crain's cleveland business

By STAN [email protected]

Drive along Pearl Road from Cleveland throughStrongsville. Prepare to get overwhelmed by the numberof empty stores you see as the long-established shop-ping corridor becomes better known as U.S. Route 42down Brunswick way.

That profusion of empty stores epitomizes the souroutlook for empty retail space in the region for KeithHamulak, a specialist in retail real estate at the Cleve-land office of CB Richard Ellis.

Mr. Hamulak said the drive reflects the increase inempty store space seen inCB’s annual retail survey,which he and four colleaguesproduce; the situationworsens as one heads from Cleveland and Akron innersuburbs to outlying areas.

The just-completed survey shows retail vacancy inNortheast Ohio climbed to 12.49% effective March 1 from10.34% in last year’s statistics. Mr. Hamulak and his colleagues do not expect the retail vacancy to worsen beyond this. However, the survey reveals what a punchthe recession dealt the region’s shopping centers.

The volume of empty retail space climbed a whopping22% over the last year, to 9.6 million square feet from 7.9million square feet a year ago. Retailers shed 1.7 million

$1.50/MARCH 22-28, 2010Vol. 31, No. 12

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Avon’s incometax base up as neighborstoil with losses Firms say governmentfriendly to businesses

INSIDE: Retail vacanciesthroughout NortheastOhio counties have beenbuilding. Page 8

INSIDENow that’s the ticket

New retailvacancynumbersdistressingSurvey shows glut of empty space inNE Ohio; observers predict turnaround

The Cleveland Browns are tellingformer season ticket holders thatthey can receive full credit for previ-ous PSLs if they renew by April 15.Read Joel Hammond’s story onPage 12.

See COLLEGES Page 14 KATHY AMES CARR

The new Plaza at SouthPark in Strongsville has many vacant stores.

See RETAIL Page 8

“We’re seeing more private sector applicants because they realizeacademia is one of the few growth areas in the city.”

– Stephanie Weaver (below), district director of talent acquisition, Cuyahoga Community College

FACULTY GOING TO COLLEGES

Northeast Ohio institutions tap accomplished talent pool to bolster staff as enrollment levels swell

By SHANNON [email protected]

Though their tuition bills haverisen, many local college students might be getting morefor their money thanks to a weak

economy.As some colleges have set out to hire more

faculty and adjunct professors to handle increased enrollment, they’ve found thatthe recession has enabled them to garner a stronger, larger pool of applicants thanthey otherwise might have seen in healthiereconomic climates.

“It’s a really great time to be hiring,” said Sean Decatur, dean of theCollege of Arts & Sciences at Oberlin Col-lege. “All of our searches are getting a very

JASO

N M

ILLE

R

By DAN [email protected]

Take a little hands-off attitude,add a municipal government that isfast and responsive and mix it allwith an unknown amount of plainluck, and what do you get? The cityof Avon and an income tax base thatgrows even during one of the worstrecessionary years the nation and region have ever seen.

In 2009, the city kept its wits — andtax base — as others around it lostground. In that year, Avon actually sawits income tax revenues rise by 5.5%, to$9.4 million, according to city financedirector Bill Logan. So far this year,revenues almost are exactly wherethey were a year ago, down by onlyabout $15,000, Mr. Logan said.

“I am happy for the mayor ofAvon. But, his situation is extremelyunusual. Virtually nowhere else inOhio is having the same positive taxrevenue experience right now,” saidCleveland economist George Zeller,who tracks tax and employment datafor Cuyahoga County and other localgovernments.

Mr. Zeller said Avon’s performanceis even more impressive considering itis located in Lorain County, which hesaid has been one of the hardest hitcounties in Ohio, losing more thanhalf of its manufacturing jobs since2001, including a 7.8% loss in 2009alone.

“By inference, it is very bad news forLorain and Elyria. If Lorain County is

See AVON Page 19

20100322-NEWS--1-NAT-CCI-CL_-- 3/19/2010 4:27 PM Page 1

22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 22-28, 2010

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The Great Lakes Expo Center is the newestvenue to join Northeast Ohio’s meeting andconvention industry. Event planners say theregion is not oversaturated with space, andthat having a variety of facilities will foster industry growth. We explore the market in our Meeting and Event Planner section.

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BELABORING THE POINT

Year Ohio U.S.2009 14.2% 12.3%

2007 14.1 12.1

About 685,000 Ohio workers in 2009 belonged to a union, accounting for14.2% of the state’s work force, according to data from the U.S. Bureau of Labor Statistics. The unionized work force percentage was the same as 2008,though it’s quite a bit off from 1989, the first year for which comparable statedata were available, when Ohio’s union membership rate was 21.3%. The Ohiorate last topped 20% in 1993.

Members of unions as a percent of the work force in the United States and Ohio, 1999-2009

2005 16.0 12.5

2003 16.7 12.9

2001 17.6 13.3

1999 17.9 13.9

SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.ORG


MARCH 22-28, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

THE WEEK IN QUOTES“It’s a really great timeto be hiring. All of oursearches are getting avery large number ofapplicants.”— Sean Decatur, dean of the College of Arts & Sciences, Oberlin College. Page One

“I’m getting to knowthe cultural partnerswho work with usand I also want to getto know the commu-nity leaders ... so I canform a picture ofCuyahoga County.”— Karen Gahl-Mills, executive director, Cuyahoga Arts & Culture. Page 6

“It’s not just aboutcashing that check. …It’s about building arelationship that’sable to support what-ever your financialgoals are.”— Poppie Parish, KeyBank seniorvice president of community development banking. Page 15

“My customers stuckwith me; they had myback through thesedifficult times. … Ifeel like I should dothe same with mypeople.”— Russell Rybka, president ofExpress Lane Transportation Inc.Page 16

Lakewood building in bad placeSuburban office tower faces higher vacancy,is latest property to be returned to lenderBy STAN [email protected]

Lakewood Center North, thetallest rental office building in theCleveland suburbs, is the lateststructure to join the growing list oflender-owned suburban officeproperties.

The Tomorrow Fund, a Germaninvestment fund that buys U.S.properties and owned the 15-floortower through Lakewood TomorrowVIII Fund LP, on March 2 surren-dered the building to CWCapital Asset Management of Washington,D.C. , according to a “deed in lieu offoreclosure” filed in Cuyahoga County.

Lakewood Tomorrow VIII acquiredthe building, 14600 Detroit Ave. inLakewood, for a healthy $14.45 million in January 2007 from BGKGroup of Santa Fe, N.M. The originalloan that Lakewood Tomorrow usedto buy the building was for $8.5 million,according to county land records.

The transfer to the lender occursas the outlook darkens for the258,000-square-foot LakewoodCenter North.

In June, it will lose its largest tenant,the United Transportation Union,

which will move to a North Olmstedoffice complex, emptying more thantwo floors, about 50,000 square feet.Realty data provider CoStar reportsthat the structure currently is just 4%vacant.

Robert Nosal, managing director ofCleveland’s Grubb & Ellis brokerageoffice, said his company will continueto manage and lease the building for CWCapital, as it did for the priorowner. Mr. Nosal said CWCapitalmanagers have not told him if they

STAN BULLARD

CBiz sellsIT divisions to refocus operationsFirm commits to providingcore professional services

By CHUCK [email protected]

CBiz Inc. doesn’t want to be in thetechnology business, but other localcompanies do.

The Independence-based busi-ness services provider has sold twoof its information technology busi-ness units to other companies withoffices in Northeast Ohio, and it istalking to another local companyabout buying another IT division.

CBiz is selling the three businessesin an effort to put more focus on itscore professional services, which include accounting, tax and other financial services, employee benefitsmanagement and physician practicemanagement, said Lori Novickis, director of corporate relations for CBiz.

The company earlier this monthsold the IT consulting division of itsCBiz Technologies unit to InterDynSocius, a Dublin-based consultingfirm with a Brecksville office. It alsosold its CBiz Network Solutions unit,which sells IT repair services andphone systems to businesses, to ITservices firm Thinsolutions of Lake-wood. None of the companies woulddisclose terms of the deals.

CBiz also is working to sell an ITstaffing business that operates underthe CBiz Technologies name. Amongthe potential buyers it has talked tois data center maintenance firm ParkPlace Technologies of Chagrin Falls.

Ms. Novickis noted that the threetechnology businesses generatedabout $13.5 million of the $739 millionin revenue that CBiz received in 2009.

“We were never a big tech company,”she said.

The purchases will have a biggerimpact on the companies buying thebusiness units.

Thinsolutions is keeping nine of theroughly 20 employees who worked forCBiz Network Solutions, which wasbased in Mayfield Village. As part ofthe purchase, the Lakewood company,which already employed 30, will gain the ability to sell traditional and Internet protocol-based phone

See CBIZ Page 8

See LAKEWOOD Page 19

INSIGHT

TICKETS TO RIDE

Akron-Canton airport’s fares, whichtypically are lower than Hopkins’,

help passenger levels take off

By JAY [email protected]

Richard Knoth’s friend had tobe in Atlanta early last Tues-day, so he gave him a lift to theairport.

The Cleveland lawyer got his friendfrom Shaker Heights to the Akron-Canton Airport in time for a 5:30 a.m.direct Delta Connection flight to Harts-field-Jackson Atlanta International Airport.

“Akron-Canton had the first flightout,” said Mr. Knoth of the airport inSummit County, which is 25 minutesand 25 miles farther from ShakerHeights than the busier ClevelandHopkins International Airport. “Yousee people using it more and more.

“My kids use it all the time,” he contin-ued. “Sometimes the (departure) timesare pretty decent and the fares are unbe-lievable.”

Though airline fare structures arecomplex and highly volatile, and theprice gap will be narrower or wider forany given itinerary, the Baker Hostetlerattorney concisely summed up the

See AIRFARE Page 22

20100322-NEWS--3-NAT-CCI-CL_--.qxp 3/19/2010 4:23 PM Page 1


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NGNGNGN Volume 31, Number 12 Crain’s Cleveland Busi-ness (ISSN 0197-2375) is published weekly, exceptfor combined issues on the fourth week of May andfifth week of May, the fourth week of June and firstweek of July, the third week of December and fourthweek of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2010by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $1.50. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. (888)909-9111.

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Community nonprofitplants seeds for market

By JAY [email protected]

With spring comes planting seasondown on the farm, which leads to theopening of farmers’ markets all acrossNortheast Ohio.

This spring also includes theplanting of an idea for a new retailproduce market that would breathelife into what was once one of Cleve-land’s busiest retail intersections.

Maingate Business DevelopmentCorp., a nonprofit community devel-

opment group, has won city approvalof a master plan for Maingate MarketPlace, a 20,000-square-foot producemarket at East 55th Street and Wood-land Avenue, once a thriving Jewishand then African-American neigh-borhood. Today, the area is largelycommercial and industrial, with littleretail, only two gas stations and several fast food restaurants.

Michael May, executive director ofMaingate, envisions an open-airbuilding that would be a fair weatherfarmers’ market, flanked by year-

round enclosed structures. He wouldlike to assemble a 12-acre site for themarket at the southwest corner of theEast 55th-Woodland intersection,which now is a vacant patch of land.

Project tenants could include a retail presence for some of the 40-pluswholesale food businesses in the area,in addition to regional farmers. Thewholesale firms have gravitated to thearea because of the nearby NorthernOhio Food Terminal, the 81-year-oldcentral receiving and distribution center for produce in the region.

“Hopefully, we will provide theproducts for the marketplace,” saidJoe Cavalier, president of Cavalier,Gulling and Wilson Inc., a wholesaleproduce firm at the food terminal.

Mr. Cavalier also is a member of theMaingate board of trustees. Maingateis a 20-year-old development corpora-tion that serves the business needs of500 businesses in a five-square-milearea that stretches from the Innerbeltsouth of downtown and WoodlandAvenue and east to East 93rd Street.

The idea for now is just a plan. Mr.May said the concept is not far enoughalong to be shopped to developers. Ac-ceptance by the city of Cleveland’splanning commission, which hap-pened on March 19, is a first step.

Cleveland planning director RobertBrown said in an e-mail that the Main-gate plan to expand on the producebusiness is consistent with the city’splan to build on existing assets.

“The proposed produce market is agreat way to leverage the presence ofthe wholesale food terminal to createadditional jobs and to make fresh produce more readily available to cityresidents,” he said. “The developmentof a produce market near East 55th andWoodland also is consistent with thecity’s initiatives to make fresh, healthyfood more available to local residents,particularly those who now have limited access” to such food.

Mr. May hesitated to put a price tagon the project, which would includeland assembly as well as construction,but he said it could be a $30 millionundertaking if all he envisions comesto pass. He said the city owns fiveacres, and six other parcels are ownedby six different owners.

Beyond the first phase, Mr. Mayimagines a new refrigerated ware-house, a drug store and, if all goes well,restaurants and even a cooking schoolin a building now owned by the Cleve-land Metropolitan School District. ■

Proposed open-air center could benefit Cleveland


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Cedar Point is the perfect place for a company outing! It’s affordable, and easy to plan too. We do all the work for you.

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Cleveland new home for plastics eventCleveland next month will play

host to the North American debutof an established European confer-ence focused on how plastics are enabling the design and develop-ment of the next generation of advanced medical devices.

The event, “Plastics in Medical Devices 2010,” kicks off April 12with a pair of concurrent, afternoonworkshops at LaCentre conferencecenter in Westlake, followed by a 30-speaker conference program April13 and 14.

The event’s organizer, the Akron-based Plastics News Global Groupof Crain Communications Inc.,chose to import the event fromBrussels, Belgium, to tap into bothNortheast Ohio’s growing high-techmedical business and the state’sstature as the nation’s second-largest maker of plastic products.

“Plastics in Medical Devices2010” aims to bring together allsegments of the supply chain underone roof for two intensive days. Participants will include polymerand equipment suppliers, product designers, plastics processors,medical device makers and phar-maceutical company end users.

Numerous organizations based in Northeast Ohio are participating,including the Cleveland Clinic,Frantz Medical Development Ltd.,Parker Hannifin Corp. and BalanceProduct Development Inc. So arehealth care giants such as Johnson& Johnson and GlaxoSmithKline.

The two-day conference costs$795, and a combination workshop/conference discount is available. Full program and sponsorship details are online at www.plasticsinmedicaldevices.com.

Arts leader navigates landscapeNew exec of Cuyahoga cultural group drawsup future plans, becomes familiar with regionBy SHANNON [email protected]

Karen Gahl-Mills keeps amakeshift calendar on the wall infront of her desk.

At the bottom of a yet-undefinedplan for the next six years isthe phrase “2016-Reautho-rization.” It’s a reminderthat one of her ultimategoals is to convince Cuya-hoga County voters to renew a 10-year cigarettetax that supports arts andcultural organizations.

“It’s my job to remind(voters) that they did some-thing cool in 2006 and to let themknow that those public tax dollars arebeing used to make their communitya better place,” said Ms. Gahl-Mills,who last month became executive director of Cuyahoga Arts & Culture,the group whose trustees determinewhich organizations and artists receive the cigarette tax money from apool of applicants.

Ms. Gahl-Mills, who most recentlyspent four years as CEO of the Syra-cuse Symphony Orchestra, will begin moving toward that goal witha four-step plan that essentially laysthe foundation for the next six years.First, she will become reacquaintedwith Greater Cleveland after leavinghere upon graduating from WestlakeHigh School in 1986.

“I’m getting to know the culturalpartners who work with us and I alsowant to get to know the communityleaders, business leaders and politicalleaders so I can form a picture of

Cuyahoga County,” Ms. Gahl-Millssaid. “The picture I have is old.”

Though she’s still studying the region’s economy, she said it resem-bles Syracuse, a city that has lost a lotof manufacturing. And like Syracuse,Cleveland seems to have difficulties

recruiting and retaining aquality work force, said Ms.Gahl-Mills, who studiedmusic at DePaul Universityin Chicago.

Though the presence ofarts and cultural organiza-tions is known to help inthe talent quest, Ms. Gahl-Mills wants local businessleaders to tell her what else

Cuyahoga Arts & Culture can do tohelp them. She wants to understandthe challenges they face.

Ms. Gahl-Millsalso will need tofamiliarize herselfwith how publicprocesses affectnonprofit andfor-profit institu-tions, said ThomasSchorgl, presi-dent and CEO ofthe CommunityPartnership forArts and Culture,which provides services for local artsand cultural organizations and acts as a consultant to Cuyahoga Arts &Culture.

“As a public grants maker, there’s awhole set of requirements that areabout transparency, equity and fair-ness,” Mr. Schorgl said. “It’s importantwhen you’re the head of a publicagency to be able to communicate ona regular basis with institutions, indi-viduals and groups of individuals” inand out of the arts and cultural sector.

Cigarette tax a sparkAs she learns more about Cuyahoga

County, Ms. Gahl-Mills also plans tospread the word about Cuyahoga Arts& Culture and the impact the cigarettetax has had on the community.

“I think it’s a story that we need totell,” she said. “It’s important forpeople to sit up a little straighter andsay the arts are not extra,” but rathera vital part of the local economy.

So far, the tax has generated $48

million in three years to supportmore than 100 organizations and 40individual artists. A fellowship programlets individual artists completedream projects, Ms. Gahl-Mills said.

“It allows them to innovate andtake risks that, in the day-to-day lifeof trying to keep it together, wouldn’thave happened,” she said.

The tax also has enabled arts orga-nizations to break out of the mold.For example, the Dobama Theatre inCleveland Heights has received twogrants from the tax totaling about$54,000.

The money was used to produce plays by local playwrights who“put an artistic voice to some of thelocal, specific issues” in Cleveland,such as foreclosure, negativity andbrain drain, said Dianne Boduszek,managing director of Dobama.

Those plays were followed up bycommunity forums with local government leaders discussing thoseissues, Ms. Boduszek said.

The cigarette taxalso has been alifeline in a reces-sion that couldhave caused manyarts organizationsto go under, Ms.Gahl-Mills said.

Though flagshiporganizations suchas the ClevelandMuseum of Art,PlayhouseSquare

and the Cleveland Orchestra likelycome to mind when people think ofthe arts, Cuyahoga Arts & Culturefunds smaller arts groups as well.Ms. Gahl-Mills said she wants people to realize how those groupsare using the arts to boost variouspockets of the community andCuyahoga County as a whole.

For instance, Ms. Gahl-Millswants people to understand the impact of an after-school music program on a neighborhood. For herpart, she wants to gain a deeper understanding of the changes the tax has enabled and whether thechanges have made a permanentdent in the community.

Mr. Schorgl said he believes Ms.Gahl-Mills is on the right track in herfirst weeks on the job and, with herpropensity toward research andanalysis, she can achieve her goal ofrenewing the cigarette tax.

“I think she’s got the chops to doit,” he said. ■

Gahl-Mills

“It’s important whenyou’re the head of a public agency to be ableto communicate on aregular basis with institutions ...” – Thomas Schorgl, president andCEO, Community Partnership forArts and Culture


“We’ll just continue oper-ating as we have. We do provide services butwe just won’t be able toenhance them.” – Stephanie Sutton, director of financial aid services, LorainCounty Community College


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Stimulus for community colleges reducedTri-C mobilizes capital campaign as federal government set to distribute less grant moneyBy SHANNON [email protected]

Once promised $12 billion in federal stimulus money, communitycolleges nationwide now are slated to get only $2 billion for newprogramming, making it more difficult to expand and enhanceprograms that would have helpedimprove student success.

Congress announced last weekthat the American Graduation Initiative, which would have provided$12 billion in grants to communitycolleges, would not be included inthe Student Aid and Fiscal Respon-sibility Act, which would overhaulthe student loan program. This act is still being debated and couldbe part of the health care reformbill.

After heavy lobbying by theAmerican Association of CommunityColleges and their members, Congress instead chose to make $2 billion in grants available to community colleges through theTrade Adjustment Assistance Act.The money will be distributed evenlyover four years, said David Baime,senior vice president of governmentrelations at the American Associa-tion of Community Colleges inWashington, D.C.

Under the act, community

colleges will be able to apply forgrants to fund programs that willhelp retrain dislocated workers, hesaid.

Though $2 billion is a fraction of the initial $12 billion pot, he saidthe association is viewing the announcement as a victory forcommunity colleges because some-thing is better than nothing.

“We’d rather have $10 billionthan $2 billion, but this is good,”Mr. Baime said.

However, local community colleges said the diminishedamount of grant money will make itharder for them to provide addi-tional services to an increasingnumber of students.

“It’s a blow to higher education ingeneral,” said Craig Foltin, execu-tive vice president of administrationand finance at Cuyahoga Commu-nity College.

Tri-C had planned to apply for $2million to $3 million to expand programs and add new technologyand equipment, specifically in thenew health careers center set toopen in January 2011 in HighlandHills, he said. Now, initiatives suchas adding counselors and providingprograms at additional times likelywon’t happen, he said.

“We’re still providing everything,but we would’ve liked to have

expanded things, maybe reacheddeeper into the (high) schools,” Dr.Foltin said. “We could have expandedprograms like health careers morebroadly across our three campuses.”

Tri-C instead will launch a capitalcampaign to raise money for newequipment, he said. Though an exactamount has not yet been deter-mined, he said it would be at least $5million over two years.

“We easily have $15 million inneeds that we could reach out for,”Dr. Foltin said. “The needs are limit-less here.”

For instance, he said the newclassroom building in Westlakeneeds to be equipped and new com-puterized equipment used to trainpeople for various trades is neededto replace manual machines.

“These are things we used to buynormally in our operating budgetbut, with the state budget cuts, we’vebeen unfunded in all of our enroll-ment growth,” Dr. Foltin said.

Tri-C’s enrollment jumped about16% from fall 2008 to fall 2009, butcounty property taxes have declinedand state support only has remained

Barberton firmacquires GE units

Babcock & Wilcox PowerGeneration Group Inc. inBarberton said it has

signed a contract with the GE Energy division of GeneralElectric Co. to acquire for anundisclosed price its electrostaticprecipitator and emissions moni-toring business units.

The B&W unit, a part of McDermott International Inc.,said the products and servicesit’s acquiring are used to monitorand control particulates and otheremissions from power plants,factories and other facilities.

The two GE Energy businessesemploy about 220 at offices inKansas City, Mo., Folkston, Ga.,Newport News, Va., and Hatfield,Pa., in the United States, as wellas locations globally.

Richard L. Killion, president andchief operating officer of B&W’sPower Generation Group, saidthe units “will be a valuable addi-tion to our strategic growth plan.”

Babcock & Wilcox Power Generation Group has been busythis month. On March 10, it an-nounced it has formed a jointventure with Indian energy-envi-ronment products companyThermax Ltd. to build highly effi-cient boilers and pulverizers forthe Indian utility boiler market.

ON THE WEB Story from www.CrainsCleveland.com.

steady, he added. Lorain County Community

College saw its enrollment spike 18%in the same time period, but it hasnot received additional operatingfunds, said Stephanie Sutton, directorof financial aid services at LorainCounty Community College.

The college had hoped to boostservices to retain students and to prepare them for graduation, but that likely will not happen, shesaid.

“We’ll just continue operating aswe have. We do provide services butwe just won’t be able to enhancethem,” Ms. Sutton said. “We won’tbe able to be creative and innovativewithout that new money.”

Morris Beverage, president ofLakeland Community College, saidhe was hoping to get grants thatwould fund programs to help students to be successful in school.He said many Lakeland students arereturning to school after having beenout for a long time, while others are single parents who are working multiple jobs.

He said Lakeland will try to fundnew and enhanced programs withfoundation grants, private donationsand state and federal appropria-tions.

“Everyone is looking for how theycan access the funds to do what theyneed to do,” Mr. Beverage said. “Tonot have that (federal stimulus)funding is a significant disappoint-ment.” ■


square feet of additional space lastyear — enough to more than fill West-field SouthPark mall in Strongsville.

“When I first saw it, I said, ‘Whoa!’ Iwas surprised,” Mr. Hamulak said ofthe huge increase in the amount ofempty selling space. “This says therewere a lot of stores that were not really needed. There was saturation inmultiple retail segments. In this down-turn, there are no winners, onlylosers.”

Pain all aroundNo winners, indeed. Medina

County’s retail vacancy at 15.4%, upfrom 9.14% a year ago, tops that of anyof the eight counties in CB’s survey.

The reason for that, Mr. Hamulaksaid, is the increase in the number ofempty stores along U.S. 42 inBrunswick in Medina County. Retailershave either shut down or gravitated tostronger locations near Interstate 71 ornear the Kmart Supercenter on U.S. 42near downtown Medina, an area thathas boomed the past 15 years.

David Browning, CB managing director, said that most of the pastdecade retailers and shopping centerdevelopers followed newly builthousetops for new locations, locally aswell as nationally. As a result, some ofthe outlying centers are suffering in thedownturn, depending on the economicstrength of the surrounding area.

In Medina, older shopping centersand smaller stores along the county’straditional market street — U.S. 42 —felt the pain of the county’s rapid retailexpansion. Lake and Lorain counties,which have had considerable recentretail growth, also logged high vacan-cy numbers, increasing to 13.59%from 10.19% a year ago in Lake, andactually falling to 13.12% from 13.9% ayear ago in Lorain.

In Portage County, vacancy climbedto 12.75% this year from 9.3%, primarilydue to added vacancy in Streetsboro,where shopping center developmentboomed the last decade and Walmartshed one store for a bigger one, leaving the old one sitting empty twoyears later.

Vacancy in Geauga County climbedless, to 10.56% this year from 9.18% ayear ago, which Mr. Browning attrib-utes to the moderating impact of addi-tional leasing at Marketplace of FourCorners in Bainbridge.

Within Cuyahoga County, which


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CBiz: Firm’s units lost money

systems, CEO Michael Fischer said.The acquisition also gives Thinso-

lutions a whole new list of clients towhom it can sell its IT services, whichare more focused on preventivemaintenance and network monitoringthan CBiz Network Solutions’ services. Such synergies should helpThinsolutions double its revenue bythe end of February 2011, he said. Hedeclined to give revenue figures forthe company.

Likewise, Socius, which employs 65people, plans to consolidate the 20employees in its Brecksville officewith 26 former CBiz Technologiesemployees this May, once the com-pany finishes renovating 6,000 squarefeet of office space on West SnowvilleRoad, said Socius marketing coordi-nator Julie Stankey. Socius decided tolease more space in the new building,located just down the street from its

current 2,858-square-foot office, afteropting to buy the CBiz unit, Ms.Stankey said.

The acquisition will give Socius abroader geographical footprint, as itwill retain the CBiz offices in Memphis, Kansas City and northernCalifornia. Most of the unit’s employees joined Socius, though Ms.Stankey declined to confirm howmany did not.

The acquisition should be a goodfit, Ms. Stankey said: Both companiesprovide IT consulting services, specializing in Microsoft Dynamicsand other business software prod-ucts, and Socius over the years hasgrown familiar with CBiz’s work andits people.

“We’ve been in the Microsoft Dynamics business for 25 years, andCBiz has been a major player in thatbusiness for about as long,” she said.

Both CBiz Inc. and Park Place

Technologies confirmed that they are discussing the prospect of Park Place,which is looking at several possible acquisitions, buying the IT staffingunit within CBiz Technologies. Thetwo companies target some of thesame customers, but Park Place hasyet to decide if the company would bea good fit, said marketing managerMegan Tobin-Jones. The growingcompany, which employs about 100 inChagrin Falls and 170 nationwide, islooking at several possible acquisi-tions, but most are focused on datacenter maintenance.

Taken together, the three units lostmoney each of the past two years, andthey weren’t big enough to warrantmore investment, according to state-ments CBiz Inc. CEO Steven Gerardmade during a conference call regarding the company’s results forthe fourth quarter of 2009.

Ms. Novickis described the units as“good businesses” that were hit hardby the recession. “In a down economy… clients are putting off or cancelingexpansions and upgrades,” she said. ■

continued from PAGE 3

Retail: Malls strongest performerscontinued from PAGE 1

County 2006 2007 2008 2009 2010

Cuyahoga 7.06% 8.61% 10.37% 10.75% 13.15%

Geauga 11.00 20.37 8.38 9.18 10.56

Lake 4.90 6.10 8.87 10.19 13.59

Lorain 11.60 12.52 11.59 13.90 13.12

Medina 9.90 7.08 5.40 9.14 15.40

Portage 3.70 10.2 11.45 9.30 12.75

Summit 8.60 8.96 8.89 8.62 8.39

SOURCE: CB RICHARD ELLIS *— 2010 FIGURES EFFECTIVE MARCH 1; ALL OTHERS EFFECTIVE JAN. 1.

WIDE OPEN SPACESThe following figures show percentage of retail vacancy in Northeast Ohio between2006 and 2010.*The overall figure includes Stark County.

Overall 7.50 8.76 9.49 10.34 12.49

has nearly half the 77 million squarefeet of retail space that CB surveys inthe region, the city of Cleveland hasthe highest vacancy rate, 15.44%,while the east suburbs of CuyahogaCounty have 14% vacancy and thewest suburbs have 11.8% vacancy.

Building blocksThe steady drumbeat of local retail

closings, which included 11 Holly-wood Video and Movie Gallery stores,14 InkStops, three Kmarts and others,grew to this crescendo of vacancy.

One factor that typically adds empty selling space to the market —construction of new shopping centersand freestanding stores — provedeven less a factor in the vacancy riselast year than usual.

CB estimates construction of suchspace fell 21% this year, to 541,900square feet, from 684,568 square feetthe prior year. Much of that figurestems from expansion at existingstores, such as Walmarts inStrongsville and Medina.

However, the small building figureshows how much the shopping center industry continues to veerfrom historic norms. Through priorrecessions, it was typical for construc-tion in the category to top a millionsquare feet annually, Mr. Browningsaid. Developers are not adding spacebecause construction loans are notavailable, even if they found new locations for retailers.

CB also analyzes selling space bytype of center. Regional centers,which have two anchors and rangefrom 300,000 to 500,000 square feet,

are in the worst shape, with 19.2% vacancy. Neighborhood centers —which range from 30,000 to 100,000square feet in size are home to grocery stores and retailers meetinglocal market needs — are in almost aspoor a condition with a 16.59% vacancy rate. Conversely, enclosedmalls — which CB classifies as super-regionals with 600,000 to about 1.5million square feet in size — have thebest occupancy with just 6.86% vacancy.

“Malls remain the strongest per-formers,” Mr. Hamulak said. “Theyare the dominant centers in theirtrade area. They have the anchors.”

What’s in storeFor all the bad news, Messrs.

Hamulak and Browning believe theupswing in retail realty is beginning.

“Our tenant reps are busy,” Mr.Browning said of retail brokers whospecialize in representing retailersrather than properties. However, hesaid, part of the action stems from retailers seeking to land better loca-tions, perhaps at a lower rent.

Likewise, Mr. Hamulak looks forimprovements this year.

“Everyone has recognized wherewe are at. We’re in a recession,” hesaid. “It’s not that anyone is lookingfor a huge influx of activity. But every-one, lenders, retailers and owners, arefocused on making things happen.”

The CB survey covers 406 retail buildings of more than 50,000 squarefeet in size in Cuyahoga, Geauga,Lake, Lorain, Medina, Stark, Summitand Portage counties. ■


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Those planning Cuyahoga County’stransition to a new form of government would do well byreading — and re-reading — this

quote from Summit County ExecutiveRuss Pry in his annual state-of-the-countyspeech, delivered last week to a gatheringof civic, business and government leaders:

“I ask each of you to join meover the next year and find apartner. Go out and look for anagency, a government or a busi-ness that you can work with tobuild a new partnership.

“Our survival depends onthis.”

As we begin the process ofchanging Cuyahoga County to asimilar government structure ofan elected county executive andcouncil, collaboration should be a central guiding principle. I know thetransition team has been saying thateconomic development is the priority,but changing the ways — and costs — of how governments deliver servicesshould be every bit as important.

How many more studies do we need

that show how many more school districts we have than other states ofsimilar population? How many more experts have to point out our crazy-quiltduplication of services? How many moreschool systems have to cut busing andforeign-language and honors programsbecause of failed tax levy votes?

Can you imagine how muchmore we could have gained fromthis massive federal stimulusspending if the grants had beendependent on service collabora-tion and stopping this duplica-tion of government?

For example, I live in MontvilleTownship, just a couple milessouth of Medina’s historic square.Our township has a police force,as does the city of Medina, as do

the other two townships that abut Medina.There’s also the county sheriff’s depart-ment. What sense does that make?

Recently, Hiram College presidentTom Chema, writing an opinion pieceon this page, opined that we have toomuch government, and even more importantly, too many elected officials.

And too many of those elected officialsare in public service so they can pile uplucrative public retirement credits.

The fact is we have way too many gov-ernmental entities doing the same thingswithin a few miles of each other, and it’s thatway across Ohio. We know we have toomany school districts, and we let it stay thatway because nobody wants to lose theirs.

Regional problem-solving is coming,and the question is whether we wait forit and then try to clean up the mess, ordo we stay ahead of the curve and makeit work in productive ways?

In his recent state-of-the-city speech,Cleveland Mayor Frank Jackson repeatedhis call for some sort of countywide approach to public education. And whilethat might terrify those who fled to thesuburbs to get away from a certain racialor ethnic presence, the fact is that Cleve-land has a handful of schools that are sogood they should be drawing more students from other parts of the county.

We must face these problems and cre-ate solutions that involve us all. And weshould do it before it’s our last hope ofavoiding economic and/or social collapse.


It’s alarmingH

ear the alarm bell in the distance? It’ssounding a warning to the executive andlegislative branches of Ohio government.Its message is that the state will face a

massive budget deficit once federal stimulus moneyruns out next year, and that elected officials alreadyshould be working on ways to deal with it.

Ohio isn’t the only state in the Union that is staring into a financial abyss — far from it. But Ohiohappens to be the state where we and our readerslive and do business. And we’re concerned that thegovernor and the Legislature lack a sense of urgencyin figuring out how to contend with a deficit thateasily could total several billions dollars in the two-year budget period that begins July 1, 2011.

More than $4 billion in federal stimulus moneythat Ohio was promised last year helped fill an $8billion gap in the current two-year state budget.President Obama’s generosity gave state leaders thegift of time to get serious about coming up with aplan for addressing a problem that isn’t going to goaway just by waiting it out.

Our view is that they’re frittering that gift away.Late last summer, state legislators created a

six-member Budget Planning and ManagementCommission to take on what they knew would be amammoth challenge come 2011. Nearly eightmonths later, that commission has yet to meet.

Ohio’s budget problems aren’t going to be fixedwith a nip here and a tuck there, nor can legislatorsexpect to tax their way to a balanced budget withoutfurther damaging the state economy. Substantive,dramatic changes in the way state and local govern-ments operate are necessary if the governor andLegislature hope to avoid a mad scramble every twoyears to make Ohio’s ends meet.

Such work can’t be done on the fly or up against adeadline. It is going to take the type of deliberate,purposeful effort described by the Brookings Institution think tank and the Greater Ohio PolicyCenter in their recent report, “Restoring Prosperity:Transforming Ohio’s Communities for the NextEconomy.”

The report correctly observes that, because of the ongoing recession, “there is not enough low-hanging fruit left to pluck on the spending and revenue side to close the budget gaps that Ohio andits municipalities will face for the next bienniumand likely beyond.”

“In order to continue to make strategic investments and maintain decent levels of serviceprovision, Ohio will have to do more to encouragemoney-saving or efficiency-enhancing consolida-tion and collaboration between local governments,including school districts,” the report states.

One suggestion the report makes for spurring innovation and savings among communities is using state dollars as carrots, “giving bonus pointsor other means of priority consideration for projectsinvolving multijurisdictional collaboration.” We’resure our elected leaders can come up with manyother ways to improve government efficiency — ifonly they put their minds to it. So, stop wasting timeand get to work.

FROM THE PUBLISHER

AND COUNTING ...

BRIANTUCKER

Government collaboration a necessity

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

Crain’s Cleveland Businessis celebrating its 30th year asNortheast Ohio’s premier sourcefor business news with a special double issue, which willfeature profiles of 30 of themost influential Clevelanders.

As part of the celebration,we also are reflecting on themost memorable events of thepast three decades with weeklypolls — some of which can befound in this space — triviaquestions, online content andvideo interviews.

You can get in on the fun byvisiting CrainsCleveland.com/30thanniversary.

Where do you live now, and why? And where have you lived in the past 30 years?

FRANK ZAGAMIOld BrooklynCleveland, because I’m a policeofficer and until very recently, Ididn’t have a choice in that. Butfor the last 30 years I’ve lived inthe city of Cleveland. I lived inSlavic Village growing up andwent to high school there. I livedin Parma for a couple years, butother than that I’ve moved aroundthe city of Cleveland.

MOLLY ENDERSCleveland HeightsI live in Cleveland Heights, because I have a young daughterand it’s close to my parentsand I work part time, so theybabysit. Before coming back toCleveland, I lived in Chicago.But I grew up in Cleveland, but I went to Chicago for schoolpurposes and I like a big city.

ERIN RODENOLakewoodI live in Lakewood, because it’sconvenient. And for the past 20years, Westlake, Lakewood and(Rocky) River.



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Management feedbackaffects job performanceReport: Communication influences engagement levelsBy GARRY KRANZWorkforce Management

The best way to drive employeeengagement is for managers to accentuate the positive in employeeperformance. The second best engagement approach is to focusperformance discussions on employeeweaknesses. Worst choice: Give nofeedback at all.

That is the synopsis of “The Rela-tionship Between Engagement atWork and Organizational Outcomes,”by Gallup Inc. More than 1,000 U.S.employees were interviewed for thereport. Gallup broke managementstyles into three categories, based onemployee perceptions:

■ Managers who focus mostly onemployee strengths;

■ Managers who focus mostly onemployee weaknesses;

■ Managers who focus on neitherstrengths nor weaknesses.

Thirty-seven percent of employeessay their bosses concentrate onstrengths, while 11% say their managers focus solely on negativecharacteristics. Gallup says 25% ofemployees surveyed fall into an “ignored” category, in which their supervisors address neither strengthsnor weaknesses. Twenty-seven percentof people did not express strong opin-ions about their managers either way.

The differing approaches reflectvarying levels of engagement. Sixty-one percent of employees in the“strengths” group report being engaged in their jobs. Still, 38% ofthose workers remain disengageddespite the positive feedback, perhaps because they believe thepraise is not sincere, according toGallup. About 1% of employeeswhose managers are focused onstrengths are considered to be “actively disengaged,” meaning theymay act out on their job frustration.

By contrast, engagement is consid-erably lower — just 45% — for employees whose managers focusprimarily on negative characteristics.One-third of such workers are disen-gaged. Most alarming: 22% are

deemed to be actively disengaged.The worst engagement scores

can be found in the “ignored” cate-gory, where only 2% of employeesare highly engaged. Fifty-seven per-cent report being not engaged and40% are actively disengaged.

So while emphasizing strengthsgives the strongest boost to engage-ment, even negative feedback isbetter than no feedback at all, according to Gallup.

“We found that it is better formanagers to dwell on some aspectof employee performance — even ifit is a focus on negatives — than toavoid the matter altogether,” saysJim Harter, a Gallup research scien-tist and co-author of the report.

Mr. Harter says negative feed-back “at least lets people know thatthey matter,” while neglecting themcan be far worse.

Engagement — or lack of it — carries huge implications for how wellcompanies achieve their businessgoals, especially amid recession, Mr.Harter said.

“The growth trajectory for compa-nies with highly engaged workers, on average, looks good comparedagainst their competitors. Thesetypes of companies are holding theirown while competitors are droppingoff” on key variables, he said.

Organizations with high engage-ment scores exceed their peers innine areas of business performance,including customer loyalty, profits,productivity, quality, turnover andabsenteeism. For instance, organiza-tions with the highest engagementscores in Gallup’s database have an83% chance of achieving above-average business performance. Orga-nizations at the lowest levels of en-gagement have a 17% chance.

The report is based on Gallup’sQ12 Index, which measures a dozenfactors that are known to affect engagement. ■

(Garry Kranz is a contributing editorto Workforce Management, a sisterpublication of Crain’s ClevelandBusiness.)

WHAT’S COOKING■ For the last year, Corbo’s Bakeryhas been rolling in some moredough.

The bakery in Little Italy beganlast April a partnership with Marc’sgrocery stores that has become sosuccessful, co-owner Selena Corbosaid the shop is looking to expand itsdistribution business.

“We’ve had other local vendorscalling, and we’re looking to distrib-ute to local restaurants as well,” Ms.Corbo said.

The partnership began becauseMarc’s wanted to be a full-servicegrocery but didn’t have a fresh bakery, Ms. Corbo said. So the bakerybegan supplying the Eastgate storein Mayfield Heights with fresh breadand cookies. Nearly one year later,anything from fresh pizza dough tocookies, cakes, pastries and pastasauces can be found in 14 Marc’sstores throughout Northeast Ohio.

“We deliver fresh products toMarc’s seven days a week,” she said.

Corbo’s previously had suppliedproducts to two Rego’s grocerystores that shut down. Pierre’s alsodistributes Corbo’s Italian LemonIce to Heinen’s, and Corbo’s supplies Sidari’s Italian Foods inCleveland with coconut bars andItalian cookies.

The bakery moved two yearsago into a larger space from itsprevious home next door, in whichit had been located since itopened in 1958. Corbo’s is in themiddle of a “huge transition,” withadding cold and hot food to itsmenu, Ms. Corbo said.

■ Constantino’s Market has begunconstruction for an expansion thatshould be complete by early Juneand increase the downtown Cleve-land grocery store’s space by 45%.

The expansion will increase thestore’s real estate by about 4,400square feet, from 9,600 square feet to about 14,000 square feet,said owner Constantine “Costas”Mavromichalis.

When construction is complete,the store will have a salad bar, a largerdeli with more prepared foods and cheese, a larger bakery, an expandedproduce section, aflower case, a beerand soda cave, alarger frozen foodsarea and a gourmetpizza kitchen.

The store also willfeature more caféseating.

The expansion utilizes vacantspace in the back of the store, andone nearby apartment in the Bing-ham Apartment complex for storageand office space.

“We think enhancing the areaand the services we provide will begood for our customers and increasesales,” Mr. Mavromichalis said.

■ Magnolia House was the firstbeneficiary of this year’s Cleve-land Renegade Lunch Project,held March 9 inside Tower City infront of the water fountain.

The lunch project is a pseudo-underground initiative presentedonce a month by Marigold Cateringand Spice of Life Catering.

Magnolia Clubhouse, a Cleve-land nonprofit that provides

services for adults with mental illness, received $400, said JoanRosenthal, founder and owner ofMarigold Catering. For smaller non-profits, the extra cash is a big help.

The Cleveland Renegade LunchProject each month brings a freetwo-course gourmet lunch for thefirst 20 to 25 passersby at a loca-tion that is kept secret until the daythe lunch is announced.

Patrons, in turn, have the oppor-tunity at the end of the lunch to donate money for that day’s desig-nated charity.

The Cleveland catering compa-nies launched thelunch project in2009 and held 10renegades that raisedthousand of dollarsfor nonprofits.

■ Tommy’s inCleveland Heightswas recognized byEsquire as one of the

best restaurants in the United Statesto have breakfast.

“As much a block club as it is arestaurant, Tommy’s has a reputa-tion among locals as a hipster hang-out. Pity. Look past the graybeardWobblies still waiting for Lefty andthe occasional Harvey Pekar sightingand you’ve got genuine dinerchops,” according to the magazine.“Much of the menu is mournfullymacrobiotic, but tempeh tomorrow:For now try some hotcakes toppedwith strawberries and a Matterhornof whipped or sour cream.”

What’s Cooking looks at the businessof Northeast Ohio’s restaurants, brew-eries and wineries. To submit informa-tion, please e-mail Kathy Carr [email protected].

ON THE WEB Check out the What’s Cookingblog on Mondays at www.CrainsCleveland.com.



Browns throw out new incentiveTeam enticing ex-season ticket holders withfull credit for previous personal seat licenses

By JOEL [email protected]

It appears the Browns are becominga bit more fan friendly these days.

The team, which has taken a beat-ing from fans for poor play on thefield, mismanagement off it andwhat fans have called poor customerservice, have extended an offer someformer season ticket holders maynot be able to pass up.

In a letter dated March 9 fromMike Holmgren, the team’s newpresident, the Browns tell non-renewing season ticket holders thatthey can receive full credit for theirprevious personal seat licenses —which can range from $375 to $1,500per seat — and will retain all seniorityand priority seat selection, providedthey renew by April 15. Not bad.

Also, as Crain’s Cleveland Businesswrote in December, the Browns aretouting their new “personal ticketservices representatives,” whichwere first advertised just days after aNovember Crain’s story detailingunrest among season ticket holders.In addition, literature that included

Mr. Holmgren’s letter offers a 15% team shop discount for seasonticket holders.

Browns spokesman Bill Bonsiewiczsaid the team extended the offer to season ticket holders who haven’t renewed over the past threeoffseasons. A Browns ticket official,through Mr. Bonsiewicz, said therehas been call activity on the offer,though as noted above, it’s in its infancy.

“This is an offer that hasn’t beendone very often, that’s for sure,” Mr.Bonsiewicz said.

Of course, there’s a flip side to theoffer: Many fans have held on totheir season tickets for the very purpose of avoiding re-paying a PSLfee if the team rebounded from itspoor performance. The risk to theteam is that these fans may feelabused for their loyalty.

“Generally, the stakeholder youwant to make sure you treat the bestis your season ticket holders,” saidJim Kadlecek, vice president of industry relations at the Sport Marketing Association and chair ofthe Department of Human Perfor-

mance and Sport Business at MountUnion College in Alliance. “You haveto be careful when you put out offersthat devalue the commitment otherpeople are making.”

Painesville native Richard Selby,an outspoken critic of the Browns’PSL policy, told Crain’s in Novemberthat he had heard from fellow seasonticket holders who were consideringnot renewing their tickets and forfeiting their PSL investment. TheBrowns’ latest offer is a step in theright direction, he said.

“I think that is a great move ontheir part to try to get back seasonticket holders who have left,” Mr.Selby said. “I’d love for them to do something along the lines ofadopting a standing policy that youcould choose to not buy tickets forsome period of time without losingthe PSL.”

That practice, he said, would allowpeople with family or business issues, for instance, to opt out oftheir tickets while not losing theirPSLs; it also would put all seasonticket holders on equal footing.

“If I pay full price for mine andyou’re sitting right next to me payinga third of what I paid,” Mr. Kadleceksaid, “I might ask myself, ‘Why am Imaking this commitment if I’m notseeing the benefit to us?’” ■

Indians hope for attendance swing in Ariz.By JOEL [email protected]

In at least one area, the Indianshope for a repeat of 2009.

While last year’s big-league clubunderperformed on the field, itpicked up box-office steam asspring training went along, dramat-ically increasing its attendance inits first season at Goodyear Ballparkin Goodyear, Ariz.

This year’s attendance, though, is off to another rocky start. The Indians, in four games, are averaging3,936 fans per game at the 10,000-seat stadium.

But Indians officials aren’t withouthope, and that’s because of last year’suptick: After averaging 3,762 fansthrough four games in 2009, the Indians ended with a 5,452 averageover 17 games, including five gamesover 6,000 and 10 at 5,000 or more.

Indians director of communica-tions Curtis Danburg said teamsthat play in Arizona’s CactusLeague depend more on day-of-game sales than their counterpartsin Florida’s Grapefruit League dueto the Cactus League’s concentra-tion near Phoenix. Once the Colorado Rockies and Arizona Diamondbacks leave their springtraining home of Tucson after thisseason, all Cactus League clubs willbe within an hour of each other.

That proximity presents fans withmany options, unlike in Florida,where teams are as far as threehours apart.

“In Florida, there wasn’t muchcompetition for us,” Mr. Danburgsaid, referring to the Indians’ formerspring training home in WinterHaven, which is in the middle of thestate. “Here, there are so many opportunities; fans can decide on the

day of the game where to go.”Another Arizona issue the Indians

are keeping their eyes on is the battleover the Chicago Cubs, with the cityof Mesa attempting to keep the Cubsthere as Naples, Fla., makes eyes forthe long-suffering — and very popu-lar — franchise. There currently is abill in the state legislature that wouldimpose taxes on every Cactus Leagueticket sold — including at GoodyearBallpark — as a way to pay for a new,$84 million complex in Mesa.

The Cubs and Mesa officials aretrying to sell the other CactusLeague teams on the benefits of theteam remaining, as other CactusLeague clubs charge premiumprices for games in which they playhost to Chicago.

“We’re watching that, but stayingon the periphery,” Mr. Danburgsaid. “We’re the new guys outthere still.” ■

PHOTO PROVIDED

The Cleveland Browns are becoming more creative in trying to attract fans to the football games. The teamis providing incentives for nonrenewing season ticket holders.


JOB CHANGES

ARCHITECTUREMIDDOUGH INC.: Peter J. Baka tomarketing manager.

EDUCATIONHIRAM COLLEGE: Christine Kohls-Hunder to director of corporate, government and foundation relations;John Coyne to director of alumni relations; Jenifer Warren to assistantdirector of major gifts.

FINANCEFIRSTMERIT CORP.: Randall J.Smith to senior vice president, seniorlender; Angela N. Ward to seniorbanking assistant.

FINANCIAL SERVICENORTHERN OHIO ASSET SERVICESLLC: David McGlynn to operationsmanager.

HEALTH CAREROBINSON MEMORIAL HOSPITAL:Linda Breedlove to vice president,patient care services and chief nursingofficer.

HOSPITALITYTHE INTERCONTINENTAL CLEVELAND: Jennifer Walsh tosales manager. MARIGOLD CATERING: Phil Goldberg to general manager. SAWMILL CREEK RESORT & CONFERENCE CENTER: KellyBrewer to director of sales.

INSURANCEMEDICAL MUTUAL OF OHIO:Kathy Golovan to vice president, internal audit; Steffany Matticola tovice president, individual and smallgroup sales and chief underwriter.

LEGALMANSOUR, GAVIN, GERLACK &MANOS CO. LPA: Meghan B. Kilbane to associate.

MANUFACTURINGFAIRMOUNT WATER SOLUTIONS:Dave Chew to director of sales andmarketing; Dana Cooper to generalmanager. PSC METALS INC.: Brian Carlone


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GOING PLACES

GoldbergWalshBreedlove

MisconishMatticolaGolovan

ZulloDayLinger

to manager, non-ferrous trading. SOUTHERN OHIO SAND: DaveEnglish to engineering and processcontrol manager.

MARKETINGCHARTREUSE INC.: Sara Misconishto designer. INSIVIA MARKETING: Chris Schmittto chief strategist. POINT TO POINT: Scott Moss to director of business development. WHITESPACE CREATIVE: JohnPuglia to director, creative depart-ment.

NONPROFITTHE DIABETES ASSOCIATION OFGREATER CLEVELAND: Holly C.

Brinda to director of advancement.

REAL ESTATETRANSACTION REALTY: BillBehrens and Annie Starks to salesassociates.

SERVICECEFARATTI GROUP: Carmen Petrello to major account represen-tative. THE DROSTE GROUP: Pam Lingerto vice president. INFOCISION MANAGEMENT CORP.:Steve Brubaker to chief of staff;Michael Van Scyoc to chief strategy officer; Michael White tochief technology officer; Bert Turner to vice president, Christianfundraising operations.TRN TECHNICAL: Jim Day to director of contract services.

SE BLUEPRINT INC.: Brittany Langel to new account manager.

BOARDSBUSINESS ADVISERS OF CLEVE-LAND: Arthur Horner to president;John S. Harston to first vice president; Roger S. Vail to secondvice president; James E. Moyse tosecretary; Henry Chisholm to treasurer. CLEVELAND SCHOLARSHIP PROGRAMS INC.: Patrick Mullin (Deloitte & Touche LLP) tochairman; David Inglis to president;George Hawk to treasurer; SanjivKapur to secretary; Sue Tyler tovice chair. FIELDSTONE FARM THERAPEUTICRIDING CENTER: James B. Naylorto chairman; Elizabeth B. Julianoto president; Allen K. Wiant to vice

president.SOUTH POINTE HOSPITAL:Medical executive committee, Dr. Modish Lane and Dr. DennisKane to co-chiefs of staff; Dr.Michael Kalus to vice chief of staff;Dr. Rick Gemma to secretary-treasurer.

AWARDSAMERICAN ASSOCIATION OFCARDIOVASCULAR AND PULMONARY REHABILITATION:Dr. Melissa Zullo (Kent State University) received the Beginning Investigator Award. NAI GLOBAL: Bob Brehmer (NAIDaus) received the 2009 Chairman’sAward.

Send information for Going Places to [email protected].


large number of applicants.”The recession also has benefited

the University of Akron, which hashired 110 new and replacement faculty members since August 2008,president Luis Proenza said.

“We’ve been able to recruit exceptional individuals who mightnot have come in a better market,”Dr. Proenza said.

Cuyahoga Community Collegefound a rich pool of adjunct facultycandidates to help educate 30,325students last September, when enrollment was 16% higher than the26,048 students the college had a year earlier, said Stephanie Weaver,district director of talent acquisitionat Tri-C.

As a result, Tri-C boosted its adjunct faculty staff to 1,075 last September, up 23% from 875 in Sep-tember 2008. Ms. Weaver said Tri-Cchose to hire adjunct professors instead of full-time, tenure-track pro-fessors because the school is unsurewhether enrollment will remain high.

“We’re seeing more private sector applicants because they realizeacademia is one of the few growthareas in the city,” she said.

Many professionals who havebeen laid off are willing to work part-time in hopes that it will lead to full-time employment, Ms. Weaver said.Others are looking to supplement in-comes that might have been reducedduring the recession.

Though Notre Dame College isjust beginning to advertise for morefaculty members, it has received alarger number of applications foradjunct positions from people withimpressive credentials gained inprivate business, said Mary Breck-enridge, vice president for academicaffairs at Notre Dame.

“The lure of money in corporateAmerica has been hard to resist,”she said, but “bad economic timescan be good in the hiring world.”

Hiring has been easy at Ursulineand Lake Erie colleges as well.

In the current school year, Ursu-line College has hired two more faculty members in both its nursingand graduate education programs.The college now has about 85 full-time faculty members, said JoAnnePodis, Ursuline’s vice president foracademic affairs.

In its quest for six more facultymembers since August 2008, LakeErie College has been able to attract“high-quality individuals,” saidScott Evans, its vice president of institutional advancement.

Lake Erie expects to hire evenmore faculty members to add to itsexisting roster of about 50 full-timeprofessors in the next few years as itexpands programs in various math,science and health care fields, Mr.Evans said.

Stagnant faculty salaries havehelped some colleges compete fortop-notch talent because they nowcan hire people they might not havebeen able to afford when the economywas booming.

According to a study released inearly March by the College andUniversity Professional Associationfor Human Resources in Knoxville,Tenn., about 21% of faculty members across the country didnot receive a pay increase in thecurrent fiscal year and another 33%saw their salaries drop.

Schools of thoughtStill, boosting the faculty ranks

can be tricky, Ursuline’s Dr. Podissaid. Schools must provide attrac-tive compensation packages while

continuing to offer affordable tuition, so they must be carefulwhen adding positions, she said.

For that reason, some local colleges only are replacing professorswho leave.

Hiram College has spent the lastseveral years replacing retirees. As aresult, about half its 78 full-timefaculty members are in their firstthree years of service, though all thenew professors have impressivebackgrounds, said Cheryl Torsney,vice president and dean at Hiram.

In the coming years, however, Hiram will be looking for grants fromindividuals, foundations and federalinstitutions to fund additional facultyand program expansions, she said.

“We’ll still be going forward withnew programs, but we’ll just belooking for someone to fund them,”Dr. Torsney said.

Baldwin-Wallace College is con-trolling its bottom line by scrutinizingwhether a faculty member needs to be replaced once he or sheleaves, said Mary Lou Higgerson,vice president for academic affairsand dean.

As student interest shifts to different programs, an empty facultyposition might be switched to amore popular major or department,such as sports management, publicrelations or health care manage-ment, Dr. Higgerson said.

Though the recession causedsome schools to temporarily freezehiring of faculty, those that were able to forge ahead will comeout on top, predicts Akron’s Dr.Proenza.

“There will be a significantly different kind of adjustment,” hesaid. “The places that were able toattract (top-notch) faculty will bethe places you will want to be.” ■


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Colleges: Schools must balance costscontinued from PAGE 1

BRIGHT SPOTSBright Spots is a periodic feature

in Crain’s, highlighting positive busi-ness news in Northeast Ohio. To submit information, please e-mailScott Suttell at [email protected].

■ Case Western Reserve Universityand the Western Reserve HistoricalSociety have agreed to digitize andshare some of their library contents.

The two institutions thisyear plan to launch five

pilot projects with theidea of forming a long-term partnership toshare resources. CWRU

and the historical societywill take inventory of their

digitizing and microfilmequipment, will share cata-

loging tools and will apply for Pellwork/study grants to hire one or twostudent assistants.

“The historical society’s primaryresearch materials overlap withCWRU’s strategic plan initiatives inmany areas,” said John Grabowski,historian and vice president for collections at the historical societyand CWRU’s Krieger-Mueller Asso-ciate Professor of Applied History.“This includes social justice; businessand entrepreneurship; medicine;and histories of the numerous ethnic,cultural, religious and identity groupsin our region, such as the Jewishcommunity and LGBT (lesbian, gay,bisexual and transgender).”

The outcomes of the pilot pro-jects will be examined in September,and the potential for future collabo-

ration then will be discussed.

■ Diabetes Daily, an online supportnetwork based in Cleveland thathelps people with diabetes live better and happier lives, said it hasreached 20,000 registered membersand 2 million annual visitors to itsweb site, www.diabetesdaily.com.

The network started in 2005,shortly after founder David Edel-man met his future wife, Elizabeth,who recently had been diagnosedwith type 1 diabetes. The couple began the network by blogging andparticipating in online discussions.

Today, Diabetes Daily offers peersupport, menu planning, educa-tional resources and managementtools for people with type 1, type 2and gestational diabetes.

■ Eye Lighting in Mentor, a makerof lamps and lighting products, hasbeen selected as the primary lampsupplier for the “Women & Spirit:Catholic Sisters of America” trav-eling exhibition, which is appearingat the Smithsonian InternationalGallery in Washington, D.C.,through April 25.

The 6,000-square-foot display,produced by Seruto & Co. ofPasadena, Calif., tells the history ofthe Sisters’ contribution and devotion to the nation throughstories and personal artifacts. Onestandout of the exhibit is a letterfrom Thomas Jefferson assuringreligious freedom following theLouisiana Purchase.

Ryan Raica, lighting designer onthe project, said the exhibition islit by Super Soft MR16 Halogenlamps from Eye Lighting.

■ Baldwin-Wallace College haslaunched the Institute for Sustain-able Business Practice to helpNortheast Ohioans integrate sus-tainability into their business plans.

The institute will provide consulting services such as auditsand sustainability planning to localsmall businesses and nonprofits andeducational programs for largercompanies. Students will be a big focus of the institute as it looks to infuse sustainability into under-graduate and graduate programs.

The college also will launch anMBA program in sustainabilitynext fall to add to its undergraduatemajor in sustainability.

■ BaseTek, a Newbury Townshipcompany that designs and buildspolymer composite bases and filledweldments for a range of industries,said it recently achieved a milestonein the pump and rotating equip-ment industry: delivery of its 10,000th

nonmetallic polymer concrete base-plate.

That 10,000th baseplate “symbol-izes the steady growth of our com-pany since its founding in 2001,”said Scott Sapita and Tim Marklay,the partners who run BaseTek.

BaseTek last year moved to a new,12,000-square-foot manufacturingplant in Newbury Township.


FINANCEI N S I D E

MARCH 22-28, 2010 CRAIN’S CLEVELAND BUSINESS 15

TAKING EVERYONE

INTO ACCOUNT

Institutions aim to wake up ‘unbanked’ to value of saving money,

dealing in financial mainstream

THE UNBANKED, BY THE NUMBERS WHAT BANKS ARE DOING TO LURE THEM IN

■ An estimated 7.7% of U.S. households,about 9 million, are unbanked. At least 17 million adults live in unbanked households.

■ An estimated 17.9% of U.S. households,roughly 21 million, are underbanked. (Under-banked households are defined as those thathave a checking or savings account but rely onalternative financial services, such as nonbankmoney orders, nonbank check-cashing services,payday loans, rent-to-own agreements or pawnshops.)

■ Taken together, at least 25.6% of U.S.households, close to 30 million, are either unbanked or underbanked. Approximately 60 million adults reside in these households.

■ Households with income under $30,000

account for at least 71% of unbanked house-holds. In contrast, only 4.2% of households withannual income between $30,000 and $50,000and less than 1% of households with yearly income of $75,000 or higher are unbanked.

■ Households with an annual income between$30,000 and $50,000 are almost as likely aslower-income households to be underbanked.

■ 6.2% of all households in the Cleveland-Elyria-Mentor metropolitan statistical area are unbanked, while 14.2% of the area’s householdsare underbanked.

■ 7.1% of all households in Ohio are unbanked.

SOURCE: FDIC NATIONAL SURVEY OF UNBANKED AND UNDERBANKED HOUSEHOLDS, DECEMBER 2009 REPORT

Many Northeast Ohio banks are reachingout to potential customers who are unbanked or underbanked in an attempt tobolster their customer base and as a service.

Here’s a snapshot of what some localbanks are doing:

■ KeyBank hosts classes at the KeyBank Financial Education Center and through schools,churches and other organizations; the bank also has a low-fee check-cashing service, which charges far less in fees than check cashers.

■ U.S. Bank has a second-chance checkingprogram, a card onto which customers can loadunemployment benefits and other governmentassistance and a rewards program for thoseable to save.

■ PNC Bank, which in 2008 bought NationalCity Bank, has savings and checking accountsthat include no minimum balance and place limitson debit card transactions and ATM withdrawals.

■ Fifth Third Bank also offers classroom training, and has a Goal Setter account, in whichcustomers receive a bonus once a target isreached.

By ARIELLE [email protected]

Not everyone has a bank account.

There are some people — many people, in fact — who deal on the out-skirts of the financial system. They go to

check cashers or payday lenders; they keep theirmoney on their person or under their mattress.

They are, in the words of mainstream financialinstitutions, the unbanked, and efforts increas-ingly are being made to bring these people intothe fold.

From financial literacy courses to special products, banks in this area have been reachingout to the unbanked both to better their own bot-tom lines and as a service to people who mayhave never before set foot in a bank.

For KeyBank, one of the banks doing the mostoutreach, it’s a way to make mission and marginwork together.

In 2009, the bank hosted about 900 people forclasses at its KeyBank Financial Education Centeron Buckeye Road in Cleveland, where photos ofpeople who managed to save enough money tobuy a house or pay off a car are displayed in a sortof hall of fame on the wall.

Another 2,000 in Greater Cleveland received financial literacy training through Key’s outreachto schools, churches and other organizations.

“It’s not just about cashing that check,” saidPoppie Parish, senior vice president of community development banking. “It’s aboutbuilding a relationship that’s able to supportwhatever your financial goals are.”

KeyBank vice president of community develop-ment banking Emmanuel Glover said his bankalso started the KeyBank Plus program, a low-feecheck-cashing service that charges between 1%and 1.5% to cash a check. Mr. Glover said nationally,

See UNBANKED Page 16

16 COMPANIESFORCEDTO MAKETOUGH 401(K)DECISIONS.


check cashers charge on averagebetween 3% and 10% for the service. Every fifth time a customer comes in, Key’s fee iswaived, and each time a check iscashed, customers receive five freemoney orders, Mr. Glover said.

The check-cashing service is avail-able to people who previously hadbeen flagged for mishandling checking and savings accounts,those who have just one form ofidentification — a normal checkingor savings account would requiretwo — and people who would be rejected for a loan, among others. Italso appeals to people who prefer towork exclusively with cash.

Other banks have created services for people who had nobanking relationship in the past orwho did have one and had troublemanaging it. At U.S. Bank, for example, a second-chance checkingprogram is geared toward peoplewho had problems with overdraftson a previous account.

U.S. Bank also offers a pre-loaded

ReliaCard that can be loaded withunemployment benefits or othergovernment money.

The bank rewards people who areable to save, giving them a $50 Visacard when they reach a $1,000 bal-ance in their accounts, through theSavings Today and Rewards Tomor-row, or START, program. And anetwork of in-store branches is designed to make going to the bankfor the first time less intimidating.

“A lot of times, people are uncom-fortable with traditional bank settings,” said Pat Ramsey, commu-nity development manager inNortheast and Central Ohio for U.S.Bank. “It helps break down barriers.”

Tom Zirbs, U.S. Bank’s regionalmanager in this region, said theprograms provide a “great oppor-tunity” for the bank to create a relationship that can be built onover the years, while also doinggood.

Opening doorsAndrew Kaplan, executive vice

president of the financial solutionsgroup at AmTrust Bank purchaserNew York Community Bancorp,said the challenge his bank andothers face is convincing peoplewho see the marble and columnsof many bank buildings as impen-etrable that they can, in fact, relateto the bankers inside.

In addition to teaching peoplethat a check can bounce or thatmoney deposited one day may notbe available immediately, he saidbankers have to work past precon-ceived notions of traditional bankingand bankers.

For that reason, he said, NYCBbankers are encouraged to volun-teer and be involved in charitableevents where they can be seen outside of the bank.

“It’s the best way to touch people,”he said. “Now we’ve put a face to that.”

Maria Thompson, vice presidentof community development bank-ing at PNC, said diversity at thebank is also imperative.

“When people come into ourdoors, they see people who lookjust like themselves,” she said. Shesaid, too, that those first efforts canhelp encourage people to reach mi-nor savings goals that can give thempeace of mind in an emergency.

“As these individuals grow andgrow their financial needs, maybeone day they’ll need help withhome ownership or college,” shesaid. “We view this as an opportu-nity to grow our customer base.”

When PNC formally enters themarket next month by switching overNational City branches, it will bringa new tool for the unbanked, shesaid. The Foundation savings andchecking accounts are designed forthose who have never used a bankbefore or who have had minor problems managing an account inthe past. The accounts include nominimum balance and limits ondebit card transactions and ATMwithdrawals.

Some legacy National City prod-ucts will remain, including an auto-save partnership with Welcome

House and a scholarship match withthe Cleveland Scholarship Program.

Reaching outLouise Gissendaner, director of

community development and a senior vice president at Fifth ThirdBank in the Northeastern Ohio region, said it is “critical” that abank provide as much support aspossible to as many people as it can.

According to the 2000 Census,she said, nearly a quarter of allhouses are unbanked or under-banked — a term meaning theylack access to credit.

A disproportionate number ofthose people are low-income or minorities, she said, but Key’s Ms.Parish also said there are doctors,lawyers and other professionalswho live paycheck to paycheck andfall into those categories.

Ms. Gissendaner said FifthThird’s strategy — like that ofmany banks — is to participate inclassroom training about financialmatters, where they hope to reachchildren when they are young. Thebank also sends a bus into manyneighborhoods so financial lessonscan be taught outside the bank.

Fifth Third has a Goal Setter savings account with no minimumbalance that promises a bonus oncethat goal is reached. Customers can-not make online banking transfersor ATM withdrawals, but can accesstheir money by visiting the bank. Ithas a Basic53 Checking account thatallows unlimited checking, check-writing and withdrawal with a debitcard, but has no deposit access to anATM for one year and will not allowaccess to funds if they are not there.And the DreamGuard program pairs financial calculators with budgetingtips and advice.

“There’s a lot of explaining involved with this,” Ms. Gissendanersaid. “Most of the time, one sessionis not enough. Some people justhaven’t grown up with a bank. … Ido think they need more hand-holding.” ■


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FINANCE

401(k) matches have costs, benefitsBy SHANNON [email protected]

The 401(k) program wentthrough a bit of a dark spellduring the recession, but itseems the sun might be

rising again on what was once amainstay in corporate America.

Like many other job perks,matches to 401(k) retirementplans took a hit last year as profitsdwindled during the recession, butsome companies are reinstatingtheir contributions to those plansas their revenue recovers.

“As the instability of last year’seconomy becomes somewhat stable, a lot of employers are reinstating or creating a match,”said Brent Besinger, a partner atWaypoint Beacon Retirement Partners in Woodmere.

His firm manages 401(k) plansfor 80 companies. About one-thirdof those companies suspendedtheir contributions to 401(k) planslast year, but half of those alreadyhave reinstated their matches toemployees’ contributions, he said.

Similarly, a survey by Hewitt Associates, a global human re-sources consulting and outsourcingservices company, found that 80%of companies nationally that sus-pended or reduced their companymatch in 2009 are planning to re-store it in 2010.

However, some Northeast Ohiocompanies still haven’t seen themarket bounce back enough to reinstate their contributions to the401(k), said Scott Ziska, a foundingpartner and wealth consultant atthe Solon office of Stratos WealthPartners. He said about 30% of his

clients stopped matching their employees’ 401(k) contributionslast year and they have not yet reinstated those matches.

“Everybody is being kind of cautious,” he said. “No one isjumping to do anything too quickly.”

ERC, the former Employers Resource Council in Mayfield Village, last year completed a studyof 145 local businesses, and it foundthat the majority of employers offer-ing 401(k) plans matched employ-ees’ contributions.

Only about 28% of the manufac-turers who provided 401(k) planssaid they did not match employeecontributions, while about 26% ofnonmanufacturing firms said theydid not match employee contribu-tions. In ERC surveys in 2005 and2006, it was slightly more commonfor manufacturers to match 401(k)contributions by employees butparticipation by nonmanufacturingfirms has been consistent in recentyears.

Overall, companies want to helppeople save for retirement andthey use 401(k)s and the employermatch as a tool to boost employeemorale, Mr. Ziska said.

“They see it as a pretty strongbenefit to keeping people happywhen they can’t give raises,” he said.

Russell Rybka, president of Express Lane Transportation Inc. inSolon, felt that maintaining compa-ny matches to the 401(k) programwas the least he could do for his em-ployees during the recession.

“My customers stuck with me;they had my back through thesedifficult times,” he said. “I feel like I should do the same with mypeople.”

Mr. Rybka’s bottom line is hurtingafter customers have reduced theamount of money they’re willing topay for his trucking services.

“In all honesty, I should probablyget rid of (the 401(k) plan) sinceour profits are down,” he said.“(But) it’s going to stay.”

As a result, none of his 14 employees stopped contributingor reduced their contributions totheir 401(k), though a few havetaken out loans against their401(k) savings that they must repay, Mr. Rybka said.

Only one employee at TrustPointTechnologies Inc. in Strongsvillereduced a contribution to the401(k) plan last year as the reces-sion deepened, said David Basile,president of TrustPoint, whichsells computer hardware, softwareand technical support services.

He said he did not change thecompany’s contribution to the employee 401(k) plan because lastyear ended up being a decent yearfinancially for TrustPoint and thisyear is looking even better, he said.

As the value of 401(k) plansdropped last year and salaries got cut, many people stopped contributing to those plans or reduced their contributions, Waypoint Beacon’s Mr. Besingersaid.

Employers now must remindworkers why it’s important to savefor retirement.

“When people lose 35% to 40% oftheir 401(k) plan, it makes for someapprehension in putting money in,”he said. “If they’re getting squeezedand their expenses are increasing,people are definitely more reticentto squirrel money away.” ■

Unbanked: Education part of outreachcontinued from PAGE 15

“A lot of times, people are uncomfortable with traditionalbank settings.”

– Pat Ramseycommunity development manager in Northeast and Central Ohio, U.S. Bank



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FINANCE

Feds looking more closely at worker classification; risks extensive

The Internal Revenue Serviceis in the beginning stages ofa three-year plan to auditapproximately 6,000 U.S.

employers, with a focus on whetherthose employers have been payingtheir share of employment-relatedtaxes.

A key component of the audits isworker classification: Are workersmisclassified as independent contractors when they really areemployees?

The IRS is not alone in its efforts.Legislation is pending that wouldclose a safe-harbor provision in theInternal Revenue Code that, insome circumstances, protects employers who misclassify workers.

Secretary of Labor Hilda Solisalso has stated that improving theclassification of workers is criticalto the mission of the EmploymentStandards Administration, the Department of Labor division responsible for administering lawsrelated to working conditions andwages.

Why does it matter that the government is looking more closelyat the status of workers? While misclassification is not illegal, theresults of the misclassification oftenare, and the resulting liabilities canbe significant.

Employers who misclassify workersmay be liable for unpaid state andfederal payroll taxes, including interest and penalties, workers’compensation premiums and up tothree years of unpaid overtimecompensation, including liquidateddamages and attorneys’ fees.

Misclassified workers may be entitled to retroactive participationin qualified pension plans, welfarebenefit plans and stock optionplans, potentially leading toadditional significant out-of-pocketcosts for the employer.

There are different tests for determining who is an employeeand who is an independentcontractor. However, regardless ofthe legal issue and governmentagency involved, there are severalfactors that are the same across thetests that, if they exist, will go a longway toward minimizing an employer’s risk of incurring liabilityfor misclassification.

The first, and perhaps most important, step is to ensure that theworker is free from the control ofthe employer.

An independent contractor maybe fairly obligated to reach the employer’s end goals in compliancewith the employer’s standards. Themeans and methods used to accomplish those goals, however,should be left up to the contractor.

This means that the employershould not have control over whenand where to do the work, whattools or equipment to use or whatsequence to follow when performingthe work, nor should the employerhave the right to control those things.

The second is that an independentcontractor is financially independentand should have the ability, based onhis or her efficiency or lack thereof, tomake a profit or sustain a loss. Anindependent contractor’s servicesshould be available to the market,not limited to just the employer.

Employers that pay contractors aflat fee per project but do not pro-vide the contractor with the tools,equipment or materials necessary

CHRISTOPHERJOHNSONANGELASIMMONS

ADVISERS

for the project, do not reimbursethe contractor for expenses and donot provide fringe benefits will bein a much better position to defendthemselves in an audit or in court.

The third is that employersshould make sure that each partytakes the steps necessary todemonstrate that the relationship isan independent contractorrelationship. In most cases, employers should not use indepen-dent contractors to perform thecore aspects of their business orperform the same work that otheremployees perform.

Employers should report pay-

ments made to the worker via Form1099 and require the worker to carryhis or her own workers’ compensa-tion insurance. Finally, the parties

should have a written agreement inwhich, among other things, the em-ployer renounces any right to controlthe means and methods of work andin which the worker acknowledgesindependent contractor status.

We mention the contract last, eventhough it is normally the first partof the process, because governmentagencies and courts consider theterms of a written contract to bemuch less important than the actual working relationship; if thereare inconsistencies between thecontract and the actual work prac-tices, courts and government agen-cies will make their decisions based

on the work practices. While the proper use of indepen-

dent contractors may lead to costsavings, misclassification can leadto significant liability and expense.

And in light of the government’srenewed emphasis on misclassifi-cation, it is imperative that employers take the steps necessaryto make sure that contractors are,in fact, contractors. ■

Mr. Johnson is a partner in Thomp-son Hine’s Labor & Employment practice, and Ms. Simmons is an associate in the firm’s Labor & Employment practice.



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FINANCE

Chap. 11 can be used as mechanism to sell a businessTRACKING BANKRUPTCIES

Cleveland Chapter 7 Chapter 11

2009 9,950 53

2008 7,464 22

2007 6,104 20

Akron Chapter 7 Chapter 11

2009 4,738 22

2008 3,664 27

2007 2,953 10

Overall* Chapter 7 Chapter 11

2009 31,463 146

2008 23,791 87

2007 19,120 63

Chapter 7 and Chapter 11 filings in U.S. Bankruptcy Court’s Northern District ofOhio generally are on the rise, according to statistics on the court’s web site.

* — INCLUDES CLEVELAND, TOLEDO, YOUNGSTOWN, CANTON AND AKRON

For many small, mid-size companies, reorganization too expensiveBy CHUCK [email protected]

Growing up, Mary Whitmerloved hearing her lawyerdad tell stories about howhe helped all sorts of

businesses — from grocery storesto coal mines to pallet manufac-turers — emerge from bankruptcyintact.

Ms. Whitmer would like to tellsuch stories herself now that she isa bankruptcy attorney at KohrmanJackson & Krantz PLL of Cleveland.

Since then, however, theprocess — governed under Chapter 11 of the BankruptcyCode since 1978 — has grown tooexpensive for most small and mid-size businesses, she said.Now, those that do go throughChapter 11 often end up undernew ownership, said Ms. Whitmer,who also is president of the Cleve-land Metropolitan Bar Association.

“I just don’t see Chapter 11 being a constructive way to reorganize unless you’re a hugecompany,” she said.

Chapter 11 filings in GreaterCleveland more than doubled lastyear, jumping to 53 in 2009 from22 in 2008, according to statisticsfrom the U.S. Bankruptcy Court ofthe Northern District of Ohio.

The increase indicates more areabusiness owners are using thestatutes as a way to sell their compa-nies while under court protectionfrom creditors, according to Ms.Whitmer and other area lawyers.

The section of the bankruptcy

code is meant to give businessestime to reorganize debt and balancesheets and continue operating. Bycontrast, in Chapter 7 bankruptcy, acourt-appointed trustee sells off afirm’s assets piece by piece.

Owners of smaller firms often useChapter 11 as a way to sell theirbusiness free of liens and claims because they can’t afford to gothrough a lengthy reorganization,Ms. Whitmer said. For one, renego-tiating contract terms, creating arevised business plan and findingnew sources of capital can take along time.

All the while, the filing companyoften ends up paying their ownlawyer as well as attorneys repre-senting the bank and a committeerepresenting everyone else owedmoney. And good bankruptcy attorneys often charge more than$400 per hour, Ms. Whitmer said.

Still, for businesses that can finda buyer, filing for Chapter 11 isway better than having a court-appointed trustee take control ofthe business and sell its assets separately as part of a Chapter 7bankruptcy, said attorney JeanRobertson, a bankruptcy partnerat Cleveland’s Calfee Halter &Griswold law firm.

“You want your managementrunning the enterprise, not abankruptcy trustee,” Ms. Robertsonsaid. “The goal here is to maximizevalue for creditors.”

Desperate times … Adding to the number of new

Chapter 11 filings is the fact that

some well-managed businessesthat happen to be short on cashcan’t find temporary financing toget them through the downturnbecause of the tight credit market,Ms. Robertson said. In normal times,she said, they wouldn’t have to selltheir companies.

“I’m seeing Chapter 11’s thatshouldn’t be filing,” she said.

Even during the Chapter 11 cases where companies are willingto take on the higher administrativecosts related to restructuring —which increased as a result ofchanges to the federal bankruptcycode in 2005 — they can’t find financing to keep them operatingthroughout the process because ofthe credit market, said Scott Opincar, a partner in McDonaldHopkins’ business restructuringpractice in Cleveland.

“Liquidating the business issimpler and quicker,” he said.

Struggling firms that can’t affordChapter 11 do have other options,Mr. Opincar said. For one, over thepast four years more companies, in-stead of filing for bankruptcy, havesought protection under receiver-ships in which they are put underthe control of state courts or federalcourts if they have substantial assetsin several states. Receiverships arecheaper, and banks are becomingincreasingly more comfortable withcase law related to the process, Mr.Opincar said.

Filing companies also can use amethod called the assignment forbenefit of creditors, which in-volves putting the company in

possession of a local probate court.Through that method, the compa-ny often is sold, but it can continueoperating under current owner-ship with court approval, Mr.Opincar said. Such arrangementsaren’t popular in Ohio, but morecompanies might use the option aslenders grow comfortable with it,he said.

“Four years ago receivershipswere not very common at all, butnow they’re very common,” he said.

Consulting a bankruptcy attorneyas soon as possible helps ensure thatbusinesses thinking about filing forChapter 11 have as many optionsas possible, said Daniel DeMarco,a partner with Hahn Loeser &Parks LLP of Cleveland. Tacklingthe problem early can help busi-nesses line up a strategy beforethey lose any major customers, forinstance, or trigger undesirableprovisions in any of their contracts.

“We as attorneys always say,‘Gee, I wish I could’ve started onthis project a week earlier, a monthearlier,’ because there are alwaysmore options,” Mr. DeMarco said.

A new startNationally, only about 10% to

15% of businesses filing for Chapter11 continue operating, includingthose that undergo significantchanges in ownership and management, Mr. DeMarco said.Anymore, cases in which a company’sownership and structure remain

for the most part in place are “extraordinarily rare,” he said.

However, he did represent Medina Glass Block Inc. duringwhat so far has been a successfulrestructuring of the company.

The maker and distributor of glassblock windows last summeremerged from Chapter 11 bankrupt-cy after about seven months ofworking with creditors and devisinga plan that included closing sevenstores and eliminating a divisionthat sold and installed residentialwindows. It still sells residential win-dows through distributors, as well ascommercial windows.

The company remains in “survival mode” but has been profitable every month since itemerged from bankruptcy, saidBud Kirkpatrick, chief operatingofficer. Medina Glass Block choseto restructure under its currentownership because, though prof-itable entering bankruptcy, thecompany had so much debt thatselling would have left the ownerswith nothing, Mr. Kirkpatrick said. In the end, it was worth the massive attorney bills and the worksessions that sometimes lasted up to20 hours, he said.

“It’s a very expensive process,but the alternatives seemed moreexpensive,” he said. ■

(Crain’s Cleveland Businessreporter Dan Shingler contributed tothis story.)

The Fitch credit rating services has affirmed its BBB+ rating on two series of generalobligation bonds of the ClevelandMetropolitan School District, buthas revised its rating outlook for thedistrict to negative from stable.

Fitch said the negative outlook reflects the district’s weakened financial position “and the need forsignificant changes to align spendingwith available revenues.”

“With a lack of voter support foroperating levies and few other options to increase revenue, the district must make meaningful

expenditure adjust-ments,” Fitch stated. “The district

is currently negotiating bargainingunit contracts, which will be crucialto its ability to reduce spending.”

Fitch said the district’s generalfund reserves “were minimal in 2009and are expected to be nil in 2010.”

“The district has approved andwill implement a transformation planwhich includes spending cuts, including a sizable number ofschool closures; this and other actions will be necessary to restorefiscal balance in 2011 and beyond,”Fitch stated.

Fitch revises Cleveland schools’ ratingON THE WEB Story from www.CrainsCleveland.com.


down by almost 8%, and if Avon is upin manufacturing, then that mustmean that the rest of Lorain County(notably Lorain and Elyria) has to bedown by more than 8%,” Mr. Zellersaid in an e-mail correspondence.

Across the state, numbers fromOhio’s Office of Budget and Manage-ment indicate income tax revenueshave been falling almost universally,he noted.

“From all of that reasoning, I conclude that Avon’s situation is anextremely unusual anomaly, both inOhio and in Lorain County,” said Mr.Zeller.

Not-so-dumb luckSo how does Avon do it? More im-

portantly, can other local communi-ties successfully copy it?

Avon Mayor Jim Smith said thecity’s success has not been the resultof any grand plan. “A lot of it’s luck —90% of what you do as a mayor is luck,and 10% of it is you don’t screw upyour own luck,” he said.

Avon also has some factors workingin its favor, such as abundant greenspaces on which to build for the firsttime. “We’ve got a great location,that’s part of that luck equation,”Mayor Smith said.

But, he adds, Avon has a city gov-ernment that tries to work with busi-nesses and that means sometimesputting developments on a fast track.

“The only thing businesses wantyou to do is get ’em through theprocess,” Mayor Smith said. “If youhave a special meeting of the plan-ning commission, and they don’t get

it all done in one night, then you havea meeting the next night.”

Avon has had some fortunatebreaks. For instance, when Skill Tooland Die went out of business and upfor sale in late 2009, it looked like theend for the firm and its more than 30employees. A buyer purchased theentire operation and restarted it eightdays later with the same workers.

Area businesses give Mayor Smithand the city credit for helping themgrow and stay in Avon. And they saythe mayor not only had a plan, hestuck to it.

“One of the best attributes of JimSmith is he had a master plan yearsago with a mix of residential andcommercial,” said Chris Haas, CEO ofAvon-based All Pro Freight Systems, afreight and distribution company.

In the 12 years that All Pro has beenin Avon, it has built most of its 500,000square feet of space from scratch, including a 200,000-square-foot dis-tribution facility it built for a tenantserving Ford at the end of 2008. Thatproject had to be completed in fourmonths in order to win the work fromFord, and it couldn’t have happenedwithout the city’s help, Mr. Haas said.

To expand, All Pro needed to purchase land adjacent to its presentfacility on Chester Industrial Parkway.The land was available, but the rail-road that owned it only wanted to sellit as one 270-acre parcel, which wasfar more than All Pro needed.

“Believe me, (the city) had a lotmore clout than I did,” said Mr. Haas,who added he was unable to changethe seller’s mind by himself. “Theypieced off the 15 acres and got me


plan to retain or dispose of thebuilding.

The prospect of new ownership forthe office tower that dominatesdowntown Lakewood sounds good toNathan Kelly, the city’s director ofcommunity and economic develop-ment. He hopes the next owner hailsfrom the region and will compete foroffice tenants. He maintains Lake-wood Tomorrow VIII fund “was notcompetitive” as it lost the union andother tenants and did not respond todemands of tenants in the building.

The Tomorrow Fund’s U.S. officein Houston referred calls about thebuilding to BGK, which provided asset management services for thebuilding. BGK did not return threecalls left last week by Crain’s Cleve-land Business. CWCapital did not re-turn two calls. CWCapital managesand sells lender-controlled propertiesas well as sour loans associated withthem, according to its web site.

This is the second time LakewoodCenter North has gone back to alender. The structure that dates to

1974 went the same route in 1993near the end of the commercial realestate credit crunch of the early1990s.

Lakewood Center North joins agrowing roster of Northeast Ohiocommercial real estate undergoingforeclosure or owned by lenders. Inthe office category alone, the list includes the landmark CommercePark Square I, II and III buildings inBeachwood, the Summit Office Parkin Independence and Key InvestmentCenter in downtown Cleveland.

RCA Capital Analytics of NewYork, which tracks investment salesand troubled real estate globally,lists nine Northeast Ohio officeproperties with a total market valueof $80 million as distressed as ofMarch 8, compared with eightbuildings with a market value of $73million in its Dec. 3, 2009, report.

RCA’s distressed property data isnot limited to public court or land-record filings, but also incorporates information on souring loans it obtains from lenders and othersources. ■

Avon: Location, some luck a boost

what I wanted.”After that, the city expedited his per-

mits and the project was completedon time — and in an almost unheardof time frame to complete a buildingof that size, Mr. Haas said.

Willing to play ballAll Pro — and other businesses — in

turn have shown their support for



Lakewood: Change may be a plus

ROLLING IN THE DOUGH

Year Value % increase

2010* $9.40M 0.3%

2009 9.37 5.5

2008 8.88 13.4

2007 7.83 0.4

2006 7.80 14.4

2005 6.82 10.9

The city of Avon’s income tax base hasbeen increasing over the last fewyears, despite a recession that hasroiled other cities throughout Ohio.

2004 6.15 6.0

2003 5.80 41.3

SOURCE: CITY OF AVON* — ESTIMATE

Avon. When the city wanted to builda baseball park to host the FrontierLeague’s Lake Erie Crushers, All Prostepped up to the plate and boughtnaming rights from the Crushers foran undisclosed sum.

Other companies also have grownin Avon and give the city high marks,including Carroll Manufacturing &Sales, which produces the nets that goaround turkeys and hams, as well as“Flavor Seal” bags used by consumersto store and prepare food at home.

In the last five years, the company’spayroll has increased from 50 employees to 75, said marketingmanager Stacey Brown.

“During our recent expansion, themayor’s office was invaluable inworking through all of the stages thatneeded to occur, including the taxabatement process,” Ms. Brown saidin an e-mail. “In turn, we feel it’s im-portant that CMS shows our appreci-ation and commitment to the community as well, so we advertise atAll Pro Stadium and support the newFrench Creek YMCA.”

Mayor Smith said he uses abate-ments when necessary, and since Mr.Smith became mayor in 1994, the cityhas so far only reduced property val-ues by a total of $43 million. All of thefirms that received abatements haveso far stayed during the abatementperiod and kept growing in Avon.

That may be in part due to somesavvy on Mr. Smith’s part. He said

whenever a company asks for anabatement, he insists they buy moreland than they need because Ohiolaw requires that abated firms use allof their existing land before moving orelse forfeit their abatement savings.

“Don’t come to me for a tax abate-ment if you’re going to buy a foot-print,” Mayor Smith said.

Avon has also found ways to keepcorporate giants happy, such as ParkerHannifin Corp., which has a divisionmaking aviation wheel and brakecomponents in Avon. Parker’s divi-sion operations team leader DennisRichards said the city has been effec-tive in working with Parker ahead oftime on future developments andthat the city’s building departmenthas been particularly responsive.

Looking over his shoulderSo far so good, but Mayor Smith

said he still worries.He said that if the city’s income

tax revenues are growing it hasmore to do with the companies inAvon being well run than anythingelse. But even well-run companieshave felt the pinch of the economicdownturn, and Mayor Smith said hesees the recessionary effects on thecoffers of cities all around him —and wonders if Avon will be next.

“We’re doing great. … We may bethe only city in Northern Ohio that’sup,” the mayor said. “I keep wonder-ing when it’s going to hit us.” ■



SHOPPING CENTERSRANKED BY TOTAL RETAIL AREA

Rank

Shopping centerAddressPhone/Web site

Total retailarea

(square feet)

Totalnumberof stores

% of retailspace

occupied Anchor tenantsYear

opened OwnerManagement companyPhone number Mall manager

1Eastwood Mall5555 Youngstown-Warren Road, Niles 44446(330) 652-6980/www.eastwoodmall.com

3,319,113 190 NA JCPenney, Macy's, Dillard's, Target, Sears,Old Navy, Food Court 1969 The Cafaro Co. NA Ken Kollar

2Westfield SouthPark(1)I-71 & Route 82, Strongsville 44136(440) 238-9000/www.westfield.com/southpark

1,626,198 183 NA Dillard's, Sears, JCPenney, Macy's, Kohl's,Dick's Sporting Goods, Cinemark Theatres 1996 Westfield Corp. Westfield Corp. NA

3Great Lakes Mall(1)7850 Mentor Ave., Mentor 44060(440) 255-6900/www.simon.com

1,306,016 120 NA Dillard's, JCPenney, Macy's, Sears 1961 Simon Property GroupInc.

Simon Property Group Inc.(330) 867-6997 NA

4Westfield Great Northern(1)4954 Great Northern Mall, North Olmsted 44070(440) 734-6300/www.westfield.com/greatnorthern

1,228,969 143 NA Dillard's, JCPenney, Macy's, Sears, 1976 Westfield Corp. Westfield Corp. NA

5Sandusky Mall4314 Milan Road, Sandusky 44870(419) 626-8575/www.sandusky-mall.com

1,152,302 86 NA JCPenney, Macy's, Sears, Elder-Beerman,T.J. Maxx, Best Buy 1976 The Cafaro Co. NA Neal Gray

6Midway Mall3343 Midway Mall, Elyria 44035(440) 324-6610/www.midwaymallshopping.com

1,104,697 NA NA Best Buy, JCPenney, Macy's, Sears,Staples 1967 Centro Properties

GroupCentro Properties Group(513) 728-6625 Mark Bressler

7Parmatown Mall7899 W. Ridgewood Drive, Parma 44129(440) 885-2090/www.parmatown.com

992,000 NA NA Macy's, JCPenney, Walmart, Dick'sSporting Goods 1960 Parmatown One LLC RMS Investment Corp.

(440) 885-5506 Nick Rudy

8Beachwood Place26300 Cedar Road, Beachwood 44122(216) 464-9460/www.beachwoodplace.com

975,000 130 93 Dillard's, Saks Fifth Avenue, Nordstrom 1978 General GrowthProperties

General Growth Properties(312) 960-5000 Rob Clarke

9Richmond Town Square(2)691 Richmond Road, Richmond Heights 44143(440) 449-3200 /www.simon.com

921,026 90 99 Barnes & Noble, JCPenney, Lowe'sTheatres, Macy's, Sears 1966 Simon Property Group

Inc.Simon Property Group Inc.(330) 867-6997 NA

10Southern Park Mall(2)7401 Market St., Youngstown 44512(330) 758-4511 /www.simon.com

900,000 174 99 Dillard's, JCPenney, Jillian's, Macy's,Sears, Tinseltown Cinema 1970 Simon Property Group

Inc.Simon Property Group Inc.(330) 867-6997 NA

11Chapel Hill Mall(1)2000 Brittain Road, Suite 830, Akron 44310(330) 633-7100/www.chapelhillmall.com

865,000 100 NA JCPenney, Macy's, Sears 1966 CBL & AssociatesManagement Inc.

CBL & AssociatesManagement Inc.(800) 333-7310

NA

12Ashtabula Towne Square3315 N. Ridge Road E, Ashtabula 44004(440) 998-2020/www.ashtabulatownesquare.com

814,026 40 NA Sears, JCPenney, Kmart 1992 Cabot AshtabulaLease Co. LLC

Zamias Services Inc.(814) 539-3845 Vince Coneglio

13The StripI-77 & Portage Road, North Canton 44720(216) 464-2860/www.starkenterprises.com

800,000 27 96 Lowe's, Walmart, Giant Eagle, Best Buy,Borders, Bed Bath & Beyond 1996 Stark Commons Ltd. Stark Enterprises

(216) 464-2860 NA

14Westfield Belden Village(2)4230 Belden Village St. NW, Canton 44718(330) 494-8815/http://westfield.com/beldenvillage

798,893 119 100 Dillard's, Sears, Macy's 1970 Westfield Corp. Westfield Corp. NA

15Southgate USA Shopping Center20950 Libby Road, Maple Heights 44137(216) 663-3850/www.southgateusa.com

788,130 NA NA Home Depot, Giant Eagle, SouthgateBowling Lanes, Dept. of Human Services 1955 SG USA Ltd. McKinley Inc.

(216) 663-3850Denise AnnArmstrong

16Southland Shopping CenterPearl Road & W. 130th St., Middleburg Heights 44130(513) 521-4350/www.centroprop.com

778,500 38 73 Giant Eagle, Burlington Coat Factory,Marc's, BJ's Wholesale Club 1950 Centro GA Southland

LLCCentro Properties Group(513) 521-4350 NA

17Summit Mall3265 W. Market St., Akron 44333(330) 867-1555/www.simon.com

766,324 120 NA Dillard's Men and Home, Dillard's Women,Macy's 1965 Simon Property Group

Inc.Simon Property Group Inc.(330) 867-6997 David Huesser

18Crossings at Golden LinkAurora Road & state Route 8, Macedonia 44056(216) 464-5900/www.thekronegroup.com

725,000 12 99 Target, Lowe's, Giant Eagle, Great Escape 2004 RLP Group The Krone Group(216) 464-5900 NA

19Steelyard Commons3447 Steelyard Drive, Cleveland 44109(216) 381-2900/www.first-interstate.com

692,528 34 NA Walmart Supercenter, The Home Depot,Target, Best Buy 2007 First Interstate

Properties Ltd.First Interstate PropertiesLtd.(216) 381-2900

Chris A.Goodrich

20Cobblestone Square(1)5500 Abbe Road, Sheffield Village 44035(440) 892-6800/www.carnegiecorp.com

680,000 NA NA Sam's Club, Regal Cinema 20, GanderMountain, Litehouse Pools 2001

Carnegie Managementand DevelopmentCorp.

NA NA

21Howland Commons2070-2390 Niles Cortland Road, Warren 44484(330) 652-6980/www.eastwoodmall.com

650,488 10 NA Borders Books, Gander Mountain, HomeDepot, Kmart, Kohl's, David's Bridal 1996 The Cafaro Co. NA Ken Kollar

22The Cascades of Brimfield3975 Cascades Blvd., Kent 44240(216) 896-5609/www.kowitpassov.com

650,000 NA NAWalmart Supercenter, Lowe's, Kohl's,Applebee's, Dollar Tree, Home Savings &Loan

2006 3D Cascades LLC 3D Real Estate Mgt. Co.(216) 641-1400 NA

22University SquareWarrensville Ctr. Rd. & Cedar Ave., University Hts. 44118(216) 297-9510/www.inlandgroup.com

650,000 14 40 Target, Macy's, Jo-Ann Superstore, Pier I,T. J. Maxx & More 2003 Inland US

ManagementInland US Management(216) 297-9510 NA

24Severance Town Center(1)3640 Mayfield Road, Cleveland Heights 44118(216) 381-5762/www.pinetreecommercial.com

633,000 33 NA Walmart, Home Depot, Dave's Markets,OfficeMax, Marshalls, Borders 1963 Pine Tree Commercial

Realty LLCPine Tree Commercial RealtyLLC(847) 735-0600

NA

25Avon Commons35974 Detroit Road, Avon 44011(216) 381-2900/www.first-interstate.com

630,646 36 NA Heinen's, The Home Depot, Kohl's, Target,Costco 2000 First Interstate

Properties Ltd.First Interstate PropertiesLtd.(216) 381-2900

Chris A.Goodrich

26Great Northern Plazas25859 Great Northern Blvd., North Olmsted 44070(216) 755-5500/www.ddr.com

627,060 38 40Home Depot, Marc's, Jo-Ann Etc, BestBuy, Bed Bath & Beyond, K&G Menswear,DSW, PetSmart

1958 Developers DiversifiedRealty

Developers Diversified Realty(216) 755-5500 Gary Jeziorski

27WestgateCenter Ridge Road & W. 210th St., Fairview Park 44125(440) 324-6610

600,000 NA NA Kohl's, Lowe's, Petco, Target, Books-a-Million, Marshalls, Ulta Beauty 2007 Centro Properties

GroupCentro Properties Group(513) 728-6625 NA

28Legacy Village25001 Cedar Road, Lyndhurst 44124(216) 382-3871/www.legacy-village.com

595,942 NA NA Dick's Sporting Goods, Giant Eagle, Crateand Barrel, Joseph-Beth, Nordstrom Rack 2003 Legacy Village

Investors LLC Bayer Properties LLC Marcie Gilmore

29Marketplace at Four CornersAurora Road & Marketplace Drive, Bainbridge 44202(561) 629-5520/www.mpgpropertygroup.com

579,488 NA NAKohl's, Marshalls, Walmart Supercenter,Babies R Us, Famous Footwear, Michaels,Dick's Sporting Goods

2002 MPG Property Group MJM Property Management(561) 629-5520 NA

30Ridge Park Square4798 Ridge Road, Brooklyn 44144(216) 464-5255/www.zeislermorgan.com

562,842 43 79 Lowe's, Marc's, T.J. Maxx, AMC Theatre,Bed Bath & Beyond 1987 Ridge Park Square

LLCZM Management(216) 464-5255

Shannon P.Blackwell

Source: Information is supplied by the companies unless footnoted, numbers as of Jan. 1, 2010. Crain's Cleveland Business does not independently verify the information andthere is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues.Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.(1) Information from shopping center and management company websites. (2) Information from CoStar Group, www.costar.com.

RESEARCHED BY Deborah W. Hillyer



REAL ESTATEContact: Genny DonleyPhone: (216) 771-5172Fax: (216) 694-4264E-mail: [email protected]

Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card

AUCTION

FINANCIAL SERVICESBUSINESS SERVICES

APARTMENTS

BUSINESS OPPORTUNITY

OFFICESPACE

INDUSTRIALSPACE

BUSINESS SERVICE OWNERS!Submit your business card to promote your service and

receive a SUBSTANTIAL DISCOUNT off your ad price.

To find out more, contact Genny Donley at 216.771.5172

WILSON AUCTION & REALTY CO., LTD.Auctioneers/Brokers & Liquidators

Bryan, OH 866-870-5500 Bowling Green, OH 419-354-7653

★ SEALED BID LIQUIDATION ★

★ SEALED BID LIQUIDATION ★Top Quality Commercial Retail Shopping & Business Centers & Advertising Media Billboard

Also PUBLIC AUCTION of 22 Acres Development Land in Toledo, OHSealed Bids DUE April 20th @ 5:00 PM for the following:

For More Information, Terms & Bidding Procedures go to Our Websitewww.WilsonAuctionLtd.com

Or, contact any of the following for more detailed information,Due Diligence Packets & to Register for a Bidders Packet

CBRE/Reichle Klein 419-861-1100 ★ Signature Associates 419-249-7070

All Sales By Order of the Court Appointed Receiver The Skutch Company, Ltd.

Sealed Bids DUE April 27th @ 5:00pm for the following:

DeVeaux Village Shopping Center

2600 W. Sylvania Ave. at the corner of Douglas Rd., Toledo, OH43613. 71,900 SqFt Complex; Renovated in 2006; 9 Suites on 3.6Acres — Great cash flow!!

Timberstone Office Complex

1630 Timberwolf Dr., Holland OH 43528 (Just off Airport Hwy).8252 SqFt Top Quality beautifully appointed Office Complex, Multi-Tenant compatible, in an UP-SCALE Commercial Office Parkw/great location!

Chesterfield Plaza

1392 Conant or 120 Chesterfield Lane, Maumee, OH 43537.31,000 SqFt Complex; Renovated in 2005; 9 Suites on 3.8 Acres— Close to Interstate & Turnpike Exit!

1470 Ford St. off Dussel Dr.,Maumee, OH 43537

9154 SqFt Multi-Tenant Commercial Center on 1.36 Acre Lot

4 Parcels at one of the HIGHEST TRAFFIC AREAS in the area; corner of Sylvania & Talmadge

#1: Undeveloped Lot #3: 10,195 SqFt Multi-TenantShopping Center

#2: Electronic Media Billboard #4: 26,912 SqFt 2-Story OfficeBuilding

★ PUBLIC AUCTION ★Thurs., April 22nd @ Noon (12:00PM) 03750 Silica Rd., Sylvania, OH 43560 22+/- Acres of bare development land w/873+/-' of frontage; Zoned M-2. Very attractive property in a GREAT AREA!

Reichle Klein

2,100 Sq. Ft. PenthouseGreat View. 3 Bdrm/2 Bath

In-suite Washer/Dryer.Underground parking and much more!

Call today and select your own carpet & tile!

216-228-776117600 Detroit, Lakewood

www.RentCastlewood.com

1549 Hamilton Ave.Two story industrial building withoffice. 2 ton crane, industrial el-evator. 6,000 sq ft on 2nd floor;6,000 sq ft. on main floor.

3432-3500 Superior Ave.12,000 sq ft. building with newglass block windows. Shelvingfor large industrial use.

4126 St. Clair Ave.Buy with lease-back option.12,500 sq ft. industrial use build-ing. 2-5 ton cranes, second flooroffices.

For Sale by Owner inDowntown Cleveland

Call 216-361-0014for details

FOR LEASECleveland/Shaker Hts.

Historic AmTrust building, N. Moreland &Larchmere. 1,000 s.f. to 8,000 s.f.

from trendy & modern to well appointed& distinguished. Free parking • KitchenFacilities • Large Training Room/Class-

room Space • Conference Room.For additional information contact

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reasons why Akron-Canton is growing.As a result, Hopkins has had to watchthe small airport in the city of Greenbleed passengers away from the larg-er air hub as careful travelers watchfares rise and flight choices decline.

Indeed, since the first quarter of

1997, the average domestic airfare forflights originating at CAK — as theairport is identified on everythingfrom baggage tags to air traffic con-trol screens — have been consistent-ly lower than flights from CLE —Hopkins — according to the latestU.S. Department of Transportation’s

bureau of transportation statistics.The data cover through the end of thethird quarter of 2009.

The figures show that for thethird quarter of 2009, the averageair fare for flights departing fromCleveland Hopkins was $337.49, or28.5% higher than the $241.40 average


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Airfare: Airports complement each otherfare at Akron-Canton. That gap haswidened and narrowed over time.

For flights to Atlanta, the trans-portation department reported an average fare from Cleveland Hopkinsof $184.39 while the average fare fromAkron-Canton was $111.85, or 39.3%lower. Other common routes havesimilar spreads.

The Department of Transportationfare survey includes all fares chargedby the airlines, including first-classand business-class fares, and any taxes and fees levied by local and federal governments. They do not include fees for baggage or fares thatare reduced by frequent-flyer programs.

Slump-bustersThose low fares have helped

Akron-Canton avoid the slump in airtraffic that has affected most U.S. air-ports. Passenger traffic at CAK is up0.78% between 2005 and 2009, at atime when traffic nationally is down8.5%. The number of passengers flyingthrough Cleveland Hopkins is off14.5% over the same time period.

The air fare report also shows thataverage fares at both airports declined over the last four quartersby about 16.7% for Akron-Cantonand 14.2% for Cleveland Hopkins. Nationally, average fares fell by 14.4%.

Low average fares notwithstanding,travel agents and officials from bothairports were quick to point out thatcoming out on top statistically doesn’tnecessarily mean Akron-Canton willconsistently have the lowest fares onany specific itinerary.

“There is no logic to it,” said LisaSward, president of Kaufman Travelin Cleveland. “I always check (forcomparable fares at Hopkins andAkron-Canton).”

Ruth Nagy, director of travel oper-ations for the East Central AAA,which serves Northeast Ohio, saidthat as air carriers have cut back onthe number of flights to reduce thenumber of empty seats they fly, timeof day, or even what dates flights areavailable, are growing factors in

choice of flights and airports.Ms. Sward said that Akron-Canton

can be best for travelers flying on shortnotice. In particular, she cited theCleveland-to-New York route, whichAirTran serves from Akron-Cantonwith several nonstop flights per day.

“If you don’t have much advancenotice, you can’t get good rates fromCleveland Hopkins, but from Akron-Canton, you can,” she said.

Friendly competitionTodd Payne, chief of marketing and

air service development at Hopkins,had only nice things to say about theoperation at Akron-Canton, but he defended the air service offered at thecity of Cleveland-owned Hopkins.

“We’ve got value fares and forsomeone who wants to travel first classat a premium fare, we’ve got that, too,”he said.

Even officials at Akron-Canton, whohave trumpeted their airport’s advan-tages over Cleveland Hopkins in advertising, concede the relationshipbetween the two airports is more symbiotic than antagonistic.

Kristie Van Auken, senior vice pres-ident for marketing and communica-tions at Akron-Canton, said both airports are important. And she pointed out it is the carriers, not theairports, which set fares.

Akron-Canton, she said, has grownby bringing in low-cost air carriers,who offer low-cost service to a limitednumber of airports. That keeps the airport’s average fare low.

She said Continental Airlines’ huboperation, which brings passengersinto the airport from many small Midwest cities to change planes andcontinue on to dozens of destinations,is an important regional air asset.

But Hopkins’ status as a hub airport,which Akron-Canton is not, raises av-erage fares in Cleveland. Ms. VanAuken said that’s because Continen-tal, a so-called legacy carrier with ahigher fare structure than the low-costcarriers, flies to so many cities thathave limited air service.

“There is not going to be a low-costcarrier who is going to compete (withContinental) on the Cleveland-to-Green Bay route,” she said. ■


It’s never too early to thinkabout March Madness 2011■ Looking for tickets to the NCAA men’sbasketball tournament’s first-round gamesat Quicken Loans Arena for next March?

You might be out of luck, or as close to it — at the mercy of scalpers and ticket brokers — as you can get.

Carrie Neville, the ticket and merchandisemanager at Cleveland State, which is serving as the host school for the first- andsecond-round games here next year, saidthe NCAA hasn’t yet toldCSU and Quicken LoansArena officials how manytickets are available.

The process, MissNeville said, works likethis: CSU first offers a pre-sale — which endedMarch 1 — for donors,faculty and staff and season ticket holders. TheQ and the Cavs then offerseats to their own con-stituent lists, likely seasonticket holders and proba-bly advertisers.

After that, any availabletickets will be made available to the publicstarting today, March 22, in a lottery format:Via the Internet, interested parties will register with the school, and names randomly will be drawn until the tickets aregone. After that, the school keeps the regis-trants’ information in case schools don’t usetheir entire allotment.

Miss Neville also said buying CSU season

tickets for the 2010-11 season won’t help any ticket seekers’ causes. — Joel Hammond

Foreclosure preventiongroup at home on the web■ Empowering and Strengthening Ohio’sPeople, the group that has been a persistentthorn in the side of many banks seeking to foreclose on residents’ homes,has started a blog. It can be found at esopblog.wordpress.com.

In entries dating backjust more than a week, theorganization has focusedmainly on the “HardestHit Fund” that distributedmoney to five states tohelp with foreclosure prevention, but left Ohiooff the list.

“One week after theHardest Hit Fund announcement, PhyllisCaldwell, who headsTreasury’s Homeowner-ship Preservation Office,testified before a Con-gressional subcommittee

hearing that Ohio was getting $145 millionof neighborhood stabilization grants (NSP),$40 million of which was for CuyahogaCounty’s new land bank initiative,” spokes-woman Charu Gupta wrote on the blog.“Here’s the problem with this logic: None ofthat money does anything for foreclosure PREVENTION — the key word in this crisis— and what’s needed most in embattled

states like Ohio.”She added, “Nice try, Treasury, but try

again.” As of last Thursday afternoon, theblog had five entries and more than 130 hits.— Arielle Kass

Credit where credit is due■ Clients across Ohio were awarded morethan $93,000 this month after attorneyswere found to have misappropriated theirfunds.

In Cuyahoga County, 12 people received atotal of $24,617 either because their attorneydied and was unable to performservices they had paidfor (that was the casewith five people) orbecause their lawyerwas suspended,reprimanded or hadresigned from thepractice of law.

In Stark County, two former clients received a total of $1,293; three formerclients of a Summit County attorney received a total of $14,500 after that attorneydied.

Statewide, 34 people received a total of$93,494 from the Board of Commissionersof the Clients’ Security Fund of Ohio. Thefund, founded in 1985, is financed by theregistration fees of attorneys and was createdin 1985 to reimburse victims of attorneytheft, embezzlement or misappropriation.

Less than one-tenth of 1% of the state’s42,000 attorneys are involved in such claims.— Arielle Kass

WHAT’S NEWCOMPANY: Adalet, ClevelandPRODUCT: Explosion-proof pendant stations

Adalet, a Scott Fetzer company (a subsidiary of Warren Buffett’s Berkshire Hathaway), has introduced a line of explosion-proof stations for push-button control in hazardous locations. The line’s cast aluminumenclosure andheavy-duty opera-tors “provide arugged solution foroperating overheadcranes, hoists, liftsand other remote-controlled equip-ment,” Adalet says.

The enclosuresare available in one- through 18-hole configurationsand can be assem-bled with Adalet’sline of explosion-proof pushbuttons,pilot lights and selectorswitches. Optional sidehandles, hanging bracketsand strain relief provide accessories for safehanging and operation, Adalet says. Yellowsafety paint provides visibility in high-traffic industrial applications.

Adalet makes explosion-proof enclosuresystems and cable accessories, enclosurethermal management products and industrialsheet metal enclosures and related acces-sories.

For information, visit www.Adalet.com.

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

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK MARCH 15 - 21

The big story: It turns out that FirstEnergyCorp. will be doing more repair work at theDavis-Besse Nuclear Power Plant than itplanned when the electric company shut theunit down at the end of February for refueling.FirstEnergy said it will be performing repair workon several control rod nozzles that penetrate thereactor head vessel at the nuclear plant at OakHarbor, near Toledo. FirstEnergy said ultrasonicinspections conducted on 49 of the 69 nozzlesdetected what it termed “indications” in 12 of them.

New station in life: The Lyden Co., a Toledo-based gas station operator, is moving its headquar-ters to Brecksville. The company said it will breakground this summer at a 22-acre site for a building

that will consolidate corporate staff in Toledowith the staffs of two regional offices, bringingtogether 25 employees.The move is part of an expansion of True NorthEnergy LLC, a firm jointly

owned by Lyden and Shell Oil Products U.S. TrueNorth has operated Shell gas stations in Ohio andMichigan since 1999. It recently acquired 109 gasstations in the Chicago area from Equilon Enter-prises LLC, a Shell Oil subsidiary, bringing its station count to 320.

Man overboard: The Cleveland-CuyahogaCounty Port Authority unceremoniously replacedits vice chairman and approved renegotiated contracts with its major tenants to help them getthrough the slump in cargo business. RichardKnoth was replaced as vice chairman by RobertSmith. Mr. Knoth laid the blame for his ouster onhis disagreements with the board majority and former president Adam Wasserman over the PortAuthority’s expansion plans and his “temerity tospeak” publicly about his concerns. He said that ata meeting last October he was confronted by Mr.Wasserman, board president Steven Williams andother board members and told to “resist any public questioning of the Port’s finances and otherbusiness dealings.”

Looking up: Polymer producer PolyOne Corp.is projecting first-quarter results considerablyabove analysts’ expectations. The Avon Lake-based company said it expects revenue to exceed$600 million for the first quarter, an increase ofabout 30% from the like quarter of 2009 and 10%higher than last year’s fourth quarter. Earningsper share before special items and tax adjust-ments are expected to be about 15 cents pershare in the first quarter; the First Call consensusestimate currently is 9 cents per share. StephenD. Newlin, PolyOne chairman, president andCEO, said auto demand “appears to be pickingup.”

This and that: Casnet, a provider of docu-ment management software and services inAkron, acquired the software division of NCDCorp. in Eastlake under undisclosed terms. Theacquisition will give Casnet access to NCD’sElectronic Worldwide Information Exchangesoftware, which allows customers to access theirdocuments via the Internet. … The ClevelandClinic received a $1 million federal grant to research treatments for spinal cord injuries. TheNational Institutes of Health grant will help leadinvestigator Yu-Shang Lee develop surgicaltreatments that might allow nerves to regenerateand the bladder to recover after a spinal cord injury. … KeyCorp promoted Christopher M. Gor-man to senior executive vice president and head ofits National Banking business. He previously waspresident of KeyBanc Capital Markets.

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


Excerpts from blog entries on CrainsCleveland.com.

BEST OF THE BLOGS

Music is international,but it still has borders■ The New York Times took a look at what itcalled the “byzantine process” of gettingU.S. visas for visiting musicians, a processthat recently led to a headache for theCleveland Orchestra.

The piece is something of a feature onTamizdat, a nonprofit group in New York“with an official mission of promoting international cultural exchange, and adocket each year of hundreds of visa applications that need I’s precisely dotted and T’s precisely crossed.” Itsclients include classical, ethnic and popmusicians from around the world, andit seems it’s constantly in business.

Recently, The Times said, the Cleve-land Orchestra’s application for MartinMitterrutzner, an acclaimed young Austriantenor, “was denied for reasons that left the orchestra perplexed: the report from immi-gration officials said, among other things, thatthe scheduling of Mr. Mitterrutzner’s perfor-mances did not indicate prestige, since he wasbooked for matinees, not evening perfor-mances.”

After two denials, the orchestra retaineda lawyer and got the decision reversed in thenick of time — but only after considerableexpense, the newspaper reported.

Word to the wise: Readthe benefits policy closely■ Tammy Wise, owner of the Wise Groupmarketing firm in Cleveland, was quoted in aMarch 18 Wall Street Journal piece about howentrepreneurs focused on growing their busi-nesses sometimes are caught off guard whenemployees start growing their families.

Various experts offer sound advice on

studying the Family and Medical Leave Actand consulting with an employment lawyerwhen creating a maternity-leave policy.

“Another piece of advice for business owners: Find out if you can tap your insuranceprovider’s disability coverage,” The Journalsaid.

Ms. Wise “says she didn’t realize shecould’ve done that when she agreed in 2004 to

give her nine employees — all women —up to 12 weeks off for maternity leave at

70% of their salary for eight of thoseweeks,” the newspaper reported.

Ms. Wise later expanded her coverage“but learned a valuable lesson this pastJuly when her provider changed its ben-efits policy,” according to The Journal.“She failed to read the new version care-fully and when two employees took ma-ternity leave, she discovered that cover-age had dropped to four weeks from

six. Had she paid closer attention, shesays she would’ve adjusted her firm’s pol-

icy in this area accordingly.”

Smart use of vacant landis a welcome development■ Next American City magazine’s Spring2010 edition includes a comprehensive andlaudatory feature on Cleveland’s efforts toreturn vacant land to productive use.

The process called “Reimagining a MoreSustainable Cleveland” is unique for thelevel of cooperation among foundations,government agencies, nonprofit organiza-tions and private citizens, Next AmericanCity said, and it is producing a vision forgreener, more cohesive neighborhoods.

“We’re talking about pushing people together into dense urban nodes,” said TerrySchwarz, interim director of the Urban DesignCollaborative. “We’re coming up with a wayof managing the landscape enough so it lookslike an intentional wildlife corridor. It makesthe spot where development occurs obvious.”


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