20100308-NEWS--1-NAT-CCI-CL_--
3/5/2010
3:22 PM
Page 1
$1.50/MARCH 8 - 14, 2010
Vol. 31, No. 3
Plastics
firms play
chess in
recession
Stronger outfits emerge through
acquisitions, while weak lose out
By DAN SHINGLER
[email protected]
INDIANS MAKE
THEIR PITCH
As the team employs its marketing
muscle ahead of its April 12 home
opener against Texas, it faces the
dueling issues of a poor 2009 season
and little optimism for 2010. Add in
last summer’s trades of marketable
faces Cliff Lee, a Cy Young winner, and
Victor Martinez, an All-Star catcher,
plus ownership’s reputation among
fans for being thrifty, and there’s a
host of issues with which to deal.
“They’re hurt by the Browns and
Mergers and acquisitions are not the hot topic they
once were, but in Northeast Ohio’s plastics industry,
they’re a chief tool for companies to enter new markets,
gain customers and expand capacity.
The activity is resulting in stronger players taking out
weak ones in an industry realignment that is driven by
the recession, but which some
observers say has been needed.
“I want to stay
“It’s a shakeout I think was
in automotive,
long overdue. We’ve had some
but I want to
weak suppliers and too many
suppliers,” said Bill Ridenour,
reduce my
CEO of Polymer Transactions,
dependency
a mergers and acquisition firm
on it.”
in Newbury that finds both
buyers and sellers for clients in
– Joseph Gingo,
the plastics industry.
CEO, A. Schulman
Mr. Ridenour and others say
Inc.
some companies are buying
weakened competitors because they want the same
customers they’ve been fighting to get for years. In other
cases, they are buying into new geographies, such as
Europe, or new industries, such as medical device
manufacturing or aerospace. Or, they are diluting their
dependence on troubled sectors such as automotive with
acquisitions that diversify their customer bases.
See INDIANS Page 7
See PLASTICS Page 6
Ball club’s front office winds up marketing efforts
to attract frustrated fans and overcome some bad PR
By JOEL HAMMOND
[email protected]
F
ormer Boston Celtics coach
Rick Pitino famously once
said, in discussing the Celtics’
struggles, that “(Boston legend) Larry Bird’s not walking through
that door, fans. Kevin McHale’s not
walking through that door.”
It’s a pantheon-worthy quotation,
and one to which the Cleveland
Indians definitely can relate.
Region’s angels in favor of pursuing new funds
North Coast, Akron groups
seek to capitalize on startups
By CHUCK SODER
[email protected]
10
Northeast Ohio’s only angel fund is about
to deplete the cash it reserves for new
investments, but the region could end up
with two new funds to replace it.
The North Coast Angel Fund plans to
finance three more early stage technology
companies over the next three months,
which would leave the group with no more
money for new deals.
Startups looking for capital shouldn’t fret,
though. While the group of angels — a term
for wealthy individual investors — has yet to
decide if it will raise a second fund, managing
member Clay Rankin said he would like the
group to do so. They plan to make the
decision over the next three months.
Plus, an informal network of angels in
Akron, known as the ArchAngels, aims to
raise its own formal fund over the next six
months, according to Barry Rosenbaum, a
senior fellow with the University of Akron
Research Foundation, which oversees the
Akron investors group.
Loose networks such as the ArchAngels
allow individual investors to get together
regularly to view presentations by startups looking for capital and to collaborate
INSIDE
For-profit colleges get booked up
Institutions such as the University of Phoenix, Stautzenberger College and DeVry University are bolstering enrollment levels because of
their flexible methods of
delivering instruction. While
some nonprofit colleges
say they are not worried
about losing market share, or
students, to their for-profit
counterparts, their attraction
has prompted nonprofits to be more creative in attracting
students. Read Shannon Mortland’s story on Page 3.
See INVEST Page 18
0
NEWSPAPER
71486 01032
6
SPECIAL SECTION
SMALL BUSINESS
Immigrant entrepreneurs say being in U.S. opens
up new opportunities, possibilities ■ Page 13
PLUS: ACQUISITIONS ■ GRAND OPENINGS ■ TAX TIPS ■ & MORE
CrainsCleveland.com/30thanniversary
20100308-NEWS--2-NAT-CCI-CL_--
2
3/5/2010
1:36 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
CORRECTION
COMING NEXT WEEK
A Page One, Feb. 22 article on
lead times in obtaining steel incorrectly
identified the city in which Hawk Corp.
president Chris DiSantis worked prior
to coming to Cleveland. Mr. DiSantis
worked at a steel company in Pittsburgh.
Spec homes scarcer
REGULAR FEATURES
30 Years and Counting ..9
Best of the Blogs .........19
Classified ....................18
Editorial ........................8
Going Places ...............12
List: Software
Developers ................17
Personal View................8
Changes in financing are drying up the
ability of local builders to build homes on
speculation to enable quick sales to
buyers, although national builders still
offer them. The shift will change the new
home buying and building process. We
explore the issues the industry faces in
our Real Estate section.
MARCH 8-14, 2010
CAN’T GET NO ...
Most people aren’t especially happy in their jobs these
days, and nowhere is the dissatisfaction more pronounced
than among younger employees. That’s the result of a
Conference Board survey of about 5,000 U.S. households
that looked at job satisfaction by age group. In no age group
did even half of respondents report they were satisfied with
their jobs.
Age group
Under 25
% satisfied with job
35.7%
25-34
47.2
35-44
43.4
45-54
46.8
55-64
45.6
65 and older
43.4
SOURCE: THE CONFERENCE BOARD; WWW.CONFERENCE-BOARD.ORG
700 W. St. Clair Ave., Suite 310,
Cleveland, OH 44113-1230
Phone: (216) 522-1383
Fax: (216) 694-4264
www.crainscleveland.com
Publisher/editorial director:
Brian D. Tucker ([email protected])
Editor:
Mark Dodosh ([email protected])
Managing editor:
Scott Suttell ([email protected])
Sections editor:
Amy Ann Stoessel ([email protected])
Senior reporter:
Stan Bullard ([email protected])
Reporters:
Shannon Mortland ([email protected])
Jay MIller ([email protected])
Chuck Soder ([email protected])
Dan Shingler ([email protected])
Arielle Kass ([email protected])
Designers/reporters:
Joel Hammond ([email protected])
Kathy Carr ([email protected])
Research editor:
Deborah W. Hillyer ([email protected])
Cartoonist/illustrator: Rich Williams
Marketing/Events manager:
Christian Hendricks ([email protected])
Marketing coordinator:
Laura Franks ([email protected])
Advertising sales director:
Mike Malley ([email protected])
Account executives:
Adam Mandell ([email protected])
Dirk Kruger ([email protected])
Nicole Mastrangelo ([email protected])
Dawn Donegan ([email protected])
Business development manager &
classified advertising:
Genny Donley ([email protected])
Office coordinator:
Toni Coleman ([email protected])
Production manager:
Craig L. Mackey ([email protected])
Production assistant/video editor:
Steven Bennett ([email protected])
Graphic designer:
Kristen Wilson ([email protected])
Billing:
Susan Jaranowski, 313-446-6024
([email protected])
Credit:
Todd Masura, 313-446-6097
([email protected])
Circulation manager:
Erin Miller ([email protected])
Customer service manager:
Brenda Johnson-Brantley (bjohnson-brantley@ crain.com)
1-888-909-9111
Crain Communications Inc.
Keith E. Crain: Chairman
Rance Crain: President
Merrilee Crain: Secretary
Mary Kay Crain: Treasurer
William A. Morrow:
Executive vice president/operations
Brian D. Tucker: Vice president
Robert C. Adams:
Group vice president
technology, circulation, manufacturing
Paul Dalpiaz: Chief Information Officer
Dave Kamis:
Vice president/production & manufacturing
Kathy Henry:
Corporate circulation/audience
development director
G.D. Crain Jr.
Founder (1885-1973)
Mrs. G.D. Crain Jr.
Chairman (1911-1996)
Subscriptions: In Ohio: 1 year, $59; 2 years, $102.
Outside of Ohio: 1 year, $102; 2 years, $180. Single
copy, $1.50. Allow 4 weeks for change of address.
Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-888-909-9111
or FAX (313) 446-6777.
Reprints: Call 1-800-290-5460 Ext. 136
Audit Bureau
of Circulation
20100308-NEWS--3-NAT-CCI-CL_--
3/5/2010
1:35 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
3
Layoffs latest trouble at software firm CSC
Receivership, bankruptcy and recent cutbacks
illustrate woes, though boss now more confident
By CHUCK SODER
[email protected]
One of Northeast Ohio’s biggest
software companies has been getting
smaller as a result of financial problems that drove the Strongsville firm
to file for Chapter 11 bankruptcy
protection in November.
Computer Systems Co., which
does business as CSC Group, two
weeks ago laid off an undisclosed
number of employees in an effort to
hold down costs while the company
continues searching for capital to
pay off several million dollars in
debt, said CEO Bill Zimmerman.
The provider of document management software and services has
made several staff cuts since April
2008, when it voluntarily put itself
under the protection of a court-
appointed receiver to stave
Lansing office to 30 from
off a lawsuit from one of its
about 50 since June 2009,
investors.
after it already had made
CSC Group now employs
cuts at that location and
roughly 100 people at its
closed its office in Livonia.
headquarters on Foltz
The recession hurt both
Parkway, which is down
the company’s sales and
from 108 as of Jan. 1 and
its ability to find many
125 in June 2009, according Zimmerman
investors willing to buy a
to information from Mr.
large portion or all of the
Zimmerman and Crain’s list of the
company, leaving CSC Group only
region’s largest software compawith deals the company considered
nies, published on page 17 of
unacceptable, Mr. Zimmerman
today’s issue. Cuts have been worse
said. He noted how CSC Group’s
at the company’s Michigan offices;
debtors agreed with the company’s
CSC Group has reduced staff at its
decision to turn down an offer to
sell the company to a group of
investors last summer because the
prospective buyers seemed uninterested in rebuilding the company.
“It appeared as though the
people … were looking to flip us,”
he said.
Mr. Zimmerman, however, said
that today he feels better about the
company’s prospects than he did in
2009. The company despite its
troubles has retained “the overwhelming bulk” of its customers,
and the economy’s apparent
improvement may help CSC Group
See CSC Page 6
INSIGHT
The book is out on for-profit
colleges: They’re gaining steam
Ascension forces traditional schools to take stock
By SHANNON MORTLAND
[email protected]
JASON MILLER
Corsa Performance Exhaust’s new exhaust system for Ford’s Taurus SHO adds 14 horsepower (to a 365-horsepower engine) and 12.5 foot-pounds of torque. Craig Kohrs (above), Corsa’s vice president of marketing and
sales, hopes car buyers fond of muscle cars will pay for the added performance.
PUTTING ON A SHOW
Berea manufacturer aims to reinvent muscle car glory days, seize
Ford’s momentum with souped-up system for automaker’s new Taurus
By DAN SHINGLER
[email protected]
C
orsa Performance Exhaust
in Berea wants to do more
than ride Ford Motor Co.’s
coattails to growth. It
wants to get right up under the
bumpers of the revved-up automaker’s
new Taurus SHO model, which
boasts a Cleveland-made EcoBoost
engine that Corsa thinks will be a hit.
“American muscle is really who
we are,” said Craig Kohrs, head of
marketing and sales for Corsa.
Muscle? Taurus? Really? Those
might be questions from someone
who hasn’t driven a Ford lately, or at
least hasn’t driven the new Taurus.
Armed with a 3.5-liter, twinturbocharged EcoBoost, the new
Taurus SHO puts out 365 horsepower
See CORSA Page 9
“(Corsa is) definitely an up-and-comer. ... Now they’re branching out.”
– Brian Prior, merchandiser, Summit Racing Equipment
They’re new, striving to be wellknown and continuing to gain a
bigger piece of the student pie.
They are for-profit colleges. The
University of Phoenix, Stautzenberger College, DeVry University
and Strayer University are just a
few of these schools that have
popped up in Northeast Ohio in
recent years.
Their flexible methods of
delivering instruction — and an
enormous amount of advertising
spending — are enabling forprofit schools to build their
enrollment levels with students
who otherwise might have chosen
the traditional, nonprofit colleges
that have called Northeast Ohio
home for decades.
“They’re obviously taking a big
chunk of the market away,” said
David A. Armstrong, vice president
of enrollment and legal counsel at
Notre Dame College in South
Euclid. “They have made all colleges look at what they do and see
if what we do, we can do better.”
About 2.6 million students are
enrolled in for-profit colleges, and
that number is rising by an average
of 9% annually, according to a
Feb. 8 article in the Chronicle of
Higher Education. Overall, about
19 million students enroll in
degree-granting schools every fall,
the article noted.
Such figures have caused Notre
Dame to take notice. Though
enrollment is up in all categories
at Notre Dame, Mr. Armstrong
said the college still worries it’s
losing market share to the forprofit schools. As a result, Notre
Dame recently launched the Finn
Center, which will oversee its
See BOOK Page 10
THE WEEK IN QUOTES
“It’s a shakeout I
think was long overdue. We’ve had some
weak suppliers and
too many suppliers.”
— Bill Ridenour, CEO of
Polymer Transactions, a boutique
mergers and acquisition firm in
Newbury. Page One
“Research has shown
that the No. 1 factor on
whether people buy or
renew tickets is hope.
It’s been said the Red
Sox actually winning
the World Series (in
2004, after an 86-year
drought) hurt them a
little.”
— Jim Kadlecek, chair of the
department of human performance and sport business,
Mount Union College. Page One
“This is the country
that will allow you to
do whatever you
want.”
— Stella Moga-Kennedy,
founder, Le Chaperon Rouge
child care centers. Page 13
“We got (market)
penetration that
might have taken years
to acquire — with the
stroke of a pen.”
— Eric Winbigler, president,
Advance Paint Technology Ltd.
Page 13
20100308-NEWS--4-NAT-CCI-CL_--
4
3/5/2010
CRAIN’S CLEVELAND BUSINESS
1:36 PM
Page 1
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
Stimulus to fuel Ohio’s
e-health record push
Providers seek better care by sharing information
By CHUCK SODER
[email protected]
First, hospitals and doctors must
adopt electronic medical records.
Then, they have to share them.
The $43 million in federal stimulus
money that the Ohio Health Information Partnership was awarded
last month should help the state
start down the path to achieving
those two goals, which the federal
government set in 2004 in an effort to
improve medical care and lower costs.
Two-thirds of the money — part
of the $775 million in stimulus
funds that the U.S. Department of
Health and Human Services awarded
to organizations nationwide on Feb.
12 — will go toward the creation of
Regional Extension Centers that will
help hospitals and doctors choose
and install electronic records systems.
The rest will help fund the creation
of a Health Information Exchange
that will allow health care providers
statewide to share those records
digitally, which would be particularly
Reality Business Checking
Because there is no such thing as “petty cash”
When it comes to your business, every last cent is important. That’s why Reality Business Checking
is built to work harder and smarter to save you money and provide the features you really need.
We will partner, listen and work with you to make your business as big as you dream.
Stop in and let’s discuss the serious advantages of Reality Business Checking:
UÊ£]äääÊ/À>˜Ã>V̈œ˜Ã
UÊ œÊœ˜Ì…ÞÊiiIʜÀʈ˜ˆ“Õ“Ê>>˜ViÊ,iµÕˆÀi“i˜Ì
UÊÀiiÊV̈ۈÌÞÊ,iÜ>À`Ã
UÊÀiiÊ/Ê/À>˜Ã>V̈œ˜ÃII
UÊÀiiÊ
>˜Vii`Ê
…iVŽÃÊ,iÌÕÀ˜Ãa
UʈÃVœÕ˜Ìi`ÊÕȘiÃÃÊ
…iVŽÊ*ÀˆVˆ˜}
UÊ->ÛiʜÀi]Ê-«i˜`ÊiÃÃ]Ê>˜ŽÊiÌÌiÀ
firstmerit.com
£‡nnn‡Ón·ÓÎäÎ
IÊ
ÊÃÃiÃÓi˜Ìʓ>ÞÊLiÊV…>À}i`Ê̜ÊޜÕÀÊ>VVœÕ˜Ì°ÊII/ʜܘiÀʓ>ÞÊ>ÃÃiÃÃÊ>ÊviiÊ܅i˜ÊÕȘ}ʘœ˜‡ˆÀÃÌiÀˆÌÊ/Ê
>˜`ÊviiÃʓ>ÞÊ>««Þʜ˜ÊÌÀ>˜Ã>V̈œ˜Ãʓ>`iʈ˜ÌiÀ˜>̈œ˜>Þ°Êa
>˜Vii`ÊV…iVŽÊÀiÌÕÀ˜ÊÃiÀۈViʓÕÃÌÊLiÊÀiµÕiÃÌi`°
helpful in cases where patients end
up in hospitals they don’t normally
visit, said Amy Andres, board chairman of the Ohio Health Information
Partnership.
“If the person ends up in the ER,
the ER would know what meds
they’re on,” Ms. Andres said.
The partnership has yet to decide
which health organizations will serve
as Regional Extension Centers, though
Ms. Andres said she has been in close
contact with Better Health Greater
Cleveland, a regional coalition of
health care providers.
“The good news is that a collaborative already exists, so they don’t have
to try to create one,” Ms. Andres said.
The Ohio Health Information
Partnership by June plans to pick a
handful of electronic medical records
companies from which hospitals
and doctors receiving help through
the partnership can choose. To be
on the short list, vendors will need to
offer a “dramatically discounted price”
on their services, Ms. Andres said.
From there, the extension centers
will help health care providers pick a
records system and implement it.
The federal government is
prompting hospitals and physicians
to have such systems up and running by the end of 2011 by promising
larger reimbursements from the Centers
for Medicare and Medicaid Services.
The bonuses will shrink over time
and in 2015 turn into payment cuts.
Among the federal requirements
is that hospitals share records, which
so far has been an elusive goal for
many regions in the country, including
Northeast Ohio.
OneCommunity, a Clevelandbased group that provides ultra highspeed Internet access to government
agencies and nonprofits, built support
for a Northeast Ohio information
exchange in 2007. However, the group
couldn’t round up financing from its
partners, which included most of the
region’s biggest hospital systems,
said Mark Ansboury, OneCommunity
chief technology officer.
The idea, which was projected to
cost about $15 million over the first
five years, was “ahead of its time,” Mr.
Ansboury said. Though federal money
should help the new effort get going,
he cautioned that the $14.8 million
set aside for the statewide information exchange won’t last long.
The effort could get help from Better
Health Greater Cleveland, which is
applying for a federal grant that
would provide about $20 million in
stimulus money for a Northeast
Ohio information exchange.
Any local exchange would be
coordinated with the statewide effort,
which in turn would be designed to
eventually connect to exchanges in
other states.
Dr. Randall Cebul, director of
Better Health Greater Cleveland,
said securing the additional money
would be a “long shot” because 200
groups are applying for 15 grants.
The overall effort, however, is important because broad, quick access to
patient records could help providers
improve quality and cut costs, both
for individuals and for the business
community.
■
Volume 31, Number 10 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except
for combined issues on the fourth week of May and
fifth week of May, the fourth week of June and first
week of July, the third week of December and fourth
week of December at 700 West St. Clair Ave., Suite
310, Cleveland, OH 44113-1230. Copyright © 2010
by Crain Communications Inc. Periodicals postage
paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send
address changes to Crain’s Cleveland Business,
Circulation Department, 1155 Gratiot Avenue, Detroit,
Michigan 48207-2912. (888)909-9111.
REPRINT INFORMATION: 800-290-5460 Ext. 136
20100308-NEWS--5-NAT-CCI-CL_--
3/4/2010
9:43 AM
Page 1
YOU WORK ALL OVER.
SHOULDN’T YOUR 3G?
PUT YOUR BUSINESS
ON THE MAP.
Buy one BlackBerry® and
get another FREE.
With new 2-yr activation on voice plan with data pak $29.99 or
higher/smartphone. Free phone must be of equal or lesser value.
NEW!
BlackBerry Curve™
Wi-Fi enabled with
support for popular apps
2999
$
$129.99 2-yr. price – $100 mail-in rebate debit
card. New 2-yr. activation on voice plan with data
pak $29.99 or higher/smartphone req’d.
More small businesses choose Verizon Wireless than any other wireless carrier. Maybe it’s because of our map. The one with the most 3G coverage in
America. And one that makes for powerful, reliable business solutions. So you can be as productive on the road as you are anywhere else.
1.800.VZW.4BIZ | verizonwireless.com/onthemap
Activation fee/line: $35. IMPORTANT CONSUMER INFORMATION: Subject to Customer Agmt, Calling Plan, rebate form and credit approval. Up to $350 early termination fee/line, and other charges. Offers and coverage, varying by service, not available everywhere. Rebate takes up to
6 weeks & expires in 12 months. Limited time offer. While supplies last. Shipping charges may apply. See verizonwireless.com for details. Small Business claim: results based on an independent research study of 3,429 single location firms with 1-49 employees using corporate liable wireless
service. Telephone interviews were conducted between 4Q08 and 3Q09 with the employee most knowledgeable with telecommunications service. © 2010 Verizon.
99816
20100308-NEWS--6-NAT-CCI-CL_--
6
3/5/2010
2:52 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
Plastics: Market favors strategic buyers
continued from PAGE 1
Achieve.
FRANK G. JACKSON
MAYOR, CITY OF CLEVELAND
CLASS OF ‘77 / ‘79 / ‘83
Learn how our alumni engage at:
www.csuohio.edu/alumni
“I continue to try to reduce my
dependency on automotive,” said
Joseph Gingo, CEO of Akron-based
A. Schulman Inc., a supplier of plastic
resins that has announced two
acquisitions in the last four months.
“Let me be clear: I want to stay in
automotive, but I want to reduce my
dependency on it,” Mr. Gingo said,
noting how acquisitions will help him
do just that.
A lack of investment by private
equity firms and other so-called
“financial buyers,” who in better
times relied on easy credit to make
acquisitions, means a friendlier
market for traditional strategic buyers.
And distressed companies continue
to be put on the market, creating
further opportunities for buyers.
In 2009, there were 315 significant
acquisitions made in the plastics
industry worldwide, according to
P&M Corporate Finance LLC, a
Michigan M&A firm that works in the
sector. More than 15% of those deals,
49 in total, involved distressed companies. By comparison, only 17 deals,
or 5.6% of the 301 transactions in
2008, involved distressed companies.
New day for Michael Day
That trend can be seen in Northeast Ohio. For instance, Mr. Ridenour
recently found a buyer for Michael
Day Enterprises in Medina, a nylon
producer with revenues of $45
million in 2009. The company
declared Chapter 11 bankruptcy last
November with the intention of
selling itself after seeing its sales fall
from about $60 million in 2008. The
credit crunch and a drop in U.S.
automotive production were too
Mission SOAR!
Helping your business reach new heights
continued from PAGE 3
Choosing Chapter 11
Attorneys on a Mission
®
Your mission is our mission. We never lose sight of it.
A business advisory and advocacy law firm
600 Superior Avenue, East, Suite 2100, Cleveland, OH 44114
216.348.5400
Carl J. Grassi
Shawn M. Riley
President
Cleveland Managing Member
Chicago • Cleveland • Columbus • Detroit • West Palm Beach
www.mcdonaldhopkins.com
Gingo said.
In December, A. Schulman agreed
to pay $191 million to acquire
ICO Inc., a Houston-based maker of
“masterbatch” plastics that produces
plastic resins used by molders around
the country. The company had 2009
revenues of about $300 million.
“There was very little overlapping
capacity” between the two companies, Mr. Gingo said.
A. Schulman’s $10 million
purchase last week of McCann Color,
a maker of color concentrates in
North Canton, was driven by its
desire to replace an existing plant
in nearby Sharon Center with
McCann’s 12-year-old facility.
The move also allows A. Schulman
to reduce its dependency on the U.S.
auto market, Mr. Gingo said. Whereas A. Schulman’s Sharon Center plant
relied on automotive for about onethird of its business, McCann did almost no automotive business, he
said.
Good times for the savvy
Mr. Gingo said he’s still looking for
other deals to fill specific niches, such
as the Latin America market or the
engineered plastics market in the
United States. He’ll likely find them,
said Mr. Ridenour, who also does
work for A. Schulman.
With the economy still tough for
many plastics companies, he expects
more will come on the market.
Mr. Ridenour suggests firms market themselves while they are still
healthy if they know they are going to
sell.“Buyers would prefer to buy a
company that hasn’t deteriorated so
much that it’s in bankruptcy,” he
said.
■
CSC: Firm opts for Chap. 11 over receiver’s changes
find the right investors, he said. The
company, he added, is engaged in
“detailed conversations” with several
prospective buyers.
“We feel much more confident,”
he said.
The attorneys at McDonald Hopkins are on a
mission to identify insightful legal solutions that
help your business soar.
much for it, Mr. Ridenour said.
“It’s a sign of the times that this
company finds itself in this situation,” he said. “It was a growing
company until it ran into this automotive buzzsaw at the end of 2008.”
The buyer was an Italian company,
Radici Plastics USA, part of the giant
Radici Group of plastics companies
with revenue of nearly $2 billion in
2009. Radici paid $5.7 million to buy
Michael Day and also signed a fiveyear lease valued at $3.1 million with
KeyBank, the lender that ended up
owning the company’s plant and
property. Radici had little presence in
the U.S. auto market, but wanted one.
“It was a smart move for them,
because Michael Day was probably
the largest compounder of nylon for
the automotive market in the U.S.,”
Mr. Ridenour said. Of course, he
added: “You have to have some faith
in the automotive market to make
this kind of deal.”
Other companies are entering
markets such as specialty health care.
That was the stated objective of
PolyOne Corp. in Avon Lake, which at
the end of 2009 announced it was
paying $12 million for Connecticutbased New England Urethane Inc.
New England Urethane makes
engineered materials used by plastic
molders to manufacture specialized
health care products. PolyOne chief
financial officer Robert Patterson said
the deal represented an opportunity
to expand in a target industry at an
attractive price.
In Akron, A. Schulman also
has been on the acquisition trail, announcing a deal in December and
another on March 1 — each done
for wholly separate reasons, Mr.
The company would not have
filed for Chapter 11 bankruptcy in
November had its original courtappointed receiver, Robert Ranallo,
not resigned last fall, Mr. Zimmerman
said. The receiver appointed to take
his place, Robert Angart, planned
to make several changes to the
company, so to avoid them CSC
Group filed for Bankruptcy Court
protection, Mr. Zimmerman said.
No receiver currently is in possession of the company.
“Basically we said, ‘If that is going
to happen, we might as well be in
charge instead of the receiver being
in charge,’” he said.
Neither Mr. Zimmerman nor
Mr. Angart, a company turnaround
specialist with Hillyer Group LLC of
Cleveland, would say whether Mr.
Ranallo resigned by his choice.
Mr. Ranallo, who is a partner at
accounting firm Skoda Minotti and
a founder of Ranallo & Aveni LLC,
both in Mayfield Village, did not
return phone messages left at his
office last Thursday, March 4, and
Friday, March 5. Mr. Angart said he
was chosen by Huntington National
Bank, CSC Group’s biggest creditor.
The bankruptcy filing, made in
U.S. Bankruptcy Court in Cleveland,
said CSC Group has between $10 million and $50 million in debts, and it
listed the value of its assets in the
same range. The company owes
money on $13 million in senior debt
from Huntington, according to the
original receivership filing, though
Mr. Zimmerman said CSC Group has
paid off “a good portion” of that debt.
The company also owes money
on both $2 million in subordinate
debt it received from DCC Growth
Fund of Washington, D.C., and $3
million in subordinate debt from
Smith Whiley & Co., the Hartford,
Conn.-based institutional investment
advisory firm that originally threatened to sue CSC Group in 2008.
In addition, the company owes
nearly $1.1 million to its 20 largest
unsecured creditors. Included in that
amount is $282,000 in taxes owed to
the state of Ohio and $17,400 in
taxes owed to Cuyahoga County.
The committee representing
unsecured creditors has been
generally happy with the way the
bankruptcy has proceeded so far
and supports CSC Group’s efforts to
find outside capital, said Ron Gold,
the committee’s attorney.
“We’ve had a good level of cooperation from the debtor and the
counsel and their principals,” said
Mr. Gold, an attorney with Frost
Brown Todd LLC of Cincinnati.
A lawyer representing DCC
Growth Fund and Smith Whiley did
not return phone messages left last
Wednesday, March 3, and Friday,
March 5, or an e-mail sent Wednesday, March 3.
■
20100308-NEWS--7-NAT-CCI-CL_--
3/5/2010
3:32 PM
Page 1
MARCH 8-14, 2010
WWW.CRAINSCLEVELAND.COM
Indians: Sizemore still key marketing tool
continued from PAGE 1
Cavs owners spending whatever they
have to,” said Paul Roetzer, president
of Cleveland-based PR 20/20, “and
by fans proving they’ll support a
winning baseball team in the ’90s.
Until they spend, I don’t know that
any amount of marketing will get
more than 20,000 fans in the seats.”
But the Indians do have hope, and
they’re using it. There’s the Tampa
Bay Rays and Colorado Rockies, two
teams that recently have advanced
to the World Series despite smaller
payrolls and being given little chance
to do so. And there’s the hiring of
manager Manny Acta, who has
proven he realizes the importance of
connecting with fans through town
hall meetings and media appearances. The engaging Acta replaced
the often-stoic Eric Wedge.
“Research has shown that the No. 1
factor on whether people buy or renew
tickets is hope,” said Jim Kadlecek,
the chair of the department of
human performance and sport business at Mount Union College. “It’s
been said the Red Sox actually winning the World Series (in 2004, after
an 86-year drought) hurt them a little.
Part of being a Cubs fan is the misery
(they haven’t won a World Series
since 1908) of being a Cubs fan.”
The Indians continue to push
unique pricing and promotions: For
the second straight season, the Indians
are employing value-based pricing,
which assigns different prices to
games at different points in the
season. In addition, the team has
added to its litany of discounts and
promotions, including a two-forTuesday offer, where fans get two
bleacher seats and $20 in food
vouchers for $32; and a Sunday package in which fans can purchase
a package for as low as $52 that
includes four game tickets and $40 in
food or merchandise.
Jim Kahler can relate to the struggles.
Mr. Kahler, former vice president
of sales and marketing for the Cleveland Cavaliers and now executive
director of the center for sports
administration at Ohio University,
said hope is crucial to marketers. He
cited the 1997 NBA Draft, when the
Cavs selected Derek Anderson from
Kentucky and Brevin Knight from
Stanford, two names familiar to fans
from the recent NCAA men’s basketball tournament. The year prior, the
Cavs took a Ukrainian named Vitaly
Potapenko and a Lithuanian named
Zydrunas Ilgauskas.
“We had a lot of buzz from Anderson and Knight,” Mr. Kahler said.
“But with Potapenko and ‘Z,’ I thought,
‘I have to get the sales staff going out
there, and I don’t even know how to
say their names?’ Every team in every
sport has to build on hope.”
The Grady’s still here
In the absence of Messrs. Lee,
Martinez and the old Travis Hafner,
All-Star center fielder Grady Sizemore helps that hope. Mr. Sizemore
missed 56 games and hit .248 in 2009,
but by all accounts is fully healthy
and still the face of the franchise.
That’s the case despite an embar-
rassing November incident in which
near-nude photos went viral on the
Internet. Mr. Sizemore said he took
the photos for his girlfriend, and they
were stolen from her e-mail account.
Mr. Sizemore adorned the front
page of a four-page Indians ad
section in the Feb. 28 Plain Dealer
that pitched “Family-Friendly Entertainment at Family-Friendly Prices.”
“Grady — one of the elite players in
baseball — will continue to play a
major role in how we market Cleveland Indians Baseball,” Indians vice
president of public relations Bob
DiBiasio said in an e-mail.
Without other stars, Mr. Sizemore
likely would have been the point man
on Tribe advertising this year no
matter what, barring an offseason catastrophe. And while Mr. Sizemore’s
judgment lapse created a buzz on the
Internet, it’s a mistake from which he
— and the Indians — can recover,
public relations professionals say.
“I don’t know if I would have
paired that headline with his picture
right away,” Mr. Roetzer said. “But
because of his stature and what he’s
accomplished, he has to be their
main image.”
While the circumstances surrounding the Internet photos were
not ideal, Mr. Sizemore may have
unintentionally created a buzz
around the team, said Dominic Litten,
social media and interactive PR
manager at Cleveland marketing and
advertising company Point to Point.
“He may have gotten more people
talking about the team,” Mr. Litten
said. “That’s never a bad thing.”
■
CRAIN’S CLEVELAND BUSINESS
7
20100308-NEWS--8-NAT-CCI-CL_--
8
3/4/2010
4:44 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker ([email protected])
EDITOR:
Mark Dodosh ([email protected])
MANAGING EDITOR:
Scott Suttell ([email protected])
OPINION
Ring it up
L
eave it to Ohio to continue to apply 20thcentury regulations to an industry that has
moved well beyond the last century.
Members of the Ohio House should recognize
that the rules that governed traditional telephone
companies when they held a stranglehold on the
market are no longer valid and should move
forward with updated regulations that would be in
line with the competitive and changed nature of the
telecommunications industry.
The state Senate already has approved a piece of
legislation, Senate Bill 162, that would modernize
Ohio’s outdated telecom rules. However, the House
has been dragging its feet on a parallel bill, House
Bill 276, and is causing proposed reforms to
languish unnecessarily.
It’s hard to justify the hang-up. It isn’t as though
traditional landline phone companies enjoy a
monopoly over phone service any longer, at least in
most parts of the state.
Just look around. Cable companies aggressively
have been pushing phone service and many people
have opted for no home phone at all because of their
cell phones. As a result, the number of landlines
served by incumbent phone companies has plunged
by nearly half over the last decade, to 4 million in
2008 from 7 million in 2001.
Most of the Ohio regulations with which traditional
phone companies must comply don’t apply to their
cable and wireless rivals. So, why saddle a group of
companies that is losing market share by the basketful
with rules that don’t vex their competitors?
It’s not that any one rule is particularly onerous.
However, the regulations in total are a lot like the
old union work rules that used to bedevil steelmakers
at their mills. The hoops a company must jump
through to avoid violating them can create an
unwelcoming atmosphere for doing business —
and Ohio surely doesn’t need to discourage telecom
companies from investing in the state.
After all, a company such as AT&T, which operates traditional phone companies in 22 states, can
pick and choose where it makes its investments. It
plans to spend at least $18 billion on hard wire and
wireless capital investments this year. Passage of
modern telecom regulations wouldn’t hurt Ohio’s
chances for snagging its fair share of that money
and more investment down the road, says Tom
Pelto, president of AT&T Ohio.
We might be skeptical of this legislation if there
was strong opposition to it from either labor or
business interests. However, the Communications
Workers of America and the Ohio Chamber of Commerce both have voiced support for passage of the
telecom bill. Indeed, the chamber’s vice president
of government affairs, Lisa Woggon, wrote to House
Speaker Armond Budish that the legislation “is so
important to our state that the Ohio Chamber has
designated the floor vote on the bills as a key vote
that will be reflected in our legislative voting
record.”
Ms. Woggon’s letter was written in late January. It’s
now March. The House needs to answer the call and
to get the reform measure going so that Ohio telecom
rules no longer are a throwback to a bygone era.
FROM THE PUBLISHER
Jackson rises to the occasion again
M
education has to happen at the county
aybe it was the sunshine that
level,” the mayor said to resounding apmade the day so pleasant;
plause from the 700-plus in the audience.
after all, we just had one of
This mayor gets it, and he’s the right
the most miserable Februarys
person in that job at this point in CleveI can remember. But last week it looked
land’s history. A not-too-distant predecesand felt, finally, like spring might come
sor would not have been able to set aside
before June this year.
ego and work in concert with other mayors
It was Frank Jackson’s State of the City
or this new county council and
speech, and he was upbeat
executive.
despite the daunting problems
BRIAN
He’s right in calling for a counthat he and every other big-city
TUCKER
tywide authority that could
mayor face these days.
examine innovative ways to fund
To his credit, the mayor
public education collaboratively,
continued an open spirit and
buy goods and services together
attitude about collaborative
and perhaps even consider joint
problem solving among governhealth care packages that could
ments. He knows that radical
leverage the large numbers of
transformation is about to happen
public employees.
in his county government and it
The mayor said we need to
appears he wants to be a partner.
think about countywide magnet schools
After all, the next census is likely to show
on the model of those that are doing so
another steep drop in his population,
well in his city. He’d like to see a mechaincome tax receipts are in the toilet
nism created to help public, private and
with this horrendous economy and he’s
parochial schools share scarce resources.
pressed to do more with less at every turn.
He also is excited — and he ought to be —
“If we are going to have educational
about his partnership with Cleveland State
excellence, and become globally competiUniversity to develop a K-12 school to
tive, then making systemic changes in
serve downtown residents and others.
Mayor Jackson knows that schools chief
Eugene Sanders’ plan to transform public
education is critical to Cleveland’s future.
He said, in his ever-so-forthright manner,
that he knows young couples will abandon
his city if we don’t get the schools fixed.
And he said he doesn’t blame them.
That’s what you get from this mayor.
Straight from the heart, a man with
candid and passionate hopes and aspirations for the city that is his home.
I hope he succeeds in forging partnerships with our area colleges and universities to create stronger bonds between
them and Cuyahoga County’s schools.
We all are wedded to this place; we all
have great stakes in its future.
The political and education leaders who
manage to solve this problem — or even
improve it significantly — will earn a lofty
place in history. I hope they find a way to
succeed.
Perhaps then, historians will look back
one day and say that it was this time, not
the public-financed building boom of the
late 1900s, when the real renaissance of
Cleveland and Cuyahoga County began. ■
PERSONAL VIEW
Public officials’ perks corrupt the system
By THOMAS V. CHEMA
I
t is not exactly news that our legislative bodies, whether we are talking
about the General Assembly in
Columbus or the Congress in Washington, D.C., are not performing at the
optimum.
There are many reasons for this
partisan gridlock, but as citizens, we all
need to find solutions and find them
quickly. I would like to suggest that one
reason for our current mess is that we
have increasingly “professionalized” the
holding of public office.
Since the early 1970s, changes to election laws, including campaign finance
reforms and other efforts to instill ethics
into our public officials, have had a
series of unintended consequences.
Mr. Chema is president of Hiram College.
Today, it is less and less likely that regular
citizens will take time from their businesses, professions or the academy to
serve in office. We have made it much
too complicated, expensive and unattractive to be a true citizen legislator.
Instead, in our attempts to rectify
various abuses, particularly around
funding, we have unintentionally created
professional politicians who make holding
office a 30-year career — culminating in
a very generous payout from the Ohio
Public Employees Retirement System or
similar pension.
Although our country was founded
on the premise that ordinary citizens
become involved in government, it is
safe to wonder today who is serving
whom. In fact, today there are basically
two paths to hold public office: One,
you are rich to start with and therefore
can afford to spend your own money
seeking a position; or two, you start out in
an elected office (usually at the local level)
and move from one office to another.
This has, in fact, stopped the revolving
door, but it hardly has been beneficial.
Moreover, after eight or 10 years in the
system, there is an enormous incentive to
keep running for office. That incentive is
the public pension system, which is very
hard to resist with its defined benefits and
health care opportunities.
To overcome this professionalization
of public office, two decades ago we
turned to another reform called “term
limits.” This effort to regulate the length
See VIEW Page 9
20100308-NEWS--9-NAT-CCI-CL_--
3/4/2010
4:58 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
9
AND COUNTING ...
Who is your favorite local TV or radio personality of the last 30 years?
Crain’s Cleveland Business
is celebrating its 30th year as
Northeast Ohio’s premier source
for business news with a
special double issue, which will
feature profiles of 30 of the
most influential Clevelanders.
As part of the celebration,
we also are reflecting on the
most memorable events of the
past three decades with weekly polls — some of which can
be found in this space — trivia
questions, online content and
video interviews.
You can get in on the fun by
visiting CrainsCleveland
.com/30thanniversary.
Thursday, March 18, 2010 11:30 am Registration • 12 Noon Lunch & Program
SENATOR
NINA TURNER
JENNIFER
THOMAS
MEGAN
O’BRYAN
CONNIE DIEKEN
State of Ohio, 25th
District
Director,
Civic Innovation Lab
President & CEO, Cleveland
Rape Crisis Center
President, onPoint
Communications
For more info: www.ExecutiveCaterers.com and click on Corporate Club or call 440.449.0700
MICHAEL HOWARD
JENNIFER WILLIAMSON
BETH LAWSON
Cleveland
Parma Heights
Middleburg Heights
My favorite is Tim White,
even though he’s no
longer there (at WKYC).
He was an open-minded
guy.
I really like Trapper Jack.
He’s pleasant.
Austin Carr on (FOX)
Sports Ohio. He’s friendly
and nice.
CLUB SEAT
PLANS
Corsa: Diversification boosts company
continued from PAGE 3
and generates 350 foot-pounds of
torque — enough to embarrass many
famous American muscle cars from
the 1960s and ’70s. For instance, a
1971 Z-28 Camaro with a vaunted
350-cubic-inch engine generated only
about 330 horsepower and was heavier than the modern Taurus.
Many of those old Camaros, Firebirds, Corvettes, Chargers and Challengers ultimately produced more
horsepower than their factories ever
intended, because their owners
beefed up their manifolds, carburetors, exhausts and other systems to
make them more muscular.
And that’s exactly what Mr. Kohrs
and Corsa are counting on some
Taurus SHO owners to do as well. The
new exhaust system Corsa began
offering for the Taurus in February
adds 14 horsepower and 12.5 footpounds of torque to the car’s factory
performance specs — and adds a sound
that no factory car ever had, he said.
That extra punch and panache will
cost Taurus owners about $1,700 for
the new Corsa exhaust system. That’s
no small amount, even for a $38,000
automobile, but many car buffs are
willing to pay such a price for performance, said Brian Prior, a merchandiser at Summit Racing Equipment
in Tallmadge. Mr. Prior said Corsa’s
exhausts are in the mid to high range
in terms of aftermarket performance
exhausts, of which Summit carries
several brands, including Corsa.
“They’re definitely an up-andcomer,” Mr. Prior said. “Their core
niche started in the Corvette and
marine industries and they built quite
a reputation out of that … but now
they’re branching out.”
Corsa, with about 60 employees,
has been around since 1988, when it
made only exhausts for boats. It began
making Corvette exhausts in 1998 and
last year was bought by the Mifsud
Group in Wadsworth. Its new owner,
for which Mr. Kohrs worked before the
Corsa purchase, wants the company
to offer more products for more models
of cars, he said. The private company
does not disclose its revenues.
Though Dodge muscle cars and,
more recently, trucks have represented
successful new markets for Corsa, Mr.
Kohrs said this latest exhaust might
have extra potential because of Ford’s
recent success as a brand and because
of the popularity of the EcoBoost
engine.
“We’re committed to increasing
our depth of Ford products,” Mr.
Kohrs said. “Right now, from what
we see, Ford is doing a better job
than anyone else at delivering what
the consumer wants.”
The EcoBoost seems like a wise
choice in terms of new engines to
target. Ford spokeswoman Megan
MacRae Whatman said in an e-mail
View: Rework officials’ benefits
continued from PAGE 8
of time a citizen can serve in an
elected office has undermined institutional memory and seeded enormous power to unelected staff and
lobbyists. Term limits just have not
worked in Ohio. In fact, the unintended consequence of this reform is
that our state government is even
less effective — a huge problem in
these difficult economic times.
How to deal with this issue? I
suggest a three-tiered approach that
gets back to our founders’ view of
citizen legislators, who took time
away from their careers to engage in
public service, rather than making
legislative service a career.
First, abandon term limits, at
least for legislators. Second, prohibit
elected public officials from partici-
pating in the public pension
systems. Third — and this will not
be popular — pay elected public
officials more reasonable salaries.
These steps will not solve all the partisan bickering and liberal/conservative inability to compromise, but they
will stop the constant moving from
office to office and will discourage
people from holding on to elective
office because of their personal economic stake. And maybe it will encourage elected officials to truly represent
all of the public, rather than the subgroups that help them get re-elected.
In politics, as in all other human
endeavors, the ends do not justify
the means. Getting elected should
be a means to serving the public
interest, not the end — personal
economic benefit.
■
Moderated by
that the company already has sold
6,000 vehicles with the new EcoBoost,
which will be put in more Ford vehicles in the next few years.
And there was another reason for
designing an exhaust for the Taurus
SHO — Mr. Kohrs hoped the EcoBoost
engine also would be available in
Ford’s new Mustang, which he expects
to appeal more to the muscle-car
crowd than the Taurus SHO.
So far Ford has not linked the two,
and Ms. Whatman said the 2011
Mustang will not be available with the
EcoBoost. However, Ms. Whatman
also said that by 2013, 90% of Ford’s
vehicles will be available with the
turbocharged powerplant.
■
6 AND 10 GAME PACKAGES
Unlimited Food and Non-Alcoholic Beverages
in the Climate-Controlled Club Lounge
216.420.4497
!
s
n
o
i
t
a
l
u
t
ra
CLEVELAND
Cong
To the newly elected 2010 Officers and Board Members
Mechanical Contractors' Association of Cleveland:
President:
Vice President:
Treasurer:
Past President &
Chairman of the Board:
Stephen Comunale
S.A. Comunale Co., Inc.
Geoff Engel
The Brewer-Garrett Co.
Michael Brandt
Smith and Oby Co.
David Williams
The Soehnlen Piping Co., Inc.
Board Members: Richard Bukovec, Diversified Piping & Mechanical, Inc.; Charles Caye,
Smith and Oby Co.; Michael J Gallagher, The John F. Gallagher Co.; David Katz, E.B.
Katz Inc.; Richard Mohar, E.B. Katz Inc.; James Primozic, Northeastern Refrigeration;
Thomas Wanner, Executive Director.
The Mechanical Contractors' Association of Cleveland represents Union affiliated mechanical contractors who install and maintain heating, cooling,
refrigeration, fire protection, and process piping systems in all types of buildings in northeast Ohio. The Association offers educational, labor relations,
government affairs, safety, informational and promotional services to its members. MCA of Cleveland is affiliated with the Mechanical Contractors' of America
(MCAA) in Rockville, Maryland, and works closely with its partners at Pipe Fitters Local 120.
20100308-NEWS--10-NAT-CCI-CL_--
10
3/4/2010
3:26 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
Book: Students like flexibility offered by for-profits Staffing firms
continued from PAGE 3
adult, graduate and professional
programs.
Under the Finn Center, Notre
Dame will increase assistance it
provides to adult students in areas
such as recruitment, financial aid
and retention, Mr. Armstrong said.
The adult programs also will be
revamped to offer more convenience, partly by offering more
online classes and majors, he said.
Classes will be offered in person
days, evenings and weekends.
“Adults, when they’re learning,
have different needs than traditional
students,” Mr. Armstrong said.
“When adults go to school, it’s all
about convenience and cost.”
No nagging
In the 2007-2008 school year, the
cost to attend a private, nonprofit,
four-year college averaged $33,935,
according to “For-Profit Higher
Education by the Numbers,” a study
released in January by the National
Consumer Law Center, a nonprofit
group in Boston. By contrast, the
average cost to attend a for-profit
school was $22,950, and the cost to
attend a public, four-year college was
$17,497, according to the report.
Though it’s cheaper to attend a
public, nonprofit college, for-profit
schools still are attracting students,
especially those unconcerned with a
campus setting.
Alecia Jones is one of the University of Phoenix’s 7,000 Northeast
Ohio students. Though she received
her undergraduate degree at Kent
State University in 1997, she said
the University of Phoenix was the
right place to earn her MBA with a
concentration in marketing.
“I was really able to get the direction and guidance I needed and that
relationship continued throughout
my experience as a student,” she said.
The flexibility of taking classes
online and in person at three local
campuses has worked well for Ms.
Jones, 35, who will graduate in August
and plans to open her own business
development firm to provide fundraising services to nonprofits.
Stautzenberger has operated in
Northeast Ohio since 2005 and has
410 students enrolled at its Brecksville
campus, said Donna Palmer, vice
president and director of that
campus. Only a handful of its classes
are offered online, she said.
About two-thirds of Stautzenberger’s students have transferred
from other colleges in Northeast
Ohio, mainly Cleveland State Uni-
versity, Kent State University, the
University of Akron, and Cuyahoga
and Lorain County community
colleges, Ms. Palmer said. Transfer
students have told her they prefer
smaller class sizes and individual
treatment.
“They get academic advising on
so many fronts, they probably think
we’re beginning to be a nag,” Ms.
Palmer said.
Sticking with tradition
Though students are flocking to
for-profit institutions in rising
numbers, some nonprofit colleges
in Northeast Ohio say they’re not
worried about the competition. They
say they pull students from different
populations, largely those who want
a traditional or residential college
experience.
Rob Spademan, associate vice
president of marketing and undergraduate admissions at Cleveland
State, said for-profits tend to target
people who already have earned
some college credits, while Cleveland State recruits students coming
out of high school and working adults
looking to earn a master’s degree.
“I wouldn’t say we react to (the
for-profit schools) at all,” Mr.
Spademan said. “This is our home
market. We know where our kids are.”
Traditional, nonprofit colleges
also have had years to refine their
missions and how they deliver
programs, said Scott Evans, vice
president of institutional advancement at Lake Erie College.
“There may be some efficiencies
(at for-profit schools), but it will take
some time for for-profits to catch up
to the delivery systems and methodologies that nonprofits have been offering for decades,” he said.
Partnership possibilities
But don’t discount for-profit
schools altogether, said Peter Ross,
vice president of enrollment management at Tri-C. The community
college often works with for-profit
schools such as the University of
Phoenix to help students transfer the
credits they earned at Tri-C to put
toward a bachelor’s degree, he said.
Most Tri-C students who want to
pursue a bachelor’s degree initially
consider attending local nonprofit
schools such as Cleveland State,
Kent State, Akron and BaldwinWallace, but they also look at for-profit
schools once they know more about
them, Mr. Ross said. The flexibility in
curriculum delivery that for-profits
offer appeals to many adult students
who work or have families, he said.
For-profit schools also tend to
offer programs that have a lot of job
possibilities, which are often the
same programs that nonprofits use
to help support liberal arts programs
that aren’t linked to specific careers,
said Kevin Kinser, associate professor
in the Department of Education
Administration and Policy Studies at
the University at Albany, State University of New York. He has studied
the dynamics of for-profit colleges.
For example, Stautzenberger
entered the Northeast Ohio market
with a veterinary technician major
that also was offered at Tri-C, which
had a three-year waiting list to get in,
Ms. Palmer said.
“We pretty much depleted their
waiting list by at least a year,” she said.
At the very least, for-profit colleges
are forcing nonprofits to think
outside the box to attract students,
Tri-C’s Mr. Ross said.
“In some sense, (for-profit schools)
push us to be creative. They make us
look at our curriculum and how it’s
offered,” he said.
■
with different
client bases
combine forces
Alliance, eSearch say
joint venture bolsters job
placement capabilities
By ARIELLE KASS
[email protected]
Two staffing firms are teaming
up to create a more comprehensive
source for job placement assistance.
Alliance Staffing Solutions, a
specialized staffing service with
strengths in health care, manufacturing, clerical, information technology
and engineering employment, is
partnering with eSearch Inc., a
company that specializes in financial
services jobs.
Randy Samsel, president of eSearch,
said while the company does a good job
of finding bookkeepers or accounting
clerks, it lacked the expertise to fill
other jobs — and so either did it
poorly for clients or told them they
were on their own to find hiring help.
While the 35-person Alliance and
11-person eSearch will remain
separate companies, they will refer
clients from one to the other and are
connecting their phone lines so calls
can be easily transferred between
both companies.
“What we initially agreed to is a
lot of sharing of information,” Mr.
Samsel said. “We want to grow the
businesses together.”
Because 85% of Alliance’s work is
for temporary jobs and a similar
percentage of eSearch’s clients are
looking for permanent employees,
the companies said they thought the
joint venture would be complementary to their clients. Windward
Partners, a retained search group
that does talent consulting for C-suite
executives and is a part of eSearch,
also is part of the agreement.
Alliance also has a joint venture
with background check company
Crimcheck of Cleveland. Alliance
president Aaron Grossman said he
wants to continue searching for
Cleveland-based partners.
■
0$;,0,=(
<285 52,
5(7851 21,17(51
A WORKSHOP FOR EMPLOYERS INTERESTED
IN STARTING OR IMPROVING AN INTERNSHIP
PROGRAM.
03/25/10 YOUNGSTOWN
03/31/10 CLEVELAND
05/06/10 LORAIN/ELYRIA
05/19/10 CLEVELAND
07/13/10 CLEVELAND
07/30/10 AKRON
register online at
www.neointern.net
learn. earn. intern.
20100308-NEWS--11-NAT-CCI-CL_--
3/5/2010
3:36 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
11
Plan to change law hiring rebuffed
Critics say proposal
limited well-run firms
By ARIELLE KASS
[email protected]
Jones Day’s hiring partner, in late
January, penned an eight-page
missive aimed at undercutting a
National Association for Law Placement recommendation that law
student recruiting be significantly
altered in the coming years.
It worked.
On Feb. 26, the association’s board
voted to reject its original proposal,
which called for law firms to move
their offer dates from the summer
until January and proposed a twoweek offer window for students to
decide what jobs they were going to
take. Instead, the legal career planning and recruiting organization
voted to shrink an existing 45-day
offer window to 28 days and took no
action on the offer date proposal.
“During a public comment period
our members participated in a spirited and thoughtful dialogue about
the proposed recommendations,”
the organization said in a statement.
“After reviewing member feedback
it became clear that there was no
consensus among the membership
about the nature and scale of change
that might be appropriate.
“As a result, the Commission did
not submit its original proposal as a
final recommendation,” the organization said. It was referring in the
statement to the Commission on
Recruiting in the Legal Profession, a
sub-group that made the recommendation. James Leipold, the association’s executive director, said the offer
date proposal — the part that rankled
most law firms — is “off the table.”
“I think it’s certainly done for
now,” he said. “There was no consensus on the offer date.”
Mr. Leipold said the association
received more than 800 comments
about the proposal, but that the Jones
Day letter, which ignited discussion
in legal circles, played a part in the
decision not to move forward with
the proposal.
“That was certainly part of it,” he said.
“We really weighed all the feedback.”
Greg Shumaker, the firmwide
hiring partner in Washington, D.C.
who wrote the Jones Day letter, said
he thought the decision to reject the
proposal was “the right thing to do.”
“We thought it was a thoughtful
response to the concerns raised by a
number of law firms, including
ours,” he said.
Mr. Shumaker said at no point had
he been contacted by the association
about the letter, which questioned
the necessity and legality of the
proposal and was posted on Jones
Day’s web site and sent to the deans
of several law schools.
In the letter, Mr. Shumaker said
the proposal did not serve the interests
of well-managed law firms and put
firms that had not been responsibly
managed on the same footing as those,
such as Jones Day, that had been.
“I strongly feel we should not be
handcuffed by this,” he said before the
decision was made. “It takes a fairly
short-term view of hiring. … I don’t
think it’s in the student’s best interest.”
Barbara Weinzierl, director of
career planning at the University of
Akron School of Law, said before
the vote that she was not sure the
proposal would have accomplished
what it intended to do. Ms. Weinzierl
noted that law students would have
added pressure on them if they had
to wait through the fall semester of
their second year to learn where
they would be able to work as a
summer associate, after interviewing
in August.
Still, she said the school would
continue to work within whatever
guidelines were established.
“Our main goal is to see students
succeed,” she said. “We’ll do whatever we have to do to make sure that
happens.”
Jennifer Blaga, director of career
planning at Cleveland-Marshall
College of Law at Cleveland State
University, said any changes don’t
affect her students greatly because
they are accustomed to looking for
jobs outside of the typical period.
Case Western Reserve University,
which the other schools agreed
would be most affected by any
changes, would not comment on
any potential changes.
Ron Stepanovic, hiring partner at
Baker Hostetler, said — as did others
— that he saw no need to change
the process, calling the association’s
proposal a “bit of an overreaction”
to the ills law firms suffered in the
recession. “I don’t think the system
is all that broken,” he said.
However, Ryan Burns, director of
legal recruiting and professional
development for Benesch, Friedlander,
Coplan & Aronoff, said he thought
the process has needed “a good
overhaul” for quite some time. ■
In the Midst
of MIDTOWN
5508-5510 & 6611 Euclid Avenue
Global Commercial Real Estate Expertise
Please Contact:
PETER C. FARINA
216.861.5262 DIRECT
[email protected]
2 Properties - 4.6 Total Acres Available
Prime Development Opportunities
Located Along The Euclid Corridor HealthLine
• Less than one mile from Cleveland Clinic
• In the Heart of Midtown’s Thriving Business District
• Neighboring proposed site of the Euclid Tech Center, State
Behavioral Health Center & $35M Mixed-Use Development
Invest in the Vibrant future of Midtown!
20100308-NEWS--12-NAT-CCI-CL_--
12
3/4/2010
9:42 AM
Page 1
CRAIN’S CLEVELAND BUSINESS
GOING PLACES
FINANCIAL SERVICE
ANCORA ADVISORS LLC: Dana
Lusardo to compliance associate.
HEALTH CARE
LEGAL
BOBER MARKEY FEDOROVICH:
Karen J. Costantini to senior manager,
taxation services.
STRATFORD COMMONS: Dana
Williams to director of human
resources.
BUCKINGHAM, DOOLITTLE &
BURROUGHS LLP: Jon R. Stefanik
II to associate.
DELOITTE: Craig Giffi to leader,
U.S. automotive practice.
HOSPITALITY
GREAT LAKES RETIREMENT
GROUP: Jarrett Lang to associate
adviser.
GREAT WOLF RESORTS INC.:
Chris Ballou to general manager,
Great Wolf Lodge.
SCHNEIDER, SMELTZ, RANNEY &
LAFOND PLL: Thomas I. Hausman
to of counsel.
ARCHITECTURE
ADA ARCHITECTS INC.: Jay E.
Jesensky to business development
manager.
UNIVERSITY SCHOOL: Kimberly
Pleasant to director of marketing and
INSURANCE
ALPHA PROPERTY & CASUALTY:
Mark DeBlauw to divisional leader,
automotive accounts.
brand management.
EDUCATION
SCHLABIG & ASSOCIATES LTD.:
Kelly Nizzer Bates to director of
administration.
MARCH 8-14, 2010
ZINNER & CO. LLP: Tina Myers to
tax manager.
JOB CHANGES
MIDDOUGH INC.: Richard J. Ragan
to senior vice president and general
manager.
WWW.CRAINSCLEVELAND.COM
Pleasant
Costantini
Bates
Stefanik
Bryk
Lanzilotta
THOMPSON HINE: Robyn Minter
Smyers to chair, diversity committee.
TUCKER ELLIS & WEST LLP:
Jaclyn A. Bryk to associate.
WELTMAN, WEINBERG & REIS CO.
LPA: Tom McGuinness to director of
title services.
MANUFACTURING
PSC METALS INC.: David Spector
to president, Northern region.
MARKETING
LINEAR CREATIVE LLC: Sherry
Thaler to diversity coordinator;
Randy Jasinski to account executive,
new business development; Hannah
Levy to graphic designer.
NONPROFIT
SUMMER ON THE CUYAHOGA:
Bernadette M. Gosky to executive
director.
REAL ESTATE
KELLER WILLIAMS GREATER
CLEVELAND WEST: Brian Salem,
Matt Chase, Dave Sanson and
Lindsay White to sales associates.
RESOURCE TITLE: Andrew Rennell
to chief operating officer.
SERVICE
BRIGHTWOOD ANIMAL HOSPITAL:
Kasie M. Podojil to associate veterinarian.
FLEET RESPONSE: Allison Lanzilotta
to vice president, business development.
TECHNOLOGY
PARAGRID: Bob Bray to help desk
engineer; Jerry Gobeille to delivery
engineer; Stacy Devore to operations
manager.
Your doctors. Your hospitals.
Health Insurance for Your Business.
TELECOMMUNICATIONS
TIME WARNER CABLE: Patrick Joy
to vice president, finance and business
operations.
TRANSPORTATION
INTERNATIONAL TRANSPORT SERVICES: Jim Leopold to vice president,
sales; Val Janicek to sales manager.
UTILITY
SummaCare’s network includes the doctors and hospitals your
employees want to see. With SummaCare, your employees have
access to more than 50 of the region’s finest hospitals, including
the Cleveland Clinic Health System, University Hospitals and
Summa Health System. Plus, our network includes nationwide
coverage that follows your employees wherever they may reside
or travel. To learn more about SummaCare, call your agent
today or visit www.summacare.com.
FIRSTENERGY CORP.: Michael J.
Dowling to vice president, external
affairs; Gretchan E. Sekulich to
director, communications.
AWARDS
BALDWIN-WALLACE COLLEGE:
Jan Murphy (Fairview Hospital, Lakewood Hospital) received the Dr. Edwin
Riemenschneider Award for Excellence in Health Care Leadership from
the Health Care MBA Class of 2009.
KIDNEY FOUNDATION OF OHIO:
Rick A. Chiricosta (Medical Mutual of
Ohio) received the 2010 Person of the
Year Award.
Send information for Going Places
to [email protected].
20100308-NEWS--13-NAT-CCI-CL_--
3/4/2010
3:27 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
MARCH 8-14, 2010
INSIDE
14 IRS EYES
S CORPS’ WAGE
REPORTING
TACTICS.
13
SMALL BUSINESS
LIVING
OUT THE
AMERICAN
DREAM
Immigration issues
can be complicated,
frustrating for many
V
eronica Dahlberg said
immigration reform is one
of the top priorities for
immigrant business owners
in Lake and Ashtabula counties.
Ms. Dahlberg is executive director
of HOLA, or Hispanas Organizadas
de Lake y Ashtabula, which serves as
the umbrella organization for the
Latino Business Association of
Northeast Ohio. The group hopes to
send several busloads of people to
Washington, D.C., to participate in
the March 21 national mobilization
for immigration reform.
“It’s been horrible, and it hasn’t
changed with this new administration,” said Ms. Dahlberg, who noted
that the immigrant population
provides both a consumer and labor
base for foreign-born business
owners. “Unfortunately, we’re
seeing no action on this.”
In practice for more than 30 years,
Margaret Wong, an immigrant
herself and the founder of Margaret
W. Wong & Associates Co., helps
those from other countries stay in
the United States. At the age of 19,
Ms. Wong and her sister left Hong
Kong and came to the United States
to study on scholarships.
Ms. Wong describes practicing
immigration as a “different world,”
one that is peppered by the personal
stories of her clients amid the complicated framework of immigration
law and policy.
“On a personal level, we all feel
very sorry, but as a nation we don’t
know what we want,” she said.
— Amy Ann Stoessel
Some foreign-born entrepreneurs say being
in U.S. helps open door to possibilities
By AMY ANN STOESSEL
[email protected]
S
tella Moga-Kennedy had to
beg for a dime at the airport
in 1979 when she landed in
the United States from
Romania with two suitcases and no
money. Today, the founder of
Northeast Ohio’s Le Chaperon
Rouge child care centers is worth
nearly $30 million.
It’s the American dream: Work
hard, prosper and be happy, and it’s
a story that seems to ring especially
true for those who come to the United
States from other countries and start
their own businesses.
“I wake up every morning thanking
God I’m in America,” said Mrs. MogaKennedy, who taught herself English
by reading children’s books. “If you
See IMMIGRANTS Page 16
In recession, some companies may buy their way out of growth rut
By DAN SHINGLER
[email protected]
Acquisitions can provide customers when finding them proves difficult
S
with discipline and focus. Just ask
Eric Winbigler, president of
Advance Paint Technology Ltd. in
Cleveland. He’s done it — both the
right way and the wrong way —
including a deal he pulled off in
2008 in the teeth of the recession.
“We got (market) penetration
that might have taken years to
acquire — with the stroke of a
pen,” Mr. Winbigler said.
Mr. Winbigler runs a 16,000-
mall businesses have
struggled through the long
economic downturn along
with big banks, big automakers
and other large corporations — but
some have found ways to not only
survive the crisis, but to grow
through acquisitions.
It can be a great strategy for
essentially buying much-needed
customers when few new ones are
to be found, but it must be done
square-foot shop in Cleveland,
where a dozen workers spend 90%
of their time painting and coating
parts that go into medical devices,
aerospace components and other
manufacturers’ products. Whatever
time is left often is spent doing
custom automotive work or other
projects for individuals.
He’s purchased two companies
since buying Advance Paint in
2004: a metal-sawing company
where six employees cut large
pieces of steel into manageable
portions for manufacturers and
steel service centers; and a threeman paint shop in Canton that
offered many of the same services
as Advance Paint, plus a few more.
For companies in a position to
buy, there’s less competition in the
market than there was a couple of
years ago, when financing was
plentiful, said Bill Ridenour, CEO
of Polymer Transactions in Newbury.
Mr. Ridenour specializes in
helping plastics companies to buy
other companies or to sell themselves. He said there are two kinds
of companies buyers are likely to
find in today’s market — those that
have to sell because their banker or
financial situation demands it, and
those that will sell if they find the
price they want.
For the latter, Mr. Ridenour said
buyers probably should expect to
See BUYING Page 15
20100308-NEWS--14-NAT-CCI-CL_--
3/4/2010
2:12 PM
Page 1
14 CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
SMALL BUSINESS
IN BRIEF
GRANDOPENINGS
A resource for
productive business
B. LUX BOUTIQUE
Euclid Avenue shop
customizes work spaces
Located on Euclid Avenue, across
the street from the House of Blues,
the new e4b (Environments 4
Business) Cleveland Resource
Center specializes in work spaces,
from complete interior construction
to specific renovations or projects.
Established in 2008, e4b creates
environments for business that
maximize productivity with
interchangeable furnishings, style,
color and texture that reflect image
and culture and suit specialized
needs. The company employs eight
and also has a location in Akron.
■ TECHNICALLY SPEAKING:
The Reserves Network has
launched a new division, TRN
Technical, that focuses on
high-end consulting, contract and
temporary assignments for
technical, professional and
managerial positions. “Contract
staffing is becoming a popular
staffing alternative for many
businesses,” said Don Stallard,
founder and CEO of The Reserves
Network. The Reserves Network is
a regional staffing service for the
office, industrial, professional and
technical markets; TRN Technical
is based out of company’s
headquarters in Fairview Park.
ters in Independence. Offices also
have been opened in Detroit, Atlanta
and Tampa.
First and Main shopping center
46 Park Lane
Hudson 44236
www.bluxboutique.com
216-407-3070
[email protected]
twitter.com/womfire_hz
B. Lux is a boutique that specializes
in apparel, accessories and shoes.
Each piece is handpicked by owners
Michelle Bryce and Lia Kalin, who are
both natives of the Cleveland area. B.
Lux carries brands such as Kensie,
Glam, Miss Me and Hazel, with an
emphasis on the romantic, yet fresh
and chic.
Phone 330-342-0033
Fax 330-342-0036
[email protected]
[email protected]
WOMFIRE
4401 Rockside Road, Suite 214
Independence 44131
www.womfire.com
WOMfire, a new social media marketing
company that helps brands and
products capitalize on the millions of
conversations already taking place
online, has opened its main headquar-
FR
by
E
ROauthor E L
SE of Th EC
GE e Big TU
O NecesRE
RG sity
E
AY
TUESD 23
MARCH .
M
7:30 P.
THE
NECESSITY
The unmentionable world of
PHOTO BY FELICITY PAXTON
human waste & why it matters
RSVP at NEORSD.ORG
CASLL LLC
4498 Great Smokey Circle
Medina 44256
www.casll.com
Founded by Scott A. Sarles, CASLL
(Cleveland-Akron Senior Living Link) is
a free elder care service available to
seniors and their families covering
eight counties throughout Northeast
Ohio. CASLL was started out of the
growing need for families to save time
and energy while minimizing the stress
of sorting through the several hundred
options available for senior care and
housing. CASLL matches the senior
and his or her family with the ideal fit
based on geographical and financial
desires as well as clinical needs.
CASLL provides person-centered
guidance with Alzheimer’s and
dementia care, assisted living, independent living and nursing homes.
CASLL also will connect seniors with
elder law attorneys, home health care
and rehab services, hospice care,
senior real estate professionals and
home care companion services.
CASLL’s services are free due to
reimbursements through contracts
with local senior service agencies and
housing communities.
To submit a new business, send the
following information by e-mail to
Amy Ann Stoessel at astoessel@
crain.com: business name; address;
city and ZIP; web site; brief description of business; business phone
number; business fax number; business e-mail address; and date that
business opened. Call 216-771-5155
with questions.
BIG
British writer Rose George explores the need to find
efficient and environmentally sustainable methods for
disposing of human waste. Enjoy free parking and free
admission to the Great Lakes Science Center Water:
H2O=Life! exhibit. Seating is limited.
B
Phone 440-623-5223
Fax 330-722-5011
[email protected]
We can’t take this
sitting down.
IRS may watch more
closely S corporations’
wage reporting tactics
usiness owners operating
under the S corporation
structure should be aware
that their tax returns and
rulebooks have become fertile
ground for authorities looking for
new ideas on where to shore up
compliance and raise new sources
of revenue.
The U.S. Government Accountability Office recently completed a
study on how well S corps generally
are complying with tax rules. The
findings suggest S corps are
under-reporting income and may
be enjoying some tax advantages
that Congress should reconsider.
The S corp structure is a
common choice of legal entity for
owners of small businesses in large
part because of the way it is taxed.
The income of an S corp is not
taxed at the corporate level, but is
passed through to the tax returns of
its individual shareholders.
That means any earnings, losses
and credits are reported by
individual shareholders rather than
the corporate structure, resulting in
only a single level of taxation, at the
individual level, rather than two
levels of tax at both the corporate
and individual level.
It also means that whatever
amount S corp owners are not
paying themselves in salary is
retained by the corporation as
undistributed earnings, which
means those earnings are not
subject to payroll, Social Security or
Medicare tax. This is a distinct
difference for S corps compared to
C corps or other types of
partnership or sole-proprietor
structures.
The IRS has long held that S corp
owners are expected to pay themselves reasonable salaries so that
their income is fairly taxed, but it
hasn’t been a point of rigorous
enforcement by the IRS. There’s
plenty of room for shareholders,
their tax preparers and the IRS to
PETERDEMARCO
TAX TIPS
judge what might constitute a
reasonable salary.
The GAO report said some S
corps in 2003 and 2004 failed to pay
adequate wages to shareholders for
their service to the corporation, and
it estimated the underpayment at
$23.6 billion. That raises serious
questions about whether employment
taxes have been underpaid as a
result, and whether perhaps the IRS
might consider some new focus on
this issue in its examinations and
audits going forward.
Other tax studies also have
shown that inadequate shareholder
compensation is a significant issue.
The IRS has provided limited guidance on what often proves to be a
highly subjective issue, prompting
the GAO to suggest the IRS consider
providing some new guidance to
help improve compliance.
The GAO also reported that
about 68% of S corporation returns
filed for the 2003 and 2004 tax years
contained at least one misreported
item, and 80% of those errors
favored the taxpayer. The most
frequent errors involved deducting
expenses for which there was no
legitimate eligibility.
Also disturbing, the report says
71% of noncompliant tax returns
were prepared by professional tax
preparers. The GAO said preparer
mistakes may result from a lack of
standards for preparers to follow as
well as a general misunderstanding
of the tax rules, both of which could
reasonably become the subject of
future rulemaking or enforcement
action to improve compliance.
As economic circumstances
prompt Congress to seek out new
forms of revenue, none of this is
good news for business owners
operating under the S corp
structure. The study’s discoveries
combined with documented earlier
concerns and the general economic
and political climate may well
cause the IRS and Congress to consider whether changes are in order.
There are a number of moving
parts to the debate in Washington
over how Congress and various
regulators should respond to
current conditions with new tax
rates, new rules and new reporting
requirements. Owners in S corps
should plan to stay tuned for what
are certain to be some meaningful
changes that may affect how they
structure and operate their businesses going forward.
■
Mr. DeMarco is vice president and
director of tax services for the
regional accounting and business
consulting firm of Meaden & Moore,
headquartered in Cleveland.
20100308-NEWS--15-NAT-CCI-CL_--
3/5/2010
1:38 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS 15
WWW.CRAINSCLEVELAND.COM
SMALL BUSINESS
Trusted insurance agent a
must in starting company
C
leveland, and all of Ohio for
that matter, is beginning to
emerge from one of the
most challenging economic
downturns in recent history.
The job losses, particularly in the
automotive and manufacturing
industries, have been felt across the
state for years, and many Clevelanders remain unemployed despite
their best efforts to find work.
However, there has been some
positive to come out of these layoffs
— namely, a number of Main Street
businesses have been started in and
around Cleveland.
Many of the men and women
who lost jobs are chasing their
passions or finding an unmet need
in the area and are taking the
opportunity to start their own businesses. These new entrepreneurs
are forming the foundation of a
new economy in the Midwest.
Starting a new business is never
easy, and statistics show that
success often is hard to achieve.
While this may be intimidating,
there is one simple step that new
and established business owners
should take to help promote success
and mitigate some of business
ownership’s most expensive risks.
When starting a new business,
entrepreneurs often assemble a
team of experts to help secure the
vitality of the business. This group
may include an accountant or
bookkeeper, an attorney, a financial
adviser, a banker and an insurance
agent.
While most small business owners
generally will maintain an ongoing
relationship with their accountant
or banker, few maintain an ongoing
dialogue with their insurance
agent. This is a common mistake
among new entrepreneurs and
more seasoned business owners
alike.
Overlooking relationship maintenance is one of the biggest mistakes
business owners make. As economic,
environmental and social conditions
change and as businesses grow, the
value of the relationship between
business owners and their insurance
representative becomes clear.
As new businesses get off the
ground, owners will work with an
insurance agent to purchase a
Business Owners Policy, or BOP.
While BOPs vary slightly from
one insurance carrier to the next, in
general they provide property and
casualty insurance, crime insurance,
liability insurance and vehicle
coverage for rented or borrowed
vehicles. A distinguishing feature of
most BOPs is that they automatically
include business income coverage,
providing money to offset lost
profits or to pay continuing expenses
when a business is forced to shut
down for a period of time.
While establishing a BOP seems
like a fairly obvious step in the
FRANKKUSHLER
ADVISER
process of starting up a new venture,
owners all too often sign their
agreements and forget about them
until the renewal process at the end
of the year. This misstep can be
detrimental to the business.
Many Cleveland-based entrepreneurs are currently finding the
opportunities available and are
driving their nascent businesses
forward by making smart investments.
As ventures expand, it is critical
that these business owners keep
their insurance agents apprised of
the evolving state of the company.
For example, investments in
equipment, technology, people,
office space and vehicles all should
be recorded in a BOP in real time,
rather than added at the end of a
business year. By updating their
policy regularly, business owners
minimize the risk of being underinsured in the event of a major loss.
The same can be said about
business owners who have not yet
experienced a jumpstart in their
businesses. Fewer employees or a
downsized office should be noted
on a policy as well, saving the
owner a few extra dollars a month.
While no business owners want
to think it will happen to them,
disasters such as winter storms,
downed trees and fires, as well as
incidents such as vandalism and
theft occur regularly and significantly impact businesses in Cleveland
and throughout the country.
Incidents such as these can shut
down a business for an extended
period of time and produce major
losses.
If business owners neglect to take
proactive measures to update their
BOP prior to such a disaster or
incident, they may be without the
necessary coverage to protect
themselves from serious losses. For
new entrepreneurs and other new
business owners, these losses can
be life-threatening to the business
— sometimes to the point that they
are forced to shut their doors for
good.
Growth and expansion are goals
of just about every small business
owner. Strategic, forward-thinking
small business owners take the time
to make their insurance agents a
regular part of their growth story. ■
Buying: Complementary services can lead to success
continued from PAGE 13
pay roughly the same prices they
paid in 2006 or 2007, even though
the company’s revenues might be
less than they were then. But, he
said, there are many potential
buyers whose own facilities are
not running at full capacity — and
by buying and consolidating a
weaker competitor, they can more
fully use the capacity and be more
profitable.
“Most of what we’re seeing are
consolidating acquisitions to eliminate capacity,” Mr. Ridenour said.
“They’re trying to buy customers,
and if they have an existing facility,
it’s probably underperforming
because of the recession.”
Often, the customers of two
underperforming companies are
enough to make one company
healthy and profitable, he said.
Hindsight is 20/20
For Mr. Winbigler’s part, aside
from retaining six good employees
from the metal-sawing company,
he wishes now that he’d skipped
that deal.
However, he’d love to find
another painting and coating
company like PowerMax, the shop
he bought in Canton. Advance
Paint and PowerMax formerly were
competitors and knew each other
well, Mr. Winbigler said, so when
business fell off and PowerMax
wanted to sell, it approached
Advance Paint, knowing its
customers would be valuable to
the Cleveland company.
That deal worked, Mr. Winbigler
said, because it dovetailed so well
with his existing business. PowerMax offered some specialized
coatings that Advance Paint did
not work with and it had customers
in Northeast Ohio that were not
previously doing business with Mr.
Winbigler’s company.
“We added half a dozen new
accounts,” he said. “Any one of
them by themselves wasn’t anything huge, but together they were
a nice piece of business.”
It also worked, he said, because
it was small. Advance Paint paid a
six-figure price for PowerMax —
an amount Mr. Winbigler was able
to come up with from his own
funds and by borrowing from a
few family members.
Had it been a multimilliondollar deal, he said, neither banks
nor his relatives could have or
would have funded it. But everyone’s been paid back already from
the small transaction that took
place, because it quickly paid for
itself, he said.
The metal-sawing company was
a different experience altogether.
Mr. Winbigler bought that company thinking he would diversify
into another business. But he soon
found out that the steel service
centers that were using the
company to handle their overflow
work were quick to abandon it
once their volumes declined and
could be handled internally.
“We had a 90% drop in business,” Mr. Winbigler said. “We
closed the doors on that in 2008.”
The taste of success
Others who have done deals
during the recession say they’ve
followed a similar recipe. AtNetPlus, a Stow information technology
company with 21 employees, is one.
Co-founder Jay Mellon said his
company bought Akron-based
VirtuMark, another IT company,
in October 2009 because it fit well
with his existing business, would
bring aboard talented employees
that AtNetPlus needed and it also
came with new customers.
“We’d done this before and
thought it was a very good way to
add a group of customers to our
portfolio,” Mr. Mellon said. “Most
of the time when you hire an
employee, they don’t come with
customers.”
Both companies offered networking and Internet services, Mr.
Mellon said, but only AtNetPlus
maintained its own servers to host
client web sites, and it put them to
work for VirtuMark’s existing
customers. That meant not only
more revenue, but customers now
had a local person they could call,
physically located with the server,
when technical issues needed to
be addressed.
Now, Mr. Mellon said he’s also
scouting for other similar acquisitions that can add customers and
in-house capabilities.
The same can be said for
Advance Paint’s Mr. Winbigler, for
whom the sweet taste of success
has proven stronger than the bitter
taste of a mistake.
Mr. Winbigler said he’s hungry
to do another deal and is actually
working on one. But his future
deals will be inline with his
company’s existing core businesses,
which he knows well, and will have
synergies with his existing operations.
Besides, he said, he likes buying
companies in deals that work.
“It’s been the most stressful,
fun, joyous, wild ride I’ve been on
in my 40 some years of living,” he
said of his acquisitions.
■
Give us a call.
Together, we can maximize
your output in a single bound.
With Cox Business’ advanced products,
you get invincible service and substantial
support in a powerful combination of trust,
loyalty and excellence. And having a
dedicated partner means more time –
and profit – to look after your business.
Mr. Kushler is regional vice president of the Great Lakes region for
Travelers Insurance.
CALL NOW! 216.535.0557 | checkoutcb.com
20100308-NEWS--16-NAT-CCI-CL_--
3/5/2010
16 CRAIN’S CLEVELAND BUSINESS
1:57 PM
Page 1
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
SMALL BUSINESS
Immigrants: U.S. offers level playing field
continued from PAGE 13
really want to do something, you
can do it.”
While it’s not a new discussion,
the issue of immigration is
bubbling to the surface with the
recession, globalization and
debates over legislative reform
serving as backdrops.
Some are even pointing to immigrant entrepreneurs as the key to
the country’s economic survival.
Still others argue that those who are
foreign-born are no more important
than those who have been here all
of their lives.
Sens. John Kerry, D-Mass., and
Richard Lugar, R-Ind., chairman of
the Senate Foreign Relations
Committee, late last month even
introduced legislation that they claim
will drive job creation and increase
America’s global competitiveness
by helping immigrant entrepreneurs who have secured significant
U.S. investments get visas.
Big-picture arguments aside,
foreign-born entrepreneurs living
in Northeast Ohio say the United
States can be a place that opens up
both doors and possibilities for the
individual.
“You see opportunities that don’t
exist in another place,” said Radhika
Reddy, who emigrated from India
after studying at Case Western
Reserve University and in 2001
founded Cleveland-based Ariel
Ventures LLC, a business advisory
firm. “In this country, there is still a
lot of opportunity if you work
hard.”
Land of opportunity
Le Chaperon Rouge’s Mrs. MogaKennedy, for one, considers herself
Is your business headed in the right direction?
Learn how to take your business to the next level at the
Planning for Business Success Conference
Sessions on short-term survival, medium-term planning, and long-term succession
7:30am - 12:15 pm • March 25th, 2010 •Corporate College East
For more information, or to register,
log on to www.oeockent.org/success or call 330-672-3028
“America allowed me to be a driven person.”
– Stella Moga-Kennedy (below)
Romanian immigrant and founder, Le Chaperon Rouge child care
differences or other factors.
“For some, there is a bias against
immigrants,” she said. “Some of the
sentiment is that they are coming
and taking away our jobs.”
Immigration economics
to be the American dream: “This is
the country that will allow you to do
whatever you want.”
After a bad experience with her
son’s child care, Mrs. Moga-Kennedy
saved her money and opened her
first day care in a church basement
with $1,800 and toys she had
collected from garage sales.
Communism in Romania came
“overnight like a tsunami,” she said.
So when it became possible to
come to the United States, Mrs. MogaKennedy was among those who
applied for a passport — although it
was another five years before she
could leave her possessions behind
and come to the United States with
her husband and 9-year-old daughter.
Today, there are eight Le Chaperon
Rouge locations with another set to
open in May in Solon. She recently
published a book, “Stella’s Way,”
and she was among those named in
2009 as winners of the Ernst &
Young Entrepreneur of The Year
award in Northeast Ohio.
“America allowed me to be a
driven person,” she said.
Alper Behar, who in May 2004
moved with his wife to Cleveland
from Istanbul in search of a higher
standard of living, said in an e-mail
the United States offers an even
playing field for new businesses.
Mr. Behar owns the Mentor and
Richmond Heights locations of Any
Lab Test Now, a walk-in laboratory.
“One does not need to know
important people to start a business
and be successful,” wrote Mr.
Behar, who owned a manufacturers
representative sales and service
organization in his native Turkey.
However, Ariel Venture’s Ms.
Reddy said there can be challenges
— whether it’s due to cultural
Richard T. Herman, principal of
Cleveland-based Richard T.
Herman & Associates LLC, an
immigration law firm, agrees there
is a sentiment of “scarcity economics
… if we bring outsiders in there’s
going to be competition for scarce
resources.”
Mr. Herman is the co-author with
journalist Robert L. Smith of the
recently published book “Immigrant Inc.: Why Immigrant Entrepreneurs are Driving the New
Economy (and how they will save
the American worker).”
“The new economy requires
certain skill sets,” Mr. Herman said,
including high-tech and advanced
degrees, new capital and globalization.
“We’ve got tremendous pockets of
immigrant talent,” he said.
Mr. Herman said he is encouraged
by activity taking place in Northeast
Ohio, including the launch of TiE
Ohio, an organization that helps
connect immigrant entrepreneurs
and work being done by the Jewish
Community Federation of Cleveland
and Cleveland State University to
pursue an international welcome
center.
“Of course we have to build up
within, but part of building up
within is attracting outside
sources,” he said.
Scott Shane, the A. Malachi Mixon
III Professor of Entrepreneurial
Studies at Case Western Reserve
University’s Weatherhead School of
Management, has a different take
on whether immigrant entrepreneurs are in themselves a driving
economic force.
Dr. Shane said there is not a
consistent statistical pattern that
shows immigrants are more likely
to be entrepreneurs.
“There are plenty of people who
immigrate to the United States and
become entrepreneurs, but there
are plenty of people who are born
here who become entrepreneurs,”
Dr. Shane said.
Ultimately, Dr. Shane said it is
important to consider the opportunity cost when applying resources.
But, he said, “If someone is going
to start a good company … it would
do us a lot of good if they started it
here.”
■
IN BRIEF
A new way of thinking
Video production company to try its hand at marketing
Sponsored by
Additional Co-sponsors
Cleveland-based Think Media
Studios, a video and event
production company, has formed a
marketing and communications firm,
The Think Agency.
“Our video clients were asking for
agency recommendations to assist
with their marketing plans. We were
able to help some, but it was clear
that the type of creative, fast turnaround support did not exist in the
market and we should expand our
offerings,” said Brian Glazen, founder
of Think Media Studios. “This void
was a unique opportunity to combine
forces and offer video production
with marketing to create an online
video strategy.”
Mr. Glazen said so far three
additional employees have been
hired on top of the current 12
employees.
20100308-NEWS--17-NAT-CCI-CL_--
3/4/2010
2:30 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
17
LOCAL SOFTWARE DEVELOPERS
RANKED BY FULL-TIME EMPLOYEES
Name
Address
Rank Phone/Web site
Number of full-time
employees
1-1-2010
1-1-2009
Full-time
programmers Industry specialization
Software products
Year Top local executive
founded Title
1
Hyland Software Inc.
28500 Clemens Road, Westlake 44145
(440) 788-5000/www.hyland.com
765
742
117
Health care, higher education,
government, financial services,
insurance, manufacturing
OnBase, enterprise content
management software suite
1991
A.J. Hyland
president, CEO
2
Snap-on Business Solutions Inc.
4025 Kinross Lakes Parkway, Richfield 44286
(330) 659-1600/www.sbs.snapon.com
277
NA
75
Global electronic parts catalogs
Global EPC
1920
Tim Chambers
president
3
Micros-Retail
30500 Bruce Industrial Pkwy., Cleveland 44139
(440) 498-4414/www.micros-retail.com
265
267
NA
Retail, including stores and direct
commerce
Xstore Java POS, Store21 Specialty
Retail POS, Tradewind Retail POS
1978
Jeremy Grunzweig
vice president operations,
Store Systems Group
4
MRI Software LLC(1)
20800 Harvard Road, Cleveland 44122
(800) 321-8770/www.mrisoftware.com
191
230
24
Business solutions for property
management and corporate real estate
MRI Commercial, CRE Manager, MRI
Residential, IMPACT, Access 24/7
1971
David M. Post
president, CEO
5
TMW Systems Inc.
21111 Chagrin Blvd., Beachwood 44122
(216) 831-6606/www.tmwsystems.com
184
186
68
Trucking and logistics
TMWSuite, TL2000, TruckMate,
Innovative, IDSC Netwise, IDSC
ExpertFuel, TMT Fleet Maintenance
1983
David W. Wangler
president, CEO
6
OEConnection
4205 Highlander Parkway, Richfield 44286
(330) 523-1800/www.oeconnection.com
147
167
27
Online parts and service exchange in the D2DLink, D2D Plus, D2D Express,
automotive original equipment parts
CollisionLink, LinkIQ,
business
ServiceAdvantage, RepairLink
2000
Charles Rotuno
president, CEO
7
BrandMuscle Inc.
3750 Park East Drive, Beachwood 44122
(216) 464-4342/www.brandmuscle.com
121
91
15
Marketing solutions
2000
Philip Alexander
CEO
8
The CSC Group
17999 Foltz Parkway, Strongsville 44149
(440) 546-4272/www.thecscgroup.com
108
130
17
Business health care, clinical health
care, manufacturing, finance, insurance, PAPERS, nPower, R4 Acert, Phoenix
government
1964
William F. Zimmerman
chairman, CEO,
interim CFO
9
SageQuest
31500 Bainbridge Road, Suite 1, Solon 44139
(888) 837-7243/www.sage-quest.com
99
99
NA
Provider of GPS fleet management
solutions
Mobile Control
2003
Dennis Abrahams
president, CEO
10
Virtual Hold Technology LLC
137 Heritage Woods Drive, Akron 44321
(800) 854-1815/www.virtualhold.com
80
80
20
Technology, software, telephony, virtual
queuing
Virtual Hold Concierge, Rendezvous,
WebConnect, Encore, Rapport,
MobileConnect
1995
Kevin Sjodin
CEO
11
Fit Technologies
1375 Euclid Ave., Suite 500, Cleveland 44115
(216) 583-0733/www.fittechnologies.com
70
125
10
Education (K-12 and higher education),
nonprofits, health care, law firms,
accounting firms
Student Information System (SIS)
1999
Micki Tubbs, CEO, cofounder; Michelle Tomallo,
executive vice president, cofounder
12
Foundation Software
150 Pearl Road, Brunswick 44212
(330) 220-8383/www.foundationsoft.com
69
66
12
Accounting software for construction
Foundation for Windows
1985
Fred Ode
chairman, CEO
13
Knotice
526 S. Main St., Suite 705, Akron 44311
(800) 801-4194/www.knotice.com
44
35
12
Direct digital marketing
Concentri
2003
Brian Deagan
CEO
14
Main Sequence Technologies Inc.
4420 Sherwin Road, Hamilton Hall, Willoughby 44094
(440) 946-5214/www.pcrecruiter.com
42
42
NA
HR applicant tracking, recruiting, human
capital management
PCRecruiter, PCRecruiter Resume
Inhaler, PCRecruiter Interim,
PCRecruiter Outlook Portal
1998
Martin H. Snyder, president
William F. Kubicek IV
vp marketing
15
Tribute Inc.
1696-F Georgetown Road, Hudson 44236
(330) 656-3006/www.tribute.com
38
38
7
Industrial distribution, fluid power, hose,
seals, power transmission, automation,
industrial controls
Tribute Software, TrulinX Software
1981
Timothy Reynolds
president
16
Merge Healthcare
571 Boston Mills Road, Suite 500, Hudson 44236
(330) 655-3300/www.merge.com
37
30
18
Health care imaging and information
technologies
Fusion RIS/PACS MX, Fusion RIS,
Fusion PACS MX, Merge Mammo,
Merge PET/CT, Fusion Billing
1987
Timothy Kulbago
general manager
17
Imaging Science and Service Inc.
95 Executive Parkway, Suite 500, Hudson 44236
(330) 342-7760/www.issimage.com
35
35
5
Regulatory document compliance
including sales and use tax exemptions,
freight forwarding
TEAMS Express, LineLink
1994
Philip C. Hodge
CEO
18
Data-Basics Inc.
9450 Midwest Ave., Cleveland 44125
(216) 663-5600/www.databasics.com
33
32
18
Service management and accounting
SAM Pro Enterprise, TechAnywhere
3.0, Escalation Manager
1974
Arthur K. Divell
CEO
19
Noteworthy Medical Systems Inc.
6005D Landerhaven Drive, Mayfield Heights 44124
(440) 864-6800/www.noteworthymedical.com
30
60
NA
Health care technology
NetPracticePM, NetPracticeEHRweb,
NetPracticeERX,
NetPracticeMedicalHub
1996
Susan E. Hagerty
CEO
19
PreEmptive Solutions LLC
767 Beta Drive, Suite A, Mayfield Village 44143
(440) 443-7200/www.preemptive.com
30
28
10
Software security, application analytics
Dotfuscator, DashO, Runtime
Intelligence
1996
Gabriel Torok
president
21
Associated Software Consultants Inc.
7251 Engle Road, Suite 400, Middleburg Heights 44130
(440) 826-1010/www.asconline.com
26
32
5
Mortgage lending software solutions for
the primary and secondary mortgage
markets
PowerLender Loan Origination &
Processing System, PowerSeller
Secondary Marketing System
1978
Timothy W. Liston
president
22
Pointe Blank Solutions Ltd.
7055 Engle Road, Suite 304, Middleburg Heights 44130
(440) 243-5100/www.pointeblank.net
23
23
NA
Health care, government
CasePointe, PropertyPointe,
LivingPointe, ProjectPointe,
DocuPointe
2000
Thomas J. Coury
chairman,
chief software architect
23
Specialized Business Software
6325 Cochran Road, Unit 1, Solon 44139
(440) 542-9145/www.specializedbusinesssoftware.com
22
22
16
Financial services, government,
technology
Docunym Document Imaging and
Workflow
1999
Steve Wiser
president
23
Urbancode Inc.
2044 Euclid Ave., Suite 600, Cleveland 44115
(216) 858-9000/www.urbancode.com
22
16
11
Technology
AnthillPro ALA
1996
Maciej Zawadzki
CEO
25
ControlSoft Inc.
5387 Avion Park Drive, Highland Heights 44143
(440) 443-3900/www.controlsoftinc.com
21
21
NA
Process control
INTUNE, MANTRA
1985
Tien-Li Chia
president
25
Workflow.com
20006 Detroit Road, Suite 300, Rocky River 44116
(440) 827-2000/www.workflow.com
21
38
11
Medical records software
Workflow EHR, Workflow PM
2002
Packy Hyland
CEO
27
Bearware Inc.
7160 Chagrin Road, Suite 210, Chagrin Falls 44023
(440) 893-2327/www.bearwareinc.com
20
20
10
Logistics
Retail Distribution System, webTMS,
Retail Payment System, Claims
Management System
1987
Jeffrey Berichon
president, founder
27
Metasystems Inc.
13700 State Road, Suite 1, North Royalton 44133
(440) 526-1454/www.metasystems.com
20
20
15
Software provider to discrete
manufacturers
ICIM ERP
1975
Joseph R. Berish
president
29
Datacore Consulting LLC
5755 Granger Road, Suite 777, Independence 44131
(800) 244-4241/www.datacoreonline.com
18
16
4
Distribution and manufacturing
CANDIS, CIS, CIS HelpDesk,
AlertSystem, DCCRM
1998
Jim Conley
senior partner
BrandBuilder, BrandPlanner,
BrandWorkshop, BrandLibrary, Digital
Asset Manager
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these
listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of
Lists are available to purchase at www.crainscleveland.com.
(1) Formerly Intuit Real Estate Solutions.
RESEARCHED BY Deborah W. Hillyer
20100308-NEWS--18-NAT-CCI-CL_--
18
3/5/2010
2:53 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MARCH 8-14, 2010
Invest: Third Frontier bolsters efforts
For instance, late last month the
group led a $2.5 million investment
ABSMaterials Inc., a company in
Wooster that makes a glass-like
material meant to pull oil and other
pollutants from air, water and soil. In
addition to the fund’s $200,000,
members and other individuals
connected to the fund plopped down
another $570,000, a record add-on
investment for the group.
Three other investors — local startup
development group JumpStart Inc.,
strategic partner Fontz Drilling Inc.
of Wooster and New York venture
capital firm Harris & Harris Inc. —
threw in $250,000 each, and the rest
of the $2.5 million came from individuals not affiliated with the fund.
ABSMaterials is using the money
to expand research and development, production, marketing and
sales. On March 1 it opened a twoperson Houston sales office to target
the oil and gas industry, and soon it
plans to lease another 11,000 square
feet of lab space at Wooster’s Ohio
continued from PAGE 1
on investment opportunities. However, the region definitely benefits by
a formal group such as North Coast
Angel Fund, Mr. Rosenbaum said.
Not only do formal funds by definition serve as a source of money
for promising companies, but their
tendency to do their own research
encourages other investors to open
their wallets.
“The rigor of the processes that
flow from having the fund, the formality and the due diligence — it’s
very helpful,” Mr. Rosenbaum said.
Planting seeds
The North Coast Angel Fund
certainly has been opening its wallet
of late. The group has invested in
nine companies in nine months and
will be 12-for-12 if it makes its next
three on schedule.
The fund itself typically invests
$200,000 in each company. Members
then chip in a few hundred thousand
dollars of their own cash.
Contact:
Phone:
Fax:
E-mail:
INDUSTRIAL SPACE
1549 Hamilton Ave.
Two story industrial building with
office. 2 ton crane, industrial elevator. 6,000 sq ft on 2nd floor;
6,000 sq ft. on main floor.
Future prospects
After the next three investments,
North Coast Angel Fund will have
financed 20 companies in four years.
By then, all that will be left of the fund’s
original $5.6 million stash will be a
“modest amount” reserved for fol-
REAL ESTATE
Genny Donley
(216) 771-5172
(216) 694-4264
[email protected]
For Sale by Owner in
Downtown Cleveland
Agricultural Research and Development Center, said CEO Stephen
Spoonamore. The company’s Ohio
office employs 14 in research, development and production, and that
number only will grow, Mr. Spoonamore said. “We intend to stay in
Northeast Ohio,” he said.
ABSMaterials represents the kind
of company the region needs and investors want to fund, said Todd Federman, executive director of North
Coast Angel Fund. The company’s
Osorb technology serves a need, and
it appears to do so better than other
products on the market, he said.
“It really was a revolutionary
concept. It wasn’t a moderate
improvement,” he said.
low-up investments in existing portfolio companies, Mr. Federman said.
Managing member Mr. Rankin said
the group could continue meeting
regularly to collaborate on individual
investments and watch presentations
by entrepreneurs. That, however, is
the “fall-back” option. He’d rather
raise more capital, which he said helps
ensure high-potential companies stay
in Northeast Ohio.
The fund is subsidized partially by
the state: The group has received two
grants totaling $2.8 million from the
Ohio Third Frontier project, a 10-year
technology-based economic development program.
The fund likely would not have
formed without money from the Third
Frontier, according to Mr. Rankin,
who said the state program will have
“a huge potential impact” on Ohio as
the technologies it helped create are
commercialized.
As for the ArchAngels, the group
plans to form its first formal fund
without a Third Frontier grant, but it
intends to apply for money next year,
Mr. Rosenbaum said.
The ArchAngels’ fund likely would
focus on investments in the biomed-
For Sale
15,600 SF
Industrial/Office Bldg.
In Valley View
Built in 1989
1 Dock 3 Drive-Ins
18’ Clear
OFFICE SPACE
FOR LEASE
Cleveland/Shaker Hts.
Historic AmTrust building, N. Moreland &
Larchmere. 1,000 s.f. to 8,000 s.f.
from trendy & modern to well appointed
& distinguished. Free parking • Kitchen
Facilities • Large Training Room/Classroom Space • Conference Room.
For additional information contact
Fairmount Properties
216-514-8700
Litigation Support Space
G
IN
M
CO
ON
O
S
Joseph Martanovic
216.861.5434
[email protected]
3432-3500 Superior Ave.
4126 St. Clair Ave.
Buy with lease-back option.
12,500 sq ft. industrial use building. 2-5 ton cranes, second floor
offices.
Call 216-361-0014
for details
List your
industrial,
commercial or
retail space
here!
Crain’s Cleveland
Business’ classifieds
will help you fill
that space.
The existence of formal angel funds
in Northeast Ohio helps high-tech
companies in the short term, but in
the long term it helps wealthy people
in the region become more comfortable with angel investing, said Chris
Coburn, executive director of Cleveland Clinic Innovations, the technology
commercialization arm of the Cleveland Clinic. And that comfort level
means more capital for future startups, he said.
“It raises the level of sophistication,”
Mr. Coburn said.
There are about 300 angel groups in
the United States, but only 22% have
formal funds, said Marianne Hudson,
executive director of the Angel Capital
Association in Overland Park, Kan. Most
angel investing is done by investors
not affiliated with a group, she said. ■
Copy Deadline: Wednesdays @ 2:00 p.m.
All Ads Pre-Paid: Check or Credit Card
Crain’s Cleveland Business
Online Property Search
Looking for property — Search thousands of local listings
Selling or leasing a property —
Get your property featured through Crain’s
For Advertising Opportunities
Contact Genny Donley
[email protected]
216-771-5172
7,000 sq. ft., Separate HVAC,
Tiled Production Room, Multiple
Offices, Divisible, Move In Condition, Owner Operated.
216-619-1100
12,000 sq ft. building with new
glass block windows. Shelving
for large industrial use.
Funds are heaven-sent
Powered by LoopNet
#1 in Commercial Real Estate Online
815 Superior
Global commercial real estate expertise
ical, advanced energy and advanced
materials sectors, given the Akron
area’s strengths in material science
and the technologies expected to
come out of the newly formed Austen
BioInnovation Institute in Akron,
which is a research collaborative
involving area colleges and hospitals.
CLASSIFIED
BUSINESS SERVICES
Landerhaven
Engaging
Events!
440.449.0700
ExecutiveCaterers.com
FLYNN
ENVIRONMENTAL
For Assessments
(800) 690-9409
www.flynnenvironmental.com
ATTENTION
BUSINESS SERVICE OWNERS!
Submit your business card to promote your service and
receive a SUBSTANTIAL DISCOUNT off your ad price.
To find out more, contact Genny Donley at 216.771.5172
BUSINESS OPPORTUNITY
Selling a Business or
Need Capital?
Contact Genny
Donley at
216.771-5172
GDIC Group, LLC is a small business investment company
recently formed to invest in distressed companies under
$20 million in revenues.
[email protected]
Phone: 440-663-4510
Contact: Steve White, President
Email: [email protected]
BUSINESS
FOR SALE
Selling A Business?
Ohio Business Brokers Assoc.
WWW.OBBA.ORG
Find hundreds of businesses.
Find a good broker to help.
Buying A Business?
SPORTS &
ENTERTAINMENT
INDIANS
CLUB SEATS
10-20 Game Partner
needed for sect 338
All you can eat. Free parking.
(440) 259-4144
for details
For daily on-line
updates, sign up @
CrainsCleveland.com/Daily
20100308-NEWS--19-NAT-CCI-CL_--
3/5/2010
3:24 PM
Page 1
MARCH 8-14, 2010
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
19
THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK
BEHIND THE NEWS WITH CRAIN’S WRITERS
MARCH 1 - 7
A loan program
worthy of note
The big story: Benesch Friedlander Coplan
& Aronoff merged with an Indianapolis law firm,
and its dealmaking may not end there. The
combination with the 43-person Dann Pecar
Newman & Kleiman took place March 1. Ira
Kaplan, Benesch’s managing partner, will
remain in that role and the firm’s headquarters
will stay in Cleveland. In Indianapolis, the firm
will be known as Benesch/Dann Pecar for at
least a year. Mr. Kaplan also said Benesch will
“be pretty aggressive” when it comes to looking
at other cities it may be able to enter. He
mentioned Chicago, Milwaukee, Minneapolis
and Philadelphia as possibilities.
■ Starving artists who need cash for a new
clarinet, clay or canvases can stop digging
through their couch cushions — there’s a
new loan source in town.
The NoteWorthy Federal Credit Union in
Cleveland, which for 50 years has been making
loans to musicians, is introducing a loan
designed for creative types in any medium.
The Creative Artist Project loan will be
available for individual artists who are
affiliated with a professional artistic organization, but who need
more money to complete a project. In a pilot
program, credit union
president Henry Peyrebrune — who is also a
bassist in the Cleveland
Orchestra — said loans
were made to help a
band finish producing a
CD, to provide working
capital for a documentary film and to buy an embroidery machine
for a costume designer.
The 400-member credit union has about
$1.5 million in assets and is earmarking
$400,000 to make the loans, which will be for
$50,000 or less each.
Mr. Peyrebrune said the credit union is
interested in expanding its base from musicians to other artists and in the future would
like to be a resource for small nonprofits and
arts businesses.
“In our experience, artists are highly
motivated and self-disciplined people, and
Seeing the light: The Public Utilities Commission of Ohio voted to require FirstEnergy
Corp. to restore the rate discounts for
the utility’s customers living in
all-electric homes. And in an
indication of how strongly the
FirstEnergy move has bothered Columbus, State Sens.
Tom Patton, R-Strongsville, and
Tim Grendell, R-Chesterland,
also introduced Senate Bill 236,
legislation that would restore the
discounts. FirstEnergy last year
eliminated special rates that it previously promoted, leading to big increases in electric
bills this winter for customers that heat with
electricity.
Heart healthy: Early stage company Cleveland HeartLab LLC, a specialty clinical laboratory
that is developing proprietary diagnostic tests
for measuring a patient’s risk for heart disease,
said it completed a $3 million fundraising round
and has selected its top officers. Cleveland
HeartLab said its new shareholders include local
business leaders that it did not identify, as well
as private equity firms Glengary LLC, Second
Generation Ltd. and Zapis Capital Group LLC.
The company also announced that its board of directors elected Les Vinney as chairman, Jake
Orville as president and CEO, Dr. Marc Penn as
chief medical officer and Dr. Stanley Hazen as
chief scientific officer. Mr. Vinney is the retired
president and CEO of Steris Corp.
Speeding things up: OneCommunity
received $18.7 million in stimulus money that it
plans to use to help poor residents in Ohio and four
other states get high-speed Internet access and
learn to use it. The Cleveland-based nonprofit,
which provides fiber-optic Internet service to
government agencies and nonprofits in Northeast
Ohio, will use $11.7 million of that money to
increase broadband adoption in Cleveland, Akron
and southeastern Ohio. The rest of the money for
the “Connect Your Community” program will go
to Detroit; Lexington, Ky.; Bradenton, Fla.; and
Gulfport and Biloxi, Miss.
The color of money: A. Schulman Inc.
announced its second acquisition deal in the last
four months, a move that will result in the closing
of its Polybatch Color Center in Sharon Center.
The Akron-based supplier of plastic resins bought
McCann Color Inc., a producer of specially formulated color concentrates in North Canton. A. Schulman put the purchase price at “less than $10
million in cash.” A. Schulman will consolidate its
production at the McCann plant.
This and that: Snack foods maker Shearer’s
Foods Inc. in Brewster agreed to buy Snack
Alliance Inc., a producer of branded and privatelabel snack foods that is a supplier to retail giant
Walmart. Terms of the transaction were not
disclosed. … Hyland Software Inc. of Westlake
acquired another document management software company, the 30-employee eWebHealth of
Reading, Mass. Terms were not disclosed.
WHAT’S NEW
they’re a good credit risk,” he said. “They
need capital just like any other business to
keep the business going.”
For more information on the loans, see
http://noteworthyfcu.com. — Arielle Kass
Software guy’s soft sell
yields new 20/30 web site
■ The Cleveland Professional 20/30 Club
couldn’t find the software it needed to build
the perfect web site. So it gathered 60 volunteers and built it.
From March 5 through March 7, the
local young professionals
group hosted Advance
20/30, an event that
doubled as a marathon
programming session
and a social outing.
Attendees included programmers and graphic
designers as well as
volunteers from nontechnical professions.
Dan Young, 20/30
Club president, denied that he was trying to
pull a Tom Sawyer-style prank on members
of the club, but from what I can tell it did
indeed look like organizers were trying to
trick attendees into believing that work can
be fun. The event took place inside the old
Hornblowers boat on Lake Erie, which now
is home to software developer LeanDog,
and it featured free food, beer and coffees as
well as appearances by a balloon clown and
a disc jockey.
If that was Mr. Young’s ploy, it worked:
The group got its new web site, though it
These killer organisms
aren’t from a horror flick
It’s a jungle out there, and few companies
know that better than ACRT.
ACRT is an employee-owned “utility vegetation management” consulting firm. (Not
your typical description of a consultant, to be
sure.) The company offers national line clearance, tree care and urban forestry training,
and its reason for being is to help power
companies provide safe and reliable electric
service.
The company opened Feb. 11, 1985, with
fewer than 50 employees. It now has more
than 400 employees, works in most U.S.
states, and has satellite groups in Lodi, Calif.,
Nashville, Tenn., Texas and Florida. ACRT
also manages arborist training in six Job
Corps centers in Oregon, Illinois, Vermont,
Arkansas and Kentucky.
ACRT moved to its current location, 1333
Home Ave., in 2004.
For information, visit www.acrtinc.com.
Send information about corporate anniversaries to managing editor Scott Suttell
at [email protected].
Sounds like a job
for Post-It notes
■ Nonprofits often have no problem touting
how they help the public, but making that
story stick in people’s minds is another
thing.
The Saint Luke’s Foundation hopes to
help nonprofits better tell their stories
through a new grant program called Make it
Stick. Nonprofits that focus on health and
health care, human services or neighborhood empowerment can submit proposals
to receive grants for unique approaches to
communications.
“This is an opportunity to really look
at nonprofits and how they can tell their
story, build capacity, build programs and
generate revenue,” said Kimberly St. JohnStevenson, communications officer for the
foundation.
Letters of inquiry must be submitted to
the foundation by April 1. Saint Luke’s will
decide which nonprofits to support and will
fund their communications efforts for one
year starting on July 1. More information is
available at www.saintlukesfoundation.org.
— Shannon Mortland
BEST OF THE BLOGS
Excerpts from blog entries
on CrainsCleveland.com.
COMPANY: ACRT Inc., Akron
THE OCCASION: Its 25th anniversary
won’t launch until finishing touches
are completed in May. Not only that, but
Advance 20/30 also helped form more
bonds between Cleveland’s community of
software developers, said Mr. Young, who
also is founder of DXY Solutions LLC, a
Cleveland company that develops software
for mobile phones.
“It was an amazing weekend,” he said.
— Chuck Soder
■ An infectious disease specialist from
Cleveland was quoted in a scary New York
Times piece on the rising threat of infections unfazed by antibiotics.
The piece led with the tale of a former baseball player who died after being infected by an
organism called Acinetobacter baumannii.
“The germ is one of a category of
bacteria that by some estimates
are already killing tens of thousands of hospital patients each
year,” The Times reported. While
the organisms do not receive as
much attention as the one known as
MRSA — for methicillin-resistant
Staphylococcus aureus — some
infectious-disease specialists say they
could emerge as a bigger threat.
“In many respects it’s far worse than
MRSA,” said Dr. Louis B. Rice, an infectious disease specialist at the Louis
Stokes Cleveland V.A. Medical Center
and at Case Western Reserve University.
“There are strains out there, and they are
becoming more and more common, that are
resistant to virtually every antibiotic we have.”
The newspaper said there are several
drugs that can treat MRSA. But for a combination of business reasons and scientific
challenges, the pharmaceuticals industry
“is pursuing very few drugs for Acinetobacter and other organisms of its type, known
as Gram-negative bacteria. Meanwhile, the
germs are evolving and becoming ever
more immune to existing antibiotics.”
Under water on the
mortgage? Walk this way
■ Worried about the consequences of walking
away from your underwater mortgage?
The ramifications might not be as bad as
you think, according to a Wall Street Journal
column that quoted Cleveland bankruptcy
attorney Richard Nemeth.
In his ROI column on the paper’s web site,
Brett Arends wrote that people who are
deeply under water on their mortgage “need
to stop living in a dream world and give
serious thought to walking away from the
debt. No, you shouldn’t feel bad about it, and
you shouldn’t feel guilty. The lenders would
do the same to you — in a heartbeat.”
In “non-recourse” states, the
mortgage lender “may have no
right to come after you for any
shortfall. They may have no option
but to take the home, sell it and
eat the loss,” he wrote. Even in
“recourse” states, lenders “may have
limited ability to come after you.
Often they’d have to jump a lot of legal
hurdles, and it’s just not worth it for
them,” Mr. Arends wrote. “They’re
swamped with cases anyway.”
As Mr. Nemeth told Mr. Arends,
“In my experience, right now they’re
not really going after anyone. They
just don’t have the resources.”
Melt’s a handful, but
our money’s on Adam
■ This was inevitable.
Melt Bar and Grilled in Lakewood said on
its Facebook page that Adam Richman and
the crew of “Man v. Food” visited recently
to film a segment for a coming show, which
airs on the Travel Channel.
Mr. Richman’s challenge was to eat a
“monster grilled cheese” loaded with 14 different cheeses and that weighed in at close
to four pounds.
Based on the gigantic food Mr. Richman
has eaten on this show, we’re sure he can
handle it.
20100308-NEWS--20-NAT-CCI-CL_--
3/4/2010
3:23 PM
Page 1
Pay early or defer payment –
either way, it’s money in the bank.
“The Plum Card seemed like a natural way to save some money. I saved
thousands of dollars over the course of a year, and it was a no-brainer.”
- Thomas Tranguch, T&F Tire Supply Inc., Member Since 2008
The Plum Card ® from American Express OPEN offers flexible payment terms.
If your established business pays your bill early, you get a 1.5% discount that
can add up to thousands of dollars that go right back to the bottom line. Or
your business can defer payment if cash flow is ever less than steady.
This kind of flexibility gives you the option to choose, each month, which way
to pay. And puts more cash back in your hands.
Is the Plum Card right for you?
Visit plumforbusiness.com to see how other businesses use the Plum Card to
their advantage. Or call 1-866-973-PLUM. Then decide for yourself.
Pay your balance in full within 10 days of the statement closing date and get a 1.5% discount on virtually all purchases made that month. The discount will appear as a credit on the following billing statement. Pay 10% of the balance
from new activity on your billing statement plus the entire amount of any previously deferred payment or amounts past due by the “Please Pay By Date” on that statement and you can extend payment on the rest until the closing date of
your next billing cycle without penalty. Visit plumcard.com for details. ©2010 American Express Bank, FSB. All rights reserved. P04