vice president, Perry Nuclear Power Plant.

BOARDSASSOCIATION OF FUNDRAISINGPROFESSIONALS, CLEVELANDCHAPTER: Beth Brown (Kimball Consulting LLC) to president; Tim McCormick to president-elect;Sharon Martin to secretary/treasurer;Paul Pawlaczyk, Marge Zellmer,George Graham and Jerry Jindrato vice presidents; Carol Carbary toimmediate past president. NATIONAL CENTER FOR CREATIVEAGING: Linda Noelker (BenjaminRose Institute on Aging) to president.

AWARDSAMERICAN INSTITUTE FOR MEDICAL AND BIOLOGICAL ENGINEERING: Liming Dai (CaseWestern Reserve University) wasnamed a Fellow.

Send information for Going Places [email protected].

JurisPuskasKrajnak

Kent aims for versatile tech specialistsDigital sciences schoolcombines disciplines


Kent State University is looking to mold an army of digital super employees with the creation of anew academic unit that’s a mashupof offerings from various disciplines.

Dubbed the School of Digital Sciences, the academic unit thatlaunched last fall combines coursesfrom computer science, visual com-munication design, journalism andcommunications to give students abroad understanding of the digitalsciences.

Exactly what “digital sciences”means still is a bit amorphous, but

Robert Walker, the school’s director,said the idea is to teach studentshow a variety of cultures, ethnicgroups and business organizationsuse technology differently and howthey can solve problems in thosesettings.

“(Students) need to be exposed todifferent types of people and be exposed to how they think,” said Dr.Walker, also a professor of computerscience. “Putting them in a bubbleand not letting them talk to peoplewho don’t look or think like them isn’t going to be very useful.”

Dr. Walker said a central piece ofthe program is its bachelor’s andmaster’s degrees in enterprise architecture — a business conceptthat focuses on how to use informa-tion technology to enhance collab-oration and efficiency throughoutan organization.

Dr. Walker maintains Kent Stateis the first school in the country tooffer such degrees, noting the master’sdegree would be of particular valueto computer science graduateslooking to apply more appropriatelytheir technical and critical thinkingskills in the business world.

Also, because the new digital sciences school is made up of theuniversity’s existing resources, KentState hasn’t had to invest in hiringfaculty to get the program off theground.

“The thing that’s amazing aboutthis from an academic perspectiveis that we’ve torn down a lot of silos tomake this happen,” said Dr. StanleyWearden, dean of Kent State’s Col-lege of Communication and Infor-mation. “It’s great to see how facultycan work together and students candraw on all these disciplines.” ■


each other, Mr. Manning said.However, if one partner has alow tolerance for working longhours or taking risks, the othershould hire that person as anemployee, he said.

“Being an owner of a businessis a lifestyle, and being an employee is a job,” he said.

Even assuming both potentialpartners have complementaryskills and a similar commitmentto the business, Mr. Manningsaid, they still need to take a fewmore steps: They should definetheir roles, decide how muchtime each person will put intothe business and create a buy-sell agreement. Should one part-ner want to buy out the other,the agreement would spell outthe terms of the deal.

Creating such an agreementahead of time is easier thanhammering out a deal betweentwo bickering partners, Mr.Manning said.

“If you haven’t done that — andmost people don’t — it is so costlyto pry things apart,” he said.

Learning from his mistakesAndy Halko admits he made big

mistakes when he decided to gointo business with a college friendin 2002.

The two men each threw in a little bit of money to start a web

By CHUCK [email protected]

Attorney Frank Manningspent the morning ofDec. 2 in two meetingswith two unrelated

clients. Both of them were tryingto get rid of their business partners.

Over the past 20 years, meet-ings such as those have helpedturn Mr. Manning into a bigskeptic of business partnerships.

It isn’t that they can’t work.Partners who complement oneanother and plan ahead canachieve a lot together — andeven remain friends, accordingto Mr. Manning and a few otherlocal business people.

However, loads of people diveinto partnerships without muchplanning, said Mr. Manning,who focuses mainly on businesslaw at Manning & Manning Co.LPA in Mentor.

The partners usually like eachother, though. At least in the begin-ning.

“They fail to consider what happens when the honeymoon isover,” said Mr. Manning, who him-self has been part of both good andbad business partnerships.

Mr. Manning said people tend togo into business together for one ofthree reasons: They like each other;one person wants to build a companyand the other has money; or they

SMALL BUSINESSI N S I D E

JANUARY 9 - 15, 2012 CRAIN’S CLEVELAND BUSINESS 13

14 TAX TIPS:STATES EYEINGREVENUE FROM

CLOUD.

RUGGERO FATICA PHOTOS

Kevin Busta (left) and Michael Carreras have teamed to run a business, Kevin Busta LLC, that sells Mr. Busta’s industrial-style artwork. Mr. Carreras serves as thecompany’s CEO.

THE TROUBLE WITH TEAMSBusiness partnerships fraught with potentialpitfalls, but can work with proper planning

have complementary skills thatcould benefit the business.

The third reason is the only goodone, in Mr. Manning’s eyes.

Even the second is questionable:If someone needs money to start abusiness, Mr. Manning said, theperson first should try to borrow it,either from a bank or from someonethey know. That method produces

less conflict, he said, because thelender won’t try to weigh in onday-to-day business decisions.Even if the company goes out ofbusiness, the lender will be happyas long as the borrower finds another way to make payments, hesaid.

By contrast, partners with complementary skills may need

The duo opened a storefront in Tremont in September.

See TEAMS Page 15

INBRIEF■ ARE YOU GETTING AHEAD?: On

Page 14 this week, we’re debuting anew feature called “Getting Ahead,”which will run in each month’s SmallBusiness section.

Targeted to early and mid-career professionals and others in career transition, the goal is to provide a regular source of information for thoseinterested in taking the next step to advance their professional and personalstanding within the community. (Theremay even be a little insight for thosewho are more established.)

Each feature will include a story,such as this month’s on how to formand cultivate a relationship with a mentor; a Q & A with a leader; andsources for building one’s network bothonline and in person.

If you have suggestions for futureGetting Ahead stories, Q & A subjectsor networking opportunities, please email sections editor Amy Ann Stoessel at [email protected] orcall 216-771-5155.

■ A NEW FINAL RESTING PLACE:Marlene Medley of Bay Village haspurchased a franchise of the EternalAscent Society, the first of its kind inthe Cleveland area. The business,which is based in Crystal River, Fla., offers a patented process for the scattering of cremated remains by releasing them in a giant balloon with a5-foot diameter. The biodegradable balloon is inflated with helium, which isreleased after a private family service.During the balloon’s ascent it expandsand, at a height of almost 6 miles, itfreezes and fractures, scattering theashes.

■ ADVISER UPDATE: In an advisercolumn in the Dec. 12Small Businesssection of Crain’s Cleveland Business,

James Kurek, apartner at Fisher& Phillips’Cleveland office,indicated that theNational LaborRelations Boardwould require allemployers to post a Notice of Employee

Rights, effective Jan. 31. This posterstates that employees have the right toact together to improve wages and working conditions, form, join and assist a union, bargain collectively andrefrain from these activities. It also provides examples of unlawful conduct.

Since the column’s publication, theNLRB has moved the compliance dateto April 30. The NLRB stated that theregulation was pushed back to April toallow for enhanced education and outreach to employers, particularlythose who operate small and medium-sized businesses. This rule applies toall private-sector employers subject tothe National Labor Relations Act, excluding agriculture, railroad and airline employers.

Kurek


TAMI BROWNGeneral managerGreater Cleveland Aquarium

One could say thatTami Brown isNortheast Ohio’snewest big fish.

As general manager ofthe Greater Cleveland Aquarium,which is slated to open to the pub-lic on Jan. 21, Ms. Brown has beenleading the startup of Cleveland’snewest attraction since September.

Ms. Brown admits she’s learneda lot when it comes to fish, butshe’s not swimming in completelyuncharted territory in terms ofpromoting tourist spots.

She most recently served as vicepresident of marketing for PositivelyCleveland, and she has a back-ground that includes time at theWestern Reserve Historical Societyand the Cleveland Museum of Art.

■ Daily must-read? Crain’sMorning Roundup and DailyHeadlines. (Seriously.) Also, thedaily sales report for the aquariumand a wonderful cartoon calledFrazz in The Plain Dealer.

■ Who do you admireand why? My parents, Patand Dave Lash. They havebeen married for nearly 50years and they still holdhands and laugh together.They have been throughsome absolutely crazy stuffin their lives, but have

never lost their focus on familyand friends and bringing love andfun into the lives of the peoplearound them.

■ What skill do you wish youhad? The ability to say “no” moreoften and more strategically. At ameeting a few years ago, I had theopportunity to hear the formerCEO of Continental Airlines speak.Someone asked a question and heresponded, “I know you want theanswer to be ‘yes,’ but it’s not, andhere’s why.” I loved it, and havetried to model my “no’s” off of thatresponse. I am getting better, butstill not where I should be. Andsinging. I really wish I could makea beautiful sound when I sing.

■ Career advice you wishsomeone would have given you?Never hesitate to ask questions.

Rather than making it look like youdon’t have answers, it alerts othersto the fact that you are thinkingand gathering information tomake better decisions and solveproblems.

■ Favorite nonwork activity?Visiting the other wonderful attrac-tions in the region and eating atour independent restaurants.

■ What most surprises youabout the path your career hastaken? My goal since high schoolwas to work in the arts and culturalfield. When I first graduated, despitemore interviews than I like tothink about, I could not land a joband ended up at an advertisingagency. While there, I volunteeredfor the pro bono account for theInstitute of Contemporary Art. If ithadn’t been for that “off my careerchoice” job at the ad agency, Iwould not have been hired at theCleveland Museum of Art as theirfirst advertising staff member.Though my career path has notbeen straight, the cumulative experience I have gained from the“side step” career positions hasbeen invaluable.


SMALL BUSINESS

Cloud’s tax implicationscould weaken benefitsState authorities analyzing newer technology

Small business owners may beintrigued by the possiblebenefits of moving theircomputer-related activities

into “the cloud,” but they should beaware that tax authorities are intrigued by the possibilitiesaround taxing in the cloud as well.

Tax authorities at all levels are ona constant hunt for creative newways to generate tax revenue tocover disturbing shortfalls in fiscalbudgets. State tax authorities inparticular are showing an increasinginterest in how they might be ableto stake a claim to tax revenue bylooking at cloud-related activitiesas taxable transactions.

The range and breadth of inter-pretations that are beginning toemerge suggest state tax authoritieshaven’t yet sewn together a strongcase for how to tax whatever is happening in the cloud. But they’reworking on it.

The cloud is a cutting-edge,rapidly evolving method of managingbusiness information. Essentially,cloud computing enables unrelatedbusinesses to share computer resources by becoming networkedin an Internet-like way.

Small business in particular canbenefit from cloud computing bygaining access to applications,servers, storage, networks and ser-vices that otherwise would be highlyimpractical or entirely unaffordable.

The cloud can give a small busi-ness owner easy access to expandedresources while reducing or elimi-nating the need to maintain expen-sive, hard-to-handle technologyand equipment.

As state tax authorities have studied the evolution, they are exploring how cloud activity can betaxed. They already have ventureddown the path of how to asserttheir tax authority, or nexus, overtransactions that cross state bordersin new and creative ways as a resultof technology.

It was a long haul for states towiggle in on Internet-based trans-actions and ensure their share ofsales and use taxes on such activity.

Today, it’s routine for customersto pay sales tax on Internet transac-tions at the time of purchase. Now,tax authorities are wondering howsales and use taxes, or possiblyeven income tax, can be assertedover cloud-based activity.

So far, Ohio hasn’t made signifi-cant inroads on whether, when andhow to tax cloud-based activity, butsmall business owners can be assuredOhio is paying close attention towhat other states are doing.

There are generally three servicemodels with cloud computing: Soft-ware as a Service (SaaS), Platformas a Service (PaaS) and Infrastruc-ture as a Service (IaaS).

Washington, for example, updatedits tax rules to say that any SaaSwould be subject to both sales anduse tax, which is imposed on the

PETERDEMARCO

TAX TIPS

user of the service, and to the busi-ness and occupancy tax imposedon the provider.

SaaS enables a consumer to access the provider’s softwarethrough various client devices, soSaaS providers located in Washingtonwill be collecting and remitting taxes related to those services.

Missouri and New York have takendifferent views on how to treat thesale of software hosted on out-of-state servers. In Missouri, such asale is not subject to sales tax whenaccessed from an in-state location.

In New York, SaaS hosted on out-of-state servers are subject totax in New York, if the software isaccessed from inside the state. New York also contends that SaaSfalls within its definition of “tangiblepersonal property” because thecustomer gains possession and useof the software.

In Massachusetts, on the otherhand, officials have concluded in at

least one case that the customer’sability to access software throughSaaS is more akin to receiving a service than receiving a product.

As another example, Texas recently amended its sales and usetax regulation to state that any retailer that owns or uses tangiblepersonal property located in thestate is considered to be doing business in the state and thereforeis required to collect and remitsales and use taxes.

Even though a July 2011 ruling issued by the Texas comptroller indicated such activities were notsubject to sales tax, the state isstarting to look at these activities.The amendment specifies that acomputer service or software wouldbe included in the view of whatconstitutes tangible personal prop-erty, therefore a business usingSaaS that’s hosted in Texas may beconsidered to be doing business inthat state.

With such varying interpretationsmaterializing, it will be a long paththrough regulatory and judicial activity for the taxation of cloud activities to become clear.

But small business owners venturing into the cloud should beaware that tax consequences aresure to follow eventually. ■

Mr. DeMarco is vice president anddirector of tax services for the regional accounting and businessconsulting firm of Meaden & Moore,headquartered in Cleveland.

BUILDING YOUR NETWORK

Building relationships: The mentor-mentee bond

GETTINGAHEAD Your monthly guide to getting to the next level in your career.

By AMY ANN [email protected]

Finding a mentor is all aboutbuilding connections —now and for the future.

“It’s nice to have someonein your corner,” said Sunny K.Lurie, the CEO of Beachwood-based Fast Focus Careers, who hasbeen in the career training andcoaching arena for 20 years. Shestarted her business in 2007, andtoday helps people at all levels, especially those looking to make acareer change.

“I think it will stretch your abilityto work through a challenge,” saidDr. Lurie of having a mentor.“People really do get stuck a lot …they don’t see what else is possible.”

Instead of zeroing in on findingone perfect mentor (although, shesaid if you can find one, great), Dr.Lurie suggests finding multiple“advisers” — a “mini team” so tospeak. The simple change in termi-nology suggests less responsibility,and having more than one coun-selor offers access to a broaderrange of skill sets and perspectives.

Dr. Lurie recommends havingadvisers both from inside one’sworkplace and from outsidesources, such as professional asso-ciations, college alumni groups,previous employers, businessowners, online communities or

even other industries. They shouldbe accessible, knowledgeable, responsible and optimistic.

She did offer one exception:Stay away from the boss.

Once a potential adviser has beenidentified, Dr. Lurie suggestsreaching out with a casual, briefintroduction, asking questions abouttheir field, eventually broaching thepossibility of furthering the rela-tionship. For example, such a propo-sition could be phrased this way:“I was interested to see if you canact as an adviser for me periodically.”

Finally, define clear-cut expec-tations for the relationship, andkeep in mind the setup should bea two-way street, with the mentorreceiving some sort of benefit aswell, Dr. Lurie stressed.

This fall, two Northeast Ohioprofessional organizations kickedoff mentorship programs to makeit easier to build such relationships— the Women in Law section ofthe Cleveland Metropolitan BarAssociation and the Clevelandchapter of the Young NonprofitProfessionals Network.

“Our main role was simply to makethe connections,” said John Lynch,chairman of YNPN Cleveland’s pro-fessional development committee.

Mr. Lynch, who works as a volunteer engagement specialist atthe Center for Families and Childrenin Cleveland, said the decision to

begin a mentoring program wasthe result of a survey the groupconducted in late 2010.

“We wanted to connect pairsthat otherwise might not havecrossed paths,” said Mr. Lynch,whose program currently links 13experienced nonprofit professionalswith 18 young professionals.

The pairings are expected tomeet once a month for at least 60minutes. “We’re hoping the rela-tionships formed persist,” he said.

Meanwhile, Nicole M. Capretta,a second-year student at ClevelandState University’s Cleveland-Mar-shall College of Law, already hasdiscussed the ups and downs ofthe interviewing process with hermentor through the Women inLaw section of the Cleveland Metropolitan Bar Association.

Developed in response to inputfrom the region’s law schools, theWomen in Law section’s programconnects law students with mentorsin Northeast Ohio’s legal commu-nity. The program, which startedin October, pairs 22 students, suchas Ms. Capretta, with mentors.

“It’s nice hearing from her whatthey’re going through,” said Ms.Capretta’s mentor, Nicole J.Quathamer, who is co-chair of theWomen in Law section and a part-ner in Porter Wright Morris &Arthur LLP’s litigation department.“It’s a reality check.” ■

Small business owners can be assured Ohio is payingclose attention to what other states are doing.

FOLLOW THE LEADER: A Q&A

Get involved and stay informedby building your network onlineand in person.

■ Check out United Way ofGreater Cleveland’s Young Leaders. It’s a group of professionalsin their 20s and 30s who want to workto make our community betterthrough philanthropy, volunteerismand advocacy through United Way ofGreater Cleveland.

Contact: Greg Renkas, 216-436-2208, or [email protected].

Web: www.unitedwaycleveland.org/youngleaders

■ While you’re in the spirit of givingback, consider looking into MindsMatter. Minds Matter of Clevelandis part of the national Minds Matter organization that’s in its fourth year locally. Young professional volunteers

help high-achieving high school studentsfrom low-income families accomplishacademic excellence. Volunteers go toMinds Matter on Saturdays during theschool year to help students improvetheir academic skills, gain acceptanceto leading college summer programsand eventually gain admission to afour-year university.

Contact: [email protected]: http://mindsmattercleveland.org


development firm called Insiviajust after graduating from JohnCarroll University. Soon thereafter,they started “stepping on eachothers’ toes” because they bothdid a little bit of everything insteadof taking on separate roles withinthe company, Mr. Halko said.

Plus, they started disagreeingover issues such as the servicesthey should offer and the customersthey should pursue, which “signif-icantly slowed” the growth of thecompany, he said.

After a few years, Mr. Halkobought out his partner’s portion ofthe company, which today employs14 people in Cleveland. He advisesothers thinking about taking on abusiness partner to define theirroles clearly and to create a buy-sell agreement ahead of time.

“You have to go into it with anunderstanding that it may end,”he said.

Mr. Halko also says that, if thebusiness has just two owners, oneshould own at least a slight majorityof the company’s stock, which

ensures that votes on big decisionsdon’t get stuck in a 50-50 stalemate.

Bob Chalfant agrees that onepartner needs to own a majoritystake: 50.1% is enough to do the trick.That setup sometimes can frustratethe partner with the minority stake,but he or she will get over it, saidMr. Chalfant, director of the Fitz-gerald Institute for EntrepreneurialStudies at the University of Akron.

“The person already agreedthat, if we have a tie, you win,” Mr.Chalfant said.

On occasion, Mr. Chalfant hasencouraged his students to go intobusiness together. When he learnedhe had one student who wanted tostart a dance studio and anotherwho wanted to start a dance clothingstore, he suggested they combinetheir ideas into one business.

“It’s just so synergetic,” said Mr.Chalfant, who has held managementpositions at several companies, mostrecently serving as CEO of TheMetalWood Bat Co. in Eleanor, W. Va.

A work of artSo far, the partnership between

Kevin Busta and Michael Carrerasis going well, according to Mr. Carreras, who is managing thebusiness side of a company theystarted to sell Mr. Busta’s industrial-style artwork and furnishings to abroader audience.

After reading about Mr. Busta’swork in Crain’s Cleveland Businesstwo years ago, Mr. Carreras startedbuying his artwork and built afriendship with Mr. Busta. Theysoon began to discuss the idea ofcreating a formal company, withMr. Carreras serving as CEO andopening a storefront where Mr.Busta could display his work.

Kevin Busta LLC opened a storein Tremont in September.

Mr. Carreras said the partnershipshould work because he and Mr.Busta have clearly defined roles,communicate well and spent ayear discussing the plan beforepulling the trigger.

“You need to build up that trustin each other and make sure thateach person is committed,” saidMr. Carreras, who is an accountexecutive at WJW-TV, Fox 8 Cleve-


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SMALL BUSINESS

It may not be time to sell, but time to plan exit

Ask anyone how to makemoney in the stock marketand you’ll get the samecliché answer: “Buy low

and sell high.” Or for the past fewmonths, “Sell high and buy low.”

The popularity of the statementis driven by its truth, yet it is rarelypracticed by anyone other than theultra-disciplined investor.

Greed, more often than not, getsin the way of a profitable sale of astock, as it does the profitable saleof a company by an entrepreneur.

If you are a typical entrepreneur,you have spent years creating yourcompany, pouring thousands ofhours over many long days, nightsand weekends into your efforts.

When things are going well, youare happy to continue your effortsand take advantage of the fruits ofyour labor. When things turn downas they have recently, like manyowners, maybe you are looking tosell with the hope of cashing in on

your past success.Unfortunately, you are looking

to sell at a time when earnings andsales growth are reduced andwhen buyers are looking to con-serve cash, reduce risks and pickup companies cheaply.

The reasons that entrepreneursbecome sellers can be numerous.They range from retirement andsuccession planning to fatigue to di-versification of assets and risk reduction.

No matter the reason, if an owner is looking to make a transi-tion, the best thing to do is to plantwo to three years in advance andbe a proactive seller when yourcompany is on the upward swing.

The time may not be right tomake a good deal and achieve a highmultiple of earnings (if there are anyearnings any longer), but it is theright time to start planning an exit.

Now is the time to assemble ateam (lawyer, accountant, financial

MITCHELLFRANKEL

ADVISER

adviser and business broker or in-vestment banker) and plan for thefuture disposition of the business.

This means that many owners ofmiddle-market companies who feelthey are ready to hand the reins tosomeone else or who wish to diversi-fy their holdings should be looking tosell their companies in the comingrecovery.

With the improving economy aswind at their backs, they will beable to show the growth and project future growth in order to

achieve the maximum value fortheir company in a sale.

Remember, as the economy recovers, you, like many owners,will have forgotten the gloomy daysof the past and will be caught up inthe euphoria of increased sales andgrowth once again.

You forget the reason why youwanted to be a seller. Instead ofseeing a recovering business as anopportunity to cash in on your efforts, you again focus on the hereand now, forgetting what just was.

As an entrepreneur, the onlything more difficult than figuringout when to sell is figuring outwhether you are a seller.

Determining whether one wantsto sell their company requires significant self-analysis. Are youready to cede control? Are youready to retire?

How will you replace your pay-check? Do you wish to continue un-der the ownership of another? Will


Teams: Defined roles, ownership keyland, and an MBA student at CaseWestern Reserve University.

Mr. Manning knows that businesspartnerships can work. For instance,he started his law firm with hiswife, though she eventually wentinto banking because she didn’tlike the business of law. Plus, heand a client who previously hadbeen in a rocky business partner-ship together started the Five StarDive Bar & Grill in Willoughby.They sold the bar for a profit twoyears ago, after which it became anIrish pub called Croagh Patrick.

Those good partnershipshaven’t helped Mr. Manning forget

the bad one, though: In the 1990s,he and a few friends decided tobuy a rental property, fix it up andsell it. They laid just one groundrule: Everyone had to show up oncertain days to work.

That agreement wasn’t enough.Soon, they were fighting over whowas pulling their weight. They didget their money back when theysold the property, but it wasn’tworth the effort and the strain itput on their friendships, Mr. Manning said.

“We all agreed we would nevergo into business with one anotheragain,” he said. ■

Common threads fuel collaboration on popup

In many ways, Steven Tatar andMichael Ozan are cut from thesame cloth, and sometimesthat’s just what it takes to start

weaving together a partnership.Both are energetic business owners

and entrepreneurs. Each shares aninterest in history. Both are passion-ate about supporting the creativeenergy building around Ohio City.

So it’s not surprising to see thetwo join forces in support of a common business and developmenteffort — a collaboration that mani-fested itself this holiday season asthe Ohio Knitting Mills popup shopon West 28th Street in Ohio City.

“We were kind of each other’smissing piece,” said Mr. Ozan, pres-ident and chief creative officer ofTwist Creative Inc., a brand strategyand design firm.

you still be motivated? Some of the issues we ask poten-

tial sellers to think about are valua-tions of their company, required future income needs and what investment vehicles (stocks, bonds,etc.) they will use to provide the income replacement.

With the information, a good financial adviser can help an ownerproject if the time is right to sell andwhether their sale will providethem with the funds they need toaccomplish their goals.

Before becoming a seller, espe-cially if you are looking for it tomean retirement, it is a good ideato review your plans and needs witha good financial adviser. ■

Mr. Frankel, chartered retirementplanning counselor (CRPC), is a financial adviser with LakesideWealth Management Group of WellsFargo Advisors LLC in Pepper Pike.Prior to joining Wells Fargo Advisors,Mr. Frankel was a merger and acqui-sition adviser to small to midsize cor-porations. Wells Fargo Advisors LLC isnot a legal or tax adviser.

Michael Ozan from Twist Creative andSteven Tatar from Ohio Knitting Mills.

The popup, which was located inthe storefront space of Twist’s offices,was a temporary retail site for Mr.Tatar’s archive of virgin vintageknitwear from Ohio Knitting Mills, acompany that for 76 years producedclothing from its Cleveland factoryfor department stores and labels.

But the setup was far more than a

landlord-tenant relationship.For Mr. Ozan, it was a chance to

further the work his agency alreadywas doing for Ohio City Inc., whichrecently adopted the Twist-inspiredbranding of being an artisan neighborhood.

It also offered his creative team thechance to be involved in a productoffering and to try out a large andlofty promotion effort: a billboardthat was dressed up in a 24-footsweater made of vintage OKM knits(for which the money that wouldhave been rent was reinvested).

Messrs. Tatar and Ozan say theend of the popup will not be the endworking together. Mr. Tatar even seesmanufacturing in textiles as a poten-tial next step: “There’s a very widebut specific niche that Cleveland canstep into.” — Amy Ann Stoessel


Northwest 19.03 17.82

Total market 11.90 12.80

Southwest 13.07 14.43

Downtown 22.19% 21.74% 21.05% 19.84% 20.11%


market — people can breathe andrelax.”

It didn’t hurt the industrial marketthat nearly 2 million square feet weredemolished in Twinsburg alone asScannell Properties and DiGeronimoCos. tore down much of the Chryslerplant after finalizing its purchase.Plans call for rebuilding on that landas well as on empty land and parkinglots at the plant site.

On the office front …The vacancy numbers were not as

favorable in the office market. Indowntown Cleveland, vacancy edgedup to 22.19% at year end from 21.74%at the end of 2010. The uptick waseven smaller in the suburbs, to 21.48%from 21.43%.

However, those numbers do nottell the whole story, notes Jeff Cristal,senior vice president at Grubb & Ellis and head of its office unit. Hesaid absorption — a little-reportedreal estate statistic that measures thechange in occupied space in themarket — climbed 246,315 squarefeet in 2011 over 2010, the first timethe regional office market posted apositive absorption figure since theend of 2008.

Credit the weak economy for de-priving the office market of greaterabsorption gains, although they beatthe bad breaks of the past few years.

“You can only sit on the sidelinesfor so long,” Mr. Cristal said. “I’mhearing business owners and opera-tors say they’re busy now. I’ve notheard that for a few years. More have

Vacancies: 2013 officemarket likely bettercontinued from PAGE 3

THE SAME GAMEAccording to statistics from Grubb & Ellis, vacancy rates in Northeast Ohio’s office market inched up while the industrial rate trended downward.

Office 2011 2010 2009 2008 2007

Suburbs 21.48 21.43 19.72 17.56 17.16

Total market 21.88 21.60 20.46 18.82 18.81

to hire and have to look at morespace.”

This time next year, the officemarket will be in far better shape,Mr. Cristal predicts, because some ofthe big deals of 2011 will increase occupancy as more tenants moveinto their space.

For example, plans by AmTrust Financial Corp. to move more than300 jobs to the 800 Superior Ave.building in downtown Clevelandfrom Seven Hills and to add as manyas 500 jobs in the future do not showup yet in the Grubb & Ellis occupancyfigures. An AmTrust affiliate boughtthe largely vacant building last August but will not be in the spaceuntil later this year.

Even so, Mr. Cristal feels a newtempo in the office market.

“There is a buzz downtown like Ihave not heard in many years,” hesaid.

That beats the gnashing of teethand hand-wringing punctuating somuch bad news in the office marketsince 2008. ■

Industrial 2011 2010Downtown 9.73% 10.45%

Northeast 12.01 12.03

Southeast 11.34 13.99

South Central 12.02 11.12

Packaging specialist inWadsworth buys Pa. firmAcquired company specializes in thermoformingBy FRANK ESPOSITOPlastics News

In a deal that it said will strengthenits position in the visual packagingmarket, Rohrer Corp. in Wadsworthhas purchased Buckell Plastic Co. ofLewistown, Pa., for an undisclosedprice.

Buckell “is a well-run companywith products and customers thatcomplement our current book ofbusiness,” Rohrer president and CEOScot Adkins said in a news release.

Buckell has annual sales of about$3.5 million. Its 50,000-square-footLewistown plant, which makesthermoformed plastic packaging forthe medical, food and retail markets,will join Rohrer plants in Wadsworth;Buford, Ga.; and Huntley, Ill.

This marks the first deal forRohrer since private equity firmShoreView Industries of Minneapolis

bought controlling interest in thecompany in early 2010. Rohrermakes thermoformed blister pack-aging as well as paper cardstock forblister packs and folding paper cartons. ShoreView owns four otherplastic-related businesses.

Rohrer reported thermoformingsales of almost $21 million for theyear ended last May 31, while Ther-moforming accounted for about28% of the company’s total sales.Rohrer employs about 100 in itsthermoforming operations.

Buckell had been owned by theSchell family. Clarence Schellfounded the firm in Lancaster, Pa.,in 1964. Buckell moved to Lewistownin 1990. Brian Schell, Clarence’s son,now serves as president of the firm. ■

Frank Esposito is a senior reporterwith Plastics News, a sister publi-cation of Crain’s Cleveland Business.

Thisyear

Company nameHeadquarters

Dollar value of approvedloans fiscal 2011

Dollar value ofapproved loans fiscal

2010 % changeNumber of loans

fiscal 2011

1 Huntington National BankColumbus 82,357,400 54,599,300 50.8% 681

2 KeyBank NACleveland 31,495,900 10,521,000 199.4% 101

3 Fifth Third BankCincinnati 17,985,300 12,197,500 47.5% 36

4 U.S. Bank NAColumbus 14,570,400 1,903,500 665.5% 28

5 JPMorgan Chase & Co.New York 14,180,200 10,902,800 30.1% 84

6 Lorain National BankLorain 13,057,300 6,142,900 112.6% 31

7 FirstMerit Bank NAAkron 7,847,200 4,080,300 92.3% 43

8 Live Oak Banking Co.Wilmington, N.C. 6,647,000 ———— ———— 8

9 Ohio Commerce BankBeachwood 6,460,000 4,248,500 52.1% 11

10 First National BankOrrville 5,820,000 1,325,000 339.2% 8

11 PNC BankPittsburgh 5,542,800 3,610,800 53.5% 19

12 Charter OneProvidence, R.I. 5,125,000 3,686,500 39.0% 63

13 Westfield Bank FSBWestfield Center 4,855,000 3,428,400 41.6% 10

14 mBankManistique, Mich. 4,788,900 ———— ———— 1

15 Community South BankParsons, Tenn. 4,581,000 ———— ———— 2

16 Consumers National BankMinerva 4,570,600 2,147,100 112.9% 13

17 Home Savings & Loan Co.Youngstown 4,255,200 ———— ———— 10

18 Park View Federal Savings BankSolon 3,946,000 ———— ———— 5

19 First Colorado National BankPaonia, Colo. 3,800,000 1,800,000 111.1% 2

20 North American Banking Co.Roseville, Minn. 3,710,000 ———— ———— 1

21 Grow America Fund Inc.New York, N.Y. 3,558,000 4,871,000 -27.0% 5

22 Portage Community BankRavenna 3,531,200 1,298,800 171.9% 15

23 First Financial Bank NAHamilton 3,528,500 420,200 739.7% 3

24 State Bank and Trust Co.Defiance 3,431,700 ———— ———— 4

25 Cortland Savings and Banking Co.Cortland 3,130,000 200,000 1,465.0% 2

26 Western Reserve BankMedina 2,697,800 661,000 308.1% 9

27 Citizens BankFlint, Mich. 2,412,200 3,098,100 -22.1% 13

28 First Place BankWarren 2,080,000 4,902,000 -57.6% 2

29 Wells Fargo Bank NASioux Falls 1,975,100 630,000 213.5% 4

30 Genoa Banking Co.Genoa 1,675,000 2,309,000 -27.5% 9

31 Newtek Small Business Finance Inc.New York 1,610,800 ———— ———— 2

32 Baytree National Bank & Trust Co.Lake Forest, Ill. 1,600,000 ———— ———— 1

33 Home Loan Investment Bank FSBWarwick, R.I. 1,475,000 ———— ———— 1

34 RidgeStone BankBrookfield, Wis. 1,410,000 ———— ———— 2

35 First Western SBLC Inc.Dallas 1,400,000 1,965,000 -28.8% 1

36 Lake National BankMentor 1,323,300 470,000 181.6% 7

37 Waterford Bank NAToledo 1,200,000 958,500 25.2% 1

38 American Business Lending Inc.Dallas 1,070,000 ———— ———— 1

39 First National Bank of PennsylvaniaGreenville, Pa. 1,069,000 345,000 209.9% 7

40 CFBankFairlawn 1,009,000 5,449,000 -81.5% 2

This list was compiled from information provided by the Cleveland District office of the SBA for fiscalyears ended 9/30/2011 and 9/30/2010. The Cleveland District covers 28 northern Ohio counties.Crain's Cleveland Business does not independently verify the information. We welcome all responses toour lists and will include omitted information or clarifications in coming issues.

Researched by DeborahW. Hillyer

NORTHEAST OHIO’S TOPSBA LENDERS

RANKED BY DOLLAR VALUE OF 7 (A) LOANS IN FISCAL 2011



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Back to the FutureBusiness successionand estate planningfor 2013 starts now

“I don’t think it would be an exag-geration to say appointing the nextCEO is the most important decisionthat this board is maybe ever goingto make because the institution is ata turning point and health care inAmerica is in transition,” Mr.FitzGerald said. “We have to find areally talented candidate to take onthat challenge.”

The impending leadership changescome at a time when MetroHealthfaces mounting financial uncertaintygiven the 35% increase in uncom-pensated care the system has stom-ached since 2008, when Mr. Morantook the helm.

To avoid $6.3 million in projectedoperating losses in 2011 and another$21.1 million in 2012, MetroHealthlast Nov. 3 announced a number ofcost-cutting moves, including 104layoffs and the elimination of 151vacant positions. It also is in theprocess of eliminating another 83jobs during the first half of this year,in part through attrition.

Out with the old …While Mr. Moran has been the

most visible figure at the institutionfor the last four years, the healthsystem’s board of trustees has beencomposed of many of the samefaces for decades — an arrange-ment Mr. FitzGerald said was “notideal.”

Mr. FitzGerald made clear in hisinterview with Crain’s he wants toinject new blood into the board,which oversees MetroHealth’s operations and signs off on thehealth system’s budget, consultingwork and spending on major capitalinvestments.

The three board members whoseterms expire over the next two years

— William Gaskill, Ronald Fountainand Donna Kelly Rego — will haveserved an average of 26 years by the time their final six-year termsexpire.

Dr. Fountain, the board’s chair-man who will have served 16 yearsas a trustee when his term expires in 2013, echoed Mr. FitzGerald’ssentiment.

“There needs to be a cross-section of people on this board whodon’t serve long, long terms,” Dr.Fountain said. “I said this to EdFitzGerald. One term is probablynot quite enough, but two terms isplenty.”

Mr. FitzGerald already has madean impact on the MetroHealth boardwith the appointments of J.B. Silversand Vanessa Whiting, and poten-tially could change the entire boardif he runs for and wins a secondterm as county executive.

“If Ed can continue to providepeople like that in terms of leader-ship on the board, it would be a different board,” Dr. Fountain said.“With picks like that, it’ll simply beamazing in the future.”

Mr. FitzGerald said Dr. Silvers,the former CEO of QualChoice — ahealth plan and insurance company— who now teaches at Case West-ern Reserve University, and Ms.Whiting, a tax and real estate attor-ney from Cleveland Heights, diver-sified the board’s skill sets in orderto address the lofty issues facing thesystem. Those include its agingmain campus on West 25th Streetand how to cope with the financialrepercussions of federal health carereform.

Mr. FitzGerald said other new appointees would elevate the board’sscrutiny of how public dollars arespent by the system, which has

been criticized in recent months forthe amount of money it haspumped into consulting contracts.

… and in with the new MetroHealth officials are putting

together a search committee to vetpotential candidates to take over forMr. Moran, who earns an annualbase salary of $550,000 with up to$150,000 in incentives.

Mr. FitzGerald wouldn’t specifyhow he or members of the 11-member county council should beinvolved in the CEO selectionprocess, other than to say it shouldbe an exhaustive and public searchwith consistent communication amongall parties. He did note, however,that Mr. Silvers and Ms. Whitingwill be on the search committee.

“I think we’ll continue to monitorthe way it’s working,” Mr. FitzGeraldsaid. “We’re a major stakeholder inthe whole system. I don’t think adecision that crucial should be madewithout input from the county.”

County Council President C.Ellen Connally wasn’t as pointed in

her language as Mr. FitzGeraldabout what the level of the county’sinvolvement should be in Metro-Health’s CEO search. She insteadnoted that the council vets and signsoff on the county executive’s Metro-Health board appointments and isconfident the board will make a gooddecision in naming the next CEO.

“I don’t know we have much moreto do with it than that,” she said.

County Councilman DaveGreenspan, who has been critical ofMetroHealth’s operations, likewisesaid council should have “zero involvement, in my opinion” in theselection of the next CEO, as dictatedby state law.

“To that extent, their indepen-dent board should independentlyselect their CEO,” Mr. Greenspansaid. “To the extent council providesfunding, I believe we have the rightand obligation to ensure the fundingis appropriated as we have condi-tioned it.”

The county in 2011 provided a$36 million subsidy to Metro-Health, which is considered to be

the county’s safety-net hospital forthose who can’t afford medical care.

A big unknown is how anychanges in leadership will affectplans unveiled late last year by Mr.Moran to expand MetroHealth’spresence by constructing at leastthree suburban health centers —the first planned for MiddleburgHeights — and undertaking othermeasures to lure more insured patients to the system.

Thomas Campanella, director ofBaldwin-Wallace College’s healthcare MBA program, indicated theimpact of any changes remains tobe seen.

“If it’s already a really solid orga-nization with a solid profit margin,you can weather those leadershipchanges,” Mr. Campanella said.“But as we all know, Metro’s chal-lenges are going to be even greatergiven the population it serves.”

Dr. Fountain said MetroHealth’sleadership is bound to change andthe model for how to guide thehealth system toward a sustainablefuture might change, too. But, headded, “the outcome doesn’tchange, which is continuing toserve the mission of the institu-tion,” that being to care for thecounty’s indigent population. ■

Metro: Changes could impact hospital system’s construction planscontinued from PAGE 1 “I don’t think (the MetroHealth CEO decision) should be

made without input from the county.” – Ed FitzGerald, Cuyahoga County Executive



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Positive jobs report has some analysts rethinking 2012 outlooksBy JEFF BENJAMINInvestmentNews

Last Friday’s U.S. jobs report, whichshowed that more than 200,000jobs were created in December andpushed the nation’s unemploymentrate to its lowest level in nearly twoyears, has some financial marketwatchers rethinking their outlookfor the year ahead.

“I don’t know what the heck’s going on here,” said Brian Gendreau,

market strategist at Cetera Finan-cial Group Inc. “This seems likenothing but good news about theeconomy.”

The report from the Bureau ofLabor Statistics showed broad-based job growth, with the only joblosses last month coming from thegovernment sector. But even thatfigure — showing 12,000 governmentjobs cut — reflects a slowing trend.

With the unemployment rate forDecember measured at 8.5%, down

from a revised November figure of8.7%, the unemployment rate is atits lowest point since February 2009.

“This is a cap to a really goodweek,” said Mark Lamkin, presidentand chief executive of LamkinWealth Management, a $225 mil-lion advisory firm. “If this continues,it could get Obama re-elected.”

It already has Mr. Lamkin rejig-gering his investment strategy. Citingimproved consumer sentiment,December retail sales increases

that came in above expectationsand data from the Institute for Sup-ply Management showing increasedbusiness activity, Mr. Lamkin is readyto move money into stocks.

“Until (last) Monday, we were80% in cash, but we’re now 50% invested and on Monday, we’ll beadjusting that to 70%,” he said.

While the loss of governmentjobs does have a negative effect onthe unemployment rate, it also represents a direction toward fiscal

responsibility and a broader recov-ery, said Brien O’Brien, chairmanand CEO of Advisory Research Inc..

“The deleveraging of municipal-ities, states and the federal govern-ment is being accomplished in partby the shrinking employment levelsin those areas,” he said. ■

Jeff Benjamin is a senior editorwith InvestmentNews, a sisterpublication of Crain’s ClevelandBusiness.


Bankruptcies are down,but don’t pop the bubbly■ A drop in bankruptcy filings in all of 2011from levels of 2010 in Cleveland and Akronmay inspire optimistic thoughts, but bank-ruptcy experts are echoing what they toldCrain’s last May: Bankruptcies aren’t fallingbecause the economy is improving.

“There is no silver bullet to our economy,”said John K. Lane, managing director andCEO of Inglewood Associates LLC, a localturnaround and workout firm. “We are notgoing to wake up to the dawn of a new day.This is going to be a tough, gradual climbback up the mountain.”

Total bankruptcy filings, including consumer and commercial cases, tumbledyear over year by 14% in Cleveland, 21%in Akron and 19% across the entireNorthern District of Ohio of the U.S.Bankruptcy Court, which also includesCanton, Youngstown and Toledo.

Bankruptcy filings in the entiredistrict totaled 30,828 — their lowestpoint since 2008, when they num-bered 31,180.

Bankruptcy professionals say filings aredropping because many people and busi-nesses cannot afford the costs of bankruptcy,and because others don’t expect to see thelight of day if they enter the bankruptcy tunnel. They also say most of the companiesthat could survive bankruptcy took the leapbefore 2011.

As for why consumer bankruptcies in particular are down, attorneys cited slowedforeclosures and increased loan modifica-tions. In addition, access to credit has been

restricted, rendering many people unable totake on debts from which they later mightneed absolved, said Alan C. Hochheiser,managing partner in bankruptcy for Welt-man, Weinberg & Reis Co. LPA in Cleveland.— Michelle Park

Missed this deal? Well, keep watching■ For the low, low price of tuning into FoxSports Ohio for the Cleveland Cavaliers’game at Toronto last Wednesday night, Cavsfans could have gotten a free ticket to theteam’s Friday, Jan. 20, game against theChicago Bulls at Quicken Loans Arena.

And many did. The latest installment ofthe “Box Office Buyout” promotion of theteam and regional sports network featured

an in-game special offer giving everyticket buyer a second ticket for

free, courtesy of FSO. Cavsspokesman Tad Carper saidthe promotion, which theparties ran a few times lastseason, typically generated“a couple hundred tickets,”

but this one produced more than 850 ticketssold, with another 850 distributed for thepromotion.

It’s the latest in what likely will be a longline of promotions this season as the Cavsdeal with a flagging fan base. Last week, theCavaliers offered a beer tasting includedwith a ticket purchase to Tuesday night’swin over Charlotte. The Cavs listed officialattendance as 14,173 for that game, or justunder 69% of capacity.

The team and FSO would partner on two

more promotions this season, according toa network spokeswoman. — Joel Hammond

A testy battle in TV land■ There is a war of words being fought in theether over Northeast Ohio.

Ohio Media Watch, an industry blog, isfollowing a flurry of increasingly testy FCCfilings by the owners of local television sta-tions WJW-TV, Channel 8, and WBNX-TV,Channel 55. It’s over a request by WJW’sowner, a subsidiary of Oak Hill Capital Part-ners, to move the station’s signal to a differentfrequency, one it occupied in the past. Thechange would eliminate some areas whereits signal is hard to pick up over the air sincebroadcasting went digital in 2009.

WJW’s petition before the FCC included alog of more than 300 complaints since June2009 from people who’ve had trouble picking up the station. But Winston Broad-casting, owner of WBNX, filed an objection,saying the switched signal would interferewith its signal and that the petition was onlya cost-saving measure.

Winston said WJW could solve the problemby raising its signal strength at its currentfrequency. That annoyed WJW, which in aDec. 12 filing scoffed at its competitor.

It said WBNX “offers viewers zero localnews or public affairs programming. Putbluntly, it really matters if viewers through-out the Cleveland market can’t reliably tuneinto WJW over-the-air; a few WBNX viewers’inability to watch reruns of ‘The People’sCourt’ and ‘Frasier’ is considerably less im-portant.” — Jay Miller

WHAT’S NEW

COMPANY: Molar Bond LLC,Auburn TownshipPRODUCT: OralEnlight

Molar Bond, a startup formed by KenLawrence, DDS, and manufacturing industryveteran Mike Tur, promises its new productwill help orthodontists see molars in a new light.

The OralEnlight device is designed to makeit easier for orthodontists to see teeth in theback of the mouth and to obtain proper iso-lation; think of it as a fitted mouth flashlight.The company says it offers total posterior illumination, shadow-free light and arechargeable battery pack. It’s made fromFDA-approved plastic and components.

Dr. Lawrence, an orthodontist and an assistant clinical professor at Case WesternReserve University, designed OralEnlight inresponse to complaints from residents thatthey had a hard time obtaining proper molarbracket position due to the difficulty of seeingfar inside the mouth.

To produce the product, he teamed withMr. Tur, a longtime friend, who heads theCleveland office of a family-owned manufac-turing company called Roboworld.

The device was designed with the assis-tance of The Technology House in Solon. Itis injection molded at GSH Industries inStrongsville and assembled in Mentor, whereDr. Lawrence has an orthodontics practice.

For information, visit www.OralEnlight.com.

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK JANUARY 2 – 8

The big story: Macy’s Inc. soon will bepulling out of Parmatown Mall, leaving the sub-urban shopping center with a massive hole tofill. The store at Parmatown is among five Macy’sstores across the country that the Cincinnati-based retailer said it will be closing early thisspring. It is the only store in Ohio that will close.The Macy’s store at Parmatown opened in 1960,when it was part of May Department Stores Co.,and consists of 288,000 square feet of retailspace. The company said it will try to find thestore’s 94 employees opportunities at otherstores it is keeping open.

It’s a gas:Chesapeake Energy Corp. completeda previously announced joint venture agreementwith a subsidiary of Total S.A., under which Total acquired for $2.3 billion an undivided 25%interest in 619,000 acres in what Chesapeake described as “the liquids-rich area of the UticaShale.” Of the joint venture acreage, about542,000 acres were contributed by Chesapeakeand 77,000 acres were contributed by Houston-based EnerVest Ltd. and its affiliates. The jointventure area covers all or a portion of 10 countiesin eastern Ohio.

Taking stock of the situation: Directorsof American Greetings Corp., which saw itsstock price battered recently by disappointingquarterly results, authorized the repurchase of up to $75 million of the company’s Class Acommon shares. In late December, investorssent American Greetings’ stock down 21% in asingle day after posting weak operating margins.On Jan. 4, the stock ended the day at $12.50 ashare, down nearly 50% from its 52-week high of$24.84. American Greetings said there is no setexpiration date for the repurchase program.

New in the neighborhood: Ferro Corp.’sformer headquarters in downtown Cleveland isin new hands long associated with Clevelandbusiness after the building’s sale to ParkwoodCorp., an investment firm formed by the Mandelbrothers, who built and sold the former PremierIndustrial Corp. in the city’s Midtown neighbor-hood. Parkwood paid $2.3 million for the 44,000-square-foot office building at 1000 Lakeside Ave.Morton L. Mandel, Parkwood CEO, said the firmwould move its 51 employees to the building in a few months after it modernizes the 1965-vintage structure.

Good chemistry: OM Group Inc. said itbought Rahu Catalytics Ltd., the developer ofwhat OM Group described as “a unique iron-lig-and based chemistry” for use in environmentallyfriendly coatings, composites and inks. The seller was Unilever Ventures and Management,the European venture capital arm of consumerproducts giant Unilever. OM Group said thetransaction includes all related intellectual property rights and master patents, as well as allmanufacturing and supply agreements. TheCleveland-based producer of specialty chemi-cals did not disclose terms of the transaction.

This and that: Sandusky-based amusementpark operator Cedar Fair L.P. said attendance atits 17 locations totaled 23.4 million guests in2011, up 2.6%, or approximately 590,000 visits,from the company’s record attendance of 22.8million in 2010. … Mining company Cliffs Nat-ural Resources Inc. reached an agreement to sellfor an undisclosed price its previously discontin-ued renewaFUEL biomass production plant inMichigan. The buyer is RNFL Acquisition LLC,an acquisition entity created by an investorgroup that includes renewaFUEL’s minoritypartners.


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

Abramoff’s comebacksets off her gag reflex■ It’s only Jan. 3, but we already have a candidate for Northeast Ohio quote of theyear, courtesy of a Bloomberg story aboutthe re-emergence of convicted felon JackAbramoff in public life.

Bloomberg reported that mandatoryethics training this year for the 138 membersof the Kentucky legislature features a lecture by Abramoff, who in 2006 was con-victed for his role in Washington’s biggestlobbying corruption scandal. He will bepaid $5,000 plus travel expenses for an hourof his thoughts.

Some lobbyists “say they are livid aboutAbramoff’s return to the spotlight, saying heonly further impugns the reputation of aprofession that rates lower in Gallup publicopinion surveys than car sales and telemar-keting,” Bloomberg reports.

Elizabeth Bartz, president of State andFederal Communications Inc. in Akron,said Abramoff’s public appearances “makeme want to gag.” (State and Federal Com-munications helps compa-nies and organizations com-ply with their politicalcontributions, state lobbyingand procurement activities.)

“Certainly you want to givepeople a chance to rehabili-tate themselves,” she toldBloomberg. “But is JackAbramoff rehabilitated? I don’tthink so.”

Might as well put that TVviewing to good use■ Here’s a fun assignment for your TV-watching high school student.

The Federal Reserve Bank of Cleveland isoffering high school juniors and seniors achance to win prizes by entering the bank’s2012 Creative Writing Contest called “Eco-nomics on TV.”

Students “can submit an essay, poem, play,or short story explaining how basic eco-nomic concepts impact the TV show’s plot,”the Cleveland Fed said.

The deadline for submissions is Feb. 27,2012. The top prize is a $500 cash gift card.Kids, start looking closely at the economicconcepts on display in “Jersey Shore.” (No joke.That would be a good one to write about.)

If the gambling doesn’tget you, the taxes will■ We avoid clichés like the plague here atCrain’s Cleveland Business, so you won’tfind us calling something a “good news/badnews” story. But a recent piece from Reutersmight be described no other way for gam-blers living in Ohio.

“In the waning days of 2011, the federalgovernment has handed gamblers twogifts,” the news service noted. “The JusticeDepartment cleared the way for states tostart legalizing online poker and other

online betting games. And theIRS agreed to a tax court deci-sion that will allow profession-al gamblers to take big taxlosses.”

But Russell Fox, a Las Vegastax expert who prepares thereturns of poker aficionados,horse bettors, slots players and

more said Ohio is not kind togamblers.

“Some states disallow gambling losses, orsubject them to their state’s alternativeminimum tax rules,” Reuters reported. “Ifyou’ve got gambling income and losses, youprobably don’t want to be from Hawaii,New York, Ohio, Wisconsin.”


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