Crain's Cleveland Business

$1.50/OCTOBER 11 - 17, 2010Vol. 31, No. 40

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Survey: Lack of faith in NE Ohio economy persistingBy DAN [email protected]

Northeast Ohio businesses agreeon many things — that the federalgovernment should reduce its bor-rowing and spending, for one — butthey can’t seem to agree on whetherthe economy is improving.

When the Deloitte accountingfirm did a survey of 133 Northeast

Ohio businesses in August and September,it found a bit of bifur-cation when it asked,“Where do you believe the U.S. is interms of current economic cycle?”

One-third of the respondentssaid the U.S. still was in a recession,while 42.1% said the nation’s economy was in the beginning of a recovery. A few, 3.8%, said the

economy was “well intorecovery,” while a fewmore, 10.5%, said the nation was entering a

double-dip recession. In other words, 43.6% of those

surveyed were pessimistic, while45.9% were optimistic — a nearlyeven split with the remainder undecided.

On the local economy, they

generally were more downbeat. Awhopping 81.2% said they were either “not particularly confident”or “not at all confident” in it, whileonly 18.8% said they were “very” or“somewhat confident.”

So who’s right?“It depends on the company

and the industry they’re in,” said See SURVEY Page 22

Andy Halko moved Insivia Marketing & Inter-active Web Design to the middle of the Flats.

INSIDEAnalyzing privatizedeconomic development

Republicangubernatorialcandidate JohnKasich’s planfor a nonprofitto take overthe state’s eco-nomic develop-ment efforts isn’t a sure winner, inthe view of experts. Page 3

INSIDE: Responses to Deloitte surveyquestions. Page 22

Downtown officials see buildings such as theold B&O Passenger Terminal as assets.

The Cleveland Rowing Club will move to Colum-bus Peninsula from Scranton Peninsula.

RAYS OF HOPEIN THE FLATS

Business owners, city leaders see betterfuture in district as recreation picks up

By JAY MILLER and STAN [email protected], [email protected]

et ready for the new Flats.It won’t be the same,

alcohol-fueled party centralas the old Flats, pronounced

dead years ago.At least that’s what Andy Halko is

thinking. Mr. Halko, president of Insivia

Marketing & Interactive Web Design,is moving his 14-person firm from Superior Avenue on the eastern edgeof downtown to 2020 Center St. in themiddle of the Flats.

“We’re excited about having accessSee FLATS Page 20

G

20101011-NEWS--1-NAT-CCI-CL_-- 10/8/2010 3:46 PM Page 1

Other benefits(dental, disability, vision) 39 65

22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 11-17, 2010

REGULAR FEATURES

Classified .....................21Editorial .........................8From the Publisher .........8Going Places................15Letters ...........................8

List: Largest accountingfirms...................16, 18

List: Northeast Ohio’s topSBA lenders ..............19

Reporters’ Notebook ....23

COMING NEXT WEEKHonoring the region’s top CFOs

Audit Bureauof Circulation

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Crain’s for the third year identifiesand profiles chief financial officers inNortheast Ohio who have helpedsteer their companies through a difficult economic period.

MONEY MAKES THE WORLD GO ’ROUNDThe way to an employee’s heart is with an attractive salary. That’s one findingof a MetLife survey of 1,503 benefits decision-makers and 1,305 full-time employees. Here’s the percentage of employers and employees reportingsalary and benefits as important contributors to employee loyalty:

Employers’ Employees’perception perception

Salary 67% 82%

Health benefits 59 74

Advancement opportunities 45 55

Retirement benefits 43 67

Work/life programs 36 53

Company culture 55 47

SOURCE: METLIFE; WWW.METLIFE.COM


points. The group suggests members tell

legislators that wind energy createsU.S. manufacturing jobs and thatwithout action on a renewable energystandard, “the United States willcede its status as the global leader inclean energy to China, and the jobsthat the RES would create will go toChina, not the United States.”

Thumbs up …Several companies in Northeast

ment. A few members of the delega-tion even circulated letters sayingthe bill would be bad for NASAGlenn; so did the Greater ClevelandPartnership.

Center director Ramon Lugo,however, stated in a letter to Crain’sthat passage of Senate Bill 3729 willprove good for NASA Glenn. (Theletter is on Page 8.) The union thatrepresents NASA Glenn’s engineersand scientists agrees, and so do the only two members of Ohio’scongressional delegation who sit onthe House Science and Technology

Committee.Those supporters all say the new

plan’s emphasis on research andtechnology development plays intoNASA Glenn’s specialties.

“This congressional direction isgood news for Glenn and Ohio,”Mr. Lugo said.

A stellar plan?Granted, the Senate bill that is

awaiting President Obama’s signa-ture doesn’t provide as much researchand technology money as theHouse version of the bill, which was

not voted on, or the initial plan thatthe Obama administration pro-posed in February.

Still, the new plan looks good,said Sheila Bailey, a senior execu-tive vice president with the LewisEngineers and Scientists Associa-tion, which is the local chapter ofthe International Federation of Pro-fessional and Technical Engineers.

A big reason the NASA Glennunion supported the Senate bill isthat it prevents NASA from layingoff government employees for three

OCTOBER 11-17, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT THE WEEK IN QUOTES“There is always someattraction here. Nomatter who you are,the water attractsyou, even if it is eatingin a restaurant andwatching (ore) boatsgo by.”— Jack Ecke, owner of Ecke’sTowing Service in the Flats and aservice station on ColumbusRoad. Page One

NASA Glenn upbeat on replacement billAgency, some congressional delegates at oddsover impact of post-Constellation legislation By CHUCK [email protected]

The new NASA may not be so badfor NASA Glenn Research Center after all.

The center’s director and otherswith close ties to NASA Glenn havevoiced support for a federal bill expected to reshape NASA’s space

exploration plans.About half of Ohio’s congressional

delegation opposed the NASA Authorization Act of 2010, a bill expected to replace the Bush-eraConstellation program with a spaceexploration plan that pays privatecompanies to develop rockets forNASA and puts more emphasis onlong-term technology develop- See NASA Page 19

See WIND Page 21

Manufacturers butt heads over wind energy proposal By DAN [email protected]

A new bipartisan proposal to getthe United States to generate anduse more renewable energy is pittingOhio manufacturing interests againsteach other.

Those already mining the gold ofthe nation’s rush to wind energytend to favor the push to renewables,while some advocates for manufac-turing generally say it’s a bad ideathat would raise the nation’s energy

By JAY [email protected]

Alook at the experiencesof other states indicatesa plan advanced by JohnKasich to replace the

Ohio Department of Develop-ment with a private, nonprofitorganization might not be theeconomic development elixirtouted by the Republican candi-date for governor.

Conversations with economicdevelopment professionals and

academics suggest the success ofstate business growth programsis more a reflection of eachstate’s appeal to site selectorsrather than a function of the organizational structure of thebusiness attraction effort.

Jeff Finkle, president of the International Economic Devel-opment Council in Washington,D.C., said he hasn’t found any evidence that private, nonprofitagencies do a better job thanpublic ones.

Some say transition will raise costs, affect business

costs.U.S. Sen. Jeff Bingaman (D-N.M.)

and his Republican colleague SamBrownback of Kansas said on Sept.22 that they intend to introduce legislation that would establish anational renewable energy stan-dard. It would require the nation toderive more of its electricity fromrenewable sources, such as windand solar energy. A detailed bill had

yet to be unveiled, but the two saidthey hope to see 15% of the nation’selectricity come from renewablesources by 2021.

The bill is backed by the GreatLakes Wind Network, which worksto increase the domestic content ofNorth America’s wind turbines. Thenetwork has asked members to calltheir federal legislators in support ofthe bill and even has provided talking

MATT SULLIVAN/REUTERS

Republican gubernatorial candidate John Kasich speaks to supporters during an Aug. 4 campaign stop in Zanesville.

A POLITICALBATTLEFIELD

Gubernatorial candidate Kasich touts plan to privatize economic development, but

experts say it’s no panacea for state’s woes

“I’m less concernedabout a double-diprecession today. …From everything I seeand everyone I’mtalking to, there’s asort of quiet confi-dence going into 2011that’s been missingthe past couple ofyears.”— Matthew Figgie, chairman,Clark Reliance Corp. Page One

“I’m very excited. …I’m also scared todeath.”— Nick Mayer, principal of NickMayer Lincoln-Mercury Inc. inWestlake. Page 11

“Bed-bug infestationscan run into thethousands of dollars.It can spiral quickly.I know that not every-body is prepared forthem. It’s just amazing.It just seemed to havegotten here fasterthan anticipated.— Rick Novickis, supervisor, environmental health services,Cuyahoga County Board ofHealth. Page 11

See KASICH Page 6


“(Winston Breeden is) always looking for newitems to come up with fortheir business.” – Mark Cegelka, mayor, Glenwillow Village


Volume 31, Number 40 Crain’s Cleveland Busi-ness (ISSN 0197-2375) is published weekly, exceptfor combined issues on the fourth week of May andfifth week of May, the fourth week of June and firstweek of July, the third week of December and fourthweek of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2010by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $1.50. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. 1-877-824-9373.

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Parma straps maker heads east After mulling benefits of nearby areas for move,Winston Products opts for Glenwillow VillageBy STAN [email protected]

Breaking the rule that East Sidecompanies go east and West Sidecompanies go west in search of largerbuildings, Winston Products LLC inParma has agreed to go east — allthe way to the massive DiamondCenter One warehouse in GlenwillowVillage.

Winston Breeden, president ofWinston Products, said the 38-employee company has leasedmore than 100,000 square feet at the

multitenant office-warehouse buildingand plans to move its office andwarehouse operation to DiamondCenter One from the Venture OneBuilding in Parma. The companylooked for replacement sites in Parma and as far southeast asStreetsboro, he said.

“This fit us better and the dealwas right, to be honest,” Mr. Winstonsaid, though he declined to disclosethe rent the concern will pay.

“It’s a new building and has a taxabatement in place,” he added.

Winston Products occupies 50,000

square feet in Parma and 15,000square feet in a satellite warehousein Cleveland that it plans to consoli-date in a single location when itmoves in December.

Diamond Center One also willhave room for Winston to grow, Mr.Breeden said, which it plans to dowith more products he declined todescribe.

Winston Products dubs its best-known product “Smart Straps.” Theproduct is a boxed rigging systemthat allows users to quickly releaseand recoil straps as they tie down orunload equipment from trucks orcars. Major retailers sell the systemand associated straps, which areamong 200 products the companydistributes, Mr. Breeden said. Contract manufacturers produce theparts.

“Our mission is to provide trulyinnovative product solutions,” Mr. Breeden said of the 5-year-oldconcern. He declined to disclose annual sales.

Mark Cegelka, mayor of GlenwillowVillage, said he’s looking forward to Winston Products moving to thevillage. He toured its Parma opera-tion and described Mr. Breeden as“an interesting entrepreneur.”

“He’s always looking for new itemsto come up with for their business,from their Smart Straps to bungeecords and related items with all sortsof uses,” Mayor Cegelka said.

Winston Products plans to ask thevillage to seek state job tax credits,but it has not yet done so, the mayorsaid. The Diamond Center Oneproperty already has an abatementof 75% of its annual property tax billin place, which was approved beforethe building was constructed. Themayor said he suggested WinstonProducts work with Parma for a loca-tion, but was assured it was unableto find one there.

Winston Products will become thethird tenant in the 400,000-square-foot building that a joint venture ofGeis Cos. of Streetsboro and WestonInc. of Solon completed in 2007. Thebuilding is at 30339 Diamond Park-way.

Terry Coyne, a senior vice presi-dent at Grubb & Ellis Co.’s Clevelandoffice who represents the building,said 133,000 square feet remainsavailable following the Winstonlease. Mr. Breeden said Brian Conroyand Scott Pick of Jones Lang LaSalle’sCleveland office represented WinstonProducts in its search.

Even with Winston Products’move, Geis retains the company as atenant because it also owns the Parma property that is Winston’scurrent home. ■



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Cleveland corrections facility a plus for neighborhoodBy TIMOTHY [email protected]

A $10.8 million, 200-bed commu-nity-based corrections facility for non-violent offenders is slated to open in January southeast of downtownCleveland, and officials associatedwith the project say it could be a posi-tive for the local business community.

The 53,000-square-foot facility, at3540 Croton Ave. near the Interstate77 bridge, will offer low-level felonyoffenders drug treatment, counselingand employment assistance. It’s thefirst such facility in Cuyahoga County,and officials involved with the projectsay it will create about 70 good-paying,full-time jobs and 20 part-time jobsand could yield other benefits.

Michael May, executive director of Maingate Business DevelopmentCorp., a nonprofit group aimed atimproving the industrial area wherethe facility is located, said his groupand the 500 businesses it representshave been supportive of the project.Mr. May said Cuyahoga County andOriana House Inc., the nonprofitpegged to operate the facility, havetaken an area that’s typically been ignored and put a good face on it.

“With this brand-new, beautifullydesigned facility, the jobs, the secu-rity envelope and everything else, itturns that area into a very majorplus,” Mr. May said.

What it isThe Ohio Department of Rehabil-

itation and Correction contributed

the bulk of the money to finance thefacility, while the county addedabout $486,000. The financing was in place in the early 1990s, but theproject didn’t take hold until abouttwo years ago. The main stickingpoint was site selection, said AlfonsoSanchez, chair of the community-based correction facility governingboard, a group that will oversee thefacility.

Mr. Sanchez noted that it washard to explain to residents or busi-ness owners that this wasn’t a jail,adding that it is “by no means acountry club.”

The facility will be geared towardhelping criminals re-enter the com-munity. These offenders, on average,stay in these types of facilities about120 days. State law prevents themfrom staying longer than 180 days.

Anne Connell-Freund, executivevice president of operations at Oriana House, said an ultimate goalis getting recovering offenders —

who typically are drug or alcohol addicts — employed soon after leavingthe facility. To accomplish that goal,she said it’s important to build rela-tionships with local employers.

“Employers tend to like our clientsbecause we get them to work on timeand drug screen them,” Ms. Connell-Freund said, adding manufacturingjobs typically are a good fit for them.

In addition, government officialshope the facility will help address theproblem of state prison overcrowding,which they say costs taxpayers farmore money than sending offendersto a community-based facility. Also,the new Cleveland facility will receive about $6 million from thestate each year for operations, which

Ms. Connell-Freund said would bespent at local businesses.

Who’s in charge? Oriana House tapped Michael

Randle, a controversial figure fromthe Illinois prisons system, to leadthe operations at the new facility.He’s doing it for more than a 50% cutin pay from the more than $150,000a year he earned as director of theIllinois Department of Corrections.

Mr. Randle, who spent nearly two decades working for the OhioDepartment of Rehabilitation andCorrection before heading to Illinoisin June 2009, became a central figurein a bungled Illinois early releaseprogram that put several violent offenders back on the streets startingin September 2009 after serving littlejail time. A state-issued report in August ultimately said the programwas “ill-conceived” and ignored theimpact on public safety.

The issue became a serious liabilityfor Illinois’ sitting governor, PatQuinn, and nearly cost him the Democratic Party’s nomination inthe February primary. Mr. Quinnsuspended the program at the end of last year and blamed Mr. Randlefor the problems, but the governorrepeatedly refused to fire Mr. Randle

despite several calls to do so fromother state officials.

Mr. Randle said he wasn’t forcedout of his role in Illinois and took thejob in Cleveland to be closer to hisfamily. He added that he didn’t getinvolved with the criminal justicesystem to get rich.

“It was totally my decision,” Mr.Randle said about his departure.“The (Illinois) governor was sur-prised I decided to leave.”

Speaking of Mr. Randle, CharlesSee, community outreach coordinatorfor the facility governing board, saidIllinois “stole him from us” and Ohiorecently “stole him back.”

Moving forwardMr. Sanchez said construction of

the facility should be completed inDecember. The facility is slated toopen in early January, on time andon budget. “It couldn’t have beendone any faster or anymore eco-nomically,” Mr. Sanchez said.

Mr. See said this facility is an example of the “change in paradigm”of corrections as more states arelooking to maximize resources andmove to low-cost, more effectivetypes of incarceration.

“You’re saving money,” he said.“It’s as simple as that.” ■

RENDERING PROVIDED


“Here’s the bottom line: I can’tprove, nobody can prove, that aquasi-public/private partnershipwill produce more jobs than a public agency,” said Mr. Finkle,whose group consists of 4,500 economic development professionalsworldwide.

Geraldine Gambale, editor ofArea Development, a publicationthat serves site selection and facili-ties planning professionals, con-curred with Mr. Finkle.

“You can’t just say the state-run,or the ones that aren’t state-run, doa better job because it’s a mix,” Ms.Gambale said. “Enterprise Floridahas been successful at it, but in California they privatized it andnow it’s back with the state.”

California dismantled its Tech-nology, Trade and Commerce Agencyin 2003 and turned economic devel-opment marketing over to a non-profit, TeamCalifornia. However,last April, Gov. Arnold Schwarzeneggercreated the Governor’s Office ofEconomic Development to bringeconomic development back inhouse.

A government reform task force,the Little Hoover Commission, hadrecommended the state of California

reclaim the business attraction andretention role.

“No one is setting a vision for thestate’s role or articulating it forbusiness and cities and regions desperate to create new jobs,” thecommission said in its report to thegovernor and legislature. “No oneknows what programs are working.No one is building or following astrategy to guide and align theseprograms.”

Mr. Finkle and others say evenstates that have privatized economicdevelopment continue to rely entirely or in large measure on public money.

“You’re really not getting rid ofpublic involvement,” Mr. Finklesaid. “There’s still a governmentfunction going on around this (economic development) game.”

Even Enterprise Florida, one ofthe most lauded private agencies,got $19.3 million of its $20.6 millionbudget for 2008 from governmentgrants, according to its 2008 incometax filing.

Don Jakeway, a former directorof the Ohio Department of Devel-opment and former president andCEO of the private Michigan Economic Development Corp., said,“If you’re using taxpayers’ dollars to

fund a private organization, it ain’tprivate.” Mr. Jakeway now is presi-dent and CEO of the Brooks Devel-opment Authority in San Antonio,Texas.

Strickland discarded ideaMr. Kasich maintains that moving

business development to a non-profit organization — which he would call JobsOhio — wouldcreate a faster-to-respond, morebusiness-friendly agency.

The Kasich plan follows similarprograms created in the last decadein states that include California,Florida, Indiana, Michigan andMissouri. However, the experiencesof those states suggest a privateagency likely would not be any moreeffective at creating jobs than thecurrent state agency, said Ohio de-velopment department directorLisa Patt-McDaniel.

Ms. Patt-McDaniel said the Strick-land administration a little over ayear ago explored best practices inother states and examined whetherto adopt the privatization model.

“What we found out when welooked at efforts in some otherstates was that the public-privatepartnerships they had, in the end,were mostly funded by the public


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Kasich: JobsOhio staff would be paid wellsector, so the private funding modeldidn’t seem sustainable,” she said.“So we dropped it at that point.”

Nonetheless, Ned Hill, dean of the Maxine Goodman Levin Collegeof Urban Affairs at Cleveland StateUniversity and a consultant on economic development issues nationwide, does see some advan-tages to a nonprofit approach tobusiness assistance.

In particular, he said a privateagency’s ability to offer highersalaries to its staff can attract and retain the most skilled economic development professionals. He saidhe has watched the churn in theOhio Department of Developmentas quality mid- and upper-level offi-cials depart for the private sector,where salaries are significantly higher.

Still, he gives the current stateagency high marks for effectiveness.

“They do a very good job,” he said.Mr. Hill and Judy McKinney Cherry,

former director of the Delaware Economic Development Office, saidprivatizing a state’s economic devel-opment department doesn’t eliminatethe need for expanding businesses todeal with state bureaucrats. Theystill must plow through state agen-cies for permits and other approvals.

Sounds like a planJobsOhio would be run by a 12-

member board of directors appointedby the governor and composed ofCEOs and former CEOs. They wouldhire a professional staff that, Mr. Kasich said, could be paid more than

the state employee pay scale andcould receive incentive bonuses forsuccessful efforts.

The state development depart-ment employs more than 400 peopleand has a budget of more than $1.1billion for fiscal 2011, though only aportion of that budget pays for busi-ness attraction and retention pro-grams. A significant part is federalpass-through money, such as the$137 million that goes to a home energy assistance program, or moneythat flows from state bonds approved by voters, such as theThird Frontier technology develop-ment program.

Under the Kasich plan, the devel-opment department would be dis-mantled and those operations thataren’t related to business attractionand retention would be moved intoother departments.

Gov. Ted Strickland has opposedthe plan, calling it a case of “the foxguarding the hen house.” Mr. Finkleof the International Economic Development Council went so far asto say that putting business peoplein charge of doling out public moneyor tax credits to businesses createsconflicts of interest.

Democratic Attorney GeneralRichard Cordray also has come outagainst the plan, saying it lacks publicaccountability and transparency.

Mr. Kasich opened the door to thereservations expressed by Mr. Cor-dray and others when he said priva-tization would allow the nonprofit toattract the best people by offeringhigh salaries and bonuses, thenadded, “The whole bonus thing, wewill not require them to disclosetheir bonuses.” ■


A federal magistratejudge last week accepteda guilty plea from Stanley

S. Chapman, formerly of Aurora,on two counts of embezzlingmoney from the Blessed HopeMissionary Baptist Church ofCleveland and on two counts offailing to pay income taxes.

In April, federal prosecutorscharged Mr. Chapman with fourcounts of income tax evasionand 12 counts of employmenttax offenses. The government alleged that between 2003 and2006, Mr. Chapman embezzled$336,777 from the church by diverting federal FICA tax moneyto his own account.

The indictment alleged thatMr. Chapman failed to report taxable income of approximately$283,136 and income taxes ofapproximately $51,301 forthose years.

Sentencing has been set forDec. 15.

— Jay Miller

are going to give us what Isee as a world-class clientsupport organization,” hesaid.

The company’s web sitelast week listed 20 positionsthat MRI Software is lookingto fill at its Highland Hillsheadquarters.

Mr. Post noted, however,that not all of those positions areopen because of the restructuring.He said some individual postings alsomay represent more than one jobopening.

Mr. Post would not say how manyemployees MRI Software has today,but he noted that the company employs more people today than itdid when Vista Equity Partners

bought the firm in January.The company employednearly 200 people in High-land Hills at the start of theyear.

MRI Software needed toadd employees to handleadministrative functionspreviously provided by Intuit,the company that makes

TurboTax and Quicken accountingsoftware. The company also is hiringsoftware developers, account exec-utives and even a few recruiters.

MRI Software expects to continuehiring, Mr. Post said, adding thatcustomer demand appears to beimproving with the economy.

“It feels like things are going inthe right direction,” he said. ■


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Software maker restructures staffMRI eliminates remote positions,plans to hire more atHighland Hills HQ

PostBy CHUCK [email protected]

David Post would rather his employees work from headquartersthan from home.

MRI Software LLC late last monthlaid off an undisclosed number ofemployees across the country whoworked from home. Now the High-land Hills company is hiring their replacements at its headquartersand its office in Secaucus, N.J.

The company, which makes softwarethat investors and large companiesuse to manage their real estate holdings, was called Intuit Real Estate Solutions until January, whenVista Equity Partners of San Franciscobought the firm from Intuit Inc. ofMountain View, Calif.

Bringing more of its employeesinto its offices should help MRI Soft-ware improve employee oversight,shift people from one function to another and increase the transfer ofknowledge among employees, saidMr. Post, whom Vista Equity Part-ners hired to serve as CEO of thecompany.

He said the only MRI Software employees who will continue workingfrom home are those who need to beclose to customers.

The restructuring is part of thecompany’s new three-part plan toimprove customer support, Mr. Postsaid. In addition to bringing moreemployees into its offices, the companyalso is about to upgrade the portalclients use when seeking supportservices, and it is revamping its employee training program.

“Those are the three things that

Man pleadsguilty in churchembezzlement

ON THE WEB Story from www.CrainsCleveland.com.


’ve asked it before: Who will be thewinner of next month’s gubernato-rial election — the loser?

A quizzical question, I admit. Butthe biennial budget that Ohio’s next governor and General Assembly willconfront is shaping up to be a bloodbath,and so far I haven’t read or heard anything concrete from either candidateabout how they plan to staunchthe wounds.

At a time when higher educa-tion is more important thanever for Ohioans, the Stricklandadministration apparently istrying to delay $127 million inpayments to state-supported,higher education institutionsuntil the 2012 biennium. Wait— we can’t find the money thisbudget year, so we’re going tohope we can make it up in 2012?

Bruce Johnson is a former lieutenantgovernor who’s now president of the Inter-University Council that representsthe state’s 14 publicly supported four-yearcolleges and universities. He told TheColumbus Dispatch last week that it would

be left for the next General Assembly andgovernor to “concur that a promise haseven been made” if that payment isshoved into the next biennial budget.

So the higher ed institutions would receive only 11 monthly payments, withthe last one wedged into the next budget.Maybe. “It’s a cut,” state Sen. JohnCarey, R-Wellston, chair of the Senate

Finance Committee, told TheDispatch. “There is no otherway to put it.”

In this political season, thelast thing a Strickland adminis-tration that pledged to helphigher education wants to do iscut funding to these institutionsso vital to our economic future.

Let’s face it. Any governorunlucky enough to have his orher job in this Great Recession

has faced a horrible set of circumstancesthat has little — perhaps nothing — to dowith party affiliation. Thousands of joblosses have slashed income tax receiptsin a state that’s becoming steadily olderand poorer, like the rest of the industri-alized world.

That’s why I find it hard to understandwhy Eric Fingerhut, chancellor of highereducation, is blocking Kent State Univer-sity’s plan to sell bonds in a once-in-a-generation attempt to make badly neededrepairs and renovations — as well asbuild a new home for its acclaimed architecture school. If done now, theuniversity estimates it can save $57 millionbecause of low-interest bond rates andone-time federal assistance.

The chancellor, whom I’ve long respected, doesn’t want the university(at which I recently served as trustee) tolevy student fees to pay off the bonds,and is rightly concerned that othersmight follow suit. But it appears thereare no better options — given the rarecircumstances presented at this point intime. Also, after the fees are fully phased in, Kent State likely still will be amongthe more affordable universities whilealso enhancing its place as a regionaleconomic engine.

The free market, rather than a limpingstate government, would then determinethe university’s place in Ohio’s future, asit should. ■


It’s time, TedT

ed Strickland is a good man, but not a goodgovernor. When put to the test, he draggedhis feet in dealing with the big deficit Ohiofaced when putting together its two-year

budget in the spring and summer of 2009. Now,with an $8 billion hole staring the state in the face inits next biennial budget, Ohio can’t afford a governorwho is hesitant to lead.

We are not in love with Gov. Strickland’s Republicanchallenger, John Kasich. However, we believe Mr.Kasich is the better choice in this year’s election forgovernor, in part because he is unlikely to show thesame reluctance to taking on a budget challengethat the incumbent displayed last year.

The campaigns of these two men haven’t beenimpressive, nor have they been particularly forth-right. It has been unfair of the Kasich campaign, forexample, to lay at Gov. Strickland’s feet the loss of400,000 jobs statewide over the last few years. Thelength and depth of the recession created a tidalwave of job losses that no occupant of the governor’smansion could have stopped.

However, it’s equally insincere for Gov. Stricklandto proclaim that he managed to balance the budgetwithout a tax increase despite the worst economiccrisis since the Great Depression. The main reasonthe state made ends meet was because of billions ofdollars of one-time federal stimulus money fromthe Obama administration.

Even with that money, Gov. Strickland was leftwith a $900 million budget gap that he tried to fillwith phantom revenue from the state’s expectedshare of the take from video slot machines that didnot exist at Ohio’s seven horse race tracks. It was aflawed gambit, as the governor’s attempt to authorizethe video slots as an extension of the Ohio Lotterywas sure to face a court challenge, which it did.Three months into the budget year, he gave up onslots and was forced to raise revenue by postponingthe last of five annual tax cuts that were scheduledduring the administration of former Gov. Bob Taft.

We would prefer not to see a replay of this thrashingabout next year when addressing what will be an incredibly tough budget to balance, given that a bigpot of stimulus money won’t be available next timearound. Based on his performance last year, Gov.Strickland does not instill in us the confidence thathe is up to the task.

Mr. Kasich only has described in broad brushstrokes how he’d tackle the looming deficit — stuffsuch as putting every program and agency underthe microscope and not using one-time funds forrecurring expenses. His lack of detail is disappointing.

However, the former congressman brings withhim the experience of serving as chairman of theHouse Budget Committee. The hope is that hisknowledge would make Mr. Kasich better suitedthan the current governor to devise a budget gameplan for Ohio.

We’re obsessed with the budget because how it’sbalanced will influence state support for education,health care, transportation and almost any other aspect of life in Ohio. We’d rather see John Kasich incharge of that assignment than Ted Strickland. It’sthat simple.

FROM THE PUBLISHER

LETTERS

BRIANTUCKER

Next governor at major disadvantage

NASA’s new plan offers Glenn opportunity■ The NASA Authorization Act of 2010 isgood news for the space community andfor NASA Glenn Research Center. In fact, theGlenn Research Center is uniquely suitedto take advantage of many of NASA’s newprograms, and I applaud Congress forsupporting this ambitious path forward.

First, the fact that NASA now has anapproved road map is definitely good news.The uncertainties of recent months havetested the resolve of those in the aerospaceindustry. The Glenn work force, however,has never ceased to focus on the job at handand has safely and effectively continuedto implement our nation’s space program.

The president asked, and the autho-rizers approved, $19 billion for NASA forfiscal year 2011. While the appropriatorswill provide the specifics, this increase isa strong vote of confidence in thesetough economic times.

The bill also supports the president’sproposal for reinvigorating NASA’s spacetechnology mission. The program willlikely include significant new opportunitiesfor Glenn in areas of technology develop-ment such as advanced in-space propul-sion and development of new enginesthat more efficiently use cryogenic fuels,electric propulsion or nuclear energy;advanced systems for energy generation,storage and distribution; and new tech-niques for in-situ resource utilization.

Glenn has already been a pioneer inmany of these areas, and NASA won’t berecreating the wheel here, but looking tobuild on existing expertise.

The extension of the InternationalSpace Station to at least 2020 is also goodnews for Glenn. This will expand our focus on the station as a national lab tohelp us learn more about human health

in space and develop technologies relevantto long-term human exploration.

Back in April, the president said in aspeech at the Kennedy Space Center inFlorida that he wanted NASA to developa crew vehicle that would build on Orion’s features. The authorizers agreed,and Glenn will likely have a role in thatwork, as it has previously on Orion.

These are just a few of the areas wherethe future of exploration is likely to touch theCleveland area, with long-term benefitsin jobs and a strong local pride that wewill be contributing to national goals.This congressional direction is goodnews for NASA Glenn and Ohio.

Ramon “Ray” LugoDirectorNASA Glenn Research Center

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

See LETTERS Page 9

I


Big environmental impact■ Thank you, Crain’s, for a memo-rable evening for Ruffing Montes-sori School at your Emerald AwardsRecognition Event. The party was exceptionally welcoming and a wonderful opportunity to meet others working for sustainability. Ofcourse, the evening’s highlight wasthe receipt of the Emerald Award inour category.

Ruffing is a small school, but wework to have a large impact. We arefirmly committed to our mission ofbeing a safe and smart school forthe future. Families who aspire tothese values are keenly interested inbeing part of our school community.A key part of our mission is to workto spread the word about the importance of sustainable living,

through our programs and, most importantly, in our curriculum.

Receiving this honor from Crain’sis a significant and prestigious honorfor us.

Gordon L. MaasHead of schoolRuffing Montessori School

South Euclid goes green■ I am writing to express my deepappreciation for the selection of thecity of South Euclid as a finalist forthe Crain’s 2010 Emerald Awards.

I know it is very rare for a munic-ipality to even apply, let alone be selected as a finalist, and for thatI would like to thank you. This selection as a finalist also serves topublicize our Green NeighborhoodsInitiative. A countless number of

community stakeholders have nowbeen exposed to South Euclid’s efforts to embrace a sustainableeconomy.

Housing manager Sally Martinand housing programs coordinatorTracie Zamiska have worked tirelesslyto make the Green NeighborhoodsInitiative a reality and being nameda finalist for the Emerald Awardsserves to validate all their hard work.

I would also like to thank the Natural History Museum and yourfellow sponsors for a wonderful reception. It was great to meet all theother finalists and truly see first-hand how the Northeast Ohio region is transitioning to a 21st-cen-tury economy.

Georgine WeloMayorSouth Euclid

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LETTERScontinued from PAGE 8

Push on to trim chronic care spendingProviders would finance programs with help from insurers, companiesBy TIMOTHY [email protected]

A nonprofit coalition ofhealth care professionals isworking with local insurersand companies to get themto pay medical providers afew extra bucks per patientto help finance programs thatultimately would help keep peoplewith chronic diseases out of hospitals.

The goal, the project leaders say,is to chip away at the $4 billion spenton hospital visits by patients withchronic diseases such as diabetes,hypertension and heart failure. Mostof these emergency hospital visits,they say, could be avoided if peopleproperly cared for their conditions.

“That’s a non-trivial amount ofmoney. That money could be usedfor a variety of services,” said Dr.Randall Cebul, the director of BetterHealth Greater Cleveland, the groupspearheading the initiative.

Thus far, about half the major insurance groups and companiescontacted by Better Health GreaterCleveland have signed on to the initiative. Dr. Cebul noted that it’simportant to get all of them onboard because all patients are goingto benefit — not just the ones from a

specific insurance provider.Medical Mutual of Ohio,

UnitedHealthcare, Care-Source and Kaiser Perma-nente have signed on to theinitiative, and project leaderssay they’ve also gotten sig-nals of support from Med-icaid and the Ohio Coverageand Quality Council.

They’re still in talks with BuckeyeCommunity Health Plan, Anthemand Aetna, which have yet to comeon board.

Aetna spokesman Scot Roskelleysaid in an e-mailed statement thatAetna has signed on to similar projects elsewhere in the countryand is awaiting results from thosebefore signing on to others.

“Until we have further data fromthese pilot projects, we are limitingour involvement in these types ofprojects,” Mr. Roskelley wrote.

These types of projects focus onreinvigorating primary care whilesimultaneously controlling costs.Some of the measures that could beimplemented with the extra moneywould offer more coordinated careand patient follow-ups. They alsocould include hiring additional staffsuch as nurse practitioners.

“The idea is that if they were

managed appropriately with morepatient engagement as well as someother measures to coordinate theircare, that would reduce those costs,”said Diane Solov, program managerfor Better Health Greater Cleveland.

Tom Campanella, a longtimehealth care observer and executivedirector of the health care MBA program at Baldwin-Wallace College,said similar initiatives throughoutthe country are focused on elevatingprimary care toward a “much moredominant role in health care.”

“If they focus on prevention, playa lead role in wellness, have a teamapproach with staff and a lot of education, hopefully we’ll be in a position where people don’t get sickin the first place,” Mr. Campanella said.

Meanwhile, Better Health GreaterCleveland is involved with other initiatives aimed at boosting theoverall health of the region. The group,for instance, is focused on using datafrom electronic medical records todrive improvements in care deliveryand clinical outcomes.

It also coordinates a regionwidelearning collaborative, which Dr. Cebul said offers health care profes-sionals the opportunity “rub elbows”and share the best practices for delivering care. ■

Cebul

OCTOBER 11-17, 2010 CRAIN’S CLEVELAND BUSINESS 9



Crisis communication more a focus at area PR firmsFalls joins those responding to market demandBy KATHY AMES [email protected]

Falls Communications today,Oct. 11, officially launches a new division of its business that aims to shape long-term strategies forclients that have endured crisesranging from employee layoffs tobankruptcy filings.

The Cleveland public relationsfirm created the business and repu-tation management group in responseto some clients’ growing concernsabout how various negative issuesaffect their organization’s imageand their bottom line.

“We’re responding to the market-place,” said Robert Falls, presidentand CEO. “We’re trying to be moreproactive with clients to ensuretheir sustainability.”

Other local public relations firmsthat specialize in crisis communica-tions, say they, too, are hearingmore from clients wanting to make

sure longer-term counseling and crisisprevention practices are in place.

To tackle the potential increase inbusiness, Mr. Falls since last springhas been putting together a team of four communications veteranswith various strengths that includefinance and public affairs.

The team already has been workingover the summer with at least ahalf-dozen of the firm’s 35 or soclients — particularly in the legaland financial industries — on enter-prise business strategies and expectsthat part of the business to grow asthe public relations firm reaches outto existing and new clients through-out Ohio.

The new division also is helpingthe firm reach projected 2010 revenue growth of 12% to 15% from2009, Mr. Falls said.

“Our intention is to have more thana Midwest presence,” he said. “I an-ticipate this business to grow rapidly.”

Typically, crisis management is

pretty episodic. Something badhappens, such as mass layoffs at amanufacturing plant. The messagethen is communicated and mitigated,and then it’s time to move on.

The business and reputationmanagement group will functionmore like a long-term retainer forcompanies who need to repair andreshape their image after a crisis hits.The new group will aim to makesure that client has certain policiesin place to determine the cause ofthe problem and identify whetherany organizational and structuralchanges need to be made to preventsomething bad from reoccurring.

The individuals whose roles willhelp round out the extension of Mr.Falls’ crisis communications depart-ment are: Kevin Donahue, managingdirector; Ronald Fountain, execu-tive counsel; Elizabeth Krouse, vicepresident; and John Znidarsic, senior account executive.

“We believe we’ve made a signif-icant, well-thought-out investmentthat has already paid off,” Mr. Falls said.

Meanwhile, Dix & Eaton, North-

east Ohio’s largest public relationsfirm, has noticed an uptick in its crisis communications work, andfinds itself working more compre-hensively on certain clients’ longer-term strategies.

“Financial services is a big area,as well as hospital systems’ becauseof health care reform, and manufac-turing,” said Matt Barkett, managingdirector of the crisis communica-tions practice.

Kathleen Obert, managing directorof Columbus-based Fahlgren Inc.,says reputation management workwithin the Cleveland office ofFahlgren Mortine Public Relations,formerly Edward Howard, contin-ues to increase as corporate entities undergo further scrutiny from both thegovernment and media that includebloggers and citizen journalists.

The phones also are “ringing offthe hook” for Cleveland-based HennesPaynter Communications — whosesole focus is crisis communications— while the three-person staff hashad to turn away business, saidpartner Barbara Paynter. ■

Citizens BankreinstatesNE Ohio postBy MICHELLE [email protected]

Nearly a year after it did away withthe job of regional president forNortheast Ohio, Citizens Bank ofFlint, Mich., has created the positionof Ohio district president in the hopeof boosting its business in the region.

Jamie Lynch, who most recentlyoversaw health care lending for all ofCitizens Bank, started the new jobSept. 7. He reports to the presidentof the bank’s Southeast Michiganand Ohio region.

The district president position wascreated because Citizens Bank offi-cials view Cleveland as a place wherethe bank can grow, said ClintonSampson, executive vice president ofCitizens Bank, which is part of Citi-zens Republic Bancorp Inc.

“We needed to give greater focusto the Cleveland market, and we neededa strong leader in that market,” saidMr. Sampson, former Northeast Ohiopresident for the former Bank One.“There are great businesses there.There are great consumers there.We’ve got 14 branches; it’s time toraise the bar on performance.”

Citizens Bank entered the Cleve-land market when it bought RepublicBank in 2006. Mr. Sampson saidNortheast Ohio was too small to beconsidered a region at Citizens Bank,so it eliminated its regional presi-dent position in October 2009 andconsolidated its Ohio operationswith those in Southeast Michigan.

However, the Northeast Ohio region is not too small to be a districtled by a district president, Mr. Sampsonsaid in explaining the new, “verysimilar” position.

Bank executives are happy withthe district’s performance, but believegrowth is possible, particularly because industrial and commercialbusinesses such as those in North-east Ohio are “really our sweet spot,”Mr. Sampson said.

However, no new branches areplanned in the Ohio district, which is“profitable and doing well,” Mr.Lynch said.

Mr. Lynch has worked for CitizensBank since 2007, when he becamesenior vice president and commercialbanking manager for the Ohio region.His role later changed to commercialbanking manager responsible for thehealth care finance group for thebank, which has locations in Ohio,Michigan and Wisconsin. The salaryfor his new role was not disclosed.

From the company’s Ohio head-quarters in Warrensville Heights, Mr.Lynch, 42, will oversee the bank’s 14local branches, most of which are located in Cleveland suburbs, includingMiddleburg Heights, North Olmstedand Strongsville. Two branches arein Fairlawn and Medina, too.

Mr. Lynch’s goal is to grow severalbusiness lines, including mortgagelending, and manage internal expenses.Increasing loans to both businessesand consumers and growing depositsare a “major charge” of his position,he said, as is managing the existingclient base.

Mr. Lynch said he will measure hissuccess based on internal perfor-mance reports and also by branchactivities and the net growth in loanbalances — “the number of new nameswe’re able to bring to the table.” ■


SMALL BUSINESSI N S I D E

OCTOBER 11-17, 2010 CRAIN’S CLEVELAND BUSINESS 11

14 BUSINESSESCAN BENEFITFROM PAYROLLTAX CREDITS.

Bed bugsmay biteinto morethan skin Exterminators say thateliminating the pestscan be a tough jobBy AMY ANN [email protected]

Incidences of bed bugs are onthe rise in Northeast Ohio, andexterminators are busy withnew work from the blood-

sucking squatters.Even so, there’s something that’s

been bugging some local pest managers: Is the bed-bug businessworth all of the time, energy and investment involved?

“It’s an uptick in business,” saidJohn Gedeon Jr., president and general manager of General PestControl Co. in Cleveland. “Butwe’re still trying to figure out if it’s aprofitable uptick.”

That’s because bed bugs aretough little critters, often resistantto conventional methods that areavailable to exterminators. From abusiness perspective, that canmean new equipment, employeetraining and labor-intensive, repeated visits to customers.

Rick Novickis, supervisor of envi-ronmental health services at theCuyahoga County Board of Health,said his department this year hasresponded to 50 bed-bug complaintscompared with 39 complaints forall of 2009. He expects that by year’send his office will end up having investigated 100 complaints, in addition to “dozens and dozens ofcalls.”

In response to the uptick in cases,the Cuyahoga County Board ofHealth, the Cleveland Departmentof Public Health and the ClevelandMuseum of Natural History arehosting a Bed Bug Symposium onNov. 4.

“Bed-bug infestations can runinto the thousands of dollars,” Mr.Novickis said. “It can spiral quickly.”

Indeed, according to a recentsurvey by the National Pest Management Association and theUniversity of Kentucky, 76% of pestcontrol managers say bed bugs arethe most difficult pest to treat.

“I know that not everybody isprepared for them,” Mr. Novickissaid. “It’s just amazing. … It justseemed to have gotten here fasterthan anticipated.”

Bugged outGeneral Pest’s Mr. Gedeon said

while he’s seen a definite increasein the parasites over the past five

See BUGS Page 12

MARC GOLUB

Mark Sims, president of Sims Chevrolet in Lyndhurst, says his dealership remains profitable this year despite an overall punch last year to auto sales nationwide.He credits the dealership’s financial position primarily to focusing on selling used cars.

A SIGN OF THE TIMESLocal auto dealers learn how to roll through tough year in sales

by shifting some focus to selling used cars, other products

By STAN [email protected]

Mark Sims, president of SimsChevrolet in Lyndhurst, saidhe believes he’s “in a com-pletely different industry”

since the big 2008 downturn in the autobusiness, bankruptcy reorganization byGeneral Motors Corp. and ChryslerCorp., and massive downsizing of dealerranks.

“Things have changed so much,” Mr.Sims said.

Although year-to-date auto sales areup 10% through September from the likeperiod last year, dealers still are recoveringfrom 2009, the weakest year in nearly twodecades.

Making money takes a different set ofskills than simply moving cars based onhow hot they are. Sims Chevrolet remainedprofitable this year and last, but Mr. Simscredits that primarily to its used-car sales.

Although things are better for dealers than last year, and many dealers are

more optimistic about the future thanthey were a year ago, challenges remain.The dealership shakeout will continue, inpart due to Ford Motor Co.’s decision todrop its Mercury line and emerging reports that it intends to slash thenumber of Lincoln dealers nationally.

Estimates of the bloodletting amonglocal auto dealers are imprecise. Louis Vitantonio, president of the GreaterCleveland Automobile Dealers’ Associa-tion, estimates that fewer than 15 of theassociation’s 255 members closed in thelast year, but he cautions that numberstill is in flux.

Jeff Sherman, a partner at theWilloughby-based Sherman-Andrzejczykappraisal firm, said online realty dataprovider CoStar shows a 9% vacancy rateamong the region’s car dealership prop-erties, compared to an all-time low of 4%in 2006. Vacancy peaked at 12% at theend of June, he said, and since has fallenas other dealerships take over emptystores and new owners convert them to

See AUTO Page 12



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SMALL BUSINESS

Auto: Arbitration process helped Bugs: Many anticipate pestproblems only will get worse

new uses, from tire stores to offices.“We’re still shedding dealer-

ships, and will for some time,” Mr.Sherman said.

Cautiously optimisticEven against that backdrop,

confidence is greater than lastyear. Consider the way Nick Mayer, principal of the Nick Mayer Lincoln-Mercury Inc. dealership in Westlake, looks at the future.

“I’m very excited,” Mr. Mayersaid. “I’m also scared to death.”

He estimates the loss of the Mercury brand will cut his busi-ness by 60%. However, he focuseson the benefit of Ford already cutting six luxury lines such asJaguar from its business.

“What gets me excited is Fordfocusing on the blue oval again,”said Mr. Mayer, who expects tosurvive the Lincoln dealer down-sizing. He also hopes the automakerwill reward his labors with a larger,lively lineup of distinct vehiclesunder the Lincoln label.

Meanwhile, Mr. Mayer said, it is the responsibility of the dealer-ship owner to steer the ship to safety.

“When the forecast is for astorm, you prepare for it. It was thesame thing for a business owner inthis economy,” Mr. Mayer said.

At the 38-employee Westlakedealership, the approach was to

emphasize used cars, slash adver-tising costs rather than staff andadd a “Quick Lane Tire & AutoCenter” in the dealership to compete directly with auto repairshops.

“If a guy comes in with a Toyotafor an oil change,” Mr. Mayer said,“what is he going to do? He’ll lookaround our dealership. We have a chance to wow him with our Lincolns.”

One reason dealers are faringbetter was last December’s federalaction to set up an arbitrationprocess for auto dealers being cutby Chrysler and GM. Alan Spitzer,chairman of Elyria-based SpitzerAuto Group, played a leadershiprole in that effort he compared to“climbing a mountain against GM,Chrysler and the White House.”

“More than half the dealers nationally benefited from the act,”Mr. Spitzer said. In Spitzer’s case,the 18-store chain wound up withfour fewer stores. Mr. Spitzer expects to gain two more stores inlocations outside Cleveland thisyear — a far different outcomethan the 10 dealerships GM andChrysler wanted to shed from hisgroup.

Spitzer wound up retaining itsChrysler Dodge dealerships in Parma and Akron. Mr. Spitzer expects deliveries of new cars toresume at both locations later thismonth. However, it will spend “sixfigures” to renovate the Parma

years, “last year it just took off.” The 35-employee family busi-

ness founded in 1937 works with alot of apartment buildings, hotelsand motels, incorporating a com-bination of treatments, includingchemicals, vacuuming and steam.

Over the last three years, GeneralPest has addressed bed bugs at 230buildings, both apartments andhotels. “We’re one company in themarket. … Look what we havetouched,” he said.

One of the methods consideredto be effective in treating bed bugsis the use of heating equipment,which can cost an exterminatoranywhere from $25,000 to $60,000to purchase. Anything over 113 de-grees is considered lethal for a bedbug, Mr. Gedeon said.

General Pest recently investedclose to $30,000 on such equipment,and over the past two years it hashired six employees to handle bedbugs.

Mr. Gedeon said for an apart-ment owner, the cost of treatmentcan run from $350 to $600 persuite. “That’s where the money really gets to be an issue,” he said,stressing that it also depends onthe building’s residents. “It’s veryeasy for bed bugs to re-infest.”

Female bed bugs lay from one to12 eggs a day; and while bed bugeggs can be hard to spot, adults arebrown to reddish-brown, ovalshaped and flattened. (Of course,their bodies can become elongated,swollen and dark red following a tastylate-night snack at your expense.)

For his part, William P. Kirchnerof Cleveland Chemical Pest Controlis not necessarily complaining aboutthe bed bug work his firm is seeing,but he stresses it is very labor intensive, and involves tearing aparta room and moving furniture.

For a typical single-family home,a job could amount to anywherefrom three to eight man hours, using a two-man crew.

“Granted, it’s more business,everybody’s making more money,”he said. “But we have other areaswhere we can make more money.”

They don’t have to biteNo one quite knows why bed

bugs are making such a grand return: Some point to increasedtravel, others to the re-use of furni-ture. Still others say the rise in bedbugs can be attributed to restrictionson the use of certain chemicals.

And despite industry efforts, theU.S. EPA has not changed its

policies to respond to the currentresurgence.

“Until the EPA gets an effectiveproduct in the hands of the public,it’s going to get nothing butworse,” said Mr. Kirchner, whoalso is past president of the OhioPest Management Association.

In the meantime, Todd Anderson,owner of A-Best Termite and PestControl, which does business inthe Akron and Ravenna areas,thinks he and a friend may havecooked up way to get some extrabusiness out of the little buggers.

Along with Tom Shetler of Action Now Pest Control in Stras-burg, Mr. Anderson has designed amobile heat unit, which is a 16-foottrailer that makes it possible toturn up the heat on items emptiedfrom an infested room.

Mr. Anderson, who invested$12,000 on his trailer, which is still inproduction, said using the mobileunit could be less expensive for acustomer (a conventional heattreatment can cost a customer acouple thousand dollars), and itcould help alleviate the problemsassociated with bed bugs movingfrom room to room when theysense an increase in temperature.

The hope is that eventually thetrailer could be marketed to othersin the industry.

In the first six months of thisyear, A-Best Termite and Pest Control responded to 24 cases ofbed bugs in comparison to four inall of 2009. In addition, his eight-person staff also has been conductinginspections and training for hotels.

“We really feel in this industrythis is the tip of the iceberg,” saidMr. Anderson.

Hard to sleep tightMolly Patton, chief operating

officer of Patton Pest Control inChagrin Falls, hasn’t treated manycases, but her business is taking onaverage three phone calls a dayabout bed bugs, and has done 25 to30 inspections so far this year.

Universally, local pest managerssay bed bugs are starting to get under people’s skin, so to speak.

“You don’t have to be embar-rassed,” Ms. Patton said. “The richestpeople can have them and thepoorest people can have them.”

And while bed begs don’t carryany known diseases, they are stilltaking a toll.

“It has turned into a public healthissue from the mental side of it,” Mr. Kirchner said. “If they’re in yourhouse, they’re going to find you.” ■

dealership to Chrysler’s currentspecifications. Spitzer also will replace the Akron store with a newone on a site it owns in Green. Aftersecuring Chrysler approval of itsdesigns, Spitzer hopes to beginbuilding the new Green dealershiplater this year.

“We’re bullish about the future,”Mr. Spitzer said. “We’re more opti-mistic about the auto business thanin some time.” Mr. Spitzer and other dealers expect diminishedauto retailer ranks to reap improvedresults whenever car sales return tonormal levels.

No bed of roses However, problems remain.

Beyond high unemployment continuing to sap consumer confi-dence, credit remains an issue forbuyers.

“Credit availability is better thanany time since 2008,” Mr. Spitzersaid. “But it has improved marginally.It is nowhere that we need it to be.”

Likewise, Mr. Sims said, lack ofavailable credit is “absolutely an issue.” He said on a new car averaging$24,000, many buyers with creditscores of 600 have trouble financingthe entire amount; they often settlefor used vehicles costing $15,000.

Another challenge is inventory.Mr. Sims has not gotten a newChevy Cruze yet, but GM is heavilypromoting the new car on TV.“They’d be better off promoting itwith word of mouth,” Mr. Simssaid.

Many dealers see reduced inven-tory levels as part of the reshapingof the auto industry in the U.S. because automakers want to produce fewer vehicles to maintainprofitability.

In Nick Mayer’s case, the dealercarries a 45-day inventory of newcars compared to three months ofinventory prior to 2008.

Ed Babcock, the owner of Junc-tion Buick GMC — now shy thePontiac name — in Chardon, saiddealers are having to adjust to achange from the old days when factories operated on a “push basisand shoved product down ourthroats” to a pull basis where newcars arrive after floor models sell.

Mr. Babcock said his great grand-father started the business in 1931.He is the fourth generation to copewith its cycles.

“During World War II we did nothave any new vehicles to sell,” Mr.Babcock said. “I was here in 1980when we did not sell many vehiclesbecause of high interest rates. Youtry to be smart and don’t overex-tend.” ■

PATRA 28601 Chagrin Blvd., Suite 705Woodmere 44122www.patradesigns.comDurga Chigurupati, owner of event de-sign company Adhya Productions, hasopened Patra, an upscale stationeryand floral boutique at Eton ChagrinBoulevard. Featured merchandise in-cludes hand-engraved stationery fromall over the world, greeting cards,journals, custom invitations and giftwrapping, as well as floral arrange-ments. Store hours are 10 a.m. to 6

jewelry pieces, wardrobe accessories,purses, hats, scarves and pieces designed by local artists. The BlackOrchid carries lounge wear by Davidand Goliath, necklaces by Dog Eared,dresses by Judith March and TheHouse of Harlow jewelry collection byNicole Richie.

[email protected]

To submit a new business, send thefollowing information by e-mail [email protected]: business name;address; city and ZIP; web site; de-scription of business; phone number;fax number; business e-mail address;and date that business opened.

GRANDOPENINGSp.m., Monday, Tuesday, Wednesdayand Friday; 10 a.m. to 8 p.m. Thursday;and 10 a.m. to 5 p.m. Saturday.

216-342-1420 [email protected]

THE BLACK ORCHID ACCESSORIES& MORE28450 Chagrin Blvd.Woodmere 44122www.theblackorchidaccessories.comCorinne Dodero has opened a women’saccessories boutique featuring a vari-ety of items, including one-of-a-kind





SMALL BUSINESS

LAURASHERIDAN

ADVISER

Review strategy before shifting marketing approach

Before you invest more inmarketing, take anotherlook at your business strategy.

We’ve worked with manyclients who want to grow their busi-nesses. Often they’ve underinvestedin marketing and then decide thatto meet their goals, they need tospend more. However, marketingthe wrong messages or using thewrong media tools wastes valuabletime and money.

Sure, it’s important to advertiseto attract buyers, but that’s oftennot the first step in the process. Instead, understanding what yourtarget audience wants and beingable to deliver it comes first.

After completing inexpensiveand quick consumer research, ourclients often learn that they need torefine their business strategy beforedeveloping a “new or improved”marketing plan.

Here are three real world lessonslearned by other Cleveland busi-nesses:

■ Real life lesson No. 1: ThePower of Speed. A manufacturingcompany was growing and prof-itable but had never put a lot of energy into marketing. After beingbadgered by the board for the com-pany’s unsophisticated marketingprogram, the CEO decided to investmore heavily in advertising.

The company engaged an adagency and attempted to providedirection regarding what theywanted the advertising to commu-nicate. This effort was wasted whenthe CEO quickly realized that theydidn’t know what messages to include in their advertising.

After this initial misstep, andwith the help of a third party, theydevised a streamlined research planto hear, firsthand, what theirprospects cared about. While theCEO was convinced that he knewwhat they would say, he was surprised at the study’s findings.Prospects shared more about theirperceptions of the company, its service and products with the third-party researcher than they had withthe CEO or sales manager overmany years.

The research identified a key insight that dramatically influencedthe future of the company. Theylearned that speed matters. Prospectswere clamoring for a company toprovide fast delivery. So, the CEOchanged its inventory strategy andmanufacturing operations to shipfaster. Only after this change wasimplemented was the companyready to invest in marketing.

By conducting research beforeembarking on advertising, ourclient was able to identify a message that resonated with its audience and differentiated itsbrand from competitors.

■ Real life lesson No. 2: The Importance of Quality. A medicaldevice company’s sales were slug-gish and they decided to focus onmarketing. As a first step, theychose to conduct research to identifywhat was important to their targetaudience. They also probed to findout how their prospects wanted toreceive their messages. Should theirads appear on TV, radio, the Internet,cell phones or in ways they may nothave considered?

Once again, customer researchled to uncovering a major customerinsight which resulted in the CEO

modifying his initial plan. Duringone-on-one phone interviews witha third-party researcher, customersand prospects talked about theirneed for quality products. They alsoexplained that this particular companyhad a reputation for delivering prod-ucts with inconsistent quality.

The CEO took the research results seriously and the marketingplanning went on the back burner.Improvements to the company’smanufacturing processes and intense customer service trainingwere implemented. After makingquantified progress on productquality, the company was ready to

ready to develop a marketing plan. Unsure of which of the new product

features to promote in its advertising,the company opted to conductmultiple online surveys. The invest-ment of a few weeks and the minimalbudget required to conduct the research turned out to be vital tothe brand’s continued success.

The key insight uncovered with research was that the brand’s successwas tied to being a niche player.The new product, however, targeteda mass audience.

Consumers were clear in their research responses. Part of thebrand’s appeal was its exclusivity.

So, offering a product for a massaudience would confuse and alienatetheir loyal customer base. The com-pany abandoned the new productand focused its engineering and design expertise exclusively onproducts that fit its niche.

How do these real life lessons apply to your business? If you’reitching to put more energy intoyour marketing, re-examine yourbusiness strategy first. And, don’tforget to check in with your customers before getting started to ensure you understand what’simportant to them. ■

Ms. Sheridan is president of Viva LaBrand, a Cleveland-based marketingstrategy and ad agency search firm.www.vivalabrand.com.

begin marketing. ■ Real life lesson No. 3:

The Value of Focus. A specialty consumer goods manufacturing firmhad designed a new product and was



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SMALL BUSINESS

CARLGRASSI

TAX TIPS

IRS offers insight on payroll tax credits for new hires

With the economy finallyshowing signs of life incertain sectors, someemployers are begin-

ning to evaluate whether now is the time to begin hiring new employees.

The IRS recently issued a list offrequently asked questions relatingto the 2010 payroll tax credit for hiring unemployed workers, andthe related tax credit for retainingthese workers.

The FAQs provide importantguidance on critical issues relatingto the availability of both the

payroll tax exemption and the taxcredit.

Legislation enacted earlier thisyear provides for a payroll tax exemption for employers who hireunemployed workers, and a taxcredit of up to $1,000 for retainingthese new hires for at least oneyear. The tax savings from thesetwo programs potentially is signifi-cant.

The Treasury Department has estimated that, through June, employers who hired workers eligible for the payroll tax exemp-tion would, in the aggregate, save

The employment tax exemptionapplies to the employer’s 6.2%share of the Social Security tax onwages paid to qualified employeesfrom March 19 through the end ofthe year. A qualified employee is apreviously unemployed individualwho began employment after Feb. 3and before the end of this year.

The employee will qualify for thepayroll tax exemption if he or shehas not been employed for morethan 40 hours during the 60-day period ending on the date employ-ment begins. The worker must certify by signed affidavit under

penalties of perjury that this is thecase.

The FAQs make it clear that workperformed as a self-employed indi-vidual does not count in determiningwhether the worker has met thistest.

The FAQs on the payroll tax exemption provide guidance in theareas of hiring employees who wereformerly terminated and employeeswho are replacing a former employee.

For instance, the FAQs make itclear that individuals who havebeen on furlough or have been subject to a temporary layoff can be qualified employees when theyresume active status as long as thefurlough or temporary layoff consti-tuted a termination of employmentand, upon hiring, the requirementsto be a qualified employee as notedabove are satisfied.

Obviously, the IRS doesn’t wantthe tax benefits to create an incen-tive to terminate an employee forthe sole purpose of hiring a newemployee in order to get the credit.

A new hire who replaces a former employee can be a qualifiedemployee if the employee whoseposition is being filled either termi-nated employment voluntarily; wasterminated for misconduct or poorperformance; or was terminated aspart of a reduction in force due tolack of work.

The FAQs also provide guidanceon the credit for retaining newhires. The amount of the credit isthe lesser of $1,000 or 6.2% ofwages, as defined for income taxwithholding purposes.

In order to receive this credit, theemployment relationship of thenewly hired employee must not beterminated during the 52-week period after hire. The wages paidfor the second half of the year mustbe at least 80% of the wages for thefirst half.

The IRS has made several clarifi-cations regarding this credit. First,there is the potential for an employerto receive multiple credits for thesame employee.

The FAQs make it clear, for example, that an employer whoclaims the “work opportunity taxcredit” for a particular employeealso can take the new hire retentioncredit.

The FAQs also make it clear thatin addition to the requirement thatthe employee must be retained for52 weeks in order to claim the credit, the employee must be hiredbefore Jan. 1, 2011.

Since the credit only can beclaimed for the first taxable year in which the retained worker satisfies the 52 consecutive weektest, for calendar-year businessesthe credit will be taken on the 2011tax return.

Both the payroll tax exemptionand the credit for the retention ofnewly hired individuals provide asignificant tax benefit for employersconsidering an increase in theirwork force.

At the same time, employersshould pay careful attention to the qualification rules and record-keeping requirements to ensurethey receive the benefits of theseprograms. ■

Mr. Grassi is a member and presi-dent of McDonald Hopkins LLC.

over $10 billion, assuming 75% ofthose workers were employed forthe full year required to take advan-tage of the tax credit.


BurgessTaylorKistler


GOING PLACESJOB CHANGES

EDUCATIONNORTHEASTERN OHIO UNIVERSITIESCOLLEGES OF MEDICINE ANDPHARMACY: Dr. Jeffrey l. Susmanto dean, College of Medicine.

FINANCIAL SERVICEMORGAN STANLEY SMITH BARNEY:Eve Moss to financial adviser. PARKLAND FINANCIAL ADVISORSLLC: Nicoleta Bortan to vice president.

director of client services. ZINNER & CO.: Andrea Sheets totax manager.

HEALTH CARESUMMA HEALTH SYSTEM: TomDeBord to president, Summa Barberton Hospital and SummaWadsworth-Rittman Hospital.

INSURANCEMEDICAL MUTUAL OF OHIO: DanPolk to director, sales and broker relations.

MANUFACTURINGFABER-CASTELL USA: Susan Mintmire to national sales manager,craft market; Rebecca Adkins to human resources manager.

NONPROFITCLEVELAND LEADERSHIP CENTER:Marianne Crosley to president, CEO.UNIVERSITY CIRCLE INC.: ErikaMcLaughlin to public affairs manager.

REAL ESTATEJONES LANG LASALLE: SteveScheer to senior manager, Projectand Development Services.OPTIMA VENTURES LLC: MargaretToth to chief financial officer.

RETAILCOLLECTION AUTO GROUP: RobKistler to vice president, CFO.

UTILITYFIRSTENERGY CORP.: Jon Taylorto assistant controller, FirstEnergyUtilities; Kevin Burgess to assistant

controller, corporate.

TRANSPORTATIONGREATER CLEVELAND REGIONALTRANSIT AUTHORITY: Mary McCahonto media relations manager.

BOARDSAPICS CLEVELAND CHAPTER: DennisOkocha (Henkel Corp.) to president.BEECH BROOK: Bari Goggins(Ulmer & Berne) to chairman; NancyKlein and Walter Stuelpe to vice co-chairs, administration; Kathy Pender and Jane Outcalt to vice co-chairs, development; Tom Seifertto vice chair, finance and treasurer. MUSEUM OF CONTEMPORARYART CLEVELAND: Scott Mueller(Dealer Tire) to chairman; Ronald H.Neill to president; Toby Lewis, Harriet L. Warm and Charlotte

DombcikBortanSusman

MintmirePolkGoldberg

ScheerMcLaughlinAdkins

SS&G: Tina Holyak, Megan Bairand Christopher Kerr to senior associates; Tracey Campbell tobilling senior associate; HeatherRoss to operations manager; RobertThorne II to project manager/analyst;Matt Keppler to operations senior associate. WEALTH STRATEGIC ADVISORSLLC: Shari Dombcik to director ofoperations; Laurel Goldberg to

Fowler to vice presidents; Mary AnnStropkey to treasurer. NATIONAL ASSOCIATION OF PERSONAL FINANCIAL ADVISORS,MIDWEST BOARD: Barbara Camaglia (Legacy Financial AdvisorsLLC) to president.

AWARDSARTHRITIS FOUNDATION NORTH-EASTERN OHIO CHAPTER: RonaldB. Richard (Cleveland Foundation) received a Community Leader of theYear Award. OHIO HOTEL & LODGING ASSOCI-ATION: Michael Cooper (InterConti-nental Hotels Cleveland) received theCleveland Area Manager of the YearAward.

Send information for Going Places [email protected].

Register for free e-mail alertsand receive:

■ The Morning Roundup: Acollection of the day’s businessnews from Ohio’s daily papers

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Register for a free seminar: http://clevelandtaxseminar.plantemoran.com

NEW TAX-SAVING OPPORTUNITIES

LARGEST ACCOUNTING FIRMSRANKED BY NUMBER OF LOCAL CPAS

Number of local CPAs Practice personnel engaged in

Rank

NameAddressPhone/Web site 8/31/2010 8/31/2009 % change

Number of degreedprofessionals

8/31/2010

Full-timepermanentemployees

Audit-accounting Tax Consulting Other

Top local executiveTitle

1Ernst & Young LLP925 Euclid Ave., Suite 1300, Cleveland 44115(216) 861-5000/www.ey.com

222 234 -5.1% 801 995 376 116 NA 503Donald T. MisheffNortheast Ohio managingpartner

2PricewaterhouseCoopers LLP200 Public Square, 18th floor, Cleveland 44114(216) 875-3000/www.pwc.com

161 155 3.9% 285 299 180 85 0 44Bob Saada, Lake ErieMarket and Cleveland officemanaging partner

3Deloitte127 Public Square, Cleveland 44114(216) 589-1300/www.deloitte.com

130 130 0.0% 400 442 121 61 188 4 Craig Donnanmanaging partner

4SS&G32125 Solon Road, Cleveland 44139(440) 248-8787/www.ssandg.com

113 112 0.9% 357 329 91 81 164 66 Gary S. Shamismanaging director

5KPMG LLP1375 E. Ninth St., Suite 2600, Cleveland 44114(216) 696-9100/www.us.kpmg.com

100 90 11.1% 165 175 70 10 85 10 John S. MacIntoshmanaging partner

6Cohen & Co.1350 Euclid Ave., Suite 800, Cleveland 44115(216) 579-1040/www.cohencpa.com

96 89 7.9% 169 183 75 44 36 28 Randall S. Myeroffpresident, CEO

7Meaden & Moore LLP1100 Superior Ave., Suite 1100, Cleveland 44114(216) 241-3272/www.meadenmoore.com

80 78 2.6% 156 124 58 36 54 22 James P. CarulasCEO

8Maloney + Novotny LLC1111 Superior Ave., seventh floor, Cleveland 44114(216) 363-0100/www.maloneynovotny.com

67 59 13.6% 93 120 80 22 6 12 Matthew J. Maloneymanaging shareholder

9CBiz Inc.6050 Oak Tree Blvd. S., Suite 500, Cleveland 44131(216) 447-9000/www.cbiz.com

56 53 5.7% 136 188 29 18 49 119 Steven L. Gerardchairman, CEO

10Skoda Minotti6685 Beta Drive, Mayfield Village 44143(440) 449-6800/www.skodaminotti.com

55 54 1.9% 104 120 59 23 27 11 Gregory J. Skodachairman

11Bruner-Cox LLP388 S. Main St., Suite 403, Akron 44311(330) 376-0100/www.brunercox.com

50 50 0.0% 83 102 31 32 20 19 Ronald J. Mansemanaging partner

12Grant Thornton LLP1228 Euclid Ave., Suite 800, Cleveland 44115(216) 771-1400/www.grantthornton.com

48 54 -11.1% 85 95 50 25 7 10 Daniel S. Zittnanmanaging partner


Rank



8/31/2010




13RSM McGladrey/McGladrey & Pullen LLP1001 Lakeside Ave., Suite 1400, Cleveland 44114(216) 523-1900/www.mcgladrey.com

45 58 -22.4% 65 77 42 18 1 15Jim GriggDonna Sciarappamanaging directors

14Apple Growth Partners1540 W. Market St., Akron 44313(330) 867-7350/www.applegrowth.com

38 39 -2.6% 82 90 33 43 40 22 David J. Gainochairman

14Hill Barth & King7680 Market St., Boardman 44512(330) 758-8613/www.hbkcpa.com

38 34 11.8% 56 84 NA NA NA NA Phillip L. WilsonCOO

16Howard, Wershbale & Co.23240 Chagrin Blvd., Cleveland 44122(216) 831-1200/www.hwco.com

37 35 5.7% 68 75 25 12 22 9 Stephen E. Stanisapresident, CEO

17Bober, Markey, Fedorovich & Co.3421 Ridgewood Road, Suite 300, Akron 44333(330) 762-9785/www.bobermarkey.com

35 32 9.4% 65 70 42 18 5 NA Richard C. FedorovichCEO, managing partner

18Ciuni & Panichi Inc.25201 Chagrin Blvd., Suite 200, Cleveland 44122(216) 831-7171/www.cp-advisors.com

34 31 9.7% 53 60 30 13 10 7 Charles M. Ciunichairman

19Barnes Wendling CPAs Inc.1215 Superior Ave., Suite 400, Cleveland 44114(216) 566-9000/www.barneswendling.com

32 36 -11.1% 65 75 42 35 10 16 Jeffrey D. Neumanpresident

19Walthall Drake & Wallace LLP6300 Rockside Road, Suite 100, Cleveland 44131(216) 573-2330/www.walthall.com

32 33 -3.0% 42 48 30 8 3 1 Richard T. Lashchairman

21BCG & Co.1735 Merriman Road, Akron 44313(330) 864-6661/www.bcgcompany.com

29 30 -3.3% 64 77 17 26 23 0 David A. Brockmanmanaging director

22Zinner & Co. LLP29125 Chagrin Blvd., Pepper Pike 44122(216) 831-0733/www.zinnerco.com

24 23 4.3% 30 37 19 14 4 0 Robin L. Baummanaging partner

23Four-Fifteen Group4100 Holiday St., Canton 44718(330) 492-0094/www.415group.com

21 20 5.0% 38 44 10 21 8 5 Frank J. Monacomanaging partner

23Hobe & Lucas CPAs Inc.4807 Rockside Road, Suite 510, Independence 44131(216) 524-8900/www.hobe.com

21 21 0.0% 29 34 23 3 2 1 Jerome J. Lucaspresident, COO

23Pease & Associates Inc.1422 Euclid Ave., Suite 801, Cleveland 44115(216) 348-9600/www.peasecpa.com

21 19 10.5% 41 48 19 20 2 7 Joseph V. Pease Jr.president

See LIST Page 18



1422 EUCLID AVENUE, SUITE 801 � CLEVELAND, OHIO 44115 � WWW.PEASECPA.COM

DollarsandSense

Proud Recipientof the 2010

When choosing an accounting firm, our quality people,service and results just make good sense.

Let us bring our accounting expertiseto your organization. To schedule

a consultation, pleasecall Joe Pease at

216.348.9600.

Real Estate/Construction

+ Business Advisors and Certified Public Accountants

Property is as unique as its owner. Our clients benefit from our depth of industry

knowledge and our commitment to offering personal-ized attention and insightful solutions. The knowledge of a trusted advisor can make the difference between a strong or shaky foundation.

The Maloney + Novotny Real Estate Practice combines a wealth of experience with a passion for understand-ing the ever-changing landscape involved in property development, ownership and management.

John Funk, Director of Real Estate Practice

+ Cleveland 216.363.0100 Canton 330.966.9400 Elyria 440.323.3200

maloneynovotny.com

BUSINESS. Commercial Banking is our business.

Building our bank one quality relationship at a time.

BANK, N.A. LIBERTY

BANK, N.A. LIBERTY

BEACHWOOD HQ 216.359.5500

C

MEMBER FDIC

TAX LIENSThe Internal Revenue Service filed taxliens against the following businessesin the Cuyahoga County Recorder’sOffice. The IRS files a tax lien to protect the interests of the federalgovernment. The lien is a public notice to creditors that the govern-ment has a claim against a company’sproperty. Liens reported here are$5,000 and higher. Dates listed arethe dates the documents were filed inthe Recorder’s Office.

LIENS FILEDLakewood Foursquare Church2150 Warren Road, LakewoodID: 94-2961674Date filed: Aug. 3, 2010 Type: Employer’s withholdingAmount: $48,928

Crossroads REO Inc.17149 Southpark Center,StrongsvilleID: 13-4324891Date filed: Aug. 17, 2010Type: Employer’s annual federal taxreturnAmount: $38,090

First Choice Homecare Inc.401 Towpath Trail, Suite C, Broadview HeightsID: 34-1876809Date filed: Aug. 19, 2010Type: Employer’s withholdingAmount: $38,043

Close to Home Child Development Center Inc.3855 Carnegie Ave., ClevelandID: 34-1894838Date filed: Aug. 12, 2010Type: Employer’s withholding, unemploymentAmount: $29,349

J. Gerchak III Inc.8601 Oakridge Drive, Olmsted FallsID: 34-1836749Date filed: Aug. 5, 2010Type: Employer’s withholding, unemploymentAmount: $27,403

Royal American Group Co.30195 Chagrin Blvd., Suite 210, Pepper PikeID: 34-1847147Date filed: Aug. 24, 2010Type: Employer’s withholdingAmount: $24,208

GC&E Inc.25440 Miles Road, Bedford HeightsID: 31-1491227

Date filed: Aug. 24, 2010Type: Employer’s withholdingAmount: $22,434

Harold Pollock Co. LPA5900 Harper Road, Suite 107, SolonID: 34-1530164Date filed: Aug. 19, 2010Type: Employer’s withholdingAmount: $21,964

Systems Modulation and Integrationfor Life-Style Enhancement Inc.24000 Mercantile Road, Suite 1,BeachwoodID: 34-1874127Date filed: Aug. 10, 2010Type: Employer’s withholdingAmount: $21,476

Ohio Natural Stone LLC760 W. Bagley Road, BereaID: 30-0260193Date filed: Aug. 3, 2010Type: Employer’s withholdingAmount: $19,716

Quality Care Residential Homes Inc.9402 Rosewood Ave., ClevelandID: 75-3189085Date filed: Aug. 17, 2010Type: Employer’s withholdingAmount: $19,488

Clinical Technology Inc.1801 E. Ninth St., ClevelandID: 34-1293451Date filed: Aug. 24, 1010Type: Employer’s withholdingAmount: $19,370

Bass Lake Child Care of Mentor1970 S. Taylor Road, Cleveland HeightsID: 30-0566013Date filed: Aug. 19, 2010Type: Employer’s withholding, unemploymentAmount: $17,505

Global Tracking Services Inc.1414 S. Green Road, Suite 106,South EuclidID: 26-1733470Date filed: Aug. 27, 2010Type: Employer’s withholdingAmount: $16,579

Disaster Restoration ManagementInc. Servicemaster of Shaker4530 Renaissance Parkway, ClevelandID: 34-1942028Date filed: Aug. 17, 2010Type: Employer’s withholdingAmount: $15,817

Etcetera Services Inc. HouseworkEtc. and Unpacking Etc.P.O. Box 40041, Bay Village

ID: 34-1816713Date filed: Aug. 10, 2010Type: Employer’s withholdingAmount: $15,597

K & L Transport Inc.24381 Aurora Road, Bedford HeightsID: 34-1798453Date filed: Aug. 17, 2010Type: Employer’s withholdingAmount: $15,160

Joseph J. Bibbo Inc.3601 Trumbull Ave., ClevelandID: 34-1478456Date filed: Aug. 24, 2010 Type: Civil penalty assessmentAmount: $14,550

Buckeye Painting and Decks Inc.4518 Renaissance Parkway, ClevelandID: 34-1790702Date filed: Aug. 5, 2010Type: Employer’s withholding, unemploymentAmount: $13,880

New Management Inc.12800 Shaker Blvd., ClevelandID: 20-3059036Date filed: Aug. 10, 2010Type: Employer’s withholding, unemploymentAmount: $13,268

Premium Technical Services Inc.4760 Lander Road, Orange VillageID: 34-1743417Date filed: Aug. 3, 2010Type: Corporate incomeAmount: $11,766

Young Futures18320 Euclid Ave., ClevelandID: 34-1870360Date filed: Aug. 24, 2010Type: Employer’s withholding, unemploymentAmount: $11,583

Title Access LLC27887 Clemens Road, Suite 1, WestlakeID: 34-1926916Date filed: Aug. 24, 2010Type: Failure to file complete returnAmount: $11,100



LARGEST ACCOUNTING FIRMSRANKED BY NUMBER OF LOCAL CPAS


Rank



8/31/2010




26Corrigan Krause2055 Crocker Road, Suite 300, Westlake 44145(440) 471-0800/www.corrigankrause.com

19 19 0.0% 27 26 15 6 3 NA Thomas L. Harrisonmanaging director

26Plante & Moran PLLC1111 Superior Ave., Suite 1250, Cleveland 44114(216) 523-1010/www.plantemoran.com

19 18 5.6% 31 37 20 6 5 0 Daniel P. Hurshoffice managing partner

26Schroedel, Scullin & Bestic LLC196 N. Broad St., Canfield 44406(330) 533-1131/www.ssb-cpa.com

19 17 11.8% 27 27 19 7 5 4 Gregory C. Besticmanaging principal

29Rea & Associates Inc.7325 Production Drive, Suite C, Mentor 44060(440) 266-0077/www.reacpa.com

17 23 -26.1% 30 45 20 15 3 0 Ryan DumermuthMentor office manager

30Crowe Horwath LLP600 E. Superior Ave., Suite 902, Cleveland 44114(216) 623-7500/www.crowehorwath.com

14 17 -17.6% 36 41 19 1 16 5 Greg McClurepartner

31Card, Palmer, Sibbison & Co.4545 Hinckley Parkway, Cleveland 44109(216) 621-6100/www.cps-cpa.com

11 10 10.0% 14 16 15 16 7 NA James E. Strohpresident

31McManus, Dosen & Co.7251 Engle Road, Suite 406, Middleburg Heights 44130(440) 243-3400/www.mcmanusdosen.com

11 11 0.0% 15 17 15 15 10 NA Michael D. McManusmanaging partner

33The D'Amore Tatman Group LLC3659 Green Road, Suite 124, Beachwood 44122(216) 378-1550/www.dtgroup.net

10 9 11.1% 12 16 6 7 NA NA Dominic M. D'Amore Jr.managing member

33Schlabig & Associates Ltd.525 Wolf Ledges Parkway, Akron 44311(330) 253-4424/www.schlabig.com

10 11 -9.1% NA 16 5 6 4 NA Thomas R. Hagermanaging partner

35Levin Swedler & Co.3501 Embassy Parkway, Akron 44333(330) 666-4199/www.levinswedler.com

9 9 0.0% 10 12 12 12 3 NA Gary D. Levinpresident

36Baumgarten & Co. LLP CPA1422 Euclid Ave., Suite 1104, Cleveland 44115(216) 781-4300/www.baumgartencpa.com

8 8 0.0% 14 17 14 14 6 NA Larry Yunaskamanaging partner

36Cunningham & Associates CPAs Inc.60 Eagle Valley Court, Broadview Heights 44147(440) 717-1350/www.c-p-a.com

8 9 -11.1% 11 18 7 13 3 3 Glenn Cunninghampresident

36Dingus & Daga Inc.20600 Chagrin Blvd., Suite 701, Shaker Heights 44122(216) 561-9200/www.dndcpas.com

8 9 -11.1% 18 21 15 3 NA NA Manohar Dagapresident

36Libman, Goldstine, Kopperman & Wolf600 Superior Ave. E., Suite 925, Cleveland 44114(216) 373-2500/www.lgkw.com

8 NA NA NA NA NA NA NA NA NA

40The Siegfried Group LLP6100 Oak Tree Blvd, Suite 200, Independence 44131(216) 643-2917/www.siegfriedgroup.com

7 5 40.0% 10 10 9 1 9 10 Brian D. Seidnerdirector, Northeast Ohio

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee theselistings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book ofLists are available to purchase at www.crainscleveland.com.

RESEARCHED BY Deborah W. Hillyer

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years, said Dr. Bailey, who also is a senior physicist at NASA Glenn.Private contractors, however, stillcould be laid off.

Aside from that protection, Dr.Bailey didn’t heavily favor either the Senate bill or the House bill.Though the House bill providesmore for research and technology,the numbers in the bills only matterso much, she said, because finaldollar figures won’t be determineduntil the bill goes through the appropriations process.

Either bill, however, would havebeen better for NASA Glenn thanConstellation, Dr. Bailey said. TheBush-era program, which focusedon designing two new rockets to replace the Space Shuttle, was underfunded and destined to missits original goal of returning to themoon by 2020 as a precursor toputting a human on Mars, she said,agreeing with a presidential taskforce’s assessment.

Under the new plan, NASA aimsto send humans to an asteroid by 2025 and to Mars by the mid-2030s.

Dr. Bailey said she imaginesthere is some trepidation amongthe estimated 250 people at NASAGlenn who are assigned to Constel-lation projects, but she says manycenter employees think NASA Glennwill be better off under the newplan.

Both Mr. Lugo and Dr. Bailey saidthey expect NASA Glenn will winwork related to the heavy lift rocketthat NASA will develop to comple-ment privately developed rockets.The bill specifies that the spaceagency is to use technologies fromthe Space Shuttle and the Constel-lation program to the extent practical,

giving it a chance to build off workalready started.

“In the end I think it’ll work outpretty well for Glenn,” Dr. Baileysaid.

Wrestling over the pieU.S. Reps. Marcia Fudge and

Charlie Wilson — the only mem-bers of Ohio’s congressional dele-gation who sit on the House Science and Technology Committee— supported the bill as well.

Rep. Fudge, a Democrat fromWarrensville Heights, said NASAGlenn will fare better under the newplan than it did under Constella-tion.

She cited as one reason the $250million that the Senate bill markedfor a new financing category called“Exploration Technology Develop-ment” in fiscal year 2011. The billalso provides $350 million in fiscal2011 for another new categorycalled “Space Technology.” NASAGlenn expertise is expected to helpthe center win assignments in bothcategories.

Rep. Fudge said many NASA officials, including administratorCharles Bolden, the agency’sleader, assured her the plan wouldbenefit NASA Glenn.

U.S. Reps. Steven LaTourette andDennis Kucinich were among thosewho opposed the legislation. Theycirculated a letter to the rest ofOhio’s delegation, urging its mem-bers to back the House bill over theSenate bill.

The letter attacked the Senate billfor reducing money available fortechnology research and develop-ment while putting too much focuson helping private companies develop rockets.

In a conversation with Crain’s,

Rep. LaTourette argued that NASAGlenn was better off under Constel-lation.

The center had won a solid spotin that program and now will needto go back to fighting bigger NASAcenters for money, the BainbridgeTownship Republican said.

“NASA Glenn is going to have tofight tooth and nail every year to getits piece of the pie,” he said.

The House on Sept. 29 passed thebill 304-118, but in August the Senate passed it unanimously. Allison Preiss, a spokeswoman forU.S. Sen. Sherrod Brown, said theAvon Democrat pushed for languageprotecting NASA’s government employees. She described the bill’spassage as “an important first steptowards NASA Glenn’s revitaliza-tion.”

U.S. Sen. George Voinovich hassaid in news reports he allowed thebill to pass only because he waspromised language protectingNASA Glenn’s role would later beadded. The House made nochanges to the bill.

The Greater Cleveland Partner-ship plans to push for such protec-tions when Congress starts the appropriations process, said NickGattozzi, vice president of govern-ment relations for the group. Thepartnership is concerned that moneymight be shifted from research andtechnology development to pay for an extra Shuttle flight that theSenate bill added to NASA’s sched-ule for fiscal 2011 and other near-term projects focused on spacetravel.

“When exploration needs addi-tional funds they go and raid placeslike technology development, researchand aeronautics,” Mr. Gattozzi said. ■


NASA: R&D funding an issue


to things like the West Side Marketand all the restaurants in Ohio Cityand Tremont,” said Mr. Halko, wholives on West Ninth Street just upthe hill from the Flats. His new office will be two blocks from theCuyahoga River and the CenterStreet bridge.

People always have been drawnto water. Indeed, the history of mostgreat cities is tied to their locationalong rivers or lakes. And when access is available and attractive,waterfronts are magnets for touristsand residents alike.

Those factors helped make theFlats the nightlife mecca it was inthe 1980s and into the 1990s, butthe new Flats is learning to playmore than one tune. Bars andrestaurants may return, but thehope is that daytime visitors andmore residents will inhabit thebanks of the Cuyahoga that runthrough the Flats.

People who talk up the Flats seerecreation as a new calling card ofthe neighborhood.

They cite as an example lastmonth’s announcement that the

Cleveland Rowing Foundation hasbought the former CommodoreClub marina for $3 million. Therowing group plans to use the prop-erty for boat storage and meetingspace and intends to create RivergatePark, a new, two-acre public park. Italso wants to offer kayak and canoerentals. The river draws rowers fromarea clubs, high schools and collegesto the Flats, sometimes in big numbers. On Sept. 18, for example,the 15th annual Head of the Cuya-hoga Regatta attracted 1,000 rowersfrom colleges and high schoolsaround the region and 2,000-plusspectators to the river.

“You’re seeing more recreationaluses down there,” said AnthonyCoyne, a lawyer and chairman of theCleveland City Planning Commis-sion, who was one of those specta-tors. “It bodes well for the Flats.”

In August, two nonprofit groups,the Ohio Canal Corridor and theTrust for Public Land, engineeredthe purchase for $4.8 million of twoparcels of land that will help connectthe Towpath Trail — a pedestrianand bike trail that begins near NewPhiladelphia in southeast Ohio —


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Flats: Prospects forresidential growthintrigue stakeholderscontinued from PAGE 1

ABOVE: Longtime Flats business owner Jack Ecke, who owns the Sunoco service station and Ecke’s Towing Service onColumbus Road, bought the 2,200-square-foot building on the left of this photo because of the Flats’ potential. “There isalways attraction here. No matter who you are, the water attracts you, even if it is eating in a restaurant and watching(ore) boats go by.” BELOW: A portion of the land acquired by the Ohio Canal Corridor and the Trust for Public Land for theTowpath Trail.

with Canal Basin Park, a 20-acre parkthe city of Cleveland plans to createalong the river near the southern endof the Center Street bridge.

Those two projects are vital linksin a trail that runs 100 miles andtakes in the Cuyahoga Valley NationalPark.

From martinis to marketingCleveland City Councilman Joe

Cimperman, whose ward coversdowntown, includes those projectsin what he foresees as more than $1billion in investment in the Flatsarea in the next few years.

Also on his list is the stalled, $275million Flats East Bank mixed-useproject of the Wolstein Group andFairmount Properties, a skateboardpark the city plans to build nearRivergate Park and a new aquariumat Nautica. He even includes, withsome justification, the planned, $287million Inner Belt Bridge and the$700 million casino pushed byCleveland Cavaliers owner DanGilbert. Both those projects will include at least facelifts to Flatsstreets and maybe more.

While Mr. Cimperman is a cheer-leader for projects in his ward, theprospects he sees for the Flats areshared by Mr. Halko and others.

Its prospects helped convince Mr.Halko to move Invisia’s office into abuilding that in the days of the oldFlats had been the Cantina del Riorestaurant and later the 2020 MartiniLounge & Café — names from theFlats past, when it was one of Cleve-land’s first urban entertainment districts.

That era began to die before theturn of the new century, and theFlats is mostly remembered forstreet crime and underage drinking.

Now, Mr. Cimperman said, thearea is evolving into a residentialneighborhood.

Tom Newman, executive directorof the Flats Oxbow Association, thearea’s development group, said2,500 people now live in the Flats,many of them at the StonebridgeApartments and Condominiumsthat cropped up in the last decade.

The prospects of more residentsand visitors have some longtimeFlats business owners expandingtheir horizons.

Pumped upJack Ecke, who owns Ecke’s Towing

Service and a service station onColumbus Road, said he has seen

the service station’s business shiftfrom serving primarily commercialand boating accounts to selling gasto residents of Stonebridge and topeople on weekends visiting the remaining night spots.

So, Mr. Ecke is buying a newproperty. He paid $210,000 to theestate of Rosemary Vinci for the triangular point of a building at1700 Columbus. He sees the three-story building with 2,200-square-foot floors as ready for a variety ofuses, including perhaps a coffeeshop on the first floor and live-workloft studios above.

At 66, Mr. Ecke has worked in theFlats since starting to run the busi-ness at 16 for his mother after his father died. And for all its changes,he has faith the Flats will reboundonce more.

“There is always some attractionhere,” Mr. Ecke said. “No matterwho you are, the water attracts you,even if it is eating in a restaurantand watching (ore) boats go by.”

Charles Bredt, chairman of theFlats Oxbow Association and presi-dent of retailer Northern Ohio Lumberand Timber Co., also remains opti-mistic about the future of the Flats,as he has for years.

“It has just taken longer than weexpected,” Mr. Bredt said. “Realitygot in the way. There are manyideas (afoot) that have not been(publicly) shared. There is a desire,a willingness to turn things over to aneighborhood feel.”

In May, brothers Tim and ToddWest paid $110,000 for an old factorybuilding at 2341 Scranton Road andplan to move their Any Heating &Air Conditioning business there.

Tim West said he and has brotherbought the building because it wascheap — half what they paid for

twice the space as their Lorain Roadoffice in North Olmsted. But, headded, the two want to positiontheir heating and cooling businessto participate in the growth ofdowntown Cleveland and the nearbyTremont neighborhood.

Big landholders lingerAnother asset of the Flats is a

number of old, underused buildingsharking back almost to the OhioCanal era, according to TomYablonsky, executive vice presidentof the Downtown Cleveland Part-nership. A prime example is theB&O Passenger Terminal on CanalRoad, which dates from the 19th

century and could become a mixed-use project oriented to the TowpathTrail and Ohio Canal Corridor, Mr.Yablonsky said. Sherwin-WilliamsCo. owns the structure, which isnext to its research center.

Many observers, such as Mr.Bredt, also expect at some point —and perhaps sooner than later — tosee big things from two major Flatsproperty owners.

Forest City Enterprises Inc. holdsat least 60 acres along ScrantonRoad and the Scranton Averell Trustholds at least 25 acres. Several Flatsproperty owners and observershave heard speculation that ForestCity, which owns Tower City Centeracross the Cuyahoga from its Scrantonpeninsula holdings, might build abridge across the river to connect itsorphaned property to the casinothat will rise behind Tower City.

“I know that Forest City did notspend $2 million” for ScrantonRoad land in the 1980s “to use it asa parking lot,” Mr. Ecke said.

A Forest City spokesman wouldnot comment on the company’splans. ■



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Chair of the Division of Business AdministrationBaldwin-Wallace College invites applications for the position ofChair of the Business Administration Division. The DivisionChair is expected to have a productive presence in the regionand work effectively with area business leaders and membersof the B-W Business Advisory Council.

A rich track record of working with corporations and their man-agement leaders is necessary as well as an MBA or Ph.D. inBusiness Administration/Management or related field. Multicul-turalism is highly valued at Baldwin-Wallace College and thesuccessful candidate will have a demonstrated track-record ofworking within diverse communities and embracing intercultur-alism from the broadest possible perspective. The DivisionChair is a full-time appointment that reports to the Vice Presi-dent for Academic Affairs and Dean of the College. Salary andprofessorial rank are commensurate with qualifications.

Additional information about this position and the Business Administration Division can be found at

http://www.bw.edu/resources/hr/jobs and at www.bw.edu/academics/bus/

Electronic applications are encouraged and may be submittedto [email protected] Applicants should submit a letter of appli-cation, curriculum vita, statement of leadership philosophy, andthe names and contact information of three current referencesto:

Dr. Mary Lou HiggersonVice President for Academic Affairs and Dean of the College

Baldwin-Wallace College275 Eastland RoadBerea, OH 44017

The search committee will commence reviewing applications October 15, 2010, and will continue until the position is filled.

Baldwin-Wallace College is an EEO/AA employer and educator. At B-W, we support and encourage diversity in a variety of forms. We valueand appreciate inclusive excellence in the classroom, within extracur-ricular activities, and as we engage our community partners. Learnmore at Diversity Affairs - http://www.bw.edu/quickfacts/diversity/

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Wind: Ohio already seeing rising ratesOhio already supply the wind energyindustry. Among them are Canton-based steel and gear maker TimkenCo. and Cardinal Fastener in Bedford Heights, which produces special bolts that go into wind tur-bines.

Cardinal Fastener CEO JohnGrabner said he’d love to see a national renewable energy standardput in place because it would helphis business, which is derivingmuch of its growth from the wind

industry.“Passage of an RES would defi-

nitely be beneficial for domesticmanufacturers and the overall national employment,” Mr. Grabnerwrote in an e-mail to Crain’s.“Presently, too many manufacturersare reluctant to invest in new man-ufacturing capacity without a clear,consistent energy policy out ofWashington. Specifically, with regardsto Cardinal Fastener, we would antic-ipate our volume increasing with aresultant increase in employment

and capital expenditures from thepassage of a national energy stan-dard.”

But many manufacturers that arelarge consumers of power aren’tthrilled with the legislation.

… and thumbs downSam Randazzo, general counsel

for the Industrial Energy Users-Ohiogroup in Columbus, said renewablestandards raise electricity rates andalready have done so in Ohio.

Ohio is one of 24 states to adopt


its own renewable energy standard,which requires the Buckeye State toderive about 12.5% of its powerfrom renewable sources by 2023.It’s a goal Mr. Randazzo said is“hugely aggressive,” though it is alower percentage than is proposedby Sens. Bingaman and Brownback.

Some Ohio electric users alreadyhave seen their rates go up by 4% inareas where utilities have takensteps to meet the state’s standard,Mr. Randazzo contends.

“Unfortunately, the discussion ofthis has disintegrated into a jobsdiscussion, but the net impact iswhat you need to look at,” Mr Ran-dazzo said.

Besides, Mr. Randazzo said, theloss of jobs at a single coal plant affects employment more than theoperation of many wind turbines.

There is one way a national renewable energy standard couldbenefit Ohio, though, even in theeyes of Mr. Randazzo. If such a federal law pre-empted the laws already in place at the state level, itwould put Ohio on a level playingfield with other states, even thosethat have not adopted their ownstandard.

“One of the problems that existspresently is each state is acting as anisland and there’s not a lot of coor-dination,” Mr. Randazzo said. ■


Deloitte’s Fiona Chambers, head ofthe firm’s Cleveland tax practicewho worked on the survey.

Ms. Chambers explains that, inany economy, not all companiesexperience the same economic circumstances.

Companies selling into high-growth sectors like medical devices,wind energy or certain automotivesupply chains are doing well. Thoseselling into still-struggling sectors,such as construction, are limping.Similarly, companies with signifi-cant sales in growing markets likeChina say their recovery is more robust than companies more depen-dent upon U.S. sales.

Both factors have helped

Strongsville’s Clark Reliance Corp.,which makes instruments and controlsused largely in the oil and gas indus-tries in the U.S. and abroad, saidcompany chairman Matthew Figgie.

Sales at the private company declined in 2009, but not enough tocause the company to lose money.Mr. Figgie also chairs Pepper Pike-based Figgie Capital, an investmentfirm that puts money into stocks,bonds, commodities and other investments. His dual roles causeMr. Figgie to look at the worldthrough a broad lens, he said —and he sees things getting better.

“I’m less concerned about a double-dip recession today than I was backin the springtime,” Mr. Figgie said.“From everything I see and every-

one I’m talking to, there’s a sort ofquiet confidence going into 2011 that’sbeen missing the past couple of years.”

Asia is similarly helping otherlarge local companies, such asCleveland-based Cliffs Natural Resources, which sells iron ore,metallurgical coal and other resourcesused by steelmakers around the world.

“We’ve certainly come back fromthe 2009 decline in our domesticbusiness, but the international areais where our business is growing,”said Cliffs CFO Laurie Brlas. “Weare looking at a global economyand the growth in Asia, particularlyin China, is extremely strong andwe expect China will continue togrow,” she said.

However, Cliffs expects the U.S.

economy to grow only slowly in thenext few years, she said.

Smaller companies are much thesame. Pick most any small machineshop, plastics maker or stampingplant in Northeast Ohio and theirview of the economy’s health islargely determined by the indus-tries and geographies they serve.Smaller companies, however, areless likely to have overseas plants orsubsidiaries that can fully take advantage of overseas growth theway their larger counterparts do.

A taxing future Another factor is still at play, said

William Beaufait, a shareholder inthe Cleveland accounting firm Mal-oney + Novotny who specializes in



Survey: Uncertainty often stalls long-term investment

working with manufacturers: Therestill is too much uncertainty aboutthe future economy and governmentalpolicies. Companies have downsizedand streamlined their way to increased profits — but that doesn’tmake them optimists, he said.

“You’ve got a lot of businessesnow saying, ‘I’m making good mon-ey now, but I don’t know if I want toinvest long-term because I don’tknow what’s going to happen.’”

Mr. Beaufait cited uncertaintyover future tax rates and the abilityto quickly depreciate capital invest-ments as two chief client concerns.

The source of much of that uncer-tainty is the federal government’sdebt, said Deloitte’s Ms. Chambers,and her survey results show nearuniversal agreement that the nationneeds to reign in its borrowing andspending. When Deloitte asked busi-nesses here about the federal budgetdeficit, 86.5% said they were either“alarmed” or “very concerned,” andonly 1.5% said they were “not partic-ularly concerned.”

Ms. Chambers said companies areconcerned not only that higher taxrates might eat into their profits andthe capital they have to invest, butalso that the tax laws are becomingincreasingly complicated and diffi-cult to plan around.

“Companies are being forced toassign more resources to (tax com-pliance and planning),” she said.

Businesses worry that things like aso-called value-added tax on goodsand services throughout the supplychain or a cap-and-trade programfor energy will drive up their costs,Ms. Chambers said. In Deloitte’s survey,42.9% of respondents said they weremost concerned about a possiblevalue-added tax, while 14.3% wor-ried about cap and trade the most.

Better times ahead?If there’s a bright spot, it’s that

about half of those surveyed thinkthe local economy will improve over thenext five years, said Craig Donnan,managing partner of Deloitte’s Cleve-land office. The reform of CuyahogaCounty’s government, efforts to growmedical device manufacturing andother local efforts are winning somesupport among businesses, he said.

Asked how confident they werethat Northeast Ohio’s economy willimprove in five years, 48.9% saidthey were very or somewhat confi-dent, while 51.1% were not particu-larly confident or not at all confident.Not stellar numbers, but they at leastshow more faith in the future than inthe present, Mr. Donnan said.

“Five years out, they’re more con-fident, which we view as a very posi-tive thing,” he said. ■

ECONOMIC ATTITUDESHow confident are you in

Northeast Ohio’s economy?

Response PercentageVery 3%

Somewhat 15.8

Not particularly 58.6

Not at all 22.6

How confident are you that Northeast Ohio’s economy can

strengthen in the next five years?

Response PercentageVery 8.3%

Somewhat 40.6

Not particularly 36.1

Not at all 15


Rokakis makes moveto the movies■ Cuyahoga County Treasurer Jim Rokakiswill be out of a job come January, but itlooks like he’s already planning a new career.

He’s one of the founders and executiveproducer of HomeTown Productions, a filmproduction team he’s started with localscreenwriter John Vourlis. The pair is working

on a film called “Garden Avenue,” described on thefilm’s web site, www.GardenAvenueTheMovie.com, as the“funny, inspired” story of a“young man’s struggle against

power and corruption, cyni-cism and self-doubt, racism,

intolerance and ignorance.”It’s set in 1977 on Cleveland’s West

Side.That young man, Jimmy Petrakis, the son

of Greek immigrants, decides at age 22 to tryto unseat the entrenched but callous anduncaring ward councilman and, presum-ably, to transform Cleveland.

If that story sounds at all familiar to anyone who was in Cleveland at the time, itshould. It’s a replay of Mr. Rokakis’ first runfor Cleveland City Council.

Not a big-budget film, HomeTown Productions is using a web site called Kick-starter.com to raise money. According tothat web site, HomeTown Productions hasmore than $13,000 from 33 backers, exceedingthe company’s goal of raising $12,500 itneeds to start production. — Jay Miller

With these gift cards, it’s the thoughts that count■ A handful of $10 gift cards is all it takes fora company to build a culture of innovation,according to Renovo Neural presidentSatish Medicetty.

The Cleveland Clinic spinoff two monthsago started challenging its employees tocome up with ways to make Renovo Neurala better company and a better place to work.Each week, the person who submits the bestidea gets a $10 gift card and a nominationfor the company’s new Innovator of the Yearaward — which comes with a paid day off.

Thanks to the program, the company nowhas a few community umbrellas for rainydays, and internal meetings automaticallyare rescheduled if a key person is more than15 minutes late.

Funny that a company developing assaysfor drug developers targeting neurologicaldiseases, as well as drugs of its own, wouldbe concerned with such ordinary ideas.

The program, however, has been a greatteam-building activity, Mr. Medicetty saidSept. 28 during a short presentation atBioOhio’s annual conference in Indepen-dence.

The program also has encouraged RenovoNeural’s six employees to be on the lookoutfor good ideas. You never know when onemight emerge: The company is studying the feasibility of providing a new service because of one employee’s suggestion.

“I think it has a significant impact onwhat we do on a day-to-day basis,” he said.— Chuck Soder

Magnet looks to create new supply chain links■ The Cleveland-based manufacturing advo-cacy and consulting group Magnet has beenawarded a $285,000 contract by the National

Institute of Standardsand Technology.

The money will go tofund a one-year pilotproject that is to assist small manufacturers whohope to sell into the supply chains for bio-mass, electric vehicles andother advanced energysegments, Magnet reports.

Under the contract, Magnet will workwith the technology-oriented economic development nonprofit, NorTech, to trainmanufacturing companies to work in thenew industries.

“Our goal is to establish Northeast Ohioas a regional model for helping manufacturerstransition from slow growth markets to new,high-demand markets with stronger growthpotential in emerging technology sectors,such as advanced energy” NorTech presidentand CEO Rebecca O. Bagley said in announcingthe contract with Magnet CEO Dan Berry.

“Ohio ranks third in the U.S. in manufac-turing production output and manufacturingemployment,” she said. “Working with Magnet,we can help our region’s manufacturersleverage their existing strengths and diver-sify their business to capture more globalmarket opportunities in advanced energy.”— Dan Shingler

WHAT’S NEW

COMPANY: GE Lighting, ClevelandPRODUCT: Energy-efficient lightingsystem

Engineers at GE Lighting teamed up withtheir counterparts at California-based JanmarLighting to create a lighting system for theTacoma Art Museum in Washington Statethat cuts system energy use by 85%, usesnearly 20% fewer fixtures and raises light levels35%.

The 50,000-square-foot, 3,500-piece artmuseum previously consumed an estimated373,000 kWh annually. The new system features a GE ceramic metal halide lamp andJanmar Lighting fixture configuration usingjust 23 watts — instead of an antiquated,150-watt incandescent system — that is estimated to consume a total of 56,000 kWhper year. The difference is expected to helpthe museum save about $10,000 per year,GE Lighting estimates.

The museum’s new lighting system alsoreduces the fixture count to 505 from 621,which helps to eliminate ceiling clutter andreduces maintenance.

“The net effect of this change is greater intensity, clarity and visual focus for eachpiece of art on display,” says Jason Raak, aCleveland-based marketing manager with GELighting.

For information, visit www.BetterMuseumLighting.com.

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK OCTOBER 4 - 10

The big story: The state of Ohio is ready tosign off on a $42 million borrowing deal that wouldfinance the construction of a 77,000-square-footresearch building at the Northeastern Ohio Universities Colleges of Medicine and Pharmacy

in Rootstown. The bondswould be repaid with

existing revenue from tuitionand student fees, with no addedcosts passed along to students. Officials say the construction

project would bring 1,000 temporaryjobs over the next 18 months, and 60

permanent research faculty and staff would behired to run the facility.

Micro managing: Nordson Corp. agreed tobuy Micromedics Inc., a company in St. Paul,Minn., that makes devices for applying and dispensing biomaterials that control bleedingand heal wounds. Nordson did not discloseterms of the deal, which is expected to close inabout 30 days. The acquired business will be integrated into Westlake-based Nordson’s Advanced Technology Systems segment.

Family ties: University Hospitals is naming athree-story outpatient building at the health system’s new Ahuja Medical Center in Beachwoodafter a member of a family that donated a signif-icant amount of money to UH’s $1.2 billion Vision 2010 renovation and construction project. Eleanore and Robert Risman and theirdaughter Kathy donated the money because ofthe culture of high-quality, personalized healthcare that University Hospitals and its physiciansoffer patients, according to a statement from Mr.Risman. The dollar amount was not disclosed.

Carbon aided: A team of Kent State Universityprofessors received a grant exceeding $1 millionto analyze how micro-organisms known as“cheaters” affect the carbon cycle. The team willuse the money to study how the microbes —which feed on small chemicals that already havebeen digested by other microbes — affect theprocess of decomposition and the effect theyhave on whether carbon is stored or releasedinto the atmosphere. Many believe excess carbonin the atmosphere contributes to global warming.

Blowing into the Windy City: Accountingfirm SS&G said it merged with Chicago-basedAhlbeck & Co., adding 22 staff members to itsroster of more than 400 employees. SS&G, whichhas offices in Cleveland, Akron, Cincinnati,Columbus and Erlanger, Ky., said the deal createsa new presence for the firm in the Chicago market, which will help expand what it called its“already strong” base of Illinois clients.

Streaking: RPM International Inc. increasedits quarterly dividend by 2.4%, to 21 cents pershare, marking the 37th consecutive year the dividend has been increased. The Medina-basedproducer of coatings and sealants said it’s one ofjust 48 publicly traded companies — of a total ofabout 19,000 — in the United States to have increased its dividend every year during those 37years.

This and that: RSB Spine LLC received a $1.5million investment that the Cleveland companyplans to use to increase production of its spinalimplant products. The company wants to boostits inventory of products to keep pace with rising demand. … Progressive Corp., an aggressivemarketer in the competitive insurance industry,named a new chief marketing officer. Jeff Charney,51, comes to Mayfield Village-based Progressivefrom insurance company Aflac, where he was senior vice president and chief marketing officer.

To keep up with local business news as it happens, visit www.CrainsCleveland.com.


Excerpts from blog entries on CrainsCleveland.com.

BEST OF THE BLOGS

Big-company profits suggestthe recession is long gone■ The government says the recession isover, even though no one really believesthat. But an Oct. 4 Wall Street Journal storymight convince you good times are hereagain — at least if you run a large companysuch as Parker Hannifin Corp., the maker ofmotion and control technologies and systems.

An analysis by The Journal found companiesin the Standard & Poor’s 500 stock index“posted second-quarter profits of $189 billion, up 38% from a year earlier and theirsixth-highest quarterly total ever, withoutadjustment for inflation,” the newspaper reported. For all U.S. companies, The Journalsaid, “The Commerce Depart-ment estimates second-quarterafter-tax profits rose to an annualrate of $1.208 trillion, up 3.9%from the first quarter and up26.5% from a year earlier.”

The profit rebound is the result of aggressive cost-cuttingto cope with lower revenue andan uncertain outlook.

At Parker, for instance, “profitmore than quadrupled from ayear earlier to $222.2 million inthe company’s fiscal quarter endedJune 30,” The Journal said. “Butsales grew only 25% to $2.8 billion.”

Parker now is stretching its work force byusing part-timers and adding weekend shifts.It intends to continue doing so for the fore-seeable future, CEO Donald Washkewicz said.

His heart’s with Democrats,but his head is elsewhere■ Count Peter B. Lewis, chairman of Pro-

gressive Corp., among the wealthy Democ-ratic patrons not enamored with the party’sdirection in this election cycle.

Mr. Lewis and George Soros, who eachgave more than $20 million to Democratic-oriented groups in the 2004 election, appearto be holding back so far this year, accordingto The New York Times.

Jennifer Frutchy, who advises Mr. Lewison his philanthropy, told The Times that heis focused on “building progressive infra-structure and marijuana reform.”

“That’s just where his head is right now,”Ms. Frutchy said.

When the idea’s good,your age is irrelevant■ Here’s something to give you even morefaith in Cleveland’s entrepreneurial class.

BusinessWeek.com is runningan online contest to identify thecountry’s most promising entre-preneurs age 25 or under. Fromhundreds of candidates, themagazine’s web site came upwith a list of 25 finalists, two ofwhom are in Cleveland.

One of the companies, Citizen-Groove, produces software fordigitizing music school applica-tions. It’s the brainchild of fourfriends from Case Western Re-serve University.

A second company with localties is LifeServe Innovations,

which is developing a new way to open pa-tients’ airways in emergency situations suchas might occur in combat zones.

“The device is intended to help emer-gency medical providers with minimaltraining to deliver oxygen to patients,” ac-cording to the web site.

LifeServe is based in Bethlehem, Pa., andCleveland, where co-founder Rick Arlow,22, is a medical student at Case.

JASON MILLER

Democrats: not highon Peter B. Lewis’ list

Bagley



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