Crain's Cleveland Busniess

JobsOhio paying the state $1.2 billionto lease Ohio’s liquor profits for 25years. JobsOhio would issue bondsto pay off the state upfront. The debtservice on those bonds is expected tobe $40 million annually, or a total of$1 billion.

Mark Kvamme, the governor’s director of job creation and economicdevelopment guru, said he believesthe upside of JobsOhio outweighswhat he sees as modest downsiderisk.

on the state-run liquor operation’sprofits, which JobsOhio is buyingfrom the state.

The governor’s proposal has

$1.50/MAY 30 - JUNE 5, 2011

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Vol. 32, No. 22

07148601032

622 SPECIAL SECTION

INVE$TINGGUIDE2011Financial losses teach investors a lesson in awareness, involvement ■■ Page I-1PLUS: ESTATE PLANS ■■ SUPERSTAR 10 ■■ & MORE

NEW

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Liquor profit plan: Worth a shot?Kasich’s strategy to lease proceeds forJobsOhio entails large debt obligation

See LIQUOR Page 24

See FILINGS Page 4

Bankruptcyfilings ebb in NE Ohio

JUICES AREFLOWING

By CHUCK [email protected]

The extra 10-cent charge thatFirstEnergy Corp.’s residentialcustomers just started seeingon their bills is only the beginning.

The money that the charge generatesis a miniscule piece of what utilities areexpected to spend over the next decadeor so as they transform the nation’s elec-tric grid into a much smarter machine.

Several Northeast Ohio companies seebig opportunities to capitalize on demandfor “smart grid” technologies, which areprojected to give utilities more controlover how power flows through the grid while also giving consumers morecontrol over how they use it.

Northeast Ohio companies power up to capitalize on smart grid technologies

By JAY [email protected]

High risk, high reward.That’s how one public finance

professional describes Gov. JohnKasich’s strategy to use profits fromliquor sales to boost Ohio as a placefor new businesses to start and

existing businesses to grow.The reward is jobs, investment

and new tax revenues for the state.The risk is that the plan could

saddle JobsOhio, the nonprofit thegovernor is working to create, with$1 billion in debt. That debt willhave first call, ahead of any eco-nomic development investments,

See POWER Page 8

Those still ailing seekless costly alternativesBy MICHELLE [email protected]

Bankruptcies are down — but don’tget too excited.

Yes, when compared to year-agonumbers, bankruptcy filings havedropped in Cleveland and Akron in seven of the past eight months.From January to April, total filings,which include consumer and com-mercial bankruptcies, are down 10%in Cleveland and20% in Akroncompared to thelike period lastyear.

At face value,the trend appearsto be a welcomesignal of economic recovery. Butfrom the vantage point of those whowork in bankruptcy circles, recoveryisn’t the sole — or even main — reasonfor the decline.

Attorneys and advisers say a keyfactor in the decrease in bankruptcyfilings is because more people andbusinesses are favoring methodscheaper than bankruptcy to reorga-nize their finances.

“Banks and companies are tryingto avoid the costs of bankruptcy, andso they’re working harder to resolvethese issues without bankruptcy,”said Larry Goddard, president of The

Kasich Kvamme

INSIDE: Bank-ruptcy filings inCleveland andAkron havedropped over thelast year. Page 4

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March 2011 3.12 million August 2010 2.86 million

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Month Job openings Month Job openings

THE GO-SLOW APPROACHMarch marked a job-market milestone — it was the first time since November2008 that there were at least 3 million job openings nationwide in consecutivemonths. On the last business day of March, there were 3.1 million job openings,up from 3 million in February, according to the federal government. The pessimistmight note, though, that the improvement is pretty modest and the country stillis a long way from reaching the 4.4 million job openings when the recession began in December 2007. Here’s how the job market has fared in the last year:

A May 16, Page 14 story profilingYoungstown Business IncubatorCEO Jim Cossler did not end properly.Visit http://tinyurl.com/3epxngl for thefull version of the story.

20110523-NEWS--2-NAT-CCI-CL_-- 5/20/2011 2:10 PM Page 1

By TIMOTHY [email protected]

he show business isn’twhat it was in Cleveland.

The city’s once-vibrantlive music scene, which

helped propel to stardom artistssuch as Bruce Springsteen andDavid Bowie, is losing its beat dueto a lackluster economy, a popula-tion in decline and an abundance— make that overabundance — ofcompetition among concert venues.

Cindy Barber has seen the change,and is trying to adjust to it. The co-owner of the Beachland Ballroomsaid the concert hall, at 15711 Waterloo Road in the Collinwoodneighborhood, is carrying “a lot” ofdebt these days, though she wouldn’tspecify the amount. She’s thankful forthe venue’s dedicated following,

which has allowed it to get by.“We’re doing OK in this economy,

and I can’t complain,” Ms. Barber said. Nonetheless, the Beachland is

exploring new business models toensure its survival. Ms. Barber saidshe’s working with a professor of finance and students at Case WesternReserve University’s WeatherheadSchool of Management to evaluatewhether some sort of nonprofitmodel would be appropriate for thevenue.

“Some of the things we’re thinkingabout are ways to support youngerCleveland bands through somekind of nonprofit push and to getthem some funding to fulfill theirown vision,” Ms. Barber said.

The Beachland is essentially anonprofit now, Ms. Barber said, asmaking money isn’t its goal as

MAY 30 - JUNE 5, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“Banks have not beenwilling to lend in aChapter 11 settingsince 2008, unless theborrower was just toobig to fail.”— Jean R. Robertson, partnerand chair of the business restruc-turing and insolvency practice atCalfee, Halter & Griswold LLP inCleveland. Page One

“Most of my clientsare ... gun-shy. Theyare a lot more cau-tious, a lot more waryof anything to do withstock-market types ofinvestments.”— Dennis R. Marvin, president,Marvin Wealth Management,Westlake. Page I-1

“Just because we’reboth retiring in 2030,doesn’t mean I havethe same risk toler-ance that you do.”— Michael McKeown, associatevice president, Aurum WealthManagement Group, Mayfield Village. Page I-2

“It’ll be about sittingdown, smiling,having some noodles,then getting back towork.”— Jonathon Sawyer on his newrestaurant, Noodlecat, opening inJuly in downtown Cleveland.Page 9

Steelmakers onalert to meetnatural gas pushNearby extraction process requires tubularsteel, and local mills expand to meet demandBy DAN [email protected]

A natural gas explosion is creatingmore steelmaking work in NortheastOhio.

The explosion — a boom, really— is taking place across easternOhio, Pennsylvania and parts ofNew York, as more wells are sunk toextract the fuel from deep beneaththe ground. By drilling thousands offeet, first down and then horizontallythrough beds of shale, companiesare able to set off explosive charges andpump a mixture of sand and chem-icals into the beds, thus releasingmillions of cubic feet of natural gasin a process known as fracking.

To do so, they need pipe, and lotsof it. To supply it, mills are expandingin Canton, Lorain and Youngstownin a steelmaking phenomenon thatis totally tubular.

“I think it’s fair to say that, priorto the development of shale gas inNorth America, particularly theMarcellus Shale, (the U.S. Steel plantin Lorain) was in a disadvantagedlocation,” said Doug Matthews, vicepresident of tubular operations forPittsburgh-based U.S. Steel.

“Now all of a sudden, the Lorainplant is right on the doorstep of theMarcellus” shale beds beneathPennsylvania, eastern Ohio andparts of New York — and which

Lawsuit delays auto dealer Moreno’s planned move to East SideBy STAN [email protected]

Luxury car dealer Bernie Morenois on a drive to enter the auto marketin Cleveland’s eastern suburbs fromhis base on the West Side as he pursues a goal to build a regionalchain of auto dealerships.

However, doing so depends onwhen he and Frank Porter Jr., ownerof Central Hummer East LLC, remove a road block by settling a recently filed lawsuit over Mr.Moreno’s agreement to purchase

the dealership at 25975Central Parkway in Beach-wood.

Mr. Moreno, presidentof M4 Motors Inc. andmanaging partner of M4Realty Inc., and Mr. Porter,best known as the owner ofCentral Cadillac in Cleve-land, said in separate inter-views that they hope to resolve thedispute and settle the lawsuit soon— perhaps within days — andcomplete the sale.

According to the suit filed May 3

in the Cuyahoga CountyCourt of Common Pleasand assigned to Judge JohnO’Donnell, Mr. Morenohas lined up a General Motors Corp. Buick andGMC dealership to installat Mr. Porter’s property.The property, originallydeveloped by Mr. Porter as

a Hummer dealership until GMdropped that brand in 2009, occu-pies a highly visible site on the westside of Interstate 271 just north ofChagrin Boulevard.

Mr. Porter has sought to sell thedealership since GM dropped theHummer line.

In the suit, Mr. Moreno said heplanned to buy the dealership by last December but had troublefinding a lender because of deed restrictions on the property. Mr.Moreno subsequently found alender he would not identify.

Both businessmen agreed April 8to consummate the transaction under their prior terms, accordingto Mr. Moreno’s complaint. How-ever, Mr. Porter told Mr. Moreno on

April 28 that the transaction wasoff, the lawsuit states. The com-plaint did not indicate why Mr.Porter said the transaction was off.

Messrs. Moreno and Porter declined to discuss what deed restrictions scuttled Mr. Moreno’soriginal loan for the 27,000-square-foot dealership on five acres. How-ever, Cuyahoga County recordsshow the city of Beachwood in 2008amended deed restrictions thatoriginally limited the site to a Hum-mer dealership to allow a Buick

Moreno

See GAS Page 6

See MORENO Page 6

MARC GOLUB

Cindy Barber, the co-owner of the Beachland Ballroom, says despite the Collinwood club’s struggles, she tries to remainupbeat. “We’re doing OK in this economy, and I can’t complain,” she says.

FACE THE MUSIC

DEALING WITH DECLINEThe Beachland Ballroom,

located in Cleveland’s Collinwoodneighborhood, and the Agora, onEast 50th Street, are institutions inthe city’s rock and roll scene.

Yet each are struggling with theeconomy and other factors. Hereis how they’re attempting to deal:

■■ Agora: Henry LoConti Sr., whofounded the venue in 1966, said he’staken to allowing other promoters tobook the hall for concerts, instead ofbooking shows.

That way, if a concert’s attendanceis poor, someone else foots the billfor the artist.

■■ Beachland: Co-owner Cindy Barbersaid the venue’s main priority now isn’tmaking money, but rather promotingthe local music scene.

In turn, she said she’s met with advisers to determine whether thebest route is to make the club a nonprofit officially.

Cleveland’s live concert scene has lost its vibe, and popular spots are exploring ways to let the bands play on

See MUSIC Page 7

T


Parkland Group Inc., a Clevelandconsulting firm that assists in turningaround underperforming and trou-bled businesses.

“As the cost of bankruptcy has increased over time, (the use of alter-natives) has become more preva-lent,” Mr. Goddard said.

In a typical middle-market Chapter11 case — the type that allows a busi-ness to reorganize — it isn’t unusualfor administrative costs to exceed$400,000 or $500,000, according tothose who work in the field.

In an ironic twist, companies oftencan’t file for bankruptcy because theycan’t secure sufficient financing to endure the reorganization process,according to Jean R. Robertson, part-ner and chair of the business restruc-turing and insolvency practice atCalfee, Halter & Griswold LLP inCleveland.

So-called debtor-in-possession, orDIP, financing typically is used tofund a company’s operations as itproceeds through a bankruptcy, andlike other forms of financing, it’shard to obtain today, Ms. Robertsonsaid.

“Banks have not been willing tolend in a Chapter 11 setting since2008, unless the borrower was justtoo big to fail,” Ms. Robertson said.She goes as far as to say that the recovery “has not trickled down hereto Northeast Ohio from my experi-ence in any meaningful way.”

Hope fadesFrom John K. Lane’s vantage

point, the drop in business bank-ruptcies is not a positive sign because it’s driven by a loss of hope.

“If there was more hope out therein the marketplace, if there weremore options available to thesecompanies, they would say, ‘I knowbankruptcy’s very expensive, but I’mgoing to reorganize because I can seethe light at the end of the tunnel,’”said Mr. Lane, managing directorand CEO of Inglewood AssociatesLLC, a virtual turnaround and work-out firm. But, he noted, “Peoplearen’t seeing that light at the end ofthe tunnel.

“There are a number of compa-nies that are just turning off thelights,” said Mr. Lane, who also iscurrent president of the Ohio Chapterof the Turnaround Management Association.

Local Chapter 11 filings this yearinclude one on May 17 by NorthCoast Drilling Services Inc. in Grafton,one on April 19 by Richard AssafDermatology Inc. in Westlake andanother on Feb. 15 by Flower FactoryInc. in North Canton. Messages leftfor those companies and several otherdebtors named in recent Chapter 11records were not returned.

Businesses in retail, real estate,health care and manufacturing aresome of the more common filers ofbankruptcy of late, local lawyerssaid. Reimbursement and insurancechallenges are two reasons why anumber of health care companieshave wound up taking that road, Ms.Robertson said.

In general, she said, material andcommodity costs are “incredibly dif-ficult for my clients to absorb.” And


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continued from PAGE 1

Filings: Bankruptcies may increase

companies often can’t secure the financing they need because real estate — the collateral pledged totheir lenders — is of marginal worthbecause of depressed property values.

Liquidity remains a significant issue, agreed Scott Opincar, partnerand business restructuring attorneyat McDonald Hopkins LLC in Cleve-land. However, private equity andventure capital funds are returningto the market and providing capital,he noted, which will help stave off the liquidations that have growndramatically because so many companies have had no other viableoptions.

Receptive to receiversMr. Opincar said cheaper alter-

natives to bankruptcy have morethan offset the decrease in Chapter11 cases he has observed.

One such avenue is receivership,wherein a judge appoints a receiverto take control of a business and either stabilize operations to payunpaid debts or, in the event of liquidation, liquidate assets. Gener-ally, the owners of a business do notretain ownership.

Ms. Robertson handled five receiv-erships in 2010 — the same numbershe probably handled over the past20 years combined, she said. Mr.Opincar said the 10 receiverships hehandled between late 2009 and late2010 represent “a significant in-crease” from 2008, when he mayhave had two or three.

In past years, secured creditorsoften were reluctant to use receiver-ships as a way to settle debts because of the unpredictability ofoutcomes, Mr. Opincar said. But anincreased number of financially distressed companies has con-tributed to creditors seeking less expensive methods, and the increaseduse of receiverships has resulted inmore creditors feeling comfortablewith them, he said.

Another cheaper alternative tobankruptcy that has seen a large increase, insiders said, is the securedparty sale — a public or private sale

under state law where a securedlender sells off the collateralpledged to it by a debtor.

Worst is yet to come?Those in the business of bank-

ruptcy offer other explanations forthe decrease in cases.

Alan C. Hochheiser, managingpartner of the bankruptcy practiceat Weltman, Weinberg & Reis Co., aBrooklyn Heights firm that repre-sents secured and unsecured credi-tors, cites an increased number ofworkouts, including the use of loanmodifications.

Plus, when credit is less available,as it has been, businesses are lesslikely to make bigger purchasing decisions that land them in finan-cial distress, Parkland Group’s Mr.Goddard said. That’s one reason whythere are, in general, fewer troubledcompanies than people might expect of this recession, he said.

In addition, when sales — partic-ularly those for which companiesextend customers credit — aredown, cash flow can be greater because less money is tied up in receivables and in inventory, Mr.Goddard said. But, when sales pickup, companies’ cash positions willtighten, he maintains.

“If the economy improves, I thinkit will trigger more bankruptciesrather than less,” Mr. Goddard said.“When sales go up, it’s tougher froma cash flow point of view. All of asudden, you’ve got more moneytied up in receivables and inventory.Your sales are going up, but youhave less cash.”

Mr. Hochheiser’s forecast is sim-ilarly gloomy. He said if foreclosuresincrease as he expects, more consumers come the third quarterof this year may file for bankruptcyin an effort to stay in their homes.Chapter 13 allows for people withregular income to keep propertyand pay debts over time.

“I think you’re going to see bank-ruptcies over the next three or fouryears at elevated levels,” Mr.Hochheiser said. “I don’t see it comingdown.” ■

Month Cleveland Akron

April 2011 -23% -27%

March -12 -17

February -8 -14

January 14 -19

December 2010 -2 -4

November -3 -4

October -2 16

September -4 3

August 2 -7

July 1 5

June 4 1

May 5 2

April 16 7

SOURCE: WWW.USCOURTS.GOV; U.S. BANKRUPTCY COURT, NORTHERN DISTRICT OF OHIO

FREE FALLINGBankruptcy filings have declined for seven of the past eight months in Clevelandand Akron compared to the like months a year earlier. The following numbersshow the percentage changes in bankruptcy filings from the previous year.


20110523-NEWS--5-NAT-CCI-CL_-- 5/19/2011 9:55 AM Page 1

Chevrolet GMC dealership at the siteif the dealership did not challenge amarket value for the property of $4.5million for tax purposes.

A listing by Ostendorf-Morris Co.on the LoopNet online commercialrealty listing service carries a $5.6million asking price for the property.However, neither car dealer woulddisclose their agreed purchase price for the dealership, which wasnot disclosed in court records. Mr.Moreno’s suit asks the court to enforce the sale agreement or providehis companies with at least $10 million in damages.

Mr. Moreno is an upstart in the region’s dealership ranks. He movedto Northeast Ohio in 2005 to open aMercedes-Benz dealership in NorthOlmsted and since has addedPorsche, Saab and Fiskar lines there.Last year, he acquired the BoylandAcura and Infiniti dealerships inBrook Park.

Mr. Moreno said in an interviewthat he wants to enter the east suburban market as part of a plan to“expand in all of Northeast Ohio, notjust North Olmsted or the (west)market.”

“We see ourselves as a regionalcompany,” he said. ■


Gas: Youngstown also now feeling effects of boomgeologists say should yield at least50 trillion cubic feet of natural gas.That’s enough to supply the entireUnited States for two years, basedon the nation’s current consumption— and is based on conservative estimates that 10% of the gas can beextracted with current methods.

The potential for significant investment in fracking is the biggestreason the company is spending$95 million to upgrade and expandthe output of the Lorain plant — aprocess that began late last yearand will be completed in the thirdquarter of this year, Mr. Matthewssaid.

The upgrade will mean about 100new jobs on top of the 500 already

at the plant, he said. With that investment, Mr. Matthews said U.S.Steel will install new quenchingand tempering lines at the plant capable of heat-treating up to 250,000tons of tubular steel products annually and enabling the companyto ship directly to drilling companiesand other customers. It will bringthe plant’s total capacity for suchproducts to more than 1 million tonsper year from 780,000 tons, thecompany reports.

Timken expands, tooIn Canton, Timken Co. is on pace

to hire 200 more workers this yearfor its own expanding steel works,which also supply tubular productsto the gas exploration business.

Like U.S. Steel, Timken is rampingup production and quality to meetincreased demand that is comingfirst and foremost from the naturalgas industry. Timken reports it hasspent $4.2 million in 2010 and 2011to upgrade its Gambrinus SteelPlant in Canton — where it makestubular steel — and will spendabout $50 million on the plant in2012.

U.S. Steel, Timken and othercompanies refer to the products as“tubular steel” because the productsinvolve more engineering work,more sophisticated productionprocesses and are stronger thanwhat often is considered “pipe.”Pipe can be cast, welded or rolled,and it can have seams, while tubes

generally are forged from a singlepiece of steel.

Timken produces more expensivetubes, necessary for the actualdrilling of the gas wells, as well asspecial steels used by componentmakers that sell drilling and frackingproducts such as augers and mudmotors, the latter of which pumpthick sand-filled fluids, said RayFryan, Timken’s director of advancedengineering and quality.

Dr. Fryan said about 20% ofTimken’s overall steel business — itsold $481.5 million of steel in thefirst quarter, up 78% from the likeperiod a year earlier — is for steelused in oil and gas exploration.Shale gas is its fastest-growing seg-ment, he said.


Dr. Fryan, who has a doctorate inmetallurgy from Case Western ReserveUniversity, said he spends much ofhis time these days following ventsin the Utica and Marcellus shalebeds, which lie largely on top of oneanother.

Drills, drills everywhereThose shale beds already are

spurring thousands of land leasesand drilling operations. Across muchof eastern Ohio, including in StarkCounty where Timken is based, signsof the natural gas boom are every-where. Billboards tell people how toreach energy companies, which areeager to sign leases that will enablethem to drill through private propertyto the gas beneath.

Drive a little farther from Cleveland,and the engine powered by naturalgas that is driving steel productionalso is working overtime. Texas-based V&M Star, another tubularsteel producer, is spending $650 million for a new mill in Youngstownthat will employ 350 people when itcomes on line in 2012.

Timken’s Dr. Fryan said there’sbusiness enough for all the compa-nies, especially because they don’tall make the same products. Headded that the more he learns aboutthe potential for fracking and theamount of gas that can be recovered,the more he expects the boom tocontinue.

Drillers are overcoming objectionsabout their practices, in part by improving them, Dr. Fryan said, andthere’s no end to the nation’s energyneeds.

There may not be an end to thepotential for gas in the region, either,at least anytime soon, Dr. Fryan said.

“It’s going to continue to grow,”he said. “The more we drill, the morewe’re finding that the Marcellus isbigger than we thought.” ■


Moreno: Movewould be latestin dealer’s rapidarea expansion


much as promoting the local musicscene. She’s still sorting out the benefits of becoming a nonprofit,but she noted it would allow thevenue to accept donations and pro-vide financial support to up-and-coming acts, much like a foundation.The Beachland already is lauded forsupporting burgeoning performers,Mr. Barber said, but it doesn’t bringin the revenue needed to operate abusiness.

It’s not all doom and gloom in theconcert business, especially for thebig boys on the block, according toMichael Belkin, senior vice presidentfor the regional office of mega-promoter Live Nation. Mr. Belkinsaid the summer concert season inNortheast Ohio is shaping up nicely,particularly for big-ticket acts.

“When you see economic indica-tors overall, they’re all positive,” hesaid.

Still, people in the concert businesssay it hasn’t helped that the numberof artists who make Cleveland a stopon their tours has slackened as thecity’s population has dwindled andits economy has stagnated. Sure,some musicians, such as The Boss,rarely stage nationwide tours withoutstopping by the lakefront. However,others have slowed their visits to acrawl and are more selective in wherethey play.

The Agora adaptsSmaller venues have been dinged

the most by the challenges the concert business faces. Already goneis The Odeon in Cleveland’s Flats,which closed in 2006. And a shell ofits former self is the Cleveland Agora,at 5000 Euclid Ave. on the city’s EastSide.

Both Ms. Barber and Henry LoContiSr., the owner who founded the Agora in 1966, said the House ofBlues took a swipe at their businesswhen it came into Cleveland in 2004as it easily was able to outbid themfor shows because the latter venue isowned by Live Nation.

“It was very aggressive when (theHouse of Blues) first opened,” Ms.Barber said. “In order for us to stayopen and stay alive, we were just using lines of credit to keep us going.There just became a very big compe-tition in town.”

Coupled with Live Nation’s domi-


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nance in the market, Mr. LoContisaid the city’s 8% admissions tax hasmade Cleveland less competitive inattracting acts and has hurt smallvenues within the city limits. The 8%is taken from a show’s gross, and after paying the performer and pro-duction costs, little cash — if any —is left to support a venue’s bottomline, Mr. LoConti said. Cleveland is the only major city in the state to have such a tax, according to themost recent data from the Ohio Department of Taxation.

Troubles continued to mount forthe Agora during its soured partner-ship with Jigsaw EntertainmentGroup, which was headed by PhilLara, who owned the Jigsaw Saloonand Concert Club in Parma, and TerryBuckwalter, an anesthesiologist inPennsylvania. A legal scuffle ensuedafter the Black Keys, a Grammy-winning rock band from Akron,weren’t paid $50,000 for a pair ofsold-out shows at the Agora.

Mr. LoConti said the venue’s legalwoes have been cleared up, but theAgora is “more or less out of the dog-fight” for concert acts. He’s largelyallowed other promoters to rent thevenue for concerts and other eventsrather than book his own shows. Theonly event he has booked himself isa wedding in September.

The shows booked by other promoters have been modestly attended, Mr. LoConti said. If the attendance is poor, he’s not on thehook for the bill of paying the per-former, which offers him somewhatof a cushion as he re-evaluates hisbusiness.

Mr. LoConti said he’s seen somesuccess with his new model, whichhas allowed the venue to break even,but it’s far from the Agora’s heyday,when artists such as ZZ Top and PattiSmith filled the house. Mr. LoContisaid he could get back into the concert game now, but he’s bidinghis time as he works to make thevenue more competitive, though hewouldn’t specify how.

Supply exceeds demandVenue owners say the live music

business in few cities escaped theeconomic storm of the last few years.However, many of the acts that havebeen on the road have been drawnto growing markets elsewhere, suchas Columbus, where census figures

Music: House of Blues’ arrival has effectcontinued from PAGE 3 show the population last decade

climbed 10.6%. Contrast that increasewith the 17% drop in population lastdecade in Cleveland — the most dramatic decline of Ohio’s urbancenters.

“It’s a little bit harder to get a volume of people to shows in Cleve-land right now,” the Beachland’s Ms. Barber said. “There’s certain markets where it’s a little more pre-dictable.”

The combination of fewer actsand fewer patrons creates an imbal-anced supply-demand situation forconcert venues in and around Cleve-land.

“Part of the problem in Clevelandis we have amazingly high-qualityentertainment choices here, andwe’re all competing for entertainmentdollars,” she said. “It seems like wehave as many choices as Chicagoright now, but we have a third of theactual people that go out and seethings.”

The perspective is different fromMr. Belkin of Live Nation, who saidany difficulty in filling arenas isn’tnecessarily a Cleveland problem, buta regional one. At times, slow atten-dance has forced the promoter tocurtain off sections of the venues,such as Quicken Loans Arena orCleveland State University’s Wolstein

JASON MILLER

Henry LoConti Sr., who founded the Agora in 1966

Center, where it stages shows, butthat hasn’t universally been thecase. There also have been selloutshows, he noted.

“The reality is that the regionkind of goes in lockstep,” Mr. Belkinsaid. “None of the cities are consid-erably better or worse. Some mar-kets have a new building, and withthat comes a honeymoon, but ingeneral, the Midwest travels as aunit.”

Mr. Belkin said he’s also “just trying to be a little smarter aboutwhat goes where” and is bookingacts that he knows can fill a large

venue, such as The Q or BlossomMusic Center in Cuyahoga Falls.

The acts currently booked forBlossom — mostly large country shows— can draw a significant crowd, hesaid. Some of the acts booked forthe outdoor amphitheater this summer include Kenny Chesney,Tim McGraw, Jimmy Buffett andRascal Flatts. Also, rock acts such asRush and Roger Waters of PinkFloyd have performed in recentmonths.

“You have a lot of strong shows,”Mr. Belkin said. “I can see goodnumbers already.” ■


Companies such as Eaton Corp.of Cleveland are selling and devel-oping automation equipment forsubstations and other parts of thegrid. Others, such as Intwine Energyof Chagrin Falls, are working onproducts consumers would use tomonitor their energy use and to orchestrate household appliancesso that they consume electricity inthe most efficient way possible.

FirstEnergy sees opportunity,too: The Akron-based utility in October 2009 was awarded morethan $57 million in federal moneyfor smart grid pilot projects in Ohio,Pennsylvania and New Jersey.

FirstEnergy is investing an equalamount of its own money in the pilot projects, including one that isunder way in Cleveland’s easternsuburbs. To recover money spenton that project, the utility on Jan. 1added a new fee onto the bills of itscustomers in Ohio. Residential cus-tomers pay 10 cents per month, andcommercial customers pay roughly$1 per month.

FirstEnergy is taking a “conserva-tive approach” to implementingsmart grid technology by complyingwith existing regulations but going

no further, according to a statementFirstEnergy Utilities presidentCharles Jones made during a May 3conference call while discussing thecompany’s first-quarter results withanalysts. The pilot projects, however,will give FirstEnergy a chance togather data on the costs and benefitsof such technology, Mr. Jones saidduring the call.

The Ohio pilot project began inJanuary, when FirstEnergy startedinstalling new equipment at substa-tions and on circuits that serve several suburbs, including Mentor,Chardon, Willoughby, Chesterlandand Concord. The utility in April began installing the first of 5,000 so-called smart meters that it plansto place in homes throughout thatarea over the next few months.

If the project goes well, FirstEnergywould continue upgrading its gridequipment, and over the next fewyears it would install another 40,000smart meters, which deliver meterreadings directly to the utility, saidFirstEnergy spokesman Mark Durbin.


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Power: Smart grid pilot could lead to equipment upgradecontinued from PAGE 1 The energy management company,

which employs five people andworks with several contractors, ayear ago started shipping its firstproduct: a thermostat that allowsconsumers to monitor and controltheir heating and air conditioningvia the Internet.

Intwine also is about to releaseearly versions of a load controllerdesigned to work with air condi-tioners, hot water heaters and poolpumps, as well as a “smart outlet”that monitors power used by devices plugged into it and can turnthose devices on and off.

In addition, Mr. Martin said Intwine has developed two pieces ofsoftware that, when combined,would let utilities monitor their customers’ energy use and, in somecases, control it. Utilities that usethe software programs could offerconsumers discounts or other ben-efits to get them to agree to let theutility turn off or turn down certainappliances when the grid is understress, Mr. Martin said.

A few utilities have committed totesting some of Intwine’s technology,Mr. Martin said, adding that thecompany could sell products to util-ities, retailers and vacation propertymanagers.

Utilities’ attitudes toward smartgrid investments have changedfrom two years ago, when they simplywere trying to decide whether theyshould implement technologiessuch as Intwine’s, Mr. Martin said.

“Now the conversations are,‘How are we going to do it?’” he said.

Eaton’s new grid guyEaton Corp. also has started paying

more attention to the market forsmart grid technology, said DougDillie, director of smart grid solu-tions for Eaton.

It was only a year ago that Eatoncreated Mr. Dillie’s position, whichinvolves looking for opportunitiesin the smart grid sector and helpingvarious departments market smartgrid products. Eaton already sellssome smart grid products, such as anetwork protector designed to spotgrid problems and to reroute powerto prevent big outages.

Mr. Dillie said Eaton also is in agood position to develop productsthat take advantage of real-time

pricing — a concept where utilitieswould charge customers more touse electricity during peak hours,when strain is put on the grid. Mr.Dillie said few technical limits existto developing both the technologythat would allow utilities to sendcustomers real-time prices and theequipment and appliances pro-grammed to turn off or on based onthose prices. However, Mr. Dilliesaid he believes it will be a long timebefore that technology becomesprevalent if the federal governmentdoesn’t pass a law giving utilities anincentive to use it.

“As a country, we really have to start walking the walk, not justtalking the talk,” he said.

Other area companies are workingin the smart grid space as well.

The evolution goes onRockwell Automation, which is

based in Milwaukee but has opera-tions in Mayfield Heights, Twinsburgand Warrensville Heights, alreadysells products designed to help factories monitor how they use elec-tricity, water and other resources.Some factories already receive real-time information about electricityprices, so Rockwell — with the helpof software developers in MayfieldHeights — eventually plans to createsoftware that would allow factory machines to use that information tomake decisions on their own, saidDave Mayewski, sales developmentleader for the company.

“There’s a lot of room to reap further benefits,” Mr. Mayewski said.

Acense LLC of Twinsburg isworking on a sensor designed to detect acetylene gas in power trans-formers. The gas is given off bypower arcs that occur during mal-functions, such as when insulationin the transformer breaks down.

The company was formed in 2009by Jack Harley, CEO of FirstPowerGroup LLC, a Twinsburg companythat specializes in maintaining cir-cuit breakers and compressors usedby utilities. Mr. Harley sees smart gridtechnologies as another part of theoverall evolution that the grid has beengoing through since it was created.

After all, he’s been working onAcense’s technology for nine years.

“I think this evolution is going tocontinue,” he said. ■

“It would give us an idea of whatthey’re using, (and) how they’re using it,” Mr. Durbin said.

Girding for spendingSpending on smart grid technolo-

gies is expected to rise in the comingyears. For instance, a 2010 report byPike Research, a Boulder, Colo., firmthat conducts market research relatedto clean technologies, suggestsworldwide smart grid spending willclimb to $35 billion in 2013, more thantriple the $10.5 billion spent in 2009.

Interest in smart grid technologypicked up when the federal govern-ment passed the American Recoveryand Reinvestment Act of 2009. Withinthe $787 billion provided by the billfor economic stimulus spending was$4.5 billion for smart grid initiatives,including FirstEnergy’s pilot projects.

Other factors driving adoption include incentives from states, growingenvironmental awareness amongconsumers and improved computingtechnology, said Dave Martin, presi-dent of Intwine Energy.

“As a country, we really have to start walking the walk,not just talking the talk.” – Doug Dillie, director of smart grid solutions, Eaton Corp.



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Esteemed chef prepares to launch second ‘green’ eatery

By KATHY AMES [email protected]

Jonathon Sawyer has catapultedThe Greenhouse Tavern during itstwo years in existence to the top ofan increasingly competitive group ofmarquee Cleveland restaurants thatgarner national praise.

That same momentum is movingforward the 31-year-old chef’s busi-ness expansion plans. This July, at240 Euclid Ave., he plans to openNoodlecat, a Japanese noodle shopjust around the corner from its sisteron East Fourth Street.

“It’ll be about sitting down, smiling,having some noodles, then gettingback to work,” said Mr. Sawyer, oneof Food & Wine magazine’s best newchefs of 2010.

The two restaurants combinedwill employ more than 100 workers.Mr. Sawyer expects The GreenhouseTavern’s sales this year to top lastyear’s $3 million mark. He hopes todo $1 million in sales at Noodlecat.

Mr. Sawyer is transplanting atNoodlecat many of The GreenhouseTavern’s environmentally consciousphilosophies and its commitment toinfusing locally sourced foods into itsmenu.

And if all goes well, Noodlecat willbe the second certified-green restau-rant in Ohio, the first of which is TheGreenhouse Tavern. Green restau-rants are certified by the GreenRestaurant Association based on water efficiency, waste reduction,use of sustainable furnishings andbuilding materials, sustainable foodofferings, energy use, and chemicaland pollution reduction.

There are 330 certified-greenrestaurants in the United States, saidJennifer Fleck, spokeswoman for theBoston-based association.

Recycled materials and reclaimedfurniture enrich Noodlecat’s 2,000-square-foot space. The reused mate-rials include science lab tables har-vested from John Carroll Universitythat will be used as dining room tables to reclaimed bleachers from aLakewood park that will serve aschair rails and benches.

Because Noodlecat’s space, ownedby East Fourth Street developerMRN Ltd., needs little buildout, Mr.Sawyer said the project will cost only$160,000. The Greenhouse Tavern’sproject cost was $1.2 million, thoughthe 200-seat establishment has morethan double the capacity of the 83-seat Noodlecat.

Noodlecat, with Greenhouse

Tavern chef Brian Reilly at the helm,will serve traditional and modernJapanese noodles, interpreted withlocal ingredients. Think crispy veggie tempura soba with seasonalvegetables and miso paste or porkbelly shoyu ramen with spinach,bamboo shoots, scallions, soy saucebraised egg and snap peas.

Most menu items will range from$10 to $14. All noodles will be vege-tarian-based, made by Ohio City Pasta.

Tammy Oliver, spokeswoman forMRN Ltd., said in an email that thedeveloper is pleased its propertycan be home to another JonathonSawyer restaurant.

“Downtown needs more street-level, pedestrian-patron friendlybusinesses, and Noodlecat will

surely deliver the goods — in theform of delicious Sawyer creations,”Ms. Oliver said.

Staffers earlier this year were sentto train at New York City inspira-tions such as Momofuku Ssam Barand Momofuku Noodle Bar.

“We want to be ahead of thecurve,” Mr. Sawyer said. “WhateverChicago or New York is doing, wewant to be doing.”

Meanwhile, Mr. Sawyer, businesspartner and wife Amelia Zatik-Sawyer, and partner Jonathan Seeholzer over the next year or two expect to unveil two more concepts,one planned for downtown and oneon Cleveland’s East Side, thoughMr. Sawyer could not discussspecifics. ■

JASON MILLER

Jonathon Sawyer, chef and owner of The Greenhouse Tavern and Noodlecat

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Jonathon Sawyer set to open Noodlecat nearflagship E. 4th St. tavern


We’re still trying to do what wecan at Crain’s ClevelandBusiness to find and applaudour region’s unsung busi-

ness heroes, and you can help.We started this process a few years ago

when we began holding an annual eventdesigned to honor the area’s chief finan-cial officers. The thought wasthat plenty of attention getsheaped on a company’s chiefexecutive — and rightly so —but that the man or womanworking the numbers was a cru-cial part of the success of anyenterprise, whether for-profit ornonprofit, large or small.

Thus was born our annual“CFO of the Year” event, spon-sored by Marsh, which last yearattracted a sold-out crowd of more than600 for a night of celebration and uber-networking.

This past week, we partnered withEDGE, our region’s economic and entre-preneur development group, for a headynight in the ballroom of Cleveland State

University’s snazzy new student center.Inside this issue, you’ll find a specialsupplement explaining EDGE and ourjoint awards program.

So now, we plan to shine the spotlighton another person who is a critical factorat each and every one of NortheastOhio’s businesses and organizations —

the human resources executive.We’ve partnered with Howard

& O’Brien to create a newrecognition program that we’reexcited about, called the ArcherAwards, so named because thevery best HR executives helpbuild their organizations’ successby creating the best mix of people, talent and culture to“hit their mark.”

We are accepting nomina-tions at www.CrainsCleveland.com/archerfor a variety of categories within the hu-man resources universe, both in publicand private businesses as well as non-profit organizations. Categories include:Human Resources Executive of the Year,Innovation, Lifetime Achievement, Citi-

zenship (philanthropy/community ser-vice) and Rising Star (recognizing theachievements of the next generation ofour top HR professionals).

The winners will be profiled in a spe-cial section in our Aug. 8 issue, and feted atan evening event at LaCentre on Aug. 17.

* * * * CASINO STANDOFF: Gov. John Ka-

sich wants more money from the twogroups that won voter approval forOhio’s four casinos, and has hired big-bucks consultants to help him do that.

Consequently, Dan Gilbert, Cavaliersowner/Rock Financial CEO and casinowinner, has stopped work inside whatwas to be the glitzy temporary gamblinghouse in the former Higbee Building onPublic Square.

This I don’t get. The governor is upset,but that’s what happens when groupssponsor — and win — public referendaon such issues.

They get what they hoped for becausethey spent enough money to win votersupport. Kinda like how governors areelected … ■


Told you soA

deal is a deal. And, thanks to Ohio voters,Dan Gilbert and Penn National GamingInc. managed to swing a sweet deal forthemselves when they convinced enough

voters back in November 2009 to pass a constitu-tional amendment that gave them the right to buildcasinos in Cleveland and three other cities.

Now it’s put up or shut up time for Gov. John Kasich and his Republican colleagues in the Legisla-ture. Unless they’re prepared to go back to voters toamend the terms of that deal, they ought to pack up their objections to it so that they don’t furtherundermine the process of getting the casinos upand running.

Keep in mind that we’re not fans of casinos. Weurged Ohioans in October 2009 to vote against thecasino amendment put forth by Mr. Gilbert andPenn National precisely because it would set in con-stitutional stone the $50 million, one-time licensingfee they’d pay the state per casino and the 33% cutof casino revenue the state could collect as a tax.

We warned then that if the state “later believes the operators’ share of the take here is too generousrelative to other states, it wouldn’t be easy to adjustthat figure.” We also wondered whether the statecould have done better if the licenses were awardedby competitive bidding.

But, the people spoke a month later and a majorityvoted for the amendment, which gave Mr. Gilbert aconstitutionally sanctioned monopoly to operateone casino each in Cleveland and Cincinnati andPenn National the sole right to run a casino inColumbus and another in Toledo.

We don’t remember too many politicians of either party raising their voices with us back in thefall of 2009 to object to the terms of the Gilbert-PennNational deal. But with the state still scrounging forrevenue here in 2011, Gov. Kasich and his cohortsare suggesting that the casino operators have gottenoff easy and should be paying more in the way of licensing fees and taxes.

The Ohio House in early May went so far as to include in the state’s two-year budget bill a provi-sion that would apply Ohio’s commercial activitytax of 0.26% to all casino wagers, not just to the casinos’ take after winnings are paid off. That action, plus comments by the governor that Ohioans“got a bad deal” under the casino amendment, havecreated needless business uncertainty for the casinodevelopers.

Construction work that had been flying along inside the Higbee Building to transform the formerdepartment store into Phase One of Cleveland’scasino has been brought to a halt by the joint venture established by Mr. Gilbert and Caesars Entertainment Corp. to create the gaming hall. Theydon’t want to proceed without knowing whether the$350 million investment they are prepared to makein the casino will pay off in a manner that is worththe substantial expenditure.

For a bunch that claims to be pro-business, thegovernor and his fellow Republicans are sending a negative signal in this episode about the state’swillingness to honor its commitments. It shouldn’tbe when it suits their convenience.

FROM THE PUBLISHER

BRIANTUCKER

Awards to highlight HR executives

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

LETTERS

Ohioans have lost appetites over gun law■ In his May 2 commentary, BrianTucker expressed a negative view toward legislation allowing guns intobars, restaurants and open-air stadiumsin Ohio. In the two weeks since, threeopposing viewpoints have appeared inyour Letters to the Editor, all supportingguns and Second Amendment rights.

Since the majority of us don’t carry guns (98.7% of the U.S. populationdoes not belong to the National Rifle Association), I feel an obligation to offera voice in support of Mr Tucker’s per-spective. I, along with my large family,subscribe to a different interpretation ofthe Second Amendment, which includesthe opening conditional clause, “A wellregulated militia being necessary to thesecurity of a free State …”

Since I do not belong to militia, I do not feel it necessary to carry a

weapon designed to kill people into my local food service establishment, nordo I feel my rights are curtailed if I cannot.

The First Amendment gives us all theright to express our opinion. In our culture, unfortunately, we give the mostpress to the loudest and most stridentvoices, even when they are in a smallminority. The 1.3% do not speak for me,but Mr. Tucker did. Thank you.

Jim SmithParma Heights

What a view■ I read your May 16 editorial, “Quitplaying,” with growing frustration. Whatis striking is your advocacy of higher taxesto close the budget gap.

Ohio is currently ranked 28th according

to the tax foundation in income tax. Yousuggest that more revenue is warrantedby increasing taxes on business. Has itescaped you that historically most of thepost-recession growth is created bysmall companies, and most small andstartup companies are S corps, which arethe most affected by tax increases?

What we need in Ohio is more revenue generated from more business,not more taxes.

Jim KurasMacedonia

Sad state of affairs■ Your comments in your May 16 edito-rial, “Quit playing,” almost match myletter to the editor that you published

See LETTERS Page 11


its part in Mayor Jackson’s educa-tion, might want to look at raising thestandards in its finance, accountingand critical thinking classes.

Republican or Democrat, I thinkboth sides would agree that the firstand foremost job of government isto provide for the safety of its citi-zens. So, then, why would you cutpolice and fire safety positions yetkeep the recreation departmentand its pools open? How do you goto sleep at night knowing that youlaid off a policeman, yet you keptthe pools open for the summer?

I would be ashamed of myself.Why cut police and firemen yetkeep a city-owned golf course openthat loses money every year? Whydoes the city still own it if is losingmoney? Who is in charge of it andwhy have they not been fired yet forincompetence?

Why does the city have 19 councilpositions in a city half the size ofColumbus, which operates with

only seven? I cannot wait for thestupidity of the council responsesto this letter justifying their ward seats.

I know, I know, it is Gov. Kasich’sfault. The mayor of Clevelandshould know and understand thatthe governor has to balance thebudget. So, unless Mayor Jacksonhas a way of making a stone roll uphill instead of downward, the impending cuts from Columbusshould be no surprise. How manyof us woke up yesterday confidentthat Columbus would be sendingmore money our way?

In addition, at what point does apolitician ever take responsibilityfor anything anymore? Our presi-dent has made this an art form —never take any responsibility foranything that is bad, never takeresponsibility, period. Same thingapplies for the mayor of Cleveland.Quit blaming the governor, act likea man and take responsibility forthe fiscal operation of the city.

Honestly, could one imagine thesilence of the room after a politicalspeech on a serious matter where-by the politician actually took responsibility for something? Liter-ally, I think the little bit of trafficthat Cleveland has would stop.

Look, this economic climate isnot going to change anytime soon.Think the cuts were difficult now?Wait. In 10 years, it will be evenmore difficult to run a city.

There is no magical amount ofmoney that is going to come fromColumbus or even Washington thatis going to help us. So, as you aresubmitting your next vote, remem-ber the incompetent efforts of yourcurrent mayor. Democracy is a won-derful thing; it is self-correcting overtime. We as the voters provide theself-correction. Remember to doyour part.

Lou BartulovicTwinsburg


CONGRATULATIONS TO THE EMBA CLASS OF 2011

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EMBA WEATHERHEAD EXECUTIVE MBA

LETTERSMarch 28. Gov. Kasich (who I believeyour paper endorsed) is on a path tomake Ohio the Alabama of theNorth.

His idea of low (or no) taxeswhich leads to low (or no) publicservices will enrich his donors at theexpense of the majority. If you setup a system where the publicschools are forced to lay off teachersand drastically increase classroomsize, you then can say “we needmore vouchers for private schoolsbecause the public schools are failing.” It’s a self-fulfilling prophecy.And guess who profits from moreunaccountable charter schools?Why, it’s folks like David Brennanand his White Hat Managementcompany, as an example.

Here in Cleveland, the city wasjust forced to lay off police and firemendue to major cuts from the state.But in the governor’s eyes, this is a good thing, since those pesky police and firemen are the cause of the state’s financial problemsanyway.

I just hope the voters (and espe-cially those who didn’t bother toeven show up on Election Day) arethrilled with what they’ve broughtto Columbus. They deserve it.

Alan J. LarrisCopley

Fear for your safety■ To the voting residents of the Cityof Cleveland:

Please save this letter for yournext trip to the voting booth as anexample of how low this once finecity has fallen. I would argue that anexecutive assistant straight fromBryant & Stratton could providemore leadership for the city ofCleveland than Mayor Frank Jacksonin doing his job.

His recent cuts in the police andsafety forces clearly show his lack ofleadership, courage to do what isright and his clear lack of intellect todeal with even simple budgetarymeasures. Balancing a budget, Iwould argue, is a relatively simplething to do: Look at incoming revenues, look at all expenditures,prioritize those expenditures interms of importance (hint: policeand firemen — very top priority),and then start doing what every liberal hates to do — start cutting.

Look, every single person readingthis has gone through this processat some point in their lives. This isnot hard. Yet politicians make itlook like quantum physics.

The courage comes in assigningthe priorities for the expendituresand making the “right” cuts. Thelack of intellect shows in the priori-ties and the final product. Tri-C, for


THE BIG ISSUEShould Gov. John Kasich seek to raise the taxes on casino operators, who have halted construction on the new casinos because of concerns their projects will be unaffordable if taxes on casino revenue are raised?

ERIC DOMBROWSKINorth RoyaltonI disagree because thedeal was made.(Gov. Kasich) isholding the project up.

DENISE SHELTONBay VillageYes. I just thinkthat it’s good forthe public to getmore revenuethat way.

PATRICIA JOHNSPittsburghI don’t believe so.I believe theyshould be able tofind other ways toget revenue.

ROBERT SHELTONBay VillageNo. Originally Iwasn’t too thrilledwith casinos any-way. Sincethey’ve alreadypassed the lawand constructionhas already be-gun, people arecounting on jobsand the revenue.Maybe they couldraise the taxes inthe future.

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



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GOING PLACESJOB CHANGES

CONSTRUCTIONPROJECT AND CONSTRUCTIONSERVICES INC.: Gene Baxendaleto vice president, business develop-ment.

ENGINEERINGENGINEERED CONCRETE STRUC-TURES: Scott Jacob to director ofbusiness development, DesignBuild Division.

FINANCEOHIO COMMERCE BANK: StevenSkaggs to vice president, senior credit officer.

FINANCIAL SERVICECEDAR BROOK FINANCIAL PARTNERS LLC: Azim Nakhoodato managing principal; Peter Franzto chief investment officer.

GOVERNMENTCITY OF MEDINA: Kimberly Rice toeconomic development director.

INSURANCEMEDICAL MUTUAL OF OHIO:Ann Levin to manager, regulatorycompliance.

LEGALTUCKER ELLIS & WEST: TerriBrown to director of marketing andcommunications.VORYS, SATER, SEYMOUR ANDPEASE LLP: Laura A. Kulwicki to of counsel.

MANUFACTURINGMOEN INC.: Tim McDonoughto vice president, global brand marketing.

NOVOLYTE TECHNOLOGIES:Ralph Wise to chief technology officer, Energy Storage Business. TRANSFORMER ENGINEERINGLLC: Jeff Boyd to president, Northand South America; Mark Scudiereto vice president, global sales andmarketing.

MARKETINGADCOM COMMUNICATIONS INC.: Eric Kogelschatz to directorof strategy and insights; Diane Millisto account executive; Brendan Lewisto assistant account executive. THUNDER::TECH: Alexa Marinosto account executive; Matt Stevensto manager of multimedia services;Andrea Aber to account manager;Marc Theodore to operations manager; Justin Smith to interactivedeveloper; Marissa Mendel to publicrelations coordinator.

NONPROFITCLEVELAND ORCHESTRA: JacobNissly to principal percussionist;Katherine Bormann and Ying Fu tofirst violin section; Jeffrey Zehngutto second violin section. ELIZA JENNINGS SENIOR CARENETWORK: Lisa Green to executivedirector, Eliza Jennings at Home;Heather Freemont to executive director, The Renaissance.LUTHERAN HOME AT CONCORDRESERVE: Katie Palm to clinical dietitian.

REAL ESTATECB RICHARD ELLIS: Lisa SantaMaria to transaction coordinator,Global Corporate Services Group. HOWARD HANNA: Janis Caesar tosales associate, Aurora.MOHR PARTNERS INC.: JamesRobey to managing director.

SERVICEACTION MANAGEMENT SERVICES:Michelle R. Andree, Susan E. Moyer and Mark K. Hopton to senior account executives.

TECHNOLOGYCASNET: Jeff Comer to chief technology officer.PARK PLACE TECHNOLOGIES:Rachelle DeLuca and Mark Caseyto business development representa-

BrownLevinJacob

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Millis KogelschatzScudiere

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tives; Bob Latina to senior accountexecutive.

BOARDSAMERICAN ASSOCIATION FORHOMECARE: Joel D. Marx (MedicalService Co.) to chairman.METALS SERVICE CENTER INSTI-TUTE, NORTHERN OHIO CHAPTER:John Zasadni (Yarde Metals) to president; Tim Sinclair to first vicepresident; Rush Williams to secondvice president; Dennis Phelpsto treasurer; Michael Procop to secretary.

AWARDSDIVERSITYBUSINESS.COM: ScottS. Hardwick (Rockwell Automation)received a 2011 Champion of DiversityAward.

Send information for Going Places [email protected].

Sports talent firmscores within field

By MICHELLE [email protected]

It appears more people believethis spot in the virtual world is theplace to draft sports talent and to bedrafted.

The scoreboard for TeamWorkOnline LLC in Shaker Heights revealsfast-pitched growth for the web-based sports jobs network, which is manned by a local staff of three, including founder Buffy Filippell.

Sports franchises, colleges andeven a professional bull riders’ asso-ciation use the network to fill posi-tions ranging from internships tojobs commanding $300,000 salaries,Ms. Filippell said.

On Thursday, May 12, more than 970 jobs were there for visitors’viewing.

TeamWork Online counted 734employer users in the first quarter of2011, up 21% over the first quarter of2010 and 39% over first quarter 2009.And its number of applicants per jobaveraged 135 last quarter, up 27%from the year-ago period and nearly57% higher than in the first quarterof 2009.

Ms. Filippell said the number ofhires the network facilitated — 2,154in the first quarter — represented anincrease of nearly 29% over the firstquarter of 2010.

Ms. Filippell had worked as an

Shaker Heights-basedTeamWork Online fillshigh-profile positions

executive recruiter since 1987 and in 1999 digitized her process andbranded it TeamWork Online. Someof the growth, she acknowledged, is due to an improving economy.Plus, the company in 2009 hired itsfirst full-time salesperson.

Sports hiring is up, said Tad Carper,spokesman for the Cleveland Cava-liers, but he believes TeamWork Online wouldn’t be growing if it didn’t provide the high-caliber service it does. Cleveland’s NBAteam has used the network for morethan a decade, he estimated.

“They have grown and developeda network and a reputation that isjust unparalleled in the sports industry,”Mr. Carper said. “They’re very thor-ough in getting the kinds of informa-tion that we need to review to evalu-ate candidates.”

Another potential reason for thenetwork’s growth, Mr. Carper said, isthat some of today’s sports uppermanagement was hired through thesite and now those managers are using it to hire others.

Daniel Helm was hired throughthe network a half-dozen years ago,when he landed a job with the WestVirginia Power, Charleston’s minorleague baseball team. He joined the Lake Erie Crushers, an indepen-dent league baseball team in Avon,as vice president of business opera-tions in late 2009 and uses Team-Work Online exclusively to hire interns and staff.

“I feel like I’m (their) No. 1 priority,like I’m the top team in their book,”Mr. Helm said. “They make you feellike that every time you have a con-versation with them.” ■


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TAX LIENSThe Internal Revenue Service filed taxliens against the following businessesin the Cuyahoga County Recorder’s Office. The IRS files a tax lien to pro-tect the interests of the federal gov-ernment. The lien is a public notice tocreditors that the government has aclaim against a company’s property.Liens reported here are $5,000 andhigher. Dates listed are the dates thedocuments were filed in the Recorder’sOffice.

LIENS FILEDGigante Construction Co.16142 York Road, North RoyaltonID: 34-1825115Date filed: April 5, 2011Type: Employer’s withholding, unemployment

Amount: $691,906

SJT Enterprises Inc.28045 Ranney Parkway, Suite L,WestlakeID: 34-1638133Date filed: April 19, 2011Type: Employer’s withholdingAmount: $669,886

SJT Enterprises Inc.28045 Ranney Parkway, Suite L,WestlakeID: 34-1638133Date filed: April 19, 2011Type: Employer’s withholding, unemploymentAmount: $317,132

Apple Child Care Inc.6827 Bunker Road, North RoyaltonID: 34-1489009

Date filed: April 14, 2011Type: Employer’s withholdingAmount: $154,900

J & R Health Associates Inc.26612 Center Ridge Road, WestlakeID: 34-1483083Date filed: April 7, 2011Type: Employer’s withholding, failureto file complete returnAmount: $138,136

Ran-Dan Transport Inc.2506 Grovewood Ave., ParmaID: 92-0184993Date filed: April 5, 2011Type: Employer’s withholdingAmount: $111,863

C & C Investors Inc.4411 Clark Ave., ClevelandID: 34-1655137Date filed: April 26, 2011Type: Employer’s withholding, unemployment, corporate income

Amount: $104,302

Doona Enterprises LLC Stone Mad1306 W. 65th St., ClevelandID: 32-0233883Date filed: April 26, 2011Type: Employer’s withholding, unemploymentAmount: $100,297

Lakeside Building Services Inc.P.O. Box 470433, Broadview HeightsID: 51-0585756Date filed: April 19, 2011Type: Employer’s withholdingAmount: $99,521

County Cork LLC22901 Millcreek Blvd., Suite 360,Highland HeightsID: 34-1954256Date filed: April 7, 2011Type: Employer’s withholdingAmount: $79,271

Nita Childcare LLC3655 Lee Road, Shaker HeightsID: 20-5602962Date filed: April 21, 2011Type: Employer’s withholding, unemploymentAmount: $57,999

Bar West Corp. Red Lantern17446 Lorain Ave., ClevelandID: 34-1279547Date filed: April 7, 2011Type: Employer’s withholdingAmount: $55,534

FTAC Inc.5310 Hausermann Road, ParmaID: 20-5743672Date filed: April 7, 2011Type: Employer’s withholdingAmount: $47,920

Academy of Learning Enrichment Center25988 Highland Road, Richmond HeightsID: 26-4566770Date filed: April 26, 2011Type: Employer’s withholdingAmount: $45,175

Gray Container LLC2800 E. 90th St., ClevelandID: 20-3598415Date filed: April 14, 2011Type: Employer’s withholdingAmount: $44,298

Extreme Cabling Inc.17216 Sedalia Ave., ClevelandID: 25-1905442Date filed: April 5, 2011Type: Employer’s withholding, unemploymentAmount: $41,736

Action Calibration Services Inc.17820 Englewood Drive, Suite 13,Middleburg HeightsID: 34-1879978Date filed: April 14, 2011Type: Employer’s withholdingAmount: $38,349

Hal-Comm Inc.9000 Bank St., Valley ViewID: 34-1870185Date filed: April 26, 2011Type: Employer’s withholding, corporate incomeAmount: $32,316

Westfall Legal Services LPA75 Public Square, Suite 914, ClevelandID: 20-2368829Date filed: April 28, 2011Type: Employer’s withholdingAmount: $31,312

Sam-Tom Inc. Royce Security Services3740 Euclid Ave., Suite 102, ClevelandID: 34-1965620Date filed: April 28, 2011Type: Employer’s withholding, unemployment, corporate incomeAmount: $29,939

Baker Motors Towing Inc.12214 Detroit Ave., LakewoodID: 20-5027878Date filed: April 7, 2011Type: Employer’s withholdingAmount: $27,674

JSSE Inc., Anago of Columbus7055 Engle Road, Middleburg HeightsID: 56-2359423Date filed: April 7, 2011Type: Employer’s withholdingAmount: $25,170

Paul E. Larson LPA815 Superior Ave. E., Suite 1201,ClevelandID: 20-4936045Date filed: April 21, 2011Type: Employer’s withholdingAmount: $24,816


INVE$TINGGUIDE2011

Poor service, not financial losses, drives some to switch advisersBy MICHELLE [email protected]

“Frankly,” Gene Lucianoremarks, “it wasn’t thelosses.”

The people he knowswho’ve changed investment advisersfollowing the economic downturndidn’t make the switch because ofthe net worth they lost when theirportfolios plunged, he explained.

“Everybody got losses,” said Mr.Luciano, an Avon investor in hisearly 60s whose adviser is CedarBrook Financial Partners LLC inPepper Pike. “I think a lot of peopledon’t get attention from their

During sustained downturn, communication becomes more important

INSIDE: Don’t delay estate plans PAGE I-2 ■ Target-date funds PAGE I-2 ■ Superstar 10 PAGE I-4 ■ Market valuations PAGE I-5

adviser. That’s where these peopleare saying, ‘Well, they don’t careabout me.’”

So they find someone else.It’s a recession lesson invest-

ment advisers continue to heed:The best advisers must communi-cate more to retain and attractclients.

And retention efforts may bemore important now than before:An April survey by Northstar Research Partners and Sullivan revealed that more than a third ofinvestors indicated they’re willing

to switch firms and advisers in thecoming year. Many say they arenot getting the attention theyneed.

When the market is doing well,“I don’t think people expect muchfrom their adviser,” remarked MarkTepper, president of StrategicWealth Partners in Seven Hills.“This increased volatility is becoming the new normal, and it’sbecoming more and more impor-tant for people to receive a betterlevel of service from their advisers.”

Local advisers say they’ve lost

only a few clients in recentmonths. Some say they’ve lostthem for reasons unrelated to thefirm’s performance, for example, aclient’s relocation. Several advisers,though, note they’ve added clientswho left other firms, displeasedwith the way their portfolios weremanaged previously.

In the last 12 months, Mr. Tepper has added some 50 newhousehold clients, increasing hisfirm’s assets under managementto $82 million from $40 million. Hebelieves the “constant communi-

cation” the firm provides, which includes weekly market updatesand quarterly conference calls, hasa lot to do with that.

Constant communicationIn Northeast Ohio, where the

population isn’t growing, the onlyway you grow is by stealing others’clients, said Frank Fantozzi, presi-dent and CEO of Planned FinancialServices in Brecksville. But someadvisers say some of their newclients didn’t have advisers beforethem.

In seeming unison, smaller firmssay they are the beneficiaries of a

See SERVICE Page I-9

LAURENRAFFERTY

ILLUSTRATION

INVESTORSNOW MORE

CAREFULThey’re involving themselves earlier, often

after years of not knowing details

By MICHELLE [email protected]

Michael Cicek no longercounts himself amongthe investors who don’t know how they’re

invested.Previously invested heavily in

stocks, Mr. Cicek and his wife lostroughly 35% in their portfolioswhen the market crashed, almostall of which they’ve recovered inthe years since. Before the down-turn, “we were in it, but we didn’tknow why we were in it,” said the36-year-old Bainbridge resident.Their investment adviser’s words

“went in one ear and out the other.”“That’s not going to cut it

anymore,” said Mr. Cicek, who’sbeen investing for about 17 years.

Today, Mr. Cicek is involvinghimself more than ever in the investing process, asking ques-tions, requesting diversificationand monitoring his statements.And he’s far from alone.

Local advisers say that while investors appear to be growinghungrier for investment growth asthe economy recovers, many arereading the menu more closelyand continue to have a diminishedappetite for risk.

See CAREFUL Page I-7


II--22 CRAIN’S CLEVELAND BUSINESS MAY 30 - JUNE 5, 2011

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Target-date funds drawsupport, some criticismBy DAN [email protected]

If all you know about investingis when you want to retire, so-called “target-date” fundsare aimed directly at you. But

there are varying opinions as towhether they’ll hit their mark.

“Target-date funds are a strategyto reach people who are not com-fortable making asset-allocation decisions,” said Phil Seuss, a partnerwith Mercer Consulting in Chicago,a proponent of the funds who alsoserves the firm’s Cleveland officewith investment advice.

The funds — which have been adefault option for worker retirementplans since the Pension ProtectionAct of 2006, but have come underscrutiny since the recession — follow a simple principle: Stocks gen-erally outperform bonds and otherinvestments over long periods oftime, but they are less liquid. So,the further away from retirementyou are, the more heavily investedyou should be in stocks, while youshould invest more in bonds andliquid assets as you near retire-ment.

A target-date fund manages thatasset allocation problem with a formulaic approach. Tell the fundyour “target date” for retirement,and the fund automatically investsyour money with a mix of assets appropriate to your time line — and automatically reallocates thoseassets as you age.

It’s a sound concept, but it’s notalways the best one, say investmentconsultants such as Michael McKe-own, associate vice president of Aurum Wealth Management Groupin Mayfield Village.

“Just because we’re both retiringin 2030, doesn’t mean I have thesame risk tolerance that you do,”Mr. McKeown said, summing upone of his main arguments againsttarget-date funds: they lump toomany people into the same basketwithout taking into account indi-vidual circumstances.

Target-date funds don’t doenough to take into considerationthings such as what an investor’sliquidity needs will be once they

retire, or the cost and valuation ofstocks and other assets when theyare purchased, Mr. McKeown says.

In the crosshairsTo be sure, the funds have had

their critics — especially in 2008and 2009 when the stock marketcrashed, as did the value of target-datefunds. Too many of them were tooexposed to the equity markets, critics claimed.

But according to MorningstarInc., which tracks mutual fundsgenerally, many target-date fundsquickly redeemed themselves.

“Target-date funds were subjectto a maelstrom of investor ire andgovernmental scrutiny over thepast year, and none more so than2010 funds. At issue has been thefunds’ 2008 losses, which were anungainly 23% on average,” Morn-ingstar wrote in a 2010 report ontarget-date funds, referencing fundsinvested with a 2010 retirement date.

But, the report continues: “Whilegovernmental agencies and Senatesubcommittees were conveninghearings on the target-date industryin 2009, many 2010 funds weremaking back a good chunk of theirinvestors’ money. In 2009, the average target-date 2010 fund returned a healthy 22.4%, with thetop performer rising nearly 31%.”

That’s a reason firms such asMercer recommend the funds, especially to larger clients, Mr.Seuss said.

The funds enforce a certainamount of contrarianism, said Mr.Seuss — they buy stocks as they arefalling in price and sell them whenthey are rising, contrary to what themarket is doing generally. That’sbecause, as stocks fall in price, theymake up a smaller percentage ofeach investor’s holdings — and thefund must buy more stocks to bringthe percentage of assets invested in stocks back up. The opposite happens when stocks rise in price,causing the fund to sell some ofthem at a profit.

Getting participants investedThe funds are probably a worthy

option for employers with hundredsor even thousands of employees intheir plan, said Norm Klopp, managing partner of Midwest Investment Management LLC inCleveland, which helps small employers in the area manage theiremployee retirement funds.

Midwest doesn’t offer target-datefunds, largely because its clientstypically have fewer than 40 employees — and sometimes asfew as 10. Companies that smallcan spend time with each employee,or their adviser can, to help eachparticipant determine a specific asset allocation and investmentplan. By working with each investorindividually, many more factorsthan a target date for retirementcan be considered, Mr. Klopp said.

But employers with many moreemployees to worry about mightnot be able to work so closely witheach one on their investments. Forthem, target-date funds probablyhave a place, he said.

The success of target-date funds“is driven, in part, by this idea thatwe must get the participants invest-ed,” Mr. Klopp said. “And anythingthat enables or forces a participantto be invested is a good thing.” ■

Despite tax flux, estate planning is vitalBy JAY [email protected]

Just because state and federalestate tax laws are in a state offlux, it doesn’t mean youshould be putting off making

decisions about your family’s financial future.

Financial planners and trust andestate lawyers are in general agree-ment that putting off making a decision on an estate is actually adecision, and a bad one.

“My simple message is keep doing what you’re doing,” said N.Lindsay Smith, name partner andleader of the estate and businessplanning group of Smith and Con-deni LLP, an Independence lawfirm. “If you wait to see what ourgovernment is going to do you’regoing to wait forever. By the timeyou get there they’re going to dosomething we never expected.”

The advisers say that if you havea plan in place you may be able totweak it to take advantage of thecurrent situation. The big tweak beinga change in the gift tax exemption.

And if you don’t have a plan, theysay, don’t wait for the dust to settle.

The estate tax is on a rollercoaster at the moment, at both thefederal and state level. Both are inplace for 2011, after a one-yearfederal estate tax holiday.

After that, what the future holdsis anyone’s guess.

The up-and-down ride began in2001, when the George W. Bush taxcuts began a gradual reduction inthe rate of the federal estate tax

and in the number of estates thatwere subject to the tax. At the time,only estates of less than $1 millionwere exempted from the estate tax.

By 2009, only estates larger than$3.5 million for an individual or $7million for a couple were taxed, ata 45% rate. Then the next year,2010, the rate dropped to zero.

But the Bush tax cuts were set tosunset and the estate tax would revert to its 2001 level for 2011.

Then last December, as part ofthe messy year-end tax compromise,Congress and the president agreedto restore the estate tax for 2011and 2012 at 35% after an exemptionof the first $5 million for an indi-vidual and $10 million for a couple.

Come 2013, the two-year exten-sion will expire and the tax ratecould revert to the 2001 level. Or itcould be something entirely different.None of the attorneys or estate plan-ners contacted for this story wantedto bet on the exemption or the rate.

At the same time, Ohio Gov.John Kasich is saying he wants toend Ohio’s estate tax. He believesit is driving wealthy retirees fromthe state. Ohio is one of only 17states with an estate tax and it hasthe lowest threshold. Estates of between $338,333 and $500,000pay a 6% estate tax. For estatesover $500,000 the tax is $9,700 plus7% of the estate’s value.

Planners are more focused on thefederal tax changes, in part becauseit packs a bigger wallop and in partbecause it has been a political hotpotato for more than a decade.

Also, Gov. Kasich, a Republican,

wants the state estate tax killed, andthe Republican Legislature is likelyto grant him his wish.

So with a foggy future, what’s aperson to do? Some people, usuallyagainst advice, are waiting.

“It’s been hard to get people tohave any sense of urgency aboutaction in the current environment,”said Molly Balunek, senior financialadviser with Inverness Holdings, aBeachwood investment advisoryfirm. “There’s a reluctance to act inthe face of ambiguity.”

However, the consensus amongplanners appears to be this: Don’twait for the muddy water to clear.

Erica McGregor, a trusts and estate attorney with Tucker Ellis &West LLP of Cleveland, said concerns about an untimely death,divorce and other family lifechanges generally override anyconcerns about taxes. “Fear aboutthe uncertainty should not causepeople to do nothing,” she said.“There are still good reasons to do(estate planning) now.”

If a person hasn’t started an estate plan, this might actually be agood time to start, though it maytake a little more planning. Forsomeone starting with a blanksheet of paper, “it may take a littlemore thinking through where theyare going,” said Jennifer Savage, apartner in the personal and succes-sion planning practice group atCleveland’s Thompson Hine LLP.“Because you can’t know what therules are going to be.”

A quirk in the way the new lawwas implemented gives people another reason to act now.

“For high net worth individualsthis is a good window of opportunityto transfer assets because unex-pectedly, Congress gave us a $5 million gift tax credit this year andnext year,” Mr. Smith said. “Thatcame as a total surprise.”

With the December compromise,while the estate tax was restored,the new law for 2011 and 2012 setthe gift tax exemption at the samelevel as the estate tax exemption —$5 million. It had since 2002 beenstuck at $1 million.

In other words, the amount youcould pass tax free to your potentialheirs while you are alive suddenly —and probably temporarily — rose to$5 million from $1 million. ■

INVE$TINGGUIDE2011


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INVE$TINGGUIDE2011

Take steps to ensure savings yield healthy retirement incomeSeveral options available to protect balances ERICENDRESS

ADVISER

When we think of our retirement savings,most of us focus on thebalance we have in our

401(k) or 403(b) accounts. But it’smore important to know how muchannual income your account balance safely can produce whenyou really need it.

The good news is that this is notdifficult to estimate. In addition, theretirement industry is developingnew investment products within401(k) and 403(b) plans that willhelp participants translate their account balances into income oncethey reach retirement age.

Pending legislation also may beadopted that would require retire-ment providers to expand yourstatement to include not only youraccount balance but also an estimateof the income it would generate inretirement.

It is important to remember thatyou have options on how to turnyour savings into income at retire-ment.

The following is a discussion ofsome of the most popular options,to help you determine how to getthe most out of your account balance.

Periodic withdrawalsThe most common way to

generate income from an accountbalance is to take periodic with-drawals from savings to fund livingexpenses in retirement.

Experts say the “magic number”to withdraw each year is 4% to 5%of your account value, adjusted upwards each year for inflation.Anything higher than that and onerisks eventually running out ofmoney.

Social Security, pension incomeand other assets such as brokerage,savings or IRA accounts, in additionto your 401(k) or 403(b) balance,collectively will fund your retirement.

But even when all of these piecesare considered, some Americansare finding that the numbers do notadd up, and they must delay theirretirement or seek out other options.

AnnuitiesAnother popular way to fund

retirement income is to purchasean annuity through a rollover ofyour 401(k) or 403(b) balance.

In its most straightforward form,a life annuity is a way to turn an account balance into guaranteedincome for life, which minimizesthe risk of quickly depleting yoursavings. You may receive higher an-nual income from an annuity thanif you take periodic withdrawals of4% to 5% from savings.

On the downside, you typicallyforfeit your principal balance whenpurchasing the annuity, leaving lessflexibility for medical emergencies(or other large expenses) and beneficiaries. The products also cancarry high fees and commissions.Make sure to do your homeworkprior to purchasing an annuity, be-cause there are many variationswith different features and expensestructures.

In-plan annuitiesRecently, certain providers of

401(k) and 403(b) retirement planshave begun offering annuity productswithin their plans that can be purchased during the working yearsand then converted into income for

an outside annuity provider, the investor is able to create an incomestream from the balance within theplan. Further, as part of a group retirement plan, the investor mayreceive lower wholesale pricingthan in the retail annuity market.

The portability of in-plan annuities

is an issue that is being discussedin the retirement community. Currently, there is no clear answerto the question of what happens to the account if you leave your employer, or if your company replaces its current retirementprovider and the new providerdoes not offer such a feature.

In the future, we expect to see agenerally accepted and standard-ized portability solution that willalleviate this issue for investorsand plan sponsors.

Weigh your optionsCareful analysis of the pros and

cons of these annuity products, asopposed to simply taking periodicwithdrawals from your account

after retirement, will help youchoose which method is right for you.

In any case, the availability ofthese products indicates that themarketplace clearly is trying tohelp workers achieve the all-impor-tant goal of converting their balancesinto the income they will needonce they retire, without eventuallydepleting their savings. ■

Mr. Endress, a chartered financialanalyst and accredited investmentfiduciary, is an investment analystwith CBiz Financial Solutions Inc.,a subsidiary of CBiz Inc.; memberof the Financial Industry RegulatoryAuthority Inc. and Securities Investor Protection Corp.; and anSEC-registered investment adviser.

life during retirement. While the investor is still working,

the in-plan annuity may offer protection against the risk of a market drop (like the one we expe-rienced in 2008), but will still beable to provide growth during timesof positive market performance.Generally speaking, an in-plan annuity costs between 0.50% to1.5% as a percentage of the accountbalance, on top of any other planfees and expenses.

At retirement, the product is “annuitized” to provide the investorannual income for life. Instead ofneeding to roll the account over to


The big improvement inthe bottom line of thesecompanies didn’t go unnoticed by investors.The one-year total returnsto shareholders ... roseby double digits in per-centage terms, with halfof the top 10 recordinggains of more than 50%.

1-YR. TOTAL 1-YR. NET NET INCOME RETURN RETURNRK COMPANY TOTAL RETURN INCOME % CHANGE ON ON EQUITY

RETURN RANK CHANGE RANK EQUITY RANK

COMPOSITESCORE


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OHIOI was just voted CFO. (Chief Fun O

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Linda

©2011 Peanuts Worldwide LLC. Peanuts.com

Rebound from ’08, ’09 losses fuel manufacturer sweepAs companies drastically cut expenses duringdown time, revenue uptick has bigger impact By MARK [email protected]

Manufacturers rule.

Those two words describe the dominanceof manufacturing

companies in the 2011 class of theCrain’s Superstar 10.

No company in any other businesssector managed to crack the elitelist of high performers among thepublic companies headquarteredin Northeast Ohio. The reason isfairly simple.

Manufacturers as a group werehammered by the economic slumpthat began in late 2008 and continued to drag them downthroughout most of 2009. Duringthat period, these companies dras-tically cut their costs by laying offsalaried and production workers,reducing their pension and 401(k)contributions and ratcheting backtheir output by closing productionlines or entire plants.

Even as the economy began torecover in late 2009 into 2010,many manufacturers continued tokeep their costs down, in part byholding off on adding to theirstaffs. Profit margins that had beenanemic or nonexistent suddenlywere robust as revenues picked upbut expenses were held in check.

The result, as the accompanyingchart shows, are triple-digit percentage increases in the net income of nearly all the companiesin this year’s Superstar 10 list intheir latest trailing 12-month reporting periods compared to thelike periods a year earlier.

And, as might be expected, thebig improvement in the bottomlines of these companies didn’t gounnoticed by investors. The one-year total returns to shareholdersof all the companies in the latestSuperstar class rose by double digits in percentage terms, withhalf of the top 10 recording gainsof more than 50%.

Indicative of the comebacksstaged by manufacturers in North-east Ohio was Park-Ohio HoldingsCorp., which sits in the pole posi-tion on the 2011 Superstar list.

Propelled by a 16% increase insales, the diversified manufacturingand logistics company in Clevelandsaw its bottom line swing from a$5.2 million loss in 2009 to earningsof $15.2 million in 2010. Park-Ohio’s strong showing has continuedinto 2011, with the company inearly May reporting that its first-quarter earnings were quadrupleits year-earlier profits as its salesclimbed 26%.

In an understated commentaryon the company’s latest results,Park-Ohio chairman and CEO Edward F. Crawford had only sixwords to say in a press release announcing the big gains.

“We are beginning to makeprogress,” Mr. Crawford stated.

And how.A trio of performance indicators

determines which companiesmake up the Superstar 10. A composite score for each publiccompany in the 15 counties Crain’stracks was obtained by adding itsrank on three different lists — 12-month total return to share-

INVE$TINGGUIDE2011

holders, percentage change in profitsin the trailing 12-month period reported before April 29 versus thelike period a year earlier, and returnon equity during the latest 12months reported by the company.

As in golf, the lower the compositescore, the better a company’s

overall performance is consideredto be.

Take Cliffs Natural ResourcesInc., the Cleveland-based producerof iron ore and metallurgical coalthat through strategic acquisitionshas transformed itself into a supplierof raw materials to steelmakersaround the globe. It ranked seventhin one-year total return to share-holders, fifth in percentage changein profits and seventh in return onequity. Adding seven, five and seven gives Cliffs a total score of 19,which ties the company with Nord-son Corp., a maker of automatedspraying equipment, for secondplace on the Superstar list.

There are three companies thatmade the Superstar rosters in 2010and 2011. One is Park-Ohio, whichchecked in at No. 7 last year. Alsoon both lists was this year’s No. 7company, polymer producer PolyOne Corp., which was No. 2 in2010, and Lubrizol Corp.; the maker of specialty chemicals andlubricant additives is tied at No. 8in 2011 and was No. 3 in 2010.

It should be Lubrizol’s last year onthe list, provided Warren Buffett’sBerkshire Hathaway Inc. proceedswith its planned, $9.7 billion cash acquisition of the company.

As with most of the companies inthis year’s class, the remaining

CRAIN’S SUPERSTAR 10

1 Park-Ohio Holdings Corp. 14 65.66 4 391.55 6 32.75 4

2 Nordson Corp. 19 60.29 6 229.58 11 34.49 2

Cliffs Natural Resources Inc. 19 51.35 7 397.27 5 26.52 7

4 Timken Co. 28 62.92 5 305.08 8 14.28 15

5 GrafTech International Ltd. 30 37.60 15 1,306.32 1 14.35 14

6 Materion Corp.* 35 40.46 13 475.78 3 12.08 19

7 PolyOne Corp. 37 28.39 20 228.49 12 31.51 5

8 Lubrizol Corp. 38 51.10 8 46.21 27 33.24 3

Parker Hannifin Corp. 38 38.53 14 203.72 13 16.69 11

10 Eaton Corp. 45 42.71 10 142.56 17 12.62 18

SOURCE: NUMERICAL INFORMATION PROVIDED BY COMPUSTAT, WWW.COMPUSTAT.COM DATA AS OF APRIL 29, 2011* — BRUSH ENGINEERED MATERIALS RENAMED ITSELF MATERION IN EARLY 2011

HOW STARS ARE MADECrain’s determines its

Superstar 10 list by obtaining acomposite score for each publicly traded company in the15-county coverage area. Thecomposite score is the total ofthree rankings:

■ 12-month total return to share-holders

■ 2010 percentage growth in profits

■ 2010 return on equity

superstars are all multinational giants that have benefited from improvements in the global econo-my. They are No. 4 Timken Co., a producer of bearings and specialtysteel; No. 5 GrafTech InternationalLtd., a producer of graphite electrodes used in steelmaking; No. 6 Materion Corp., a supplier of beryllium alloys and specialty materials that until recently wasknown as Brush Engineered Materials; No. 8 (tie) Parker Han-nifin Corp., a producer of motionand control technologies; andNo. 10 Eaton Corp., which makes power management systems andtruck components. ■


VALUATION VALUATION PERCENT4/29/11 5/28/10 CHANGERK COMPANY


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INVE$TINGGUIDE2011

Two-year runs propel Eaton, ParkerBig companies leapfrog insurance giant Progressive Corp., last year’s No. 1By SCOTT [email protected]

Eaton Corp. is on the move,both literally and figura-tively.

The Cleveland-basedproducer of power managementand electrical systems is building aheadquarters in Beachwood that itexpects to occupy in late 2012.Eaton’s 470,000-square-foot structure is sure to be impressive,though at a cost of $170 million,the new HQ is minor stuff compared with another move: thecompany’s ascent to the top ofCrain’s Cleveland Business’ list ofLargest Public Companies.

Eaton saw its market valuationrise 55.9% to $18.27 billion as ofApril 29, 2011, from $11.72 billionon May 28, 2010, the 11-month period covered in Crain’s 2011 Investing Guide. That surge — illustrative of the generally muscularrecent performance of NortheastOhio manufacturing companies(see Superstar 10 story, Page I-4) —helped elevate Eaton to the top ofour public company rankings, pastNo. 1 on the 2010 list, auto insurerProgressive Corp. in Mayfield Village.

Progressive slipped to No. 3 onthis year’s list, even though itsmarket value rose 9.5% to about$14.39 billion. Another manufac-turing company, Parker HannifinCorp. of Mayfield Heights, now isthe second-largest public compa-ny in Northeast Ohio with a market value that rose 54.3% to $15.26 billion as of April 29, 2011.

Both Eaton and Parker, whichmakes motion and control tech-nologies, are on ridiculously strongtwo-year runs as they heal fromthe deep global recession of 2008-2009. (Some would argue it’s notover, but we’ll stick with the govern-ment’s definition that it ended inJune 2009.)

For instance, Eaton’s market

value on April 30, 2009, was $6.67billion, which means the companyhas increased market value bynearly 174% in two years — no smallfeat for a company of such size.

And Eaton says business continuesto look strong. First-quarter 2011net income rose 85% to $287 million, or 83 cents per share, fromearnings of $155 million, or 46cents a share, in the like period of2010. As a result of that strong per-formance and what CEO AlexanderM. “Sandy” Cutler called a “slightlystronger market outlook for theyear,” Eaton raised its full-year2011 guidance by 15 cents a shareto net income of between $3.66and $3.96.

In a trajectory similar to that ofEaton, Parker’s market value onApril 30, 2009, was $6.13 billion, soits market cap has risen nearly149% in the same time frame.

Parker also is maintaining itsmomentum. The company reportedthat net income in the third quarterthat ended March 31 totaled$281.6 million, or $1.68 a share, up82% from $154.4 million, or 94cents a share, in the year-earlierthird quarter. Sales at Parker climbed24%, to $3.2 billion from $2.6 billion, and the company raised itsquarterly cash dividend by 16%.

The 11-month period that endedApril 29, 2011, was kind to mostNortheast Ohio companies when itcomes to measuring their marketvaluation. Of the 60 companies onour public companies list, 47 sawtheir market values rise — four ofthem by more than 100% — sincelast year’s Investing Guide and 12posted a decline. One company onthis year’s list was not on the 2010list.

On a percentage basis, thebiggest gainer on this year’s listwas TravelCenters of AmericaLLC, the Westlake-based operatorof highway travel centers. Its mar-ket value rose just over 181% sincelast year, to $141.6 million from

$50.3 million. That increase movedTravelCenters of America up on thelist by eight spots, to the 44th- largestpublic company in Northeast Ohiofrom 52nd last year.

The biggest such jump, though,came from Chart Industries Inc. ofGarfield Heights, a maker of equipment used in the production,storage and end-use of hydrocarbonand industrial gases. Chart’s marketvalue rose 165.3% to more than $1.4billion from $528 million a year ago.That increase made Chart the 24th-largest company on the list, up ninespots from last year.

Like fellow manufacturers Eatonand Parker, Chart continues to poststrong results so far this year; in thefirst quarter, it earned $7.5 million,or 25 cents per share, comparedwith earnings of $1.4 million, or fivecents per diluted share, for the firstquarter of 2010, and sales rose 38%to $162.9 million. Chart said it nowexpects 2011 sales in the range of$740 million to $780 million, compared with previous guidanceof $710 million to $750 million, andits full-year earnings per share to bein the range of $1.65 to $1.85, upfrom the previously forecast $1.50to $1.70.

There were two other 100%-plusmarket valuation gainers: PreformedLine Products Co. of Mayfield Village,a producer of cable anchoringhardware for utilities and telecomcompanies, up 130.2% in marketvalue to $378.7 million, andAssociated Estates Realty Corp. of Richmond Heights, an apartment-focused real estate investmenttrust, up 124.7% in market value to$688.6 million. ■

TOP MARKET VALUATIONS

1 Eaton Corp. 18,274.6 11,723.6 55.9%

SOURCE: NUMERICAL INFORMATION PROVIDED BY COMPUSTAT, WWW.COMPUSTAT.COM

2 Parker Hannifin Corp. 15,268.7 9,897.3 54.3

3 Progressive Corp. 14,386.0 13,135.1 9.5

4 Cliffs Natural Resources Inc. 12,712.6 7,565.2 68.0

5 FirstEnergy Corp. 12,181.2 10,733.2 13.5

6 Sherwin-Williams Co. 8,760.9 8,409.0 4.2

7 J.M. Smucker Co. 8,706.3 6,577.9 32.4

8 Lubrizol Corp. 8,613.9 6,037.3 42.7

9 KeyCorp 8,270.5 7,050.0 17.3

10 Timken Co. 5,515.1 2,787.5 97.9

11 Goodyear Tire & Rubber Co. 4,428.6 2,890.7 53.2

12 TransDigm Group Inc. 4,134.3 2,597.0 59.2

13 Nordson Corp. 3,886.4 2,273.5 70.9

14 Developers Diversified Realty Corp. 3,766.8 2,854.8 31.9

15 GrafTech International Ltd. 3,367.2 1,998.1 68.5

16 TFS Financial Corp. 3,355.3 4,082.1 -17.8

17 Lincoln Electric Holdings Inc. 3,309.8 2376.4 39.3

18 Forest City Enterprises Inc. 3,178.2 2,059.6 54.3

19 RPM International Inc. 3,065.1 2,567.4 19.4

20 Diebold Inc. 2,221.2 1,915.1 16.0

21 Steris Corp. 2,138.4 1,885.2 13.4

22 FirstMerit Corp. 1,899.5 1,692.7 12.2

23 Applied Industrial Technologies 1,496.8 1,167.0 28.3

24 Chart Industries Inc. 1,401.2 528.2 165.3

25 PolyOne Corp. 1,359.6 926.6 46.7

Of the 60 companies on our public companies list, 47saw their market values rise — four of them by morethan 100% — since last year’s Investing Guide.


II--66 CRAIN’S CLEVELAND BUSINESS MAY 30 - JUNE 5, 2011INVE$TINGGUIDE2011

LARGEST PUBLIC COMPANIESRANKED BY MARKET VALUE

Market value(millions)

Net income(millions)This

yearLastyear

Company/Ticker symbolHeadquartersPhone/Web site 4-29-2011 5-28-2010

Percentchange 2010 2009

Percentchange

2010 returnon equity Lines of business

Top local executiveTitle

1 2Eaton Corp./ETN1111 Superior Ave., Cleveland 44114(216) 523-5000/www.eaton.com

$18,274.7 $11,723.6 55.9% $929.0 $383.0 142.6 12.6Electrical, hydraulic,aerospace, truck andautomotive products

Alexander M. Cutlerchairman, CEO

2 4Parker Hannifin Corp./PH6035 Parkland Blvd., Cleveland 44124(216) 896-3000/www.parker.com

$15,268.7 $9,897.3 54.3% $853.4 $281.0 203.7 16.7Fluid power systems,electromechanicalcontrols

Donald E. Washkewiczchairman, CEO, president

3 1Progressive Corp./PGR6300 Wilson Mills Road, Mayfield Village 44143(440) 461-5000/www.progressive.com

$14,386.1 $13,135.1 9.5% $1,068.3 $1,057.5 1.0 17.7 Insurance and financialcompany

Glenn M. Renwickpresident, CEO

4 6Cliffs Natural Resources Inc./CLF200 Public Square, Suite 3300, Cleveland 44114(216) 694-5700/www.cliffsnaturalresources.com

$12,712.7 $7,565.2 68.0% $1,019.9 $205.1 397.3 26.5 Full-service iron orecompany

Joseph A. Carrabbachairman, president, CEO

5 3FirstEnergy Corp./FE76 S. Main St., Akron 44308(800) 646-0400/www.firstenergycorp.com

$12,181.2 $10,733.2 13.5% $784.0 $1,006.0 -22.1 9.2 Electric utility holdingcompany

Anthony J. Alexanderpresident, CEO

6 5Sherwin-Williams Co./SHW101 W. Prospect Ave., Cleveland 44115(216) 566-2000/www.sherwin-williams.com

$8,760.9 $8,409.0 4.2% $462.5 $435.8 6.1 28.7 Coatings and relatedproducts

Christopher M. Connorchairman, CEO

7 8J.M. Smucker Co./SJM1 Strawberry Lane, Orrville 44667330-682-3000/www.smuckers.com

$8,706.3 $6,577.9 32.4% $505.2 $467.8 8.0 9.4 Manufacturer of brandedfood products

Timothy P. Smucker, chmn.,co-CEO; Richard K. Smucker,exec. chmn., co-CEO

8 9Lubrizol Corp./LZ29400 Lakeland Blvd., Wickliffe 44092(440) 943-4200/www.lubrizol.com

$8,614.0 $6,037.3 42.7% $732.2 $500.8 46.2 33.2 Specialty chemicalcompany

James L. Hambrickchairman, president, CEO

9 7KeyCorp/KEY127 Public Square, Cleveland 44114(216) 689-6300/www.key.com

$8,270.5 $7,050.0 17.3% $554.0 ($1,335.0) NM 5.0 Bank holding company Beth E. Mooneychairman, president, CEO

10 13Timken Co./TKR1835 Dueber Ave., S.W., Canton 44706(330) 438-3000/www.timken.com

$5,515.1 $2,787.5 97.8% $274.8 ($134.0) NM 14.3Friction management andpower transmissionproducts and services

James W. Griffithpresident, CEO

11 11Goodyear Tire & Rubber Co./GT1144 E. Market St., Akron 44316(330) 796-2121/www.goodyear.com

$4,428.6 $2,890.7 53.2% ($216.0) ($375.0) NM NM Tire manufacturer Richard J. Kramerchairman, president, CEO

12 14TransDigm Group Inc./TDG1301 E. Ninth St., Suite 3000, Cleveland 44114(216) 706-2939/www.transdigm.com

$4,134.3 $2,597.0 59.2% $125.3 $154.1 -18.6 21.0Designer and producer ofhighly engineered aircraftcomponents

W. Nicholas Howleychairman, CEO

13 17Nordson Corp./NDSN28601 Clemens Road, Westlake 44145(440) 892-1580/www.nordson.com

$3,886.5 $2,273.5 70.9% $187.2 ($144.5) NM 34.5 Adhesives, coating andsealant applicators

Michael F. Hiltonpresident, CEO

14 12Developers Diversified Realty Corp./DDR3300 Enterprise Parkway, Beachwood 44122(216) 755-5500/www.ddr.com

$3,766.9 $2,854.8 31.9% ($209.4) ($356.6) NM NM Real estate investmenttrust

Daniel B. Hurwitzpresident, CEO

15 19GrafTech International Ltd./GTI12900 Snow Road, Parma 44130(216) 676-2000/www.graftech.com

$3,367.2 $1,998.1 68.5% $176.5 $12.6 1,306.3 14.4 Manufacturer of graphiteelectrodes and cathodes

Craig S. Shularchairman, president, CEO

16 10TFS Financial Corp./TFSL7007 Broadway Ave., Cleveland 44105(216) 441-6000/www.thirdfederal.com

$3,355.3 $4,082.1 -17.8% ($4.9) $11.8 NM NM Bank holding company Marc A. Stefanskipresident, CEO

17 16Lincoln Electric Holdings Inc./LECO22801 St. Clair Ave., Cleveland 44117(216) 481-8100/www.lincolnelectric.com

$3,309.9 $2,376.4 39.3% $130.2 $48.6 168.1 11.5Designs andmanufactures weldingproducts

John M. Stropkichairman, president, CEO

18 18Forest City Enterprises Inc./FCE-A50 Public Square, Suite 1100, Cleveland 44113(216) 621-6060/www.fceinc.com

$3,178.3 $2,059.6 54.3% $58.7 ($30.7) NM 3.8 Owner and developer ofreal estate

Charles A. Ratnerpresident, CEO

19 15RPM International Inc./RPMP.O. Box 777, Medina 44258(330) 273-5090/www.rpminc.com

$3,065.1 $2,567.4 19.4% $179.4 $158.8 13.0 14.8Specialty coatings forindustrial and consumermarkets

Frank C. Sullivanchairman, CEO

20 20Diebold Inc./DBD5995 Mayfair Road, North Canton 44720(330) 490-4000/www.diebold.com

$2,221.2 $1,915.1 16.0% ($20.3) $26.0 NM NMIntegrated self-servicedelivery systems andservices

Thomas W. Swidarskipresident, CEO

21 21Steris Corp./STE5960 Heisley Road, Mentor 44060(440) 354-2600/www.steris.com

$2,138.5 $1,885.2 13.4% $42.1 $126.4 -66.7 5.6Maker of sterileprocessing and infectionprevention systems

Walter M. Rosebrough Jr.president, CEO

22 22FirstMerit Corp./FMERIII Cascade Plaza, Akron 44308(330) 996-6300/www.firstmerit.com

$1,899.6 $1,692.7 12.2% $102.9 $82.2 25.2 6.8 Bank holding company Paul G. Greigchairman, president, CEO

23 24Applied Industrial Technologies Inc./AIT1 Applied Plaza , Cleveland 44115(216) 426-4000/www.applied.com

$1,496.9 $1,167.0 28.3% $86.2 $25.2 241.9 14.6Distributor and providerof industrial parts andservice

David L. Pughchairman, CEO

24 33Chart Industries Inc./GTLSOne Infinity Corporate Centre Dr., Suite 300, GarfieldHeights 44125(440) 753-1490/www.chart-ind.com

$1,401.2 $528.2 165.3% $20.2 $61.0 -67.0 4.0 Maker of cryogenicprocesses and equipment

Samuel F. Thomaschairman, president, CEO

25 26PolyOne Corp./POL33587 Walker Road, Avon Lake 44012(440) 930-1000/www.polyone.com

$1,359.7 $926.6 46.7% $162.6 $49.5 228.5 31.5Provider of specializedpolymer materials,services and solutions

Stephen D. Newlinchairman, president, CEO

26 28Ferro Corp./FOE1000 Lakeside Ave., Cleveland 44114(216) 641-8580/www.ferro.com

$1,298.3 $776.0 67.3% $5.7 ($42.9) NM 1.0 Manufacturer of specialtyperformance materials

James F. Kirschchairman, president, CEO

27 27OM Group Inc./OMG127 Public Square, Suite 1500, Cleveland 44114(216) 781-0083/www.omgi.com

$1,106.2 $910.6 21.5% $83.4 ($17.9) NM 6.7Producer/marketer ofmetal-based specialtychemicals

Joseph M. Scaminacechairman, CEO

28 29Invacare Corp./IVCOne Invacare Way, Elyria 44035(440) 329-6000/www.invacare.com

$1,063.5 $773.7 37.5% $25.3 $41.2 -38.5 3.9 Home health careequipment

Gerald B. Blouchpresident, CEO

29 31Cedar Fair LP/FUNOne Cedar Point Drive, Sandusky 44870-5259(419) 627-2233/www.cedarfair.com

$1,051.3 $701.5 49.9% ($31.6) $35.4 NM NMAmusement and waterparks in the United Statesand Canada

Richard L. Kinzelpresident, CEOCedar Fair Management Inc.

30 25American Greetings Corp./AMOne American Road, Cleveland 44144(216) 252-7300/www.americangreetings.com

$994.0 $930.9 6.8% $87.0 $81.6 6.7 11.6 Greeting cards; characterlicensing

Zev WeissCEO

31 30Nacco Industries Inc./NC5875 Landerbrook Drive, Cleveland 44124(440) 449-9600/www.nacco.com

$876.9 $704.5 24.5% $79.5 $31.1 155.6 17.8 Coal mining, lift trucks,small electrical appliances

Alfred M. Rankin Jr.chairman, president, CEO

See LIST Page I-8


“Most of my clients are, for lackof a better word, gun-shy,” saidDennis R. Marvin, president ofMarvin Wealth Management inWestlake. “They are a lot morecautious, a lot more wary of anything to do with stock-markettypes of investments.”

That said, the market run-up inrecent months has piqued investors’ interest in aggressivegrowth strategies, Mr. Marvin noted. The Standard & Poor’s 500-stock index has risen nearly 6% in2011 and almost 17% over the past12 months.

Still, despite the run-up, manypeople haven’t embraced buyingback into the stock market, saidFrank Fantozzi, president and CEOof Planned Financial Services inBrecksville.

Mr. Cicek and his wife are an example of this mindset. With theguidance of an adviser at CedarBrook Financial Partners LLC inPepper Pike, the two now investless in stocks and more in low- andmoderate-risk vehicles, includingmutual funds and bonds, he said.

“We won’t see that 20% increase,but we also won’t see that 20% decrease,” he said. “We’re worriedmore about protecting ourselvesnowadays than we are about getting that 20% growth year overyear.”

Going with the flowFor the first time in a long time,

cash is back, observed AzimNakhooda, managing principal ofCedar Brook Financial Partners.Companies are leaner and are experiencing profit recovery, henoted, so there are record amountsof cash on balance sheets.

People, too, likely have morecash than they did six months to ayear ago, Mr. Marvin said.

But, different from other times,many aren’t racing to tie up theirincreased cash in illiquid invest-ments, Mr. Nakhooda said.

What people thought were liquid investments in the past cycle proved not to be — for exam-ple, the real estate many believedthey could sell or borrow against ifneed be. When real estate driedup, many couldn’t access the

capital they expected to have.As a result, advisers and

investors today question whethersomething affords true liquidity orliquidity that can change if the unexpected happens, Mr. Nakhoodasaid. There’s much more scrutinyof the “gray area,” he said.

Dividend-yielding products —regarded by some as “plain vanilla”— have made a comeback, Mr.Nakhooda said.

They’re particularly attractivenow because they provide incomeat a time when interest rates arevery low, noted Robert C. Smith,president and CEO of Spero-SmithInvestment Advisers Inc. in Beach-wood.

Diversification remains a common goal, and alternative investments are increasingly popular. Also, commodities suchas precious metals and emergingmarket equities, which are invest-ments in companies domiciled indeveloping countries like Brazil,are attracting more dollars.

“When you come out of any typeof recession … everyone wants tofind the next golden nugget,” saidMr. Fantozzi, who said he’s observed a “huge uptick” in thebuying of commodities.

“What’s surprising is peoplehave short-term memories,” headded. “They just don’t learn frompast mistakes. People get greedy.People want to get rich quick. Theydon’t want to be prudent.”

The problem is when people follow trends, they risk shootingwhere the rabbit was, Mr. Smithsaid.

Some clients have questionedwhy Mr. Fantozzi isn’t selling municipal bonds, which have experienced a “huge selloff.” ButMr. Fantozzi expects them to appreciate in value.

And unlike the average clientwho might want to buy morebonds because they see bonds asless volatile than stocks, Mr. Marvin points out that interestrates will rise and when they do,

bond values will drop. So a couplemonths ago, the firm repositionedits bond portfolio in order to use a different bond vehicle that performs better when interestrates rise, he explained.

Risky businessInvestors of this recovery appear

to understand risk better than investors did in the 1990s, Mr.Smith remarked. In the ’90s, thequestion was, “How much can Imake?” he said. Now it’s, “Howmuch can I lose?”

But taking risks can be the thingto do now for those who can affordto, Mr. Nakhooda said.

As things are beginning to beworked out and companies emergefrom bankruptcy, distressed assetsare being freed up for trading, hesaid. Cedar Brook Financial Partners is taking advantage ofsuch opportunities for certainclients, particularly higher networth individuals who have theability to buy such assets.

“There’s been a lot of pain outthere,” he said, citing the “implo-sion” in the financial world andreal estate. “If you have the buyingpower and the access … now’s thetime to make some money.”

How much investment strategyhas changed and how long riskaversion will persist really dependson the investor, their circumstanceand their relationship with theiradviser, Mr. Nakhooda said.

“There’s a percentage of the investing public that is foreverscarred,” he said. “They’re just notcoming back to the risk assets ever. They are essentially ofthe mindset: ‘I’m done with this.’”

They, however, are not the majority, Mr. Nakhooda said.Younger investors, for one, hadless to lose and have more time tomake gains, he said.

Mr. Marvin also believes thechange he’s seen to some investors’risk tolerance is lasting. Mr. Cicekcan only speak for himself and hiswife.

“It’s permanent,” he said of thechanges to their investment strategy.“We’re looking at everything with aconservative eyeglass. We’re reallysaying, ‘Let’s not rock the boatanymore.’ ” ■

continued from PAGE I-1


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Workers who have left a 401(k)account behind upon leaving a jobmay need help figuring out what todo with it, according to a survey byFidelity Investments.

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“There’s a percentage of the investing public that is forever scarred. They’re just not coming back to therisk assets ever.” – Azim Nakhooda, managing principal, Cedar Brook Financial Partners



LARGEST PUBLIC COMPANIESRANKED BY MARKET VALUE

Market value(millions)

Net income(millions)This

yearLastyear

Company/Ticker symbolHeadquartersPhone/Web site 4-29-2011 5-28-2010

Percentchange 2010 2009

Percentchange

2010 returnon equity Lines of business

Top local executiveTitle

32 34Materion Corp./MTRN6070 Parkland Blvd., Mayfield Heights 44124(216) 486-4200/www.materion.com

$848.6 $512.2 65.7% $46.4 ($12.4) NM 12.1 High-performanceengineered materials

Richard J. Hipplechairman, president, CEO

33 32A. Schulman Inc./SHLM3550 W. Market St., Akron 44333(330) 666-3751/www.aschulman.com

$783.9 $582.9 34.5% $50.0 $9.8 409.2 9.8 High-performance plasticcompounds and resins

Joseph M. Gingochairman, president, CEO

34 39Associated Estates Realty Corp./AEC1 AEC Parkway, Richmond Heights 44143(216) 261-5000/www.associatedestates.com

$688.6 $306.4 124.7% ($8.6) $5.8 NM NM Real estate investmenttrust

Jeffrey I. Friedmanchairman, president, CEO

35 36National Interstate Corp./NATL3250 Interstate Drive, Richfield 44286(330) 659-8900/www.nationalinterstate.com

$435.3 $397.9 9.4% $39.5 $46.4 -14.9 12.8 Specialty property andcasualty insurance

David W. Michelsonpresident, CEO

36 41Stoneridge Inc./SRI9400 E. Market St., Warren 44484(330) 856-2443/www.stoneridge.com

$388.5 $246.6 57.5% $10.8 ($32.4) NM 12.9Highly engineeredelectrical and electroniccomponents

John C. Coreypresident, CEO

37 37Omnova Solutions Inc./OMN175 Ghent Road, Fairlawn 44333(330) 869-4200/www.omnova.com

$385.1 $358.9 7.3% $101.1 $34.1 196.5 78.6 Decorative and functionalinterior surfaces

Kevin M. McMullenchairman, president, CEO

38 44Preformed Line Products Co./PLPC660 Beta Drive, Mayfield Village 44143(440) 461-5200/www.preformed.com

$378.7 $164.5 130.2% $23.1 $23.4 -1.0 11.8 Wire and cable products Robert G. Ruhlmanchairman, president, CEO

39 38Myers Industries Inc./MYE1293 S. Main St., Akron 44301(330) 253-5592/www.myersindustries.com

$376.8 $316.9 18.9% ($42.8) ($0.7) NM NMPolymer and metalproducts; equipment fortire service

John C. Orrpresident, CEO

40 35CBiz Inc./CBZ6050 Oak Tree Blvd. S., Suite 500, Cleveland 44131(216) 447-9000/www.cbiz.com

$368.7 $411.7 -10.5% $24.5 $31.4 -21.9 10.7 Provides outsourcedbusiness services

Steven L. Gerardchairman, CEO

41 40Olympic Steel Inc./ZEUS5096 Richmond Road, Bedford Heights 44146(216) 292-3800/www.olysteel.com

$319.6 $299.9 6.6% $2.1 ($61.2) NM 0.8 Steel service center Michael D. Siegalchairman, CEO

42 43Park-Ohio Holdings Corp./PKOH6065 Parkland Blvd., Cleveland 44124(440) 947-2000/www.pkoh.com

$252.4 $172.5 46.3% $15.2 ($5.2) NM 32.7 Diversified manufacturer Edward F. Crawfordchairman, CEO

43 45Shiloh Industries Inc./SHLO880 Steel Drive, Valley City 44280(330) 558-2600/www.shiloh.com

$190.7 $164.0 16.3% $4.9 ($12.2) NM 4.8 Steel processing Theodore K. Zampetispresident, CEO

44 52TravelCenters of America LLC/TA24601 Center Ridge Road, Suite 200, Westlake 44145(440) 808-9100/www.tatravelcenters.com

$141.6 $50.3 181.8% ($65.6) ($89.9) NM NMInterstate travel plazas;fuel, food, conveniencestores and truck repairs

Thomas M. O'Brienmanaging director, president,CEO

45 46Agilysys Inc./AGYS28925 Fountain Parkway, Solon 44139(877) 374-4783/www.agilysys.com

$119.9 $155.7 -23.0% ($11.0) ($109.7) NM NM Electronic componentsand industrial products

Martin Ellispresident, CEO

46 48Sifco Industries Inc./SIF970 E. 64th St., Cleveland 44103(216) 881-8600/www.sifco.com

$86.5 $59.8 44.7% $4.6 $8.4 -45.9 9.2Production, repair,plating, machining andmarketing of jet engines

Michael S. Lipscombpresident, CEO

47 51Athersys Inc./ATHX3201 Carnegie Ave., Cleveland 44115(216) 431-9900/www.athersys.com

$53.2 $52.5 1.3% ($11.4) ($15.4) NM NM Biopharmaceuticalcompany

Gil Van Bokkelenchairman, CEO

48 49PVF Capital Corp./PVFC30000 Aurora Road, Solon 44139(440) 914-3900/www.parkviewfederal.com

$52.9 $55.4 -4.5% ($5.8) ($13.6) NM NM Bank holding company Robert J. King Jr.president, CEO

49 55LNB Bancorp Inc./LNBB457 Broadway Ave., Lorain 44052(440) 244-6000/www.4lnb.com

$45.7 $36.8 24.2% $5.4 ($2.0) NM 4.9 Bank holding company Daniel E. Klimaspresident, CEO

50 50United Community Financial Corp./UCFC275 Federal Plaza West, Youngstown 44503(330) 742-0500/www.ucfconline.com

$43.6 $54.7 -20.2% ($37.3) ($16.8) NM NM Bank holding company Patrick W. Bevackpresident, CEO

51 53Ohio Legacy Corp./OLCB600 S. Main St., North Canton 44720(330) 263-1955/www.ohiolegacycorp.com

$31.6 $48.7 -35.1% ($3.1) ($6.7) NM NM Bank holding company Rick L. Hullpresident, CEO

52 54First Citizens Banc Corp./FCZA100 E. Water St., Sandusky 44870(419) 625-4121/www.fcza.com

$31.4 $40.0 -21.4% ($1.3) $1.7 NM NM Bank holding company James O. Millerpresident, CEO

53 56Middlefield Banc Corp./MBCN.PK15985 E. High St., Middlefield 44062(440) 632-1666/www.middlefieldbank.com

$27.8 $29.4 -5.4% $2.5 $1.8 41.3 6.6 Bank holding company Thomas G. Caldwellpresident, CEO

54 57Wayne Savings Bancshares Inc. /WAYN151 N. Market St., Wooster 44691(330) 264-5767/www.waynesavings.com

$25.6 $24.8 3.3% $2.2 $2.0 12.5 5.8 Bank holding company Phillip E. Beckerpresident, CEO

55 58Energy Focus Inc./EFOI32000 Aurora Road, Solon 44139(440) 715-1300 /www.energyfocusinc.com

$18.7 $23.5 -20.5% ($8.5) ($11.0) NM NM Fiber optic lightingsystems

Joseph G. KaveskiCEO

56 60Avalon Holdings Corp./AWXOne American Way, Warren 44484(330) 856-8800/www.avalonholdings.com

$11.0 $11.2 -1.7% ($0.5) ($0.8) NM NMHazardous andnonhazardous wastebrokerage andmanagement services

Ronald E. Klinglechairman, CEO

57 61Datatrak International Inc./DATA6150 Parkland Blvd., Suite 100, Mayfield Heights 44124(440) 443-0082/www.datatrak.net

$9.6 $6.7 42.5% $0.1 ($1.9) NM NM Provider of clinicalresearch services

Laurence P. Birchchairman, CEO

58 62Central Federal Corp./CFBK2923 Smith Road, Fairlawn 44333(330) 666-7979/www.cfbankonline.com

$4.8 $6.6 -26.3% ($6.9) ($9.9) NM NM Bank holding company Eloise MackusCEO

59Hickok Inc./HICKA.PK10514 Dupont Ave., Cleveland 44108(216) 541-8060/www.hickok-inc.com

$2.4 NM NM ($1.3) ($2.5) NM NM Products for thetransportation industry

Robert L. Baumanpresident, CEO

60 59Morgan's Foods Inc. (1)/MRFD.OB4829 Galaxy Parkway, Suite S, Cleveland 44128(216) 359-9000/www.morgansfoods.com

$2.3 $11.7 -80.2% ($0.0) $0.3 NM NM Restaurants Leonard R. Stein-Sapirchairman, CEO

Numerical information provided by Compustat, www.compustat.com. The Market Value data used the April 29, 2011 close price for each company, net income figures representtrailing 12-month data through the quarter ending December, January or February depending on the fiscal year end of each company. NA=Not available. NM=Not meaningful.Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to ourlists and will include omitted information or clarifications in coming issues. The Book of Lists and other specialized business lists are available to purchase atwww.crainscleveland.com.(1) Information is for the period ending November 2010.

RESEARCHED BY Deborah W. Hillyer

INVE$TINGGUIDE2011


14 PolyOne Corp. 27.23

13 Nordson Corp. 27.99

7 OM Group Inc. 37.28

6 A. Schulman Inc. 44.82

5 GrafTech International Ltd. 52.80

4 Olympic Steel Inc. 53.81

3 Shiloh Industries Inc. 53.88

15 TravelCenters of America LLC 26.87

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Service: Client trust harder to gainmovement by clients away frombigger players. Dennis R. Marvin,president of Marvin Wealth Manage-ment in Westlake, believes a lackof communication at the largerfirms is the reason why.

However, one big player, Northwestern Mutual, has seen “alot of growth” in its client numbers,according to Christopher Brown,investment specialist for the Fortune 500 company’s NortheastOhio group. While it has lost someclients, the company’s seen a netgain overall of late, he said.

It, too, is trying to increase thefrequency and the substance of itscontact with clients, Mr. Brown said.

“We are finding that it’s impor-tant to reach out and talk to ourclients much more than peoplehave in the past,” he said.

Cedar Brook Financial Partnersstarted coffee talks during thedownturn and continues them today, though they are scheduledless frequently and attended byfewer people now, said AzimNakhooda, managing principal.

Marvin Wealth Management recently improved its website tomake it more interactive and user-friendly, Mr. Marvin said.

Also driven by the recession andresponses gleaned through focusgroups, Planned Financial Servicesbegan publishing more originalcontent, including a piece it distributes a couple times amonth. Clients wanted to knowwhat the firm’s professionals reallythink, and this is one way of deliv-ering, Mr. Fantozzi said.

He estimated the firm has increased by 40% the time andmoney it spends on such outreach.

At least one of the firm’s clients,A.J. Hyland, president and CEO ofHyland Software in Westlake, hasnoticed.

“They’ve definitely increasedthe amount of communication,”Mr. Hyland said, citing newslettershe receives from the firm todaythat he didn’t when he first joinedas a client four years ago. “They’vedefinitely made efforts to cutthrough the rhetoric.”

Rebuilding trustThe sheer velocity with which

things changed a few years agoand the unprecedented failuresand government bailouts were theinitial fuel for more proactive outreach, Mr. Nakhooda said.

From his vantage point, “The

communication aspect of ourbusiness is completely and irrevo-cably changed.”

The added outreach also is rooted in a need for the financialindustry to rebuild trust, he said.

“You’ve seen so much bad behavior,” he said. “It’s one thingwhen markets go down. Those arethings I think most rational peoplewill accept.

“(But) I think there is a hugeamount of goodwill and trust thatwas lost,” Mr. Nakhooda said, citingthe fraud that permeated the industry and the perception amongmany that finance executives “cashedout on the backs of losers.”

Mr. Tepper agreed his firm hasto work harder to gain new clients’confidence. In fact, though it usu-ally only permits clients to listeninto quarterly conference calls,“we’ve felt the need to invite someprospective clients who were onthe fence” to listen, he said.

For the foreseeable future, Mr.Brown of Northwestern Mutualexpects the demand for more out-reach to continue.

“I think it will continue becausethere is so much competition,” hesaid. “Clients have a lot of choicesas to how they go about this.” ■

continued from PAGE I-1

INVE$TINGGUIDE2011

TOP ONE-YEAR RETURNS

1 Preformed Line Products Co. 144.13%

2 Chart Industries Inc. 111.40

3 TravelCenters of America LLC 93.12

4 Park Ohio Holdings Corp. 65.66

5 Timken Co. 62.92

6 Nordson Corp. 60.29

7 Cliffs Natural Resources Inc. 51.35

8 Lubrizol Corp. 51.10

9 TransDigm Group Inc. 50.72

10 Eaton Corp. 42.71

11 Stoneridge Inc. 41.80

12 Shiloh Industries Inc. 41.75

13 Materion Corp.** 40.46

14 Parker Hannifin Corp. 38.53

15 GrafTech International Ltd. 37.60

INFORMATION PROVIDED BY COMPUSTAT, WWW.COMPUSTAT.COM; * — DATA AS OF APRIL 29, 2011** — BRUSH ENGINEERED MATERIALS RENAMED ITSELF MATERION IN EARLY 2011

TOP ONE-YEAR REVENUE CHANGERK COMPANY ONE-YEAR CHANGE*

1 Cliffs Natural Resources Inc. 100.03%

2 Materion Corp. 82.09

8 Stoneridge Inc. 33.69

9 Omnova Solutions Inc. 33.61

10 Preformed Line Products Co. 31.53

11 National Interstate Corp. 30.44

12 Timken Co. 29.09

INFORMATION PROVIDED BY COMPUSTAT, WWW.COMPUSTAT.COM; * — DATA AS OF APRIL 29, 2011** — BRUSH ENGINEERED MATERIALS RENAMED ITSELF MATERION IN EARLY 2011


“If we are able to meet our goalsand objectives, I believe this is howeconomic development will bedone across the country,” Mr.Kvamme said.

However, public finance andeconomic development specialistsreached by Crain’s, as well as anoutspoken critic of the plan and astate senator, are raising variousquestions about the deal.

First, the finance professionalsask, what benchmarks will the stateuse to measure the success of Jobs-Ohio compared to the state’s existingeconomic development program?

Second, will the additional suc-cess JobsOhio might attain in bringingjobs and businesses to the stateovercome the cost of $1 billion innew debt service?

And last, is the state getting a fairprice for its liquor business?

None of the half-dozen financeand economic development profes-sionals who spoke with Crain’s wouldgo on the record with their concerns.All do business regularly with thestate and, though skeptical aboutthe financing plan, hope JobsOhiowill spur business development. One,though, said he thought the Kasichplan was “high risk, high reward.”

Where finance professionals arecircumspect, JobsOhio’s chief critic isdirect.

Not a fan“It’s a short-term strategy for

money that is going to cost the state

for a long time,” said Brian Rothen-berg, executive director of ProgressOhio, a Democratic-leaning politicalaction group based in Columbus.“It twists the constitution, and it’snot a proven economic develop-ment tool by any means.”

In April, Mr. Rothenberg’s groupjoined two Democratic state legis-lators and sued the governor in theOhio Supreme Court over the Jobs-Ohio plan. The suit argues that thelaw that created JobsOhio violatesthe state constitution on severalcounts, including the way it handlesstate debt and because it allows thegovernor to serve as chairman ofthe nonprofit organization.

In addition, state Sen. Tim Gren-dell, a Republican from Chester-land, told The Columbus Dispatchlast week that he, too, questions theplan’s constitutionality. He also believes the liquor profits couldbring as much as $3 billion.

Mr. Kvamme maintains the po-tential positives of JobsOhio trumpthe possible downside risk.

As for Sen. Grendell’s contentionthat the liquor profits are worth $3billion, Mr. Kvamme said he believesthe $1.2 billion is a fair price. Hesaid higher estimates are based onthe state selling the liquor business,rather than just leasing the profitsfor 25 years, as JobsOhio is doing.

Western Reserve Partners LLC, aCleveland investment banking firm,made an unsolicited proposal to Gov.Kasich that estimated privatizing theliquor business could bring the

state between $2 billion and $2.5billion. But Mark Fillipell, a WesternReserve Partners managing director,said he thought the $1.2 billionprice for leasing the liquor profits —a different kind of transaction thanhis firm proposed — was fair.

How profits would flowImproving the state’s economic

development efforts was a keyplank in now-Gov. Kasich’s guber-natorial campaign, and creating anonprofit economic developmentorganization was his first major actas governor. On Feb. 18 he signedHouse Bill 1, creating JobsOhio, aprivate, nonprofit entity he wouldcontrol that he described through-out the campaign as an organiza-tion that would “work at the speedof business to get jobs created.”

The Legislature still must fundthe organization’s startup in thetwo-year budget it now is considering,and it then must pass additionalenabling legislation to give Jobs-Ohio a structure before it takes theeconomic development reins nextJanuary.

Gov. Kasich wants an organiza-tion that would have $100 millionannually to attract business to thestate in ways the current developmentdepartment cannot — in particular,by making equity investments inbusinesses that want to come to orgrow in Ohio. A lease of the state’sliquor profits by JobsOhio wouldprovide it with that revenue stream.

The state would use $700 million


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Liquor: Kasich touts economic payoffcontinued from PAGE 1

of the $1.2 billion in lease proceedsit would receive up front from Jobs-Ohio to refinance economic devel-opment debt already financed bythe liquor profits. It also would send$500 million to the state general fund,in part to replace lost liquor profitsover the next two years but also tohelp plug Ohio’s $8 billion budget gap.

The finance professionals whospoke to Crain’s are unconcernedabout the $700 million that alreadyis used to finance economic devel-opment projects. To them, it is notnew debt.

However, the debt created to finance the other $500 million Jobs-Ohio would pay the state will costabout $1 billion over the life of theliquor profit lease and is a new drainfrom the liquor profit stream.

It’s that cost, critics say, that Jobs-Ohio must recoup by getting a higherreturn on investment to prove itssuccess.

Lemons before lemonadeMr. Kvamme said he believes the

program can be successful and thatJobsOhio will have the data to prove it.

“I am very focused on metricsand we will have to show our share-holders — the people of Ohio —that we’re performing,” he said.“That’s very important.”

He said independent auditorswill have three core metrics to review: net new job growth on dealsJobsOhio works on, net new capitalinvested in the state and the profitJobsOhio makes on its equity investments.

The hardest of those to measure,especially in the short term, wouldbe the increase in the value of

investments in the JobsOhio equityportfolio. The question, Mr.Kvamme understands, is whethervoters will have the patience to waitfor a payoff that could take three,five or even eight years to pan out.

“In investing, there is somethingcalled the J curve,” Mr. Kvammesaid. “The (investments) that don’tdo well go out of business morequickly” and show up as losses inthe early years.

“The ones that do very well”make big profits eventually, he said.“You make lemons before you makelemonade.”

Florida switches backIf the plan doesn’t bring big wins

or at least bring them quickly enough,several observers questionedwhether voters will give the plantime to work or clamor for its repeal.

That’s what has happened inFlorida. That state brought economicdevelopment operations back intostate government after using a non-profit for more than a decade.

In January, new Florida Gov. RickScott fired the head of the nonprofitEnterprise Florida, saying he intended to bring the operation intothe governor’s office. The Floridalegislature wouldn’t go along withthat plan, but it’s working on a planto bring at least part of the Enter-prise Florida operation back inhouse.

Mr. Kvamme said his team hasinvestigated the nonprofit efforts inother states and believes Ohio’splan avoids the pitfalls that trippedup those programs.

“I think the other folks got a littlebit mixed up in how they imple-mented their programs,” he said. ■



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Publish in Crain’s Cleveland BusinessMay 23, 2011

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Kvamme’s linkto LinkedIn■ Ohio’s director of job creation, MarkKvamme, spent part of his day last Thurs-day, May 19, ringing the bell to open tradingon the New York Stock Exchange — andscoring the kind of financial home run hehopes to bring to Ohio.

That day, the stock of LinkedIn Corp., theoperator of the social media web site with abusiness slant, went public. With LinkedIn’sinitial public offering, its early investors, including Mr. Kvamme and his old partners atSequoia Capital, made millions — perhapshundreds of millions — of dollars. Until he signed on to build Gov. John Kasich’s eco-nomic development program, Mr. Kvammewas a member of the LinkedIn board.

In the days leading up to the IPO, the expected opening price kept rising from $32a share past $45. Then after Mr. Kvammerang the bell, he said it took 40 minutes ofbidding up for the offering to open at $83 a share. It soon soared past $122 a share before closing at $94.25, giving the company amarket value of nearly $9 billion.

“It was pretty cool to be on the floor of theNew York Stock Exchange while they’re tryingto find a price,” Mr. Kvamme said. “Thepresident of the New York Stock Exchange was saying this is something thatdoesn’t happen too often.” — Jay Miller

A full house indowntown Cleveland■ Here is another sign of the apartmentmarket’s vitality, particularly in the submarket

that is the new kid on the block, relativelyspeaking: downtown Cleveland.

Real estate developer Bob Rains, a partnerwith John Carney in Landmark Manage-ment of Cleveland, says the partnership’s400-suite apartment portfolio in the city’sWarehouse District is full.

Moreover, it’s full for the first time. Theapartment owners have not had the proper-ties that long, for they began developing thesuites that include the Bridgeview and PerryPayne buildings fairly recently, in 1992. Mostof the region’s apartment stock is older.

“If someone calls and asks for a suite in July, we say we may have one open up inAugust,” Mr. Rains said.

Reports like that are enoughto make an inquiring mindwonder why so many develop-ers are killing each other to tryand rehabilitate old buildingsin downtown Cleveland for themercurial hotel market, evenwith a medical mart and con-vention center and perhaps acasino on their way. — Stan Bullard

Our manHannahan■ The Indians signed journeyman infielderJack Hannahan this offseason to help stabi-lize a defense that ranked 20th in the majorslast season in fielding percentage.

Little did they know he’d gain cult statusso quickly. The Indians last week receivedtheir first batch of merchandise featuringMr. Hannahan’s No. 9, after fans — includingthis reporter and his friends, in search of the

next Casey Blake — repeatedly inquired.Mr. Hannahan prior to this season played

for three teams in his four-year big-leaguecareer; he’s hitting .240 this season in 35games. More important: Through lastThursday, the Indians were second in theleague in fielding percentage and had madejust 17 errors. — Joel Hammond

Egad! It’s e-agentsat an e-branch■ According to the CEO of Ohio CatholicFederal Credit Union, two other credit unionshave asked to observe its “e-branch” forthemselves once it’s up and running.

Ohio Catholic has hired ateam of four for its e-branch —a newly renovated space in itsGarfield Heights location that’ssurrounded by glass panelswhere “e-agents” and onemanager will sit, said CEORandy Trimm.

Beginning June 2, customerswho call in will be routed directly to the e-agents instead of the main phone line, andthe team will assist them with services rang-ing from inquiries to transactions and e-signing of checks, Mr. Trimm said. The goalis to provide enhanced service to memberswho prefer to do business outside the insti-tution’s six branches.

Ohio Catholic plans to roll out by lateJune remote deposit capture, which, as thename implies, permits customers to depositchecks remotely. Mr. Trimm said it also willadd live chat capability on its website, whichthe e-agents will handle. — Michelle Park

WHAT’S NEWCOMPANY: Flaming River Indus-tries, BereaPRODUCT: Flaming River SyntheticPower Steering Fluid

The maker of steering and electrical components has developed a new line of synthetic power steering fluid that serves asa complement to the company’s Power Rackand Pinions and Power Steering Accessoryproduct lines.

Flaming River says its newpower steering fluid, which isavailable in a one-quart bottle, “reduces operatingtemperatures and fluidexpansion, resists foamingand increases the life ofpower steering systemsby reducing internalwear and tear.”

The steering fluid canbe used for all powersteering applications,according to Flaming River. “Simply purgethe vehicle of its current power steering fluidand replace with Flaming River’s unique blendthat easily mixes with any trace amounts ofother steering fluid left behind,” the companysays.

Retail price for the power steering fluid is$14.50.

For information, visit www.FlamingRiver.com.

Send information about new products to managing editor Scott Suttell [email protected].

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK MAY 16 - 22

The big story: And the winner is … Westlake.Greeting card maker American Greetings Corp.said it plans to establish a new world headquar-

ters in Westlakeand exit its long-time corporatehome in Brooklynfor a location atCrocker Park.The companyplans to developa 700,000-square-

foot complex on a 13-acre site off of Main Streetin the mixed-use development. The companyplans to move into the new HQ, dubbed “Amer-ican Creative Studios,” in 2014. American Greet-ings did not put a specific dollar cost on the projectbeyond its previously stated millions of dollars.

Global players: Digital marketing agencyRosetta Marketing Group, which has a largepresence in Cleveland after its July 2008 purchase of Brulant Inc., was bought by PublicisGroupe SA. Publicis, a French advertising com-pany, paid $575 million in cash for Hamilton,N.J.-based Rosetta. According to Crain’s Cleve-land Business research, Rosetta had 404 employeesin Cleveland as of last Oct. 4. Rosetta said it willcontinue to operate “as an autonomous, stand-alone brand” within Publicis.

A match made in Romeoville: OlympicSteel Inc. of Cleveland said it’s buying ChicagoTube & Iron of Romeoville, Ill., for $150 millionin cash in a deal it expects to close by June 1.With the acquisition, Olympic picks up 10 ChicagoTube operations in six states. The company pro-vides a variety of steel and aluminum tubing,valves and related products across the Midwestand in North Carolina. Olympic said ChicagoTube had more than 1.2 million feet of com-bined space in its facilities, where it inventoriesmore than 30,000 items.

Highlight of their week: Private equity firm3i Group PLC of London said it has bought a majority stake in Hilite International Inc., aCleveland maker of fuel-efficient auto parts. Financial details of the deal were not disclosed,but Dow Jones and Reuters reported the dealwas worth about $300 million. Hilite has sixplants in North America, Europe and Asia. Thedowntown Cleveland headquarters is its only operation in Ohio. Hilite in 2010 generated revenuesof $400 million.

UH is beaming: University Hospitals’ SeidmanCancer Center announced it will invest $30 million to establish a proton therapy center, whichwould make the new, freestanding hospital one ofthe few facilities in the country to offer this typeof radiation treatment. Proton therapy uses apowerful beam of protons rather than the pho-tons to target cancerous tumors. The new tech-nology can help spare healthy tissue in the body,which can be damaged by traditional radiationtreatments.

Turf battle: A proposed one-year extension ofthe Cleveland Browns’ parking agreement withits lakefront neighbor, the Cleveland-CuyahogaCounty Port Authority, for parking spacesaround Cleveland Browns Stadium failed to winthe needed votes from Port Authority boardmembers. The Browns sought the extension toallow the team to continue to use 3,878 parkingspaces on Port Authority land on football gamedays. The 3-3 vote reflected some peevishnesson the part of the dissenting board members onbroader issues, including the looming postpone-ment or cancellation of the pro football seasonand the way the Browns handled discussionswith a select group of Port Authority board mem-bers over its proposal to redevelop the lakefront.

BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com


Reversal of fortune: Clevelandthrives as Sun Belt struggles■ Scholars at the Brookings Insti-tution have looked at economicdata for the last five quarters andfound the economic recovery isreal but uneven — and Clevelandis among the winners.

In the United States, “Output isrising, credit conditions are thawing and firms are hiring,” threeBrookings researchers wrote in aWashington Post opinion piecelast week. However, they notethat “consumer and small-busi-ness confidence remain low bypre-recession standards, which isperhaps not surprising with theunemployment rate at 9%.”

But even among the metropol-itan economies hit hardest by the Great Re-cession, the differences in the speed of recov-ery have been striking, according to the piece.

“Areas heavily linked to the auto industry,such as Cleveland and Detroit, have bene-fited from the resurgence of manufacturingactivity since 2009,” the Brookings researcherswrote. “On average, the unemploymentrates of these urban economies have fallentwo percentage points in the past year —double the national decline.”

Conversely, areas that were hit hard because of their exposure to the housingbust — think Las Vegas or Tampa — “havebeen slow to recover, with their housingmarkets still facing significant structuralproblems.”

Hopkins airport takesinnovation under its wing■ Aviation Week credits Cleveland officials

with pursuing an innovative strategy to retain air service at Cleveland Hopkins International Airport in the wake of theContinental/United merger.

“In order to retain its hub, the GreaterCleveland Partnership, the largest chamber

of commerce in the metropolitanarea, has created the Air ServicesDemand Task Force,” the maga-zine noted. “This group is devotedto working with local businessesto raise demand for travel fromHopkins. It also works to raiseUnited Continental’s yields byworking with local business leadersto increase demand.”

Aviation Week said Hopkins,unlike some other airports, “hasalways been an origin-and-desti-nation (O&D) market, with 72%of its 10 million annual passen-gers from the local area.”

Airport director Ricky Smith,an ex-officio member of thegroup, told the magazine, “We

need to create an environment in which air-lines experience high yields on routes.”

JCU, CWRU near head of theclass in entrepreneurship■ Northeast Ohio is home to two of the 50best undergraduate entrepreneurship pro-grams in the country, according toBloomberg Businessweek.

The magazine each year ranks under-graduate business programs in a dozen specialty areas, such as operations manage-ment, ethics, sustainability, macroeconom-ics, accounting, financial management andbusiness law. This year, Bloomberg Busi-nessweek added entrepreneurship and in-ternational business to its rankings.

In the entrepreneurship rankings, JohnCarroll University is 43rd nationwide andCase Western Reserve University is 50th.

FILE PHOTO/MARC GOLUB

Cleveland Hopkins In-ternational Airport di-rector Ricky D. Smith


Together.It Starts Here.

Here is where steel starts. Here is where Cliffs Natural Resources Inc. (NYSE: CLF, Paris: CLF) furthers it’s position among the world’s top iron ore producers. Here is where acquiring Consolidated Thompson Iron Mines Limited boosts Cliff’s capacity to help meet the burgeoning demand for steel everywhere. Together. It starts here.


Rumor has it the weather in Cleveland will get better. Be prepared.

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