crain's cleveland business

$1.50/APRIL 25 - MAY 1, 2011

Entire contents © 2011 by Crain Communications Inc.

Vol. 32, No. 17

07148601032

617 SPECIAL SECTION

BUSINESS TRAVELStudies predict an uptick for 2011, but previouscutbacks spared area companies ■■ 5PLUS: FAMILIES TAG ALONG ■■ FLYING IN STYLE ■■ & MORE

NEW

SPAP

ER

In twist, home equity loans rise

After buyingAmTrust,NYCB addslocal staff

Metro goes off campusThe county-subsidized health

system is continuing an initiative itstarted last summerto bulk up its outpa-tient operations atcommunity centersacross the city ofCleveland and its

suburbs. Read Tim Magaw’s story on

Page 8.

INSIDE

And borrowers seemingly are more prudent, unlike past frivolityBy MICHELLE [email protected]

This is housing-related news somemight not expect.

Even though property values remaindepressed and people’s equity intheir homes is lower in many cases than it was a few years back,

numerous financial institutions areseeing big gains in their home equitylending.

The dollar volume of CharterOne Bank’s home equity loans andlines in Northeast Ohio shot up229% in 2010 from 2009 levels,which were up 35% from 2008.

“It’s grown at a pace unlike we’ve

seen for years,” said Randy Corbin,Charter One senior vice presidentand retail banking director for Ohio.

At KeyBank, home equity lines ofcredit — which carry variable rates— have dropped in Northeast Ohio,but home equity loans are up dra-matically, said Cindy Balser, seniorvice president and senior product

manager. New dollars deployed inthose home equity loans — whichcarry fixed rates — climbed 400% in2010 over 2009, and the upwardtrend continues this year. Volumewas up 190% in this year’s first quarterover the year-ago period.

And after a decrease in home equity loans and lines during the 12months that ended in March 2009,Eaton Family Credit Union recorded

Since deal in late 2009,bank focuses on stabilityBy MICHELLE PARK [email protected]

It’s been nearly a year and a halfsince New York Community Bankbegan operating in Northeast Ohiowhere AmTrust Bank once did, andthe company has added to its staffand business operations here just asexecutives said it would.

Westbury, N.Y.-based NYCB acquiredthe failed AmTrust Bank in Decem-ber 2009 in a deal arranged by theFederal Deposit Insurance Corp. Itassumed $8.2 billion in deposits and 66 branches in three states and operates here as Ohio Savings Bank.

Though not typically what thecompany does after an acquisition,the thrift has brought certain opera-tions to Northeast Ohio. A call centerwith nearly 100 employees in subur-ban Brooklyn has become NYCB’scentralized retail banking call center,and NYCB also is in the process ofmoving some disaster recovery services to Cleveland, said Joseph R.Ficalora, president and CEO of NewYork Community Bancorp, NYCB’sholding company. As a result, one oftwo disaster recovery sites in NewYork will close.

“These are things that we’re doingin Ohio that we weren’t doing before,”

See NYCB Page 20

See EQUITY Page 19

See CLEANUP Page 7

CLEANUPON WEST 25th

— AND STAT!Community leaders strategizing on how to

revitalize corridor between zoo, market

By JAY [email protected]

eople are beginning to pay attentionto a tattered stretch of one of theWest Side’s main streets.

A group of employers and commu-nity leaders have begun meeting to plot astrategy for improving the look of a three-mile stretch of West 25th Street in Clevelandand linking a group of island neighborhoodsinto a cohesive residential and employmentdistrict. The hope is to spark redevelopmentof the neighborhood comparable to what isoccurring in the nearby Detroit-Shorewayneighborhood and in the Midtown area eastof downtown.

Spurring this community effort is thegrowth of two large employers — Metro-Health Medical Center and L.J. Minor Co. —in the middle of the corridor; comingchanges in traffic flow; and an expected increase in tourist traffic through the corridorwith the opening of the new African Ele-phant Crossing exhibit at the ClevelandMetroparks Zoo and the development of theCuyahoga Valley scenic byway.

The segment of West 25th that is the topicof discussion runs from Ohio City and the

P

JASON MILLER PHOTOS

Community leaders hope to spark growth along the West 25th Street corridor,similar to that in the Detroit-Shoreway and Midtown areas.

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Country/region Index of hourly compensation costs Europe 134

United States 100

Japan 86

East Asia 41

Mexico 13

Philippines 5

China 4

A WORLD OF DIFFERENCEChina is clearly a major player in the global economy, but it has a long way to gobefore it reaches parity with much of the world in labor costs. As measured inU.S. dollars, Chinese hourly labor compensation costs in manufacturing were 4%of those in the United States in 2008, the latest year for which the U.S. Bureauof Labor Statistics could assemble global data. China’s costs “were roughly onpar with those of some developing countries like the Philippines, but lagged behind those of other countries like Mexico and Brazil,” according to the BLS.The average hourly compensation cost in China in 2008 was $1.36. Here’show compensation costs stack up globally, with the U.S. indexed to 100:



It happens sometimes in neighbor-hoods. One day painters turn up toput a fresh face on one house, andsoon more tradespeople are showing

up, re-landscaping the house next doorand putting in a new driveway across thestreet.

Something similar is happening in theHeights area in the eastern suburbs.

University Heights is joining its neighbors Cleveland Heights and ShakerHeights and is changing its approach tothe kind of economic development itwants to encourage.

Long satisfied to be a place where people live, University Heights, like itstwo neighbors, wants to be a place wherepeople work — and pay the city incometaxes.

The suburb is creating an economicdevelopment committee comprised ofresidents and development professionals,and it’s considering hiring a part-timeeconomic development coordinator tofind ways to bring office workers to acommunity that has little traditional officespace.

“Communities like University Heights,Shaker Heights and Cleveland Heightsare traditional bedroom communities,”

APRIL 25 - MAY 1, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“Really, for anyone tohave enough equity intheir home to be doing this, it’s notsomething we wouldhave thought to bethe case.”— Mike Losneck, CEO, EatonFamily Credit Union. Page One

“The value of collegesports ... is at an all-time high, and ifyou’re able to expandyour media footprint,ultimately it increasesyour ability to sell(television) rights andadvertising.”— Lee Berke, a New York-basedtelevision consultant. Page 6

Fuel cell growthlags, and statesupport wanesAdvocates say they must better educate policymakers on industry’s vast potentialBy CHUCK [email protected]

Convincing Rolls-RoyceFuel Cell Systems to keepexpanding its U.S. head-quarters in North Cantoncould be hard if state andfederal support for the fuelcell industry shrinks toomuch, according to Mark Fleiner,CEO of the company.

Mr. Fleiner and several otherswho spoke last Tuesday, April 19, atthe Ohio Fuel Cell Symposium inNorth Canton noted that the federalgovernment has been cutting financial

support for fuel cell researchand that state support forthe industry is in question.

Several speakers arguedthat the industry needs towork harder to convincepolicymakers that, whilethe fuel cell industry hasn’tgrown as fast as projected,the technology still has

great potential to create both cleanenergy and manufacturing jobs.(Using hydrogen and other mole-cules as fuels, fuel cells createchemical reactions that generateelectricity.)

“It had always beenour practice to lookfor conferences wher-ever they might be,but we reined that in.… We’re not back towhere we were, butwe’re on our way.”— Jim Aronoff, partner-in-charge, Thompson Hine. Page 15

“Given the frustrationlevel of flying with theairlines, if executiveshave the extra money,they may be more inclined to charter.”— Michael Hoyle, president ofBusiness Aircraft Group Inc. Page 17

Atlanta labor law firm latest national force to enter Northeast OhioCleveland’s Millisor + Nobil finds right fit after years of merger resistanceBy TIMOTHY MAGAW

[email protected]

The recent acquisition of Millisor+ Nobil by Atlanta’s Fisher & PhillipsLLP has Steven Nobil feeling a littlebit of déjà vu. After all, he’s backwhere his whole career started —just in a different city.

After graduating from Ohio StateUniversity’s law school in the early1970s, Mr. Nobil joined Fisher &Phillips’ practice in Atlanta. But soonthereafter, he got the itch to comeback to Ohio, and he joined with KenMillisor to start an independent,

Cleveland-based employ-ment and labor law firm.

“If you’re not prepared tomake changes in your life,then you’re going to end uppretty static,” Mr. Nobilsaid.

Mr. Nobil said he and hispartners for years had resisted the pressure to beabsorbed by large national firms,though he had difficulty explainingwhy, other than a merger “either

fits or it doesn’t.”When Fisher & Phillips

first broached the idea ofan acquisition, Mr. Nobilsaid the firm wasn’t inter-ested. But after someprodding by a mutual associate, representativesfrom both firms decided tomeet, and now Millisor +

Nobil dons the Fisher & Phillipsmoniker.

“It turns out we were able to

make the case that we were differ-ent,” said Roger Quillen, managingpartner at Fisher & Phillips. “Weshare values. There just seemed tobe a real fit from the beginning eventhough they told me upon arrivalthat, ‘we’re happy to talk to you, butdon’t expect anything to come ofthis.’”

Fisher & Phillips did not disclosethe terms of the deal, but Mr.Quillen said he expects the acquisi-tion to add about $8 million in rev-

enue this year. Last year, Fisher &Phillips brought in $107.5 million.

The dust settlesMr. Quillen said the acquisition

rides on the tail end of a trend thatpeaked a few years ago, when threeof the major labor law firms stam-peded into the Cleveland market.

In 2007, for example, Atlanta-based Ogletree, Deakins, Nash,Smoak & Stewart P.C and LittlerMendelson P.C. of San Francisco established locations in the city. Littlercame to town through its merger

See LAW Page 18

See PAY Page 4

See SUPPORT Page 18

Nobil

Fleiner

JANET CENTURY

University Heights mayor Susan Infeld took over the job last year and is exploring economic development ideas. “We needto look at ourselves a little differently now,” she says.

LIVE, WORK AND PAYUniversity Heights aims to draw more workers — and their income taxes — to the traditionally residential community

UNIVERSITY HEIGHTS PROFILETraditionally a bedroom community,

the city is looking for ways to driveeconomic development and lure moreworkers. A look at the specifics:

Population: 13,500Largest employer: John Carroll

University, with about 540 employees(the school estimates its workers payabout 10% of the city’s income taxes)

Potential areas for develop-ment:

■ Half-vacant University Squareshopping center, which includes a Tar-get and Macy’s. Mayor Susan Infeldsees the space as a possible homefor offices and incubators, along theline of what Shaker Heights has done.

■ Corner of Cedar and Taylor

roads, which is largely retail and hasempty buildings that could be redevel-oped, Mayor Infeld said.

Quotable: “We’re challenged. ...We don’t have areas that are neces-sarily attractive or amenable to busi-ness.”

— Frank Consolo, UniversityHeights councilman


said University Heights Mayor Susan Infeld. “But we need to lookat ourselves a little bit differentlynow and look at being able to offermore for our residents than justlovely homes and a little bit of retail.

“We’re growing up,” she added,and acknowledged that the need tofind new sources of tax revenue ispushing this new approach to development.

Gut checkMayor Infeld is new to the job,

taking over last year from BerylRothschild, who had been the city’smayor for 32 years. Last month,Mayor Infeld held a retreat with Uni-versity Heights’ seven city council

members to develop new ways toprepare the city for a financiallyleaner future.

In addition to boosting the city’seconomic development profile, thepolitical leaders agreed UniversityHeights needs to start collaboratingmore with its neighbors and region-ally.

“Economic development is the gutsof government these days,” Coun-cilman Phillip Ertel said. “If we are going to take one idea from our retreat,I’ll be pleased if it’s hiring someoneto do economic development.”

University Heights is a smallcommunity, with only 13,500 resi-dents, most of whom work outsidethe city. Its largest employer is JohnCarroll University, which has about


Volume 32, Number 17 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 © 2011by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $1.50. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. 1-877-824-9373.

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continued from PAGE 3

Pay: City eyes developed sites 540 people on its payroll. The university estimates its workers pay10% of the city’s income tax.

The city has little vacant land anddoesn’t expect to expand the amountof property zoned for commercialdevelopment, Mayor Infeld said. Instead, she’s looking for creativeways to turn existing buildings intocommercial space.

“It would be nice to focus on areasalready developed for commercialactivity and make sure it’s full andpreserve the residential character ofthe city by keeping homes separatefrom commercial,” she said.

Rezoning has been a hot-buttonissue in University Heights for sometime. Resident pressure has forcedthe city since 2007 to put off rezoningfor a property on Warrensville CenterRoad south of the University Squareshopping center. The first skirmishwas over a plan for a car wash on thesite; more recently, residents objectedto a McDonald’s restaurant.

Mayor Infeld’s first thought is tosee if vacant space in the UniversitySquare shopping center can beturned into offices and business incubators. University Square is afour-story shopping center builtaround a parking structure. Targetand Macy’s are major tenants in the287,000-square-foot center, but ithas been half empty since a Tops supermarket closed in 2006.

Shaker Heights already is doingsomething similar. It bought a vacantauto dealership and has turned itinto incubator space for young businesses. It also is looking at retailand office redevelopment alongWarrensville Center Road, an arteryit shares with University Heights.

Likewise, Cleveland Heights islooking to redevelop existing properties— perhaps closed school buildings— into office or incubator spaces.

Up to a challenge?Mayor Infeld also wants to create

a brand identity to better market alargely retail area in the city’s north-west corner, at Cedar and Taylorroads. It has several empty buildingsalong the border with ClevelandHeights that could be redeveloped.

Councilman Frank Consolo thinksUniversity Heights faces a morecomplicated economic developmentchallenge than its neighbors.

“We don’t have areas that are necessarily attractive or amenable to business,” Mr. Consolo said. “Wehave one strip (along WarrensvilleCenter) that’s been fought over sinceI’ve been in council, first with a carwash and now with McDonald’s.”

But neither project, he said, “is going to set the world on fire for us interms of money.”

Nonetheless, Vince Adamus, aneconomic development consultantwho has served as economic devel-opment director in both Brook Parkand Beachwood, thinks UniversityHeights is making a smart move. Hethinks hiring an economic delopmentcoordinator would help.

“It bears fruit,” he said. “The realestate brokers tell me it’s good tohave a person on the ground, a go-toperson for the development commu-nity.” ■


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LCCC’s $40M bond sale to support rapid growthBy TIMOTHY [email protected]

Lorain County Community College’senrollment has grown 120% over thelast decade, and it plans to sell $40million in bonds to help financethree construction projects that wouldaccommodate the steady growth andextend its regional footprint.

Marcia Ballinger, vice presidentof strategic and institutional devel-opment, said the school servesabout 16,000 students annually on acampus built for 6,600 students.

“From a demand perspective, wehave had exponential growth, whichis really indicative of today’s economyand the growing recognition of com-munity colleges,” Ms. Ballinger said.

The construction projects arepart a strategic plan adopted by thecollege about five years ago. Theplan includes renovating its old library, which now is used as a mul-tipurpose center, at a cost of $17.5million; a new culinary arts andconvergent digital arts building at acost of $12.5 million; and a newsatellite location in North Ridgevillewith a $12.5 million price tag.

Only construction on the multi-purpose center is under way. Con-struction at the other two locationsis slated to begin in the comingmonths, with openings planned forthe fall of 2012.

Over the last decade, LorainCounty Community College hasopened satellite locations in downtown Lorain (in 2001) and inWellington (in 2008), and created ajoint venture in Brunswick with theUniversity of Akron in 2009. Thenew North Ridgeville site will be at the intersection of Interstate 480and Lorain Road.

“We’re already bursting at theseams from a facilities perspective,”Ms. Ballinger said.

Lorain County Community Col-lege estimates the maximum annualdebt service obligation on the bondsale would be $2.6 million. Admin-istration officials say student feesare not expected to rise as a result ofthe sale, as the bonds would be fi-nanced through existing operatingfunds and existing student fees.

The college also plans to obtainan updated credit rating fromMoody’s Investor Services. ■

MAC follows its Temple templateLast week’s additionof UMass gives leagueanother top market By JOEL [email protected]

The Mid-American Conferencereaped enough benefits when it addedTemple University as a football-onlymember in 2005 that it decided to doit again.

Sure, the names were different inlast week’s announcement that University of Massachusetts-Amherstwould compete as a MAC member infootball beginning in 2012, but thegoal is identical: Increase the confer-ence’s footprint by moving into major media markets previously underexposed to college football.

The MAC accomplished that withthe addition of Temple, in Philadel-phia, which added to the league’sfootprint the No. 4 media market inthe United States, according toNielsen Co. The addition of UMass,the major college of interest in thatstate, brings into play Boston, theNo. 7 market, according to Nielsen,and to a lesser extent, Hartford,Conn., the No. 30 market.

“We brought value to Temple,and Temple brought value to theconference,” MAC commissionerJon A. Steinbrecher said. “As youenter into new markets, you broadenyour footprint, sponsorship rightsand TV opportunity. These areunique opportunities for us.”

Population data also illustrate theimpact. The league, prior to addingTemple, had 12 schools; the popu-lation footprint of those schools —including Cleveland, Cincinnati,Detroit and Chicago, based on theirproximity to member institutions —is 21.5 million, according to NavigateMarketing, a Chicago-based sportsand entertainment research firm.

By adding Philadelphia andBoston, the conference adds 10.6million in population — a nearly50% increase. And that helps whenit comes to securing media deals.

Rick Chryst, of counsel at Cleve-land law firm Walter & Haverfieldand the MAC commissioner whenTemple came on board, said Tem-ple and the Philadelphia market’spresence helped the league when itformed in 2006 a regional footballpackage with ESPN; that was rightaround the time the Big Ten formedits own network and vacated regionalESPN time slots.

That ESPN contract was renewedin 2009 for eight years and hasgrown wildly: This fall, 15 gameswill air on ESPN, ESPN2 or ESPN3,with a six-week regional componentto supplement the national presence.The regional games appear in 25markets, including Chicago, Philadel-phia, Detroit and Cleveland.

Next in lineThe MAC is following the blue-

print of conferences such as the BigTen and Pac-12, said AJ Maestas,president of Navigate Marketing.He cited the Big 10’s long-ago addi-tion of Penn State as a gateway tothe eastern United States, and thePac-12’s courtship of Colorado andUtah.

The latter additions gave the Pac-12, which was rumored last summerto be hard after Texas and other big-name schools, a hefty presence inthe Denver and Salt Lake City markets.

“You didn’t see the (Pac-12) goafter Kansas State” in Manhattan,Kan., population: 52,281, Mr. Maestassaid. “The MAC looked at its current

members and added significantly toits presence.”

That’s the name of the game, saidLee Berke, a New York-based televi-sion consultant who co-wrote theoriginal business plan for the Yankees’ YES Network, often con-sidered the model for team-ownedregional sports networks. He saidthe MAC’s expansion approach makesperfect sense, amid the rat race thatconference realignment has become.

“The college sports landscape isbooming from a media standpoint,”said Mr. Berke, who runs a firmcalled LHB Media. “The value ofcollege sports, particularly football,is at an all-time high, and if you’reable to expand your media foot-print, ultimately it increases yourability to sell (television) rights andadvertising.”

Other benefitsFor the conference’s more tradi-

tional members, the moves have increased significantly their exposurein the Northeast, where previouslythe MAC was little known, said KentState athletic director Joel Nielsen.

That exposure has been helpedby Temple’s success under Al Golden,who left the school this winter to become head coach at the Universityof Miami. Temple in 2009 played inits first bowl game since 1979 as partof the MAC’s enhanced bowl tie-ins.

“With the additional exposure onESPN, we’ve had more mentions ofKent State (and) of the MAC in general,” Mr. Nielsen said. “Weknow firsthand what that means; itassists the athletic program, and itassists the whole university.”

TV exposure also helps with recruiting, as does the chance toplay in professional stadiums. Templerents the Eagles’ Lincoln FinancialField, and UMass has a rent-freedeal with the New England Patriotsto play games at Gillette Stadium inFoxborough, Mass.; the school andteam split revenues from the games.

In addition, the MAC requiredTemple and now UMass — bothmembers of the Atlantic 10 Confer-ence outside of football, and eachwith high-caliber basketball pro-grams — to play at least four men’sand women’s basketball gamesagainst MAC schools each year aspart of their admission to the MACas football members. ■



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West Side Market on the north endof the road and the zoo on the south.

Cleveland City Councilman BrianCummins, who inherited much ofthe southern end of the corridorwhen City Council redistricted before the 2009 election, said a firstmeeting this month brought togethermany of the stakeholders in the areato see if they could develop a coordi-nated effort to improve the look andfeel of the thoroughfare. The corridorhas suffered in part because the arealacks strong neighborhood develop-ment groups that could help fightthe residential and commercial dete-rioration on West 25th.

“Hell, we can’t even get bannerson the street,” Mr. Cummins said.

Nonprofit development groupssuch as Ohio City Inc., Tremont WestDevelopment Corp. and the DetroitShoreway Community DevelopmentOrganization can play key roles inneighborhood development becausethey bring neighbors together forgrassroots efforts to fight blight.They also can act as intermediariesthat buy and assemble parcels ofland, including vacant properties inthe hands of the city or county.

A battered ‘front door’Bobbie Reichtell, senior vice

president for programs for Neigh-borhood Progress Inc., a foundation-supported nonprofit that providesprofessional support and at times financial assistance to neighborhoodgroups, said there’s much work to bedone on the street.

“It’s pretty unsightly in someplaces,” Ms. Reichtell said. Hergroup has its office on West 25th

across from the West Side Market.Neighborhood Progress sponsored

a field trip last November to Pitts-burgh for Mr. Cummins and a fewothers to tour that city’s revitalizedPenn Avenue district, looking forideas that might be applied to West25th. Then, this month, she broughttogether a group of about 30 repre-sentatives of various companies andorganizations to begin thinkingabout how to spruce up the corridor.

“We view West 25th Street as ourfront door,” said John Corlett, vicepresident of government relationsand community affairs at Metro-Health Medical Center, who attendedthat meeting. “So, we’re very sup-portive of any effort that improvesthe area.”

MetroHealth employs nearly 6,000people in the middle of the corridorand over the last decade has pushedits physical presence west fromScranton Avenue to West 25th.

Mr. Corlett said the hospital is

continued from PAGE 1 starting to assess how its campuswill develop over the next few years,spurred in part by the likelihoodthat its nearest neighbor — thestate-run Cleveland PsychiatricHospital — will be closing and itsland turned over to MetroHealth.

Further north, L.J. Minor, a divisionof Nestlé SA, is beginning a multi-million-dollar expansion of itsplant at the Queen Avenue intersec-tion of West 25th. L.J. Minor makessoup bases and other professionalculinary products. A Nestlé spokes-woman did not return by deadlinethree attempts to make contact.

Opportunity corridorA key force behind the first meeting

was Tim Donovan, executive directorof the Ohio Canal Corridor, a non-profit that promotes the recreationalcorridor between central Ohio anddowntown Cleveland, including theTowpath Trail. West 25th is part of afederally designated scenic bywaythat provides tourists access to thetrail.

“Let’s face it — West 25th Street, ifyou tell people it’s a scenic byway,they have a little trouble translatingthat,” Mr. Donovan said. “This is anopportunity to look at the physicalinfrastructure and the curbside appeal and make sure we can address this with a strategy thatbrings new investment to West 25th

Street.”

Mr. Donovan said it’s a goodtime to begin this effort because thererouting of traffic for the rebuildingof the Inner Belt highway will bringsuburban commuters along West25th for the first time.

“It’s going to be an opportunitygained or an opportunity lost,” hesaid. “Those people that haven’t drivendown West 25th are going to be making judgments about Cleveland.”

Neighborhood Progress is helpingwith the effort in part by enlistingthe aid of the Detroit Shorewayneighborhood group to providesome leadership to the project. TheDetroit Shoreway group has led themuch-praised, $33 million-plus redevelopment of its West Side

home turf. Those involved in theWest 25th plans say it’s too early toapply a price tag or timeframe tothe corridor’s transformation.

“We want to be practical and wewant to look at low-hanging fruit,”said Ms. Reichtell of NeighborhoodProgress. “These would be thingsthat are economical to do that canenhance the attractiveness (of West25th) and make it more conducivefor businesses to move in.”

One idea she mentioned that hasbeen a success in improving PennAvenue is what one Pittsburghgroup calls a “green and screen”program that landscapes parkinglots and other empty spaces alongthe avenue. ■



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Metro hopes community push offsets uncompensated careBy TIMOTHY [email protected]

Officials at MetroHealth say thefuture of the county-subsidizedhealth system isn’t only at itsbustling urban campus off West 25th

Street, but also at a handful of community health centers in andaround Cleveland.

MetroHealth launched an initiativelast summer to beef up its outpatientoperations and to expand its market reach through the commu-nity health centers. At the sametime, the health system is recruitingthrongs of doctors and has expandedaccess to its insurance plan, Metro-Health Select.

MetroHealth’s strategy of capi-talizing on its outpatient assets ismeant to drive more patients —and thus, more revenue — to thesystem. The system never has beena major cash cow in the Clevelandarea, as it largely serves a poorerpopulation than, for instance, the Cleveland Clinic or University Hospitals.

Broadening its patient base,though, will help MetroHealth offset the heavy amount of debt thesystem carries as a result of the uncompensated care it provides.

Last year, despite declining countysupport, MetroHealth provided$109 million in charity care, up from$100 million the previous year.

“MetroHealth — like most healthcare organizations — does dependon a balance of commercially insured patients to help finance thecare for others,” said Phyllis Marino,vice president of market develop-ment at MetroHealth.

MetroHealth’s location near theheart of downtown has disadvantagesas the city’s population continuesto move to the suburbs, so officialsconsider outpatient centers a keycomponent of its strategic growthstrategy.

“Our patients are moving to allparts of Cuyahoga County,” Ms.Marino said. “That includes our insured and uninsured patients.There’s some notion the uninsuredpatients might live closer to the city,but in reality, they’re all over.”

To the ’burbsSo far, MetroHealth’s suburban

strategy has reaped benefits. Thehealth system has made changes tothe way it operates its outpatient locations in Brooklyn, Strongsvilleand Cleveland’s Broadway neigh-borhood, and the number of

patient visits at those facilitiesclimbed 20% in the first quarter ofthis year compared to the like periodlast year.

The system plans to roll out thechanges to 10 other outpatient facilities throughout the county inthe coming months in order toboost the number of patients theycan see. Some of the changes include freeing up physicians fromadministrative work, adjusting thenumber medical assistants or nursesavailable at each location andtweaking the scheduling models toaccommodate more patients.

“We want to make sure we started with a care model that was ateam approach,” said Dr. Ed Hills,MetroHealth’s chief operating officer. “By doing that, you’re ableto use physician extenders, likenurse practitioners, so physicianscan free up their time for more face-to-face visits.”

By adjusting its operations to see more patients, MetroHealth is laying the groundwork to constructnew community health centers,though hospital officials aren’tready to signal where they may be.

“We still have plans to build newlocations, but we’re just assessinglocations carefully,” said Dr.

William Lewis, chairman of the system’s market development cam-paign and chief of clinical cardiologyat MetroHealth.

Carefully plotting where Metro-Health’s new community healthcenters are located is an importanttask, as the market is flush with suchsites through the Cleveland Clinicand University Hospitals health systems.

Still, Dr. Lewis said MetroHealthhas a strong presence in Cleveland’soutlying communities, particularlyStrongsville.

“We are playing a little bit ofcatch up,” Dr. Lewis said. “But wethink we have all of the pieces inplace to have this happen very well.”

In some respects, he said, Metro-Health is ahead of the game because of resources such as its insurance plan, community healthcenters, its data tracking patientoutcomes and its electronic medicalrecord system.

We’ll cover youIn recent months, MetroHealth

has been pushing its insurance plan,MetroHealth Select. Previously, it onlywas offered to Cuyahoga Countyemployees, but it’s been expanded foremployees in other municipalitiessuch as Olmsted Falls, OlmstedTownship and Walton Hills.

And more insurance enrolleesmean more patients, thus the needfor access to existing and new community health centers, Dr.Lewis said.

“You can’t have one without theother,” he said. “If we have Metro-

Health Select, we need to have access in all parts of CuyahogaCounty. This product has tremendousinterest among municipalities,companies and other organiza-tions.”

MetroHealth officials tout the lowcost of the insurance plan comparedwith its competitors, and they saidMetroHealth is in negotiations witha handful of companies that are interested in offering the plan totheir employees. A working groupadvising the new county govern-ment reported that since 2008, theplan saved the county between$3,000 and $4,000 per year per employee who switched to the insurance plan.

A health system offering its owninsurance plan isn’t a model that’snew for Northeast Ohio. Akron’sSumma Health System’s insuranceplan — SummaCare — offers coverageto more than 155,000 peoplethroughout the region.

Regardless, Dr. Lewis said expanding access to its insuranceplan and community health centerssituates MetroHealth well for becoming an accountable care orga-nization — a still-evolving aspect ofthe federal health care reform lawthat aims to align medical providersand reward them with financial incentives for offering quality careat a controlled cost.

“I think we are reassured that wewere heading in the correct directionwith that,” Dr. Lewis said. “We haveall the pieces in place to be a high-quality accountable care organiza-tion.” ■



Building owners see energy efficiency upgrades as worthwhile‘Green’ improvementsenhance properties’value, selling pricewhen market returnsBy STAN [email protected]

William Beargie, a certified publicaccountant, has removed the datedmansard roof of his Westlake officebuilding and replaced it with asloped roof outfitted with solar cellsthat will help him slash his electricbills.

“Cutting my electricity costs toabout $5,000 a year from $8,000 ispretty attractive,” Mr. Beargie said.

The decision to pursue the projectwas made easier because Mr.Beargie received a grant from a just-expired state program for the instal-lation, plus a federal energy deduction,and he wants to sell energy creditsfor the project. All told, the incen-tives will pay about 80% of the cost ofMr. Beargie’s energy updates.

State and federal grant programsmay be in flux, but commercialbuilding owners increasingly are taking steps to make their propertiesmore energy efficient. Ironically, thewoes of the commercial real estatebusiness — which is dealing withlower margins due to falling rentsand rising vacancies — are fuelingsome of the action.

Although bank financing for general building improvements remains scarce, building owners aredigging deep to fund efficiency efforts to cut utility costs becausethey make properties more profitableand may lead to higher selling prices when the investment marketreturns.

There are broader interests atstake here than just private pocket-books. Commercial buildings lastyear consumed about 20% of all energy in the U.S. economy, accordingto the Obama administration, sowidespread improvements to suchbuildings can have a big impact onthe country’s energy sufficiency.

Property owners are waging thisfight on a building-by-building basis.

Kenny Coven, a CB Richard Ellismanaging director who overseesabout 9 million square feet of commercial properties in NortheastOhio, said an increasing number ofthe buildings his firm is responsiblefor managing have owners who wantto reduce expenses in these leantimes.

“With proper steps, a building of600,000 square feet can trim its elec-tric bills by 15% to 26%,” Mr. Covensaid. “That’s a lot of money.”

Typically, an energy audit costingaround $7,000 recommends stepssuch as adding variable speed motors to heating and cooling systems, or replacing older magneticbulbs and ballasts in lighting sys-tems with newer fluorescent lights.

So much for the night shiftConsider just one building, the 28-

story Eaton Center at 1111 SuperiorAve.

In a program it began three yeasago, the building’s owner, SovereignGroup LLC of New York, slashedpower costs 26% with steps such asreplacing two, 600-ton chillers witha 500-ton chiller and a 700-tonchiller that allow the system to varyhow hard it works. It also updated

PHOTO PROVIDED

CPA William Beargie is outfitting his Westlake office with a roof featuring solarcells, aimed at cutting his electricity costs.

lighting systems and added sensorsthat allow lights in hallways to go offat night. This year, heating and coolingsystem fans that run constantly atfull force will receive controls so theycan be slowed or sped up as condi-tions warrant.

Eaton Center officials would notdisclose total cost savings, but indi-cated the steps trim electrical bills by$10,000 to $25,000 monthly from priorlevels.

Thomas West, a principal at theCresco real estate brokerage in Inde-pendence, said the drive for energyefficiency even is transforming tenant and building owner negotia-tions.

“In times past, tenants wanted tocap their (energy) costs in lease negotiations,” Mr. West said. “Nowthey want landlords to control theirutility costs.”

Tenants in some cases are askedto embrace changes in practices thatmay not require capital investments,but will save energy. A primary example is an increasing number ofbuildings going to daytime cleaningcrews if tenants approve them.

“Traditionally, cleaning crews gothrough a building floor by floor,turning lights on as they go,” Mr.Coven said. “In the daytime, theydon’t need to turn on the lights tosee to clean. They’re already on.”Sensors that douse hallway lights atnight until someone walks by alsoare growing common, he said.

Planting changes in the plantOffice building owners aren’t the

only ones on an energy-efficiencykick. Akro-Mils, a unit of Akron-based Myers Industries Inc., recentlycompleted what general manager JeffGervais described as major energy-saving initiatives at its main plant inWadsworth.

The installations included newfluorescent lighting systems that replaced halide lighting from the1990s and other lighting systemsdating from the plant’s construction38 years ago. The company put inswitches in its warehouse so lightscome on only when workers enter thatarea. Injection molding machinesfrom the 1980s were replaced withmore efficient current equipment.

The maker of plastic storage binsand metal storage, organization andmaterial handling products wouldnot disclose how much it spent onthe improvements. However, it expects a $40,000 annual savings inlighting costs as it reduces electricity

costs 50%.“We’re excited knowing that the

outcome will have a positive impacton the environment as well as increasing the level of efficiency withwhich our products are created,” Mr.Gervais said.

Wrangling for a credit

An aggressive energy programalso is in the works at the Tower CityCenter complex, which last monthbegan reviewing legal agreementsto accept grants for more than$500,000 that its owner, Forest CityEnterprises Inc., was awarded lastDecember under the 2009 federalstimulus bill.

The federal grants will go towardupgrading interior lights andadding exterior LED lights similar tothose on Forest City’s TerminalTower building. Plans also call for asteam turbine-powered electricgenerator to convert waste heat to electricity for the retail-officecomplex.

Brian Capelli, who manages TowerCity, wouldn’t estimate how muchthe improvements will save ForestCity, but he acknowledged the center’s 20-year-old lighting systemis outdated.

Incentives from utilities are oneelement in some of the updates, buta common element in many of therecent efforts to reduce energy consumption by as much as 20% is the ability to use a federal tax deduction of as much as $1.60 asquare foot.

Last February, the Obama administration proposed a “BetterBuilding Initiative” that offered toreplace the energy tax deductionwith a yet-to-be-determined energycredit that would be easier for companies to secure. Mr. Capelli, a national board member of theBuilding Owners and Managers Association trade group, said fewcompanies receive as much of a deduction as they desire becausetechnical requirements are difficultto reach.

President Barack Obama proposedthe package before federal budgetbattles with the Republican-led U.S.House of Representatives dominatedthe national agenda. Prospects forparts of the initiative have becomeuncertain, but insiders believesome parts of the initiative will beenacted, particularly those replacingthe federal deduction for commer-cial energy-efficiency investmentswith a credit.

“There is built-in support formaking existing programs work better, especially the energy tax deduction, perhaps through tax reform,” said Bryan Howard, lobbyistfor the U.S. Green Building Council.“At this point, it’s more alive thandead.” ■


This column is about apartheid, afree press and an obituary notice,and they all involve yours truly.

It’s rare to read an obituary ofa national figure and recall a seminalmoment with that person. But that’swhat happened to me this week when Ilearned of the death of William Rusher, anationally known conservativefigure and longtime publisherof National Review magazine.

Mr. Rusher, along with otherAmerican journalism giants, wasa member of the now-defunctNational News Council when Itraveled to New York City as ayoung and suddenly unemployedreporter who had been asked totestify in a hearing about theowner of my former company.

I was in my mid-20s, and was caughtup in an ethical dispute in the newsroomof The Mining Journal, a daily paper inMichigan’s Upper Peninsula (in Mar-quette) owned by Panax Newspapers.Infuriated by Panax’s insistence that wepublish biased, untrue articles aboutPresident Jimmy Carter and his wife,

both our editor and city editor had resigned. Dave Rood — a respected figurein his town of Escanaba and editor of thesister Panax newspaper there — refusedto resign and forced the company, led byJohn P. McGoff, to fire him.

Some of the Mining Journal reporters— me included — had written an op-ed

piece in support of our editors,and Panax refused to print it,thus ending the employment ofthree of us. Citizens’ commit-tees were formed in Escanabaand Marquette to boycott thepapers. The New York Timesand Chicago Tribune were reporting about this protestover newspaper ethics. CBSproduced an hour-long specialreport on the dangers of chain

ownership of newspapers, and our revoltwas at the center of the show.

And there I was, sitting in a conferenceroom in Manhattan with Mr. Rusher andother members of the News Council,which included at the time CBS Newspresident Richard Salant, Joan GanzCooney (creator of the Children’s Televi-

sion Workshop) and a member of thePulitzer family.

I recall that Mr. Rusher was opposedto the censure of Panax for trying to force thepublication of the stories, but the councildid just that, and the results were pub-lished in the Columbia Journalism Review.I also recall that I didn’t agree with himbut admired the tenacity of his position.

The National News Council — whichwas formed as a sort of national ombudsman for considering complaintsabout the press — died in the early1980s, when many of the large news organizations refused to fund its opera-tions. It’s a shame, because now mostmajor newspapers have an editor dedi-cated to dealing with similar complaintsabout news coverage.

As for Mr. McGoff, he finally sold hisnewspapers, and later died. A few yearsafter the U.P. revolt, a retired SouthAfrican supreme court judge headed upa commission that determined that Mr.McGoff had been financed in part by thewhite ruling government of that countryto influence public opinion in the U.S. insupport of apartheid. ■


Stimu-lessT

he heads of municipal governments and local school districts have made a big stinkabout the budget cuts they’ll need to makebecause of the reduced level of state support

they would receive under Gov. John Kasich’s proposed two-year budget. They should save us thehistrionics, because they knew — or should haveknown — as far back as two years ago that this daywas coming, and they deserve a share of the blamefor failing to prepare in the intervening time for fewer dollars from the state.

Even if deposed Democratic Gov. Ted Stricklandwas still in office, it’s likely Ohio’s next biennial budget still would be scrimping on support for localgovernments and schools. Why? Because of the absence this time around of nearly $1.8 billion infederal stimulus money that two years ago allowedthen-Gov. Strickland to make ends meet — barely— in the current, two-year general fund budget.

The Obama administration hoped back in 2009the stimulus money would prop up state govern-ments long enough to get them through the worst ofthe recession, when their tax revenues were falling,and wouldn’t be needed by the time those dollarsran out in two years. But as a jobless rate that hangsaround 9% attests, the economy still hasn’t pickedup enough to rejuvenate the income tax take of thestate and many municipalities. And a depressedhousing market where home values remain weighteddown by tons of foreclosures continues to crimp theproperty tax receipts of many school districts.

Given the imminent loss of stimulus money, wecan’t back the current push by Gov. Kasich and Republican lawmakers to repeal Ohio’s estate tax.As we’ve stated previously, we agree in principlewith ending the tax. However, now is not the time,because the communities where deceased individualsresided receive 80% of the $300 million-plus a yearin estate tax receipts, and many of them desperatelyneed all the tax dollars they can get. (The PersonalView by Martin R. Kolb that begins on this pagemakes a great case for retaining the tax.)

Yet even if the estate tax remains intact, it stillwould do nothing to replace the crutch of stimulusmoney that will disappear June 30, when the state’sbudget year ends. And that’s the bigger problem.

Back in February 2009, state Rep. Bill Batchelderof Medina warned that the use of stimulus dollars tocover the state’s operating expenses “is dangerousto taxpayers, as it creates a structural imbalancethat will only put off and exacerbate our budgetproblems into the future.” Well, the future is here,and as Rep. Batchelder correctly predicted, the consequences of filling budget holes with tempo-rary money will be severe, both for Ohio and formany of its towns and school districts.

The surprise with which mayors and school superintendents are reacting to the cuts they’reabout to see in their share of state general fundmoney is hard to understand. They could have usedthe last two years to evaluate their operations and todraw up contingency plans for the inevitable reduc-tion in state support that was bound to occur oncethe stimulus money vanished. It appears many didnot — and that’s not Gov. Kasich’s fault.

FROM THE PUBLISHER

PERSONAL VIEW

BRIANTUCKER

The intersection of journalism history

Cities will pay price if estate tax repealedBy MARTIN R. KOLB

Iam a recently retired business exec-utive and Republican who supportedJohn Kasich for governor. I applaudthe governor’s efforts to shift the

spending paradigm in Ohio, but disagreewith House Bill 3 and Senate Bill 90,which would repeal Ohio’s estate tax andshift the burden to hundreds of munici-palities.

Eliminating this critical source of vitalincome for community safety, infra-structure and other local services is apoor business decision with no directoffsets or clear sources of new revenue.

I dislike taxes as much as anyone, butbefore eliminating a source of revenuethat brings real dollars to our communi-ties and state, the Legislature needs to

consider the implications of its actionson essential services. It needs to definealternate sources of income to cover theloss.

I live in Shaker Heights, where I recently chaired the Shaker Heights Financial Task Force. We reviewed the financial issues facing our communitycomprehensively. The impact of an estate tax loss would be widespread,hurting many Ohio communities. Citiesand townships have become more effi-cient. They continue to do so. But estatetax repeal would devastate the quality ofmany communities and force requestsfor more local taxes throughout Ohio.

Shaker Heights has averaged approxi-mately $3 million from the estate tax in

recent years. To put this into concreteterms, the loss of the estate tax revenuewould translate into the equivalent reduction of more than 30 police officerswith wages and benefits. That is 45%, ornearly half, of our uniform officers, everyone of whom is needed to keep our com-munity safe and secure.

The Ohio estate tax has been an inte-gral component of the state tax structurefor financing government since 1893,when the Ohio Inheritance Tax first wasadopted. After 118 years of serving theneeds of Ohio’s governments and its citizens, it should not lightly be set asidewithout a thoughtful process that involvescareful consideration of alternatives toreplace it.

From a business and economic

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

Mr. Kolb is a resident of Shaker Heights.

See VIEW Page 11


THE BIG ISSUE

perspective, I believe the proposedrepeal will severely damage Ohio’seconomy, communities and resi-dents, while doing nothing to increase business.

Repeal of the estate tax will elim-inate approximately $70 million ofstate revenue and $280 million oflocal community revenue, worseningan already serious state deficit crisis.At a time of imbalance between revenue and expenses in the state, itis not a prudent business decision toreduce revenue sources.

This is further compounded bythe proposed reduction in the LocalGovernment Fund. Managing andabsorbing two tax-based revenuereductions of this magnitude wouldbe most crippling to our communi-ties and our residents. To replacethese dollars, local communitieswould be forced to seek major taxincreases on millions of Ohioans.

If the estate tax dollars are elimi-nated, it will mean even more program and service reductions.And elimination of the estate taxwould send millions from the state’seconomy to heirs who could be

living in New York or California. Repeal proponents argue the tax

drives business owners out of thestate. This is an abstract and unproven argument with no com-pelling data-based research or evi-dence. The Plain Dealer’s Politifactrecently gave its worst rating for veracity to statements made by amajor repeal proponent.

In my nearly 40 years of runninglarge components of successfulbusinesses, I would never approvesuch an action with these negativeconsequences on quality services,and based entirely on a lack of datato support such an action. With services as vital as community safetyon the line in so many Ohio citiesand townships, and huge cuts in local government aid pending, repeal would be wrongheaded.

Gov. Kasich strikes me as pro-business; so does the legislature.They most certainly understand theconsequences of repeal. I hope thegovernor is looking at HB 3 and SB90 in context, through practical andnot ideological eyes. These are thewrong bills at the wrong time. Hope-fully, they will not move forward. ■


DAVE FENNSagamore HillsI think it’s good for Donald and laughable foreverybody else. … I can’tsee how he’s in any way aserious candidate.

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

What do you make of the possibility of Donald Trump running for president in 2012?

ROB CALABRESEWilloughby HillsAnything’s better than(what we have) now, right?I don’t think he’d be agreat candidate, but I thinkthere needs to be achange.

SHANNON HOEHNENLyndhurstI think he’s maybe seriousabout running, but if he is,it’s slightly terrifying. … Ihaven’t taken him seriouslyenough to know what hisstance is (on issues),which I think is a challengefor him.

JAMES SOMERVILLEClevelandHe’s asking PresidentBarack Obama for his birthcertificate, yet at the sametime won’t reveal all his financial (holdings). … I’mnot sure how that’s goingto fare with Democrats orthe GOP. BUSINESS.

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View: Dual revenue hits would cripple communitiescontinued from PAGE 10

LETTER

■ I always love Brian Tucker’scolumns, but the column, “Focuson the economy, nothing more,” inthe April 18 issue was right on themark — and I couldn’t agree morewith the view it expressed.

My husband, Glenn Brown, and Iwere in Washington, D.C., last weekon a Cleveland Council on WorldAffairs trip. We were reading TheWashington Post plus watching

their local TV stations, and they alsoshowed the same problems there.The partisanship and focus on non-essential budget issues is verydiscouraging.

I truly believe our citizens under-stand that the debt issues in Ohioand in the United States must beaddressed, and we expect our electedofficials to make tough decisions.They won’t get our future support if

they don’t.Ohio’s lawmakers should focus on

the budget and economic issues,rather than deal with a bill to broadenOhio’s concealed weapons law toallow guns in bars, restaurants andopen-air stadiums, where alcohol issold. That scares me to death!

Jeanette Grasselli BrownChagrin Falls

Lawmakers, bring out the big guns

WRITE TO USSend your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W.St. Clair Ave., Suite 310, Cleveland, OH 44113-1230e-mail: [email protected]



true-grit-ednessThe 2011 Key4Women Forum—come curious, leave courageous.

Key4Women® advice | capital | education | networking

* This information is not intended as legal or tax advice. For specific tax advice, please consult your tax advisor. Key.com is a federally registered service mark of KeyCorp. ©2011 KeyCorp. KeyBank is Member FDIC. ADL3191

Key4Women Forum Facts

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8:00 a.m. Registration and networking

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Polymer molder Mar-Bal turns up dials of operationInvestments in Chagrin Falls, globaloperations signal market share growth

By BILL BREGARPlastics News

Polymer molder and com-pounder Mar-Bal Inc. is investinglocally and globally — with plans fora factory in Mexico and a sales officein China, and a new finishing oper-ation at its Chagrin Falls headquartersthat creates a metalized finish onplastic parts.

Family-owned Mar-Bal takes along-term view of its business. Forexample, after outsourcing the metalizing process, Mar-Bal invested$1.5 million to build a dedicatedroom in Chagrin Falls for physicalvapor deposition — the process bywhich it creates the metalized parts.The metalizing and decorating operation, which the companymarkets as Thermital, began pro-duction in February and handlescontrol knobs for ovens and ranges,along with other appliance parts.

By offering attractive stainlesssteel, chrome and brass finishesalong with repeatable textures thatlook and feel like metal, Thermitalhas obvious appeal for appliancemakers, said Steven Balogh, Mar-Balvice president. Stainless steel rangesand refrigerators first became popularfor high-end kitchens, and appli-ance designers took notice. For

Mar-Bal, it was a market opportunity.“We saw the appliance manufac-

turers trying to get more of yourconsumer products to look likestainless. They had to find ways todo that, because it’s just too expen-sive. So, that’s where we saw anopening for this,” Mr. Balogh said.

Big-name customersMetallic looks of steel, chrome

and brass are moving beyond thekitchen to washers and dryers andother household appliances. Andthe home appliance sector is a bigone for Mar-Bal, which specializesin thermoset molding — theprocess used to make plastic parts,such as oven handles and knobsand electrical insulators, that mustwithstand lots of heat.

Mar-Bal already molds parts forappliances with the nameplates ofWhirlpool, Amana, Maytag andElectrolux, among others. Now,Mar-Bal officials say, Thermital willhelp grab new plastic molding busi-ness outside of appliances. KevinCasey, whom Mar-Bal hired last December as its vice president ofsales and marketing to beef up itsefforts to win new business, said thepotential markets include lighting,under-hood automotive and evenice machines.

Mar-Bal has forged strong linkswith Whirlpool, a customer for morethan 20 years, by becoming involvedin Whirlpool’s Six Sigma OperationalExcellence program. Eight years ago,Mr. Balogh participated in an inten-sive, four-week OpEx course, stayingat Whirpool’s training and confer-ence center in Michigan.

Since then, three other peoplefrom Mar-Bal have gone throughOpEx. One — Li Bradshaw, a materialschemist at the company’s researchand development center in ChagrinFalls — has become a Master BlackBelt in Six Sigma. She was certified at aceremony at Whirlpool’s headquartersin Benton Harbor, Mich., last Dec. 17.

Now, Ms. Bradshaw is leadingOpEx training at Mar-Bal.

“The Whirlpool people are actuallycoming out and co-teaching with us,”said Mar-Bal president and CEO ScottBalogh, who is Steven Balogh’s brother.

Ken Kleinhample, Whirlpool’svice president of global quality, saidthe two companies have a valuedpartnership.

“OpEx is the woven fabric of ourcompany’s DNA and now of Mar-Bal’s as well,” Mr. Kleinhample said.

Roots extend to HungaryMar-Bal was founded in 1970 by

Jim Balogh, the father of Scott andSteven. However, the elder Mr.Balogh’s own personal story goesback to his native Hungary.

Jim Balogh was just 17 years oldin 1956 when he joined thousandsof other young Hungarians in Budapest fighting against the Soviet-sponsored government in the Hun-garian Revolution. He was woundedand jailed, but eventually managedto leave for Yugoslavia. There, hesigned up for the U.S. Army.

He was discharged in 1962 andsettled in Cleveland. The tooling engineer got a job at Glastic Corp., aCleveland composites company.While working at Glastic, Jim Baloghstarted Mar-Bal in a small buildingin Cleveland’s Flats industrial area,with a single used machine. Scott andSteven did odd jobs there as children.

Fast forward to today. Mar-Balexpects to generate $47 million insales this year, from plants in ChagrinFalls; Cuba, Mo.; and Dublin, Va.The company employs 335 people.

Companywide, Mar-Bal runs 73presses — 41 injection molding ma-chines and 32 compression molders.The company makes bulk moldingcompounds in Chagrin Falls.

Decades after its humble begin-nings, Mar-Bal is making globalmoves.

Answering China’s callThe Balogh brothers went to China

in 2004 on a trade mission coordi-nated by the Society of the PlasticsIndustry Inc. Those contacts led toMar-Bal buying raw materials fromChina, followed by molds. The com-pany already was sourcing moldsfrom Taiwan.

In 2007, Mar-Bal signed a three-year licensing agreement with aChinese thermoset molder of partsfor the electrical sector. Last year,Mar-Bal renewed that agreement.

“It’s really been a good relation-ship — a good way to start to knowand understand the way of doingbusiness in China, from the raw material sources to the whole marketover there. It’s been a good learningexperience,” Steven Balogh said.

This year, Mar-Bal is opening asales office in Shanghai.

“That will allow us to sell and dis-tribute our current insulator linemore effectively, as opposed to directfrom the U.S.,” Steven Balogh said.

The next step is a Mar-Bal manu-facturing plant in China in the nextyear or two.

Mar-Bal also will open a plant inMexico’s Bajio region, in the centralpart of the country, to better serveappliance and electrical customersthat have production there. Mar-Balofficials said they hope to beginproduction in early 2012. The com-pany already has hired key employeesand is training them. ■

Bill Bregar is senior reporter withPlastics News, a sister publicationof Crain’s Cleveland Business.

Steven Balogh Scott Balogh


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GOING PLACESJOB CHANGES

EDUCATIONCLEVELAND STATE UNIVERSITY:John Parry to athletic director.

ENGINEERINGWHEATON SPRAGUE INC.: ChrisHerchek to project manager.

FINANCETHE FEDERAL RESERVE BANK OFCLEVELAND: William Fosnight tosenior vice president, general counsel;Susan Steinbrick to senior vice president, general auditor. FIFTH THIRD BANK, NORTHEASTERNOHIO: David Hall to vice president,private banking relationship manager;Hugh J. O’Donnell to vice president,business banking relationship manager.

HEALTH CARECLEVELAND CLINIC: Dr. AbbyAbelson to chair, Department ofRheumatic and Immunologic Diseases.

INSURANCEDAWSON COS.: Linda Sekerak tobenefits coordinator; Deborah Blissto benefits account representative;Angela Drook to legal counsel,claims manager; Kevin Rak to helpdesk technician; Melissa Sterby toaccounting assistant; Kim Fortneyand Christie Evans to commercial insurance representatives. THE HOFFMAN GROUP: Lori Smithto select lines account manager. HYLANT GROUP: Don Bryant Jr.to vice president, practice leader —environmental practice; Estelle Lekasto regional wellness coordinator.

MANUFACTURINGA. SCHULMAN INC.: Donald B.McMillan to chief accounting officer.

MARKETINGTHE FAIRMOUNT GROUP: TiffanyMassing to project coordinator.

MEDICAL EQUIPMENTSIMBIONIX USA CORP.: YaelFriedman to director, Regulatory Affairs Department.

REAL ESTATEM.C. REAL ESTATE: Matt Marquardto chief executive officer; BrandonMarquard to president; Rick Stallard to director of property management. TRANSACTION REALTY:Heather Sletten, Greg Wheeler,Sandra Waibel and Grace Zazo to

sales associates.

RETAILVISIBLE VOICE BOOKS: AmyRosenfield to external sales and marketing manager.

TECHNOLOGYTHE KARCHER GROUP: SamSweitzer to application developer;Lisa Davala to search engine optimization specialist.MCPC INC.: Andy Jones to grouppresident, advanced technologygroup; Darin Haines to group presi-dent, converged networks group; Peter DiMarco to executive vicepresident, sales; Mike Montisano tovice president, vendor management;Mike Riley to health care verticalmanager; Dave Clifford to vice president, business development; Brian Cambier to delivery engineer;Gary Henry to account manager,printing and imaging group; MattGear to voice engineer; Joe Wojnarowski to supervisor, managedservices; Marc Barnett and SteveBrady to engineers.

BOARDFIELDSTONE FARM THERAPEUTICRIDING CENTER: Elizabeth B. Juliano (Litigation Management Inc.)to president; Lisa McConnell,Thomas Rathbone, Teresa J.Schaffer and Allen K. Wiant to vice presidents; Mary McMillan totreasurer; Charles P. Alusheff tosecretary.NORTH COAST COMMUNITYHOMES: Ronald D. Holman II(Cavitch Familo Durkin LPA) to chair;Patrick T. Finley and Anne Rapacz-Kimmins to vice chairs; Richard K.Greaves to secretary/treasurer.

Send information for Going Places [email protected].

StallardM. Marquard B. Marquard

MassingO’DonnellHall

S&P credit shot serves as wakeup callNegative outlook pushes debt further into spotlight

By JEFF BENJAMINInvestment News

Investment strategists agree thatthe Standard & Poor’s credit ratingservice fired a shot across the bowof Congress and the Obama admin-istration with its announcementMonday of a negative outlook forthe AAA debt rating of the UnitedStates.

“The national mood right now isone where people are expectingWashington to start dealing withthe debt, and this (credit rating announcement) is an opportunityfor the president and Congress totake some action,” said Robert Tipp,chief investment strategist of fixedincome at Prudential Financial Inc.

The S&P report indicated there’sa 33% chance it would downgradeU.S. debt in the next two years.

Steve Van Oder, fixed incomestrategist at Calvert Asset Manage-ment Co., said he believes “it was agood thing that the ratings agencybrought the issue to more of a public market.”

As Mr. Tipp noted, the ratings announcement is less of an immi-

nent threat of change in the nation’scredit quality as it is a serious wakeupcall for lawmakers. The United Stateshas never lost its AAA credit rating,but the government is running a$1.5 trillion deficit and carrying a $9trillion debt, which adds up to a 60%debt-to-gross domestic product ratio.

“This is a consequential state-ment, given the extent to which theAAA rating contains borrowingcosts for all of American society, butit also impacts the rest of the worldwhich uses the dollar as a reservecurrency and the most liquid bondmarkets in the world,” said MohamedEl-Erian, chief executive and co-chief investment officer at PacificInvestment Management Co.

“All this can be avoided if the U.S.were to converge on a common visionof medium-term fiscal adjustmentand start implementing such a reform package,” Mr. El-Erian said.

Mr. Tipp saw the ratings announce-ment as something that lawmakerscould leverage as a reason for fiscalrestraint.

“Now they can use this as an outsideforce to justify making some difficultchanges,” he said. “I would like to

think this will be the most visibleshove they will need, but time will tell.”

■■ SINGLE-MANAGER HEDGE FUNDSGROW IN NUMBER: New single-man-ager hedge funds launched in 2010totaled 1,184, up 51% from 783 fundsthat opened in 2009, according to aPerTrac analysis of fund informationfrom 10 hedge fund databases.

There were 352 new hedge fundsof funds launched in 2010, up 15.8%compared to 304 fund debuts theprior year, according to a report released last week by the softwareand reporting systems company.

PerTrac’s analysis of establishedhedge funds found 9,572 in opera-tion as of Dec. 31, 73% of whichmanaged less than $100 million. Ofthe 3,196 hedge funds of funds ana-lyzed, 70% managed less than $100million and 108 funds managedmore than $1 billion.

Single-manager hedge funds man-aged $1.6 trillion and funds of fundsmanaged $518 billion, both as of Dec.31, according to PerTrac’s report.

“One clear area of growth has beenin the number of single-manager hedgefunds,” said Lisa Corvese, managingdirector, global business strategy, in anews release.

— Pensions & Investments


Crain’s talked withfour frequent businesstravelers about theirfavorite trips and thebenefits — and down-falls — of being on theroad or in the air so often.

Read their stories onPage 16.

BUSINESS TRAVELI N S I D E

APRIL 25 - MAY 1, 2011 CRAIN’S CLEVELAND BUSINESS 15

17 USE OFCHARTERS CANSAVE EXECSVALUABLE TIME.

THE GOOD AND BADOF BEING ON THE ROAD

Heavy cut to budgets never hit hard locally

If monitored properly, family members easily can join the funBy KATHY AMES [email protected]

Jim Nash and his executivepeers from all over the worldhave seen each other’s fami-lies grow up. Because their

corporate travels take themeach year to locales such as LosAngeles, Denver, Ireland or Italy,Mr. Nash and his colleagues usu-ally extend those business tripsinto family vacations.

“I belong to an association ofCEOs, and we get together two tothree times a year,” said Mr. Nash,managing partner of WarrensvilleHeights-based Marcus Thomas.

“We’ve seen each others’ familiesgrow up together. My kids are 20(years old) and 18 (years old), andthey’ve been traveling since theywere 10.”

Mr. Nash and other NortheastOhio employees say extendingprofessional travels into family vacations is the way to go if the location and timing are opportune.

Companies that permit employeesto bring along spouses, significantothers or children say certain procedures are in place to makesure personal expenses do not collide with the corporate ledger.

“If employees are participatingin personal events, they are to

reimburse the company,” Mr.Nash said. “Employees submit expense reports to their supervi-sors,” which all are audited for accuracy, he said.

Steve Brubaker, chief of staff forAkron-based InfoCision Manage-ment Corp., said internal travelcoordinators handle business excursion planning for theprovider of call center solutions’4,200 employees. All personal travel expenses are paid separately,even though families still can booktheir trips through the company’stravel agent.

John Sturm, executive directorof sales and marketing at North

Olmsted-based Professional Travel,said the process for handling corporate and personal travel issimilar.

“It’s not that difficult,” Mr.Sturm said. “We have to maintainseparate accounting for the personal and corporate side. Oncethey get (to their destination), depending on the expense systemthey use, it’s fairly easy to track.

“We haven’t had one companycome back and eliminate the procedure because it’s beenabused,” he said.

Carry on Still, it’s not like Mr. Sturm and

other agency colleagues are inun-dated with requests for bookingbusiness travel with guests.

“The percent of business travelerswho bring families is a small fraction of our business,” said Mr.Sturm, whose company booksabout $200 million in total traveleach year.

Lisa Sward, president and certi-fied travel counselor of Cleveland-based Kaufman Travel Agency,said she never has handled requestsfrom corporate travelers who wantbring along their families.

“I guess they see no advantageto having family along,” Ms. Sward

See FAMILY Page 17

National forecast improves, area companies increase secondary spendingBy JOEL [email protected]

Go to your favorite searchengine, type in “businesstravel 2011,” and you’ll findany number of national

studies and surveys predictingcontinued growth for this year.

The Global Business Travel Association announced this

month that business travel had hitits highest levels since the reces-sion. Business travel spending thisyear is expected to be strongerthan originally estimated, increasingby 6.9% for the year, up from the5% previously forecast.

Meanwhile, Travel LeadersGroup, a national travel agencyfranchisor, said 76% of agents focused purely on business travel

predicted they’d match or exceed2010 bookings, and American Express Global Business Travelpointed to rising demand forflights as the cause of a 6% hike inairfares.

Yet a gauge of Northeast Ohiocompanies seemingly shows that,for the most part, travel trendshere never took much of a hit. Andthose companies that scaled back

did so not to their core business,but rather to other, secondary areas, such as business develop-ment and conferences, for instance.

On that front, the Cleveland office of law firm Thompson Hinein 2009 became “more strategic”when traveling for nonclient activi-ties, such as continuing educationand other development opportuni-ties, said Jim Aronoff, the office’spartner-in-charge.

“It had always been our practiceto look for conferences wherever

they might be, but we reined thatin significantly when we saw eco-nomic fallout,” Mr. Aronoff said.“Now, we’re sending associates toconferences all over the countryagain. We’re not back to where wewere, but we’re on our way.”

Westlake-based Hyland Softwareat the beginning of last year introduced a new initiative for managers and salespeople, in whichthose employees were to visit customers in person throughout

See CUT Page 16

Emily Lauer CaliforniaMs. Lauer, from Fahlgren

Mortine, travels roughly 40,000miles in the air a year and lists“any California destination”among her favorites. Kevin Gregory

New Orleans The benefits consultant

says New Orleansis like “goingback in time.”

Bernardinevan Kessel

GermanyThe Team NEO

executive has four trips to Germanyplanned in the comingmonths.

Chris Messina TokyoRad-Con’s Mr. Messina

thought his plane waspulling from the gatewhen it started rocking ona recent trip this month;instead, it was anotherearthquake hitting 100miles north of Tokyo.


Bernardine van Kessel

Director, internationalbusiness attraction, Team NEO

Cleveland

Asupport systemat home is essentialto Bernardine van Kessel.

That’s because the director ofinternational business attractionfor Team NEO also is a mother tofour young children — 10-year-oldtwins, a 4-year-old and a 2½-year-old.

“I think it’s gone well becauseeverything at home is organizedwell,” said Ms. van Kessel, whowithin the past year returned tofull-time work and travel. “Youcannot do it all.”

In addition to working as a teamwith her husband, Ms. van Kesselsaid she has a “super-good nanny”and assistance with householdchores and meal preparation.“Don’t be afraid to spend moneyon some good care,” she said.

Ultimately, she said the transi-tion has made the weekends morefun and valuable, because the focus now can be completely onfamily.

As for her travels, Ms.van Kessel has had the opportunity to travel toextraordinary locations,but it doesn’t necessarilymean that she’s had thechance to do a lot of sight-seeing. For example, shedrove by Tiananmen

Square and was at the Great Wallof China for less than 20 minutes.

“You have to always realize whyyou are there,” she said. “I have along list of things I’ve seen briefly.”

■ How do you spend your timein transit? Reading, responding toemail.

■ Longest stretch of time awayfrom home? In the last year, 10 days.

■ How many trips a year? Nine■ Worst travel story? Just this

past February 2011, I landed in aToronto hospital with a medical emergency. The trip prior to that I wascaught in a two-day snowstorm inLyon, France, and missed most of myappointments. I had a bad case offood poisoning in Mexico City.

■ What are the personal bene-fits of business travel? It widensone’s perspective.

■ What are the personal down-falls of business travel? Missingtime with immediate family.

Christopher J. Messina

Vice president of sales and projects, Rad-Con Inc.

Cleveland

Aftershocks and radiation aren’t enoughto scare away Rad-Con’sChris Messina.

Mr. Messina recently traveledthrough earthquake-tsunami-nuclear meltdown-ravaged Japanon his way to Taiwan and Chinafor business. (Plane tickets throughTokyo were significantly cheaperthan those that avoided the area altogether.) “It was a ghost towntype of thing,” he said of the Tokyoairport. “It was creepy.”

In 2010 alone, Mr. Messina traveled to all corners of the worldfor Rad-Con, a Cleveland-basedmanufacturer of industrial furnaces

and a heavy exporter: He visitedChina, Taiwan, India (severaltimes), Vietnam,India, Europe,Austria, Hungaryand Germany.

And all weretrips that he viewsas necessary.

“I cannot sellcapital equipmentthrough the Inter-net,” said Mr.Messina, who dealsin equipment that’s often worthmillions of dollars. “There’s an intangible trust factor.”

■ Favorite places traveled tofor business: In general, Europe ismore comfortable. But, it is always interesting to have the chance to see

world-famous siteslike The Great Wall ofChina, Pyramids ofGiza, etc.

■ On average,how many milesdo you travel forbusiness a year?100,000-plus.

■ Longeststretch of timeaway from home?A month.

■ How manytrips a year? About

eight international trips per year. ■ Worst travel story? Trains in

India are definitely the worst, each astory unto itself — especially nighttrains; getting fleeced in Egypt for acamel ride; and high-stakes internationalnegotiation; and illegal cab drivers inAsia have led to a couple of unsettlingstories. However, being stuck in

Europe due to last year’s Icelandic volcano tops the worst-travel-story list.

■ What are the personal bene-fits of business travel? See theworld! Meet new people in their owncultures. Experience the various customs. Get a broader perspectiveon international relations. This perspective and interest in the worldhas filtered down to my teenagers,which I also think is a benefit. Ohyeah, beaucoup frequent-flyer miles.

■ What are the personal down-falls of business travel? Of course,being away from home makes it diffi-cult to stay connected with family andfriends (although this is getting easierwith the ever-increasing connectivity).Long flights are a drag. This email isbeing written from Tokyo, so healthalso comes to mind … beating up thebody with time changes and maybe alittle radiation.


BUSINESS TRAVEL

the year. In doing so, public relations

specialist Kaitlin Maurer said, thecompany prioritized its travel andwas more conservative when it cameto travel for marketing purposes,such as reducing the number ofHyland employees attending atrade show. Additionally, the company encouraged visitingmore than one client on each trip.

North Olmsted-based Profes-sional Travel Inc. executive vicepresident Rob Turk said theagency handles a diverse group ofclients, and confirmed that all areas of his customers’ travel itineraries are picking back up.

“There’s been an across-the-board resumption of normal activity,”Mr. Turk said. “A lot of it has to dowith businesses’ overall strength;people are realizing that they have

to revert back to those activities togrow, to globalize their organiza-tions.”

It’s just businessA popular refrain among the

employers contacted for this storywas that travel — and the relation-ships built from in-person com-munication — is a part of being inbusiness.

That was at the root of Hyland’snew customer visit program.Thompson Hine’s Mr. Aronoff saidthe firm recently closed a deal inwhich its client had offices in 17countries, and lawyers were in eachof the 17 at one point or another.

“There’s no substitute for getting together,” he said.

The same goes for Home TeamMarketing, a Cleveland companythat connects corporate advertiserswith high schools across the

country. It has grown from one office — in the Caxton Building inthe Gateway neighborhood — toeight, including in Chicago, Denver,Los Angeles, New York City andAtlanta in the last two years.

Additionally, it works with 18 stateassociations across the country.Travel, then, is mostly unavoidable.

“We have to do what we have todo,” said Jackie Keim, HomeTeam’s director of marketing andpublic relations. “We keep growing,and we have to continue to travel.”

Warrensville Heights ad andbranding agency Marcus Thomasalso had a good 2010, and it seescorporate travel as a necessarymeans. Lori Hedrick, the company’svice president of human resources,said last year was a “breakthrough”for the company, known for itsdog-friendly workplace.

“Our clients’ business has been

Cut: Face-to-face contact importantcontinued from PAGE 15

robust,” Ms. Hedrick said, “and wehave responded accordingly.”

Still a way to watch penniesWhile traveling may be unavoid-

able and a part of business thesedays, watching costs on thoseflights and hotel rooms is a way tominimize some of the expense.

Alan Kopit, the partner-in-charge of law firm Hahn Loeser +Parks’ Cleveland office, said it istraveling smarter, not less often.Instead of buying insurance onrental cars, associates use thefirm’s insurance; they also buynonrefundable plane tickets andchoose lodging more carefully.

“We’re not encouraging peopleto stay at the Ritz-Carlton; theMarriott will do just fine,” Mr. Kopitsaid. “These visits are good forbusiness and good for our clients.”

Mr. Kopit said much of thefirm’s growth has been outside ofNortheast Ohio, and he used Milwaukee-based Johnson Controlsas an example. Johnson found

Hahn to be more affordable thanfirms in New York, Chicago andelsewhere, and now does morebusiness with Hahn. As a result,the law firm not only is flying moreoften to Wisconsin, but also the 38states where Johnson does business.

Additionally, one way thatHome Team Marketing has foundsavings is in planning ahead as muchas possible, thus avoiding costlylast-minute trips, Ms. Keim said.

That works, said ProfessionalTravel’s Mr. Turk, but other strate-gies are effective, also. He saidcompanies should study theirflight purchases, and like Hahn,buy nonrefundable tickets forthose travelers least likely to makechanges. If there’s a group whosetickets change more often, spendmore on flights that allow changeswithout the most severe penalties.

“In the past, these things weren’tas heavily managed,” Mr. Turk said.“Now, companies are paying moreattention to their travel policiesand adhering to them more.” ■

WORKING ON THE ROAD: GETTING FROM HERE TO THERE Kevin Gregory

Principal, Symmetric SolutionsCleveland

When Kevin Gregory once asked his father-in-law what helps make for a successful

marriage, he got this answer: business travel.

Mr. Gregory — now married 19years — is testingout that theorythese days, travel-ing the country as a benefits consultant andprincipal forSymmetric Solutions.

He splits histime on the road between newbusiness development and clientretention. It’s work that takes himeverywhere from Sioux Falls, S.D.,to Albuquerque, N.M.; Tampa;Nashville; Atlanta and Boston — toname a few of his destinations.

“It helps you appreciate yourspouse,” he said of the frequenttravel.

Mr. Gregory said he prefers todrive to his destinations wheneverpossible — there’s more control,even if it is snowing.

Of course, there’s still no place likehome for the father of two teen girls.

“At the end of the day, this is thebest place to raise a family,” hesaid. “I couldn’t imagine ever notliving in Cleveland.”

■ Favorite places traveled to forbusiness: Some of my favorite placesare New Orleans and Chicago. Thecombination of fun clients, great foodafter work really influence these locations.

■ On average, how many milesdo you travel for business a year? Ifyou include air, rail and car, it is over70,000. Some years, it is more.

■ How do you spend your time intransit? When I drive it is on the telephone or preparing for my meet-ings. I enjoy driving because I can getsome time to think strategically. I enjoy reading and doing Sudoku puzzles.

■ How many trips a year? If youcount day trips of more than 200miles, it is around 40.

Emily Lauer

Vice president, FahlgrenMortine

Cleveland

None of EmilyLauer’s clientsare based inCleveland — so it’s no

surprise the public relations spe-cialist spends a lot of time on theroad to get her job done.

The single 35-year-old said thatright now, she’s making a con-scious decision to make her job apriority. “My dust bunnies don’tmind when I leave,” she laughed.“I have a ton of flexibility in thatregard.”

Ms. Lauer’s travel schedule firststarted to increase in 2005-2006,and it has consistently grown overthe past couple of years. She saidthe tremendous teamwork back atthe home office makes it possibleto keep things running smoothly.

While in transit, Ms. Lauer divides her time between work and personal reading. “Airplanes arethe only places I read books,” shesaid.

Of course, there’s also the matter of staying healthy while onthe road. “The business environ-

ment lends itself to long,caloric-filled dinners,” saidMs. Lauer, who had a personal trainer develop ahotel exercise program.

Today, Ms. Lauer doesn’t blink when itcomes to hopping on aplane, which means the

summer and holiday travel rush atthe airport have taken on newmeanings.

“I call it rookie season,” she said.

■ Favorite places traveled to forbusiness: Any California destination,New York City and Boise, Idaho.

■ On average, how many milesdo you travel for business a year?About 40,000 in the air.

■ How many trips a year? 12-15,not counting day trips or overnights toour headquarters office in Columbus.

■ What are the personal benefitsof business travel? Being able to seeand experience other parts of theU.S.; test-driving rental cars; tryingand comparing cuisine from differentregions visited like Texas BBQ versusNorth Carolina BBQ; building a bank offrequent-flyer miles and hotel rewardpoints to use on personal trips (so farI’ve used miles for about eight interna-tional trips); mastering the airport security routine; the people-watching.

Mr. Messina in Egypt



SAND

USKY

OHIOI was just voted CFO. (Chief Fun O

.

Linda

©2011 Peanuts Worldwide LLC. Peanuts.com

877-AIR-EXC1 (877-247-3921)e-mail: [email protected]

F O R T H E S A F E T Y & S E C U R I T Y. T H E C O N V E N I E N C E & C O M F O R T. T H E R E L I A B I L I T Y & P I E C E O F M I N D . Y O U D E S E R V E T O F LY W I T H A I R E X C E L L E N C E .

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F O R T H E S A F E T Y & S E C U R I T Y. T H E C O N V E N I E N C E & C O M F O R T. T H E R E L I A B I L I T Y & P I E C E O F M I N D . Y O U D E S E R V E T O F LY W I T H A I R E X C E L L E N C E .

A B O V E A N D B E Y O N D .

WARNING: This activity may be habit forming.

BUSINESS TRAVEL

Commercial flights’ burden drives some executives to chartersFractional ownershippopular, evidenced byFlight Options’ rebound


Corporate executives, sales-people and others are returning to travel on char-tered or company-owned

aircraft, ending a tailspin that startedwith the collapse of the economy.

Always a lightning rod for public-company critics, all facets of thebusiness jet world took a beating in2008 when Detroit automobile executives, whose firms were teetering on bankruptcy, flew incompany planes to Washington, D.C.,to plead for a government bailout.

Indeed, some companies havesold their airplanes, and those thatretain them don’t advertise the fact.

But some details are known. Pro-gressive Corp., for example, basesaircraft in an unmarked hangar atCuyahoga County Airport.

The company noted in its proxystatement issued in March thatCEO Glenn Renwick is entitled topersonal use of a company plane aspart of his compensation. That personal use cost the insurancecompany $72,400 in 2010, accordingto the proxy statement.

Typically, high-profile companiesargue that such use is a matter ofsecurity, which some critics question.

But beyond the security argumentused for high-profile chief execu-tives, the reasons for the growth inbusiness jet use in 2011 are twofold,according to people in the industry.

First, commercial air travel often isa time-consuming chore. And whileit may never be as cheap to fly on aprivate jet as it is to fly commercial,the trade-off between time and money often can be justified.

For example, a round-trip businessticket from Cleveland to Fayetteville,Ark., the closest airport to the Ben-tonville, Ark., headquarters of Wal-mart, might cost $1,660 and takefrom between 4½ to 7½ hours eachway, according to flights offered

through the Orbitz travel service. That’s$6,600 for four people, not countingthe cost of a likely overnight stay.

By comparison, a charter flightfrom Cleveland’s Burke LakefrontAirport to Louise Thaden Airport inBentonville, a 1½-hour trip, couldcost $14,000 and up, depending onthe size of the plane.

Taking off slowlyRather than actually owning

aircraft, businesses are finding lessostentatious — and less costly —ways to allow their execs to moveabout the country for business purposes, though questions aboutcorporate flight departments fromreporters are routinely met with no-comment statements.

The growth is coming from theuse of charter services to the pre-paidpurchase of bulk flying hours andfractional ownership of jets. Thelast two options ensure that pur-chasers will be able to fly to whatevertheir destination on short notice.

Also, as the economy improvesand more sales calls end in firm orders, it’s easier to justify theadded expense of private flight.

“I would say you have a lot offrustration with commercial travelright now,” said Michael Hoyle,president of Business AircraftGroup Inc., which has five aircraftbased at Burke Lakefront Airportavailable for charter. “I don’t knowif that’s the driving factor, as muchas the economy coming back, butgiven the frustration level of flyingwith the airlines, if executives havethe extra money, they may be moreinclined to charter.”

Comparing March 2011 businessaircraft traffic with figures from ayear earlier, Argus International reports a 4.7% increase in businessflight activity. Argus is a Cincinnatifirm that specializes in research forthe business and commercial air-craft industries.

With memories of the recessionstill fresh, businesses are adopting amore frugal approach to private-jettravel.

Though they may not be purchasingaircraft, many businesses are making long-term commitments toprivate travel. They are looking at

fractional ownership of aircraft andso-called jet cards that may offertax advantages and may lower theper-hour cost of flying by requiringa commitment of perhaps 25 hoursof flying annually.

“My utilization numbers (thenumber of hours a plane is in flightduring a 24-hour period) are upabout 10% year over year with current customers and how theirflying activity has increased,” saidMichael J. Silvestro, CEO of FlightOptions LLC, the RichmondHeights-based fractional jet operator.“And new business also is up; we’rebringing planes back on line.”

He’s so optimistic about thegrowth of the business that FlightOptions is planning to buy 15 newaircraft in 2011, adding to its stableof 102 planes.

By comparison, overall businessjet sales haven’t rebounded. TheGeneral Aviation Manufacturers Association reported in Februarythat worldwide sales of businessjets was off 12.3% in 2010 comparedwith 2009, marking the thirdstraight year of declines.

Flight patternsWhat kind of private jet travel a

business uses depends on its needs.Mr. Silvestro’s customers are

businesses, but he allows some individuals — who travel at least 50hours a year — to buy a 1/16th

fractional interest in a small- tomedium-sized business jet.

It costs between $400,000 for a1/16th interest in a small Beechjet400 that typically can carry six passengers and has a range of 2,000miles, to about $22 million for aone-half interest in a Gulfstream

Family: Work-life balance beneficial

said. “I think everyone’s down tobusiness, and that’s the end of that.”

Gale Cochran, president ofBeachwood-based Flite 2 Travel,said about 20% of their corporatebookings includes accommodationsfor a spouse or significant other.

“But rarely do they include children,” she said.

Ms. Cochran surmises that busi-ness travelers likely find it difficultto extend business trips into familyvacations, particularly when thoseexecutives are headed to bustlingsites in Europe, Boston or Chicago.

But InfoCision’s Mr. Brubakerpointed to the benefits of a healthywork-life balance when families areable to go along on business trips.

“I have two daughters, and they’dgo on the road with me when weopened new offices in Pennsylvania,Ohio and West Virginia,” Mr.Brubaker said. “And of course, we

made a family vacation out of abusiness trip to Orlando.”

Meanwhile, Todd Nelson, presi-dent and owner of Kalahari ResortConvention Center in Sandusky,said he’s noticed a rise over the lastcouple of years in the number ofbusiness travelers bringing alongtheir families.

“We’re seeing that more and more,”he said.

Mr. Nelson expects that trajectoryto continue, with a larger 215,000-square-foot conference center inthe works, which will bolster San-dusky’s convention center capacityfrom 2,200 to 5,200 attendees.

“During 2008, 2009 and 2010,we experienced double-digit revenue growth” between both theSandusky and Wisconsin Kalaharifacilities, he said. “We’ve provedthat over time, when people have ameeting at an indoor water park,attendance goes up.” ■


550, a large, long-range aircraft,that can carry eight passengers7,300 miles, according to the Aerlex Law Group of Santa Monica,Calif., which represents fractionaljet purchasers. Owners also pay foreach hour of use.

Flight Options also sells what itcalls a JetPass that gives the user 25hours of flight time. Those cardscost between $100,000 and$212,375, depending on the size ofthe airplane and between $4,000and $8,495 per flying hour.

Mr. Silvestro said JetPass salesare up 46% between the first quarterof 2010 and the first quarter of 2011.Fractional jet sales are up 467%over the same period, reflectingthe sharp decline in sales over thelast two years and a rebound.

Mr. Hoyle said chartering his aircraft costs between $2,300 and$5,500 an hour depending on thesize of the aircraft. The big advan-tage of chartering, he said, is that“you don’t have to commit to long-term obligations.” ■


with the Cleveland law firm of Duvin, Cahn & Hutton, while Ogle-tree set up its own shop andsnagged attorneys from Spieth, Bell,McCurdy & Newell. Also, in late2006, Jackson Lewis LLP of NewYork announced it had lured fourattorneys from McDonald Hopkinsto staff its Cleveland practice.

“Most of (the small labor lawfirms) have disappeared into firmslike ours, but there are a few hold-outs, like Nobil,” said Mr. Quillen,whose firm now has offices in 25cities thanks to the acquisition here.“I have in my mind the remainingcandidate firms (across the coun-try), but there aren’t many left.”

One of those holdouts in theCleveland area is Ross, Brittain & Schonberg Co. — a labor and employment boutique firm.

“We’re the last of the breed in thismarket,” said Alan Ross, the firm’spresident and one of its founders.

Mr. Ross said his firm has beenapproached about possible mergersby some of the larger national firmsover the last several years, but hehasn’t felt the need to join theirranks. He said he and his partnersare comfortable with the culturethey’ve developed and don’t wantto risk losing it.

“Everybody works well together,”he said. “Our client base mesheswell the lawyers we have in the firm.It’s a comfortable environment forus and one we’ve been able to continue to grown in.”

Benefits in a big houseStill, joining the big kids on the

block has its perks. Millisor + Nobilnow will have access to Fisher &Phillips’ breadth of expertise it previously lacked, according to Mr.Quillen.

Millisor + Nobil, for one, hadlacked a strong business integrationlaw practice, but now gains accessto Fisher & Phillips’ resources. Like-wise, Fisher & Phillips lacked a strongworkers’ compensation practiceand will be able to elevate Millisor +Nobil’s to a national platform.

“They truly practice law the sameway — try to solve problems beforethey happen, demand that clientscome first and are very responsiveto them,” Mr. Nobil said. “We startedthinking about it, and it all came together.”

The acquisition also offers Fisher& Phillips the change to delve intothe industrial markets of Cleveland,Akron, Youngstown and Canton.

“It’s a hotbed of the kind of workwe want to do,” Mr. Quillen said.“All we do is labor and employment.When you have a heavy manufac-turing sector — even when peopleare out of work — there’s a lot ofwork to do.”

The migration of the larger laborlaw firms into the Cleveland marketwas somewhat delayed comparedto other major cities, according toJames Stone, who left McDonaldHopkins in 2006 to join the Cleve-land office of Jackson Lewis LLP. Henoted that Cleveland has a very established legal community, whichmade it difficult for outsiders tobreak into the market.

Finding the right firm with whichto merge also can be a challenge,Mr. Stone said, because at the endof the day, the lawyers are a firm’smost important asset.

“All of these national firms havetheir own cultures,” said Mr. Stone,managing partner of Jackson Lewis’Cleveland office. “They’re lookingfor people that they feel can fulfillthose cultures. They tend to bepicky and choosey.” ■


LARGEST COMMERCIAL CONTRACTORSRANKED BY 2010 REVENUE

Rank

CompanyAddressPhone/Web site

Local revenue2010

(millions)

New localcontracts 2010

(millions)

# of localprojects started

2010

New corporatecontracts 2010

(millions)

# of corporateprojects started

2010

FTE employees asof 4/1/2011

LocalCorporate

Yearfounded Top local executive

1Gilbane Building Co.1621 Euclid Ave., Suite 1830, Cleveland 44115(216) 535-3000/www.gilbaneco.com

$274.5 $212.7 10 $2,411.5 116 622,297 1873

Thomas M. Lairdsenior vice president,regional manager

2Cleveland Construction Inc.8620 Tyler Blvd., Mentor 44060(440) 255-8000/www.clevelandconstruction.com

$216.8 $32.3 9 $172.1 51 55828 1980 Jon D. Small

president

3Donley's Inc.5430 Warner Road, Cleveland 44125(216) 524-6800/www.donleyinc.com

$203.4 $165.4 6 $215.0 10 150420 1892 Malcolm M. Donley

president, CEO

4The Ruhlin Co.6931 Ridge Road, Sharon Center 44274(330) 239-2800/www.ruhlin.com

$166.0 $132.6 28 $152.0 36 150220 1915 James L. Ruhlin

president, CEO

5Panzica Construction Co.739 Beta Drive, Mayfield Village 44143(440) 442-4300/www.panzica.com

$128.6 $65.0 15 $90.0 15 100100 1956 Anthony M. Panzica

president, CEO

6Turner Construction Co.1422 Euclid Ave., Suite 1400, Cleveland 44115(216) 522-1180/www.turnerconstruction.com/cleveland

$100.0 $500.6 31 $8,000.0 1,400 1205,051 1902

Mark L. Dentvice president, generalmanager

7Fortney & Weygandt Inc.31269 Bradley Road, North Olmsted 44070(440) 716-4000/www.fortneyweygandt.com

$76.2 $17.8 24 $54.9 127 8895 1978 Robert L. Fortney

president

8Continental Building Systems23230 Chagrin Blvd., Suite 430, Beachwood 44122(216) 454-0111/www.continental-buildingsystems.com

$51.2 $29.3 12 $192.4 80 21146 1984 Rick Adante

project executive

9Infinity Construction Co.18440 Cranwood Pkwy., Warrensville Heights 44128(216) 663-3777/www.infinityconstruction.com

$28.8 $27.3 21 $27.3 21 3131 1997 Charles A. Izzo

president

10Drake Construction Co.1545 E. 18th St., Cleveland 44114(216) 664-6500/www.drakeconstructionco.com

$19.4 $12.0 40 $19.4 50 3945 1954 Steve Ciuni

president

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

RESEARCHED BY Deborah W. Hillyer

Support: Focus on quick growth hurts Law: Acquisition gives Ga.firm access to new markets

“The state of Ohio and the U.S.government should not be flinchingright now,” Mr. Fleiner said duringthe symposium, which attractedabout 200 people to Kent State University’s campus at Stark StateCollege of Technology.

“I believe strongly that, if they do,we’re going to see (the industry)move off shore,” Mr. Fleiner said.

So could that happen to Rolls-Royce Fuel Cell Systems? In a conversation with Crain’s ClevelandBusiness, Mr. Fleiner said the company — a joint venture betweenRolls-Royce Group plc of Londonand a consortium of companies inSingapore — is growing roots inNorth Canton, but it still would bepossible to move the operation,which is developing a stationary fuelcell that would provide electricity tothe power grid. Continued govern-ment support would help those roots“get a little deeper,” Mr. Fleiner said.

The federal government cut the support that fuel cell projects receive from the U.S. Departmentof Energy by 30%, to $174 million,in fiscal 2010, which ended Sept. 30,from $250 million in both fiscal2008 and 2009. The White House’sproposed budget for fiscal 2012would reduce that support to $100million, a 43% drop from fiscal 2010.

In need of a pushOn the state level, the Ohio Third

Frontier Commission is trying todecide what to do with the state’sfuel cell program, which is part ofthe Third Frontier, an economic development initiative designed tostimulate Ohio’s economy throughinvestments in technology.

The fuel cell program has awardedmore than $80 million in grants tofuel cell projects in Ohio, said PatValente, executive director of theOhio Fuel Cell Coalition, which

organized the symposium.One possible outcome of the

commission’s review could be thatit eliminates the fuel cell programand has fuel cell projects competefor grants through the Third Fron-tier’s existing advanced energy pro-gram, said Norm Chagnon, execu-tive director of the Third Frontier.

Mr. Fleiner said he believes fuelcell projects in Ohio could win theirfair share if they had to competewith advanced energy projects applying for Third Frontier grants.He’s more concerned about howGov. John Kasich and his adminis-tration want the Third Frontier program to focus more on projectsthat can spur significant job creationin three to five years.

Mr. Valente also voiced concernsabout the federal cuts and what hedescribed as “iffy” support at thestate level. Though some fuel cellproducts already are sold into nichemarkets, the industry still needsgovernment support, he said.

Re-establishing trustFuel cells already are used to

power products such as fork lifts,backup power generators and refrigeration systems. Utilities haveconnected a small number of fuelcells to the grid for testing purposes;among them are FirstEnergy Corp.of Akron, which last year installed aone-megawatt fuel cell at its coalplant in Eastlake.

Fuel cells that run on hydrogenare under development for cars aswell, though many more hydrogenfueling stations will need to be builtfor fuel cell cars to become popular.

Companies that are focusedmainly on building fuel cells ormaking products for them will feel the impact if federal and state support for fuel cell research anddevelopment is cut significantly,said Bill Whittenberger, president

of Catacel Corp. of Garrettsville,which is northeast of Kent.

Catacel, which makes productsfor managing heat and chemical reactions, will be affected, thoughMr. Whittenberger said the companywould be in a worse position if it hadn’t diversified into other markets a few years ago.

Some companies in the fuel cellindustry have been guilty of exag-gerating the numbers of jobs theywould be able to create in the nearterm when applying for grants, Mr.Whittenberger said.

“There was a couple, maybethree years there, where peoplewere promising the sky,” he said.

Now the industry must rebuild itscredibility, Mr. Whittenberger said.

Growth on the way?Ashlawn Energy LLC, which is devel-

oping what its web site describes asa “fuel cell flow battery,” is based inVirginia but opened a research center in Painesville partly becauseof Northeast Ohio’s expertise relatedto fuel cells, said president NormaByron. The state’s investmentsthrough the Third Frontier’s fuelcell program have helped build thatexpertise, she said.

“It’s nice to have that separate potof money because it guarantees thatthe expertise will stay here,” she said.

Stark State has made a big bet onfuel cells: The school offers fuel cell-related certifications and itfeeds interns to area fuel cell companies, including Rolls-Royce,which is housed in the school’s FuelCell Prototyping Center.

Stark State president John O’-Donnell said he isn’t worried aboutgovernment support for fuel cells,though. With some work, he said, theindustry will convince policymak-ers that growth is coming.

“I think that story is going to carrythe day,” he said. ■




prices. “They may feel that the riskof more debt on the home may beworth it. It’s a matter of offsettingthe risks.”

Plus, interest rates are expectedto rise and there’s concern aboutinflation, and home equity products— unlike credit cards — can be atool for locking in rates and terms,Mr. McCain said.

Filling a voidThe recent double- and even

triple-digit percentage increases inhome equity lending are due in partto the drop in activity in previousyears. When levels become low, anyincrease appears more dramatic — and home equity lending, Mr. McCain noted, is “nowhere as sig-nificant as it was.”

Mr. Losneck said one reasonhome equity lending is up at EatonFamily Credit Union is the with-drawal of other lenders from thespace. Among those that aren’t engaged in home equity lending atpresent is Third Federal Savingsand Loan, which stopped such

lending last June. It entered into anagreement last September with itsregulator, the Office of Thrift Super-vision, to limit the concentration of home equity loans in its portfolio.

Mr. Corbin agreed that fewerhome equity lenders means thosethat are active in that market get abigger piece of the pie. In addition,Charter One has ratcheted up its regional mortgage lending groupsignificantly in the past six to 12months. Where there had beeneight mortgage loan officers mid-year last year, there now are 26 loanofficers, he noted. And the bank intends to add another 10 to 15 byyear end.

One bank industry insider, whorequested anonymity, said she hasseen increased advertising forhome equity products, which couldbe another factor in their growth.

Mr. Corbin said home equityproducts remain attractive forlenders because they’re an avenuethrough which banking relation-ships tend to deepen — unlike autoloans, for example, which often are

written indirectly, rendering lendersless able to address other needsconsumers may have.

Mr. Losneck expressed a similarview.

“We like the first mortgage andthe home equity product because itreally gets to the point where thecredit union becomes the primaryinstitution for a family,” he said.

Old ways die hardMr. Corbin said he hopes con-

sumers don’t return to borrowingagainst their homes to live moregrandiosely.

“My hope is that people use goodcommon sense to fuel their futureand not the changing equity valuesin properties,” he said.

Others, however, doubt this is thelast we’ve seen of such behaviors.

Though people are using homeequity lines increasingly for theirintended purpose — home improve-ment — Bill Valerian, president andCEO of Liberty Bank N.A. in Twins-burg, anticipates consumers will return to their old ways. He wouldn’tventure a guess at when.

“People will return to usinghomes as a piggy bank,” Mr. Valerianpredicted. “It will happen as sure asthe sun will come up tomorrow.” ■

“Lines of credit used to be our ATMs or our check-books. ... But not now.” – Cindy Balser, senior vice president and senior product manager, KeyBank

a 25% increase in home equity loandollar volume in the 12 monthsended March 2010, and a 3% increasein home equity lines, CEO MikeLosneck said. Loan growth in 2011has been flat, but lines of credithave continued to grow at nearly4%, he noted.

“It’s kind of surprising because,in a lot of cases, home values havecome down significantly over thelast couple of years,” Mr. Losnecksaid. “Really, for anyone to haveenough equity in their home to bedoing this, it’s not something wewould have thought to be the case.”

The increases aren’t happeningeverywhere, KeyBank’s Ms. Balsernoted, citing regions such as theSoutheast and Southwest wheremortgages are “very upside down,”meaning the loan amounts arehigher than the values of the housesthat secure them. And some lenders’growth has been more modest, likethe 3% growth in home equity lending Huntington Bank reportedin this year’s first quarter over theyear-ago period.

But, Mr. Balser added, “everyoneis saying there is a new spring in thestep of the consumer.”

Borrowers show restraintHere’s what’s not happening:

Most consumers are “not puttingthe house on the line for the vacation,not being frivolous with equity,”Ms. Balser said.

“Lines of credit used to be ourATMs or our checkbooks,” she saidof the last decade, when home values appreciated year after year.“If I ran out, next year, I’d just getmore. But not now. Clients aren’tgoing crazy and saying, ‘Hey, I’vegot all this equity, give it all to me.’”

Today, home equity borrowing isused increasingly as a financialmanagement tool, not to fund“lifestyle upgrades,” Charter One’sMr. Corbin observed.

“People are really thinking abouthow they manage their finances,”Mr. Corbin said. “If you can useyour equity, from a pricing stand-point, you’re usually paying less (ininterest rates than is charged) onmost credit cards.”

Consolidating debt is a big driverfor today’s home equity borrowers,

noted Mr. Losneck of Eaton FamilyCredit Union, which has three locations in Northeast Ohio, one inArkansas and one in Illinois.

Some continue to finance highereducation with home equity lines,too.

The concept that people usedtheir home equity for lifestyle upgrades seems somewhat of an urban myth to Bruce McCain, chiefinvestment strategist for Key PrivateBank. One of the most significantuses for the product was college tuition payments, he said, notingthat the volume of student loanssurged when borrowing againstone’s home became less feasible.

That said, Mr. McCain agreedthat people are trying to get their financial houses in order.

Risky business?More consumers and lenders also

are matching the use of loan products to collateral — a trend thatmakes “good common sense,” Mr.Corbin said, because it prevents, forexample, the financing of a seven-year asset, such as a vehicle, with15-year debt.

Key’s Ms. Balser agreed, and notedthat many clients are borrowing to make home improvements to ensure what value they do have intheir houses doesn’t deteriorate.

“Folks have not done a lot of workaround their houses the last coupleof years,” she said. “They’ve realizedeven if they thought they wanted tomove, they probably can’t moveright now. Now they’re just going toadd to the house they have and stayput.”

The question arises, though: Isn’tlending and/or borrowing moreagainst a home, when home valueshave so recently collapsed, risky?

That depends, Mr. McCain said.Applying more debt against one’shome when values are stagnant orin decline increases the risk of goingunder water, or owing more on ahome than it’s worth, he acknowl-edged. But it also could be the casethat some consumers are reshuf-fling existing debt and perhaps reducing it.

“People are focused at this pointon making their budgets stretch forthings that have to be purchased,”Mr. McCain said, citing higher gas


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Equity: Banks see products as means to deeper relationshipscontinued from PAGE 1


It’s a keeperFor some time, the fate of the

mortgage subsidiary, rebranded NYCBMortgage Co. LLC, was unclear, as itwas not a business in which NYCBhad been involved and the thrift initially intended to sell it. However,after a few months of due diligence,“we came to appreciate that thisbusiness was actually a good busi-ness, well run … and was better forus to keep,” Mr. Ficalora said.

Mr. Gillespie agreed.“That could have been sold,” he

said. “It could have been moved toNew York. It’s a big commitment forCleveland — all those jobs, all thosepayroll taxes, all those dollars thepeople can spend in the community.”

As of March 31, the mortgage subsidiary staffed 386 of the 1,149NYCB employs here.

Asked whether he, too, would saythe past year has been one of con-tinued stabilization, the mortgage subsidiary’s president and CEO, JonBaymiller, replied, “No questionabout it.

“New York Community Bank … isproviding excellent support for thebusinesses that they chose to keep,”said Mr. Baymiller, who was execu-tive vice president of mortgagebanking for AmTrust when it failed.

Wide open spacesLess lucrative for NYCB in North-

east Ohio, Mr. Ficalora said, is a lackof tenants for the downtown buildingat 1801 E. Ninth St. it bought this year.

The vacancy rate in the buildingcurrently is 38%, though the buildingstill operates at a profit, Mr. Gillespiesaid. The number of showings to potential tenants is picking up —driven, he believes, by NYCB’s own-ership of the building — somethingpotential tenants view favorably.

Increasing core deposits remainsa priority, Mr. Gillespie said, notingthe institution is planning variousproduct promotions. He said April toApril, the institution’s market share inNortheast Ohio increased nearly 1%.

According to the FDIC’s Summaryof Deposits, which is published everyOctober and is based on June data,NYCB’s deposits were $1.74 billionin Cuyahoga County in 2010, rendering it No. 7 in market share.AmTrust’s deposits had been shrinkingdramatically and were $2.67 billionin the county in June 2009, $4.23 billion in June 2008 and $4.43 billionin June 2007.

NYCB has made one acquisitionsince the AmTrust deal — of DesertHills Bank in Arizona in March 2010.

Might it grow again by acquisitionin Northeast Ohio?

“Given our experience in Ohio, wewould certainly be more inclined toentertain offers in Ohio,” Mr. Ficalorasaid.

But Mr. Kelley, the securities ana-lyst, said he’d be surprised if NYCBbought other banks in Ohio or Ari-zona. He expects the thrift to stick tothe east, where its core New Yorkmarket and core customers are,which Mr. Kelley said makes addi-tional transactions in Florida morelikely. ■

“Given our experience inOhio, we would certainlybe more inclined to entertain offers.” – Joseph R. Ficalora, presidentand CEO, New York CommunityBancorp


www.laborlawyers.comAtlanta Charlotte Chicago Cleveland Columbia Dallas Denver Fort Lauderdale Houston

Irvine Kansas City Las Vegas Los Angeles Louisville New England New Jersey New OrleansOrlando Philadelphia Phoenix Portland San Diego San Francisco Tampa Washington, DC

Fisher & Phillips LLPis now

The attorneys and staff of Millisor + Nobil in Cleveland and Columbus, Ohio havejoined Fisher & Phillips LLP, a national law firm representing employers in laborand employment matters. With its newest additions, Fisher & Phillips is now afirm with 260 attorneys in 25 cities. All of them are committed to partneringwith clients to find practical and efficient solutions to issues arising inthe workplace.

Each of the firms has earned an outstanding reputation for excellent client service.Of the 260 combined attorneys, 70 are listed in The Best Lawyers in America,Chambers USA: America’s Leading Lawyers for Business or Super Lawyers.Fisher & Phillips recently received a “First-Tier Ranking” for management-sidelabor and employment law firms from U.S. News &World Report – Best Lawyers.

To learn more about Fisher & Phillips LLP, visit us at www.laborlawyers.com.

In Cleveland and Columbus, the name has changed but the commitment remainsthe same.

Cleveland Managing Partner: Steven Nobil

Fisher & Phillips LLP9150 South Hills Boulevard • Suite 300 • Cleveland, OH 44147

Phone: (440) 838-8800 • Fax: (440) 838-8805

Fisher & Phillips LLPattorneys at law

Solutions at Work®National First–Tier RankingsEmployment Law – Management

Labor Law – Management

NYCB: AmTrust’s mortgage subsidiary proves to be lucrativeMr. Ficalora noted. “We have goodemployees in a good environment,and we’re building on that.”

AmTrust Bank prior to its failurehad laid off hundreds of people,and “the people that remainedwere really the best of what theyhad,” Mr. Ficalora said.

The past year has been one ofcontinuing stabilization, saidRobert P. Gillespie, first senior vicepresident for New York CommunityBancorp, who worked for AmTrustfor more than 20 years.

For one thing, NYCB over the lastyear closed on the purchases of 18former AmTrust buildings, 13 ofwhich are in Ohio. Plus, local hiring

has continued: Since last April, 15retail positions, including branchmanagers, have been filled, and therelocation of certain operationsalso has added roughly 15 jobs.

There are about 50 jobs open,most of which are not new jobs, butreplacements. It’s still to be deter-mined how many jobs the move of disaster recovery services will involve, Mr. Gillespie said.

Jobs branch outThree major downsizings by

AmTrust prior to NYCB’s acquisi-tion resulted in some branch man-agers leading two or three branches,Mr. Gillespie said.

“That’s not the case now,” he

said, noting there are three manage-ment staff members at every office,unless the positions haven’t beenfilled yet.

As of last March 31, NYCB employed 1,149 in this region;that’s up 4% from 1,103 in March2010 and up nearly 6% from 1,085at the time of the Dec. 4, 2009, acquisition.

Overall, the acquisition ofAmTrust, which excluded the failedinstitution’s nonperforming assets,has proven lucrative for NYCB, Mr.Ficalora said. Its Ohio Savings Bankbranches and AmTrust branches in Florida and Arizona operate efficiently, he said, citing an analysis of the branches’ costs and

services.Plus, the acquisition of AmTrust’s

mortgage subsidiary has addedpower to NYCB, said Matthew Kelley, a senior analyst who followsNYCB for Sterne, Agee & Leach Inc.,a brokerage firm in Portland,Maine. Mr. Kelley said of the $1.27a share the thrift earned during2010, 27 cents was generated by themortgage unit.

The subsidiary originates one- tofour-family mortgage loans nation-wide and packages and sells themto the secondary market. Accordingto Mr. Gillespie, mortgage origina-tion was up 13.5% in the first quarterof 2011 over the same period a yearago.




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Real Estate Auction

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Bed & Breakfast / Residencew/ Pond • 4.8 Acres

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1441-1535 Mentor Ave., Painesville, OH

CURRENT NET OPERATING INCOME AT 75% OCCUPANCY

IS $645,000

EXCELLENT VALUE ADDED RETAIL OPPORTUNITY!

Painesville Commons Shopping Ctr, 142,000 SF

Center on 13.23 Acres

Located adjacent to Lake County Fairgrounds on the newly widened, heavily traveled Mentor Ave (Rt. 20) and minutes from I-90, SR-44, & SR 2. Credit tenants include: H&R Block, Sherwin Williams, Best-Cuts, Little Caesar’s, AutoZone, Rent-a-Center, & Save-a-Lot. Very strong location for retail with it’s fantastic demographics and many new developments in the area.

OFFERED W/ A PUBLISHED RESERVE OF:

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ON-SITE INSPECTIONS: Tuesdays, April 19 & 26, May 3 & May 10 from 1:00 PM to 3:00 PM

SELLER FINANCING FOR QUALIFIED

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EXCELLENT SELLER FINANCING AVAILABLE!1.Rt. 611 & Harris, Sheffield Village, OH (Lorain Co.) 18 Acres Zoned Residential. Suggested Opening Bid: $25,0002. I-90 & SR 45, Saybrook Township, OH (Ashtabula Co.) 36 Acres Zoned Commercial. Suggested Opening Bid: $30,0003. Lake Breeze Rd. (N of Rt. 611), Sheffield Village, OH (Lorain Co.) 128 Acres Zoned Residential, Opportunity for re-zoning to Industrial. Suggested Opening Bid: $75,0004. Rt. 18 & Abbeyville Rd., Medina City, OH (Medina Co.) 3 Acre Corner Zoned Comm. Suggested Opening Bid: $7,000

LAND AUCTION!

Off-site Due Diligence Seminar at Chartwell Group Headquarters: 1301 E. 9th St., Cleveland, OH 44114. Friday, May 6 At 1:00 PM

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ON-SITE INSPECTIONS: Thurs., April 28, May 5 & May 12th from 1:00 PM to 3:00 PM

Currently 75% Occupied with a NOI of $63,682. Projected NOI @ 100% Occupancy $78,461. Originally built in 1974 with an addition in 1988. Many Capital improvements including, new A/C units & updated electrical & plumbing. Excellent opportunity for investor or user/investor to add value and increase income. Located within walking distance of public transportation, major lifestyle centers, retail, restaurants, & entertainment venues in the terrific suburb of Cleveland Heights.

ESTATE DIRECTS IMMEDIATE SALE! 25,000 SF, 2-STORY

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Well located off SR 44 and 1/4 mile South of I-90, this property was built in 1971 with a 12,000 SF addition in 1994.12’- 20’ clear ceilings, 6 docks, 1 drive-in door, overhead gas unit heaters, 277/480V/3P with power and distribution throughout. Seller would consider 10,000 SF leaseback. Terrific opportunity for user, investor, or user/investor. Property lends itself well for multi-tenant occupancy.

BANK DIRECTS IMMEDIATE SALE!

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ON-SITE INSPECTIONS: Thursdays, April 28, May 5 & May 12 from 1:00 PM to 3:00 PM

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8023 Crile Road, Concord Township, (just North of Chardon) OH 44077.

REAL ESTATE AUCTION / MAY 18

For Brochure & Terms of Sale call: Michael Berland or Mark Abood: 216-360-0009www.chartwellauctions.com | Chartwell Auctions/Chartwell Group, LLC

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Dan Gilbert has a FLUDof business opportunities■ Mortgage lending, pro sports, casino development, real estate — sometimes itseems like Dan Gilbert does just abouteverything.

Here’s one more to add: a startupthat provides a new way for people toconsume news.

Forbes.com noted in a short storythat Mr. Gilbert is providing someof the money behind FLUD, whichbrings customized news to readersin a highly attractive visual format.“It’s a busy space” these days,Forbes.com said, with competitionfrom Flipboard, Pulse and Zite.

FLUD has about 1 million users and hasraised $1 million from a group of investorsled by Mr. Gilbert’s Detroit Venture Partners.San Diego-based FLUD has iPhone and iPadapps that offer slick interfaces of articles thatare tiled on the screen. Founder BobbyGhoshal said FLUD is differentiating itselfby focusing on “news that really affectsyou,” and it’s implementing a location-based service that will recommend storiesand feeds based on a user’s location.

Mr. Ghoshal built the service last year inhis spare time and launched it last August.Through pitching the company on the online angel investing site AngelList,Forbes.com reported, Mr. Ghoshal was introduced to Mr. Gilbert and eventually gota 15-minute meeting with the Cavaliersowner, who was impressed enough with Mr.Ghoshal’s pitch to invest.

Hypnosis brings calmbefore surgical storm■ There’s a Cleveland story at the heart of a

OK, so it isn’t an exact representation …■ Last week saw the unveiling of two plansfor redevelopment in Cleveland and somewelcome clarity about the theoretical natureof the ideas that were put on display.

First, on Tuesday, Cleveland Mayor FrankJackson was at Cleveland Hopkins Interna-tional Airport rolling out a plan for the trans-formation of Hopkins and Burke LakefrontAirport. Then, the next day, the mayor stoodby at Cleveland Browns Stadium as teampresident Mike Holmgren de-scribed a vision for lakefrontland north of the stadium.

Whenever civic leaders holdpress conferences to talk aboutthe fruits of months or years ofplanning and studying, theygenerally follow the credo ofarchitect Daniel Burnham,who designed Cleveland’sMall. “Make no little plans,”he wrote. “They have no magic to stir men’s blood.”

So, to stir the blood, the plansthat were laid out includeddramatic artist renderings ofstylish, futuristic structures. Both press conferences even displayed the same rendering for Burke that showed an officebuilding next to a man-made pond — creatingthe appearance of a lush, blue-greenShangri-La. Never mind that the small pondwould be an incongruous addition becauseit would be 200 yards from a vast and real, ifless inviting, Lake Erie.

That was too much for Fred Nance, special

counsel to the Browns, who was taking reporters through the details of the lakefrontplan. So he added a lawyerly, and honest,caveat to his presentation.

“It may look something like this or nothinglike this,” he said.—Jay Miller

Monsters work to play offtheir playoff appearance■ As you might expect, the Lake Erie Monstersare serious about the first American HockeyLeague playoff appearance in the fran-

chise’s four-year existence.So serious, in fact, that

they’ve spent “well into the fivefigures,” according to teamspokeswoman Sarah Jamieson,on a rebranding effort just forthe playoffs. The Monsterswere scheduled to play theManitoba Moose in Winnipeglast Friday night; they led theopening-round, best-of-sevenseries 3-1 entering the game.

The makeover includes theteam’s web site and social media presences, exterior arena signage (pictured) and

merchandise, along with newly brandedplayoff giveaway items, such as a Fatheadmobile device cover.

Should the Monsters beat Manitoba,they’d be guaranteed at least two morehome games in a division final series againsteither Hamilton or Oklahoma City. In thefirst two home playoff games, April 16 and 17,the Monsters drew 7,908 and 8,822 fans, respectively. That’s on the heels of a 1.3%

regular-season attendance increase, to anaverage of 6,568. That total is a new franchisesingle-season record and was good for sixthin the 30-team league. — Joel Hammond

Docs are the stars inlatest Akron Children’s ads■ Akron Children’s Hospital recently unveiled a new promotional campaign thatadministrators hope will lure not only newpatients to the health system, but also newdoctors as well.

Typically, the hospital’s advertising campaigns had focused on patients, but thelatest campaign has turned the camera to telldoctors’ stories, said Beth Smith, Akron Chil-dren’s director marketing and public relations.

“It’s part of what makes us special,” Ms.Smith said. “What we’re trying to do is showhow intensely they care for every child.”

Dr. Norm Christopher, chairman of thedepartment of pediatrics, said he’d like tohire about 100 physicians over the nextthree to five years. He noted an extremeshortage in pediatric subspecialists, and asthe hospital extends its regional footprint,luring those physicians to Akron Children’sis paramount.

Dr. Christopher said the ad campaign ismeant to help recruit those doctors by setting apart the care the hospital providesfrom that of its competitors.

“These are really great people who aren’ta lot different from your neighbors and en-joy and relish what they do in careers,” hesaid.

To view the ads, visit http://tinyurl.com/3mf373l. — Timothy Magaw

WHAT’S NEW BEST OF THE BLOGS

COMPANY:APV Engi-neered Coatings,AkronPRODUCT:APV eCool-Roof app

The company’s new iPhone and iPod Touchapp is designed to educate consumersabout a roofing system introduced in January that’s comprised of a Kynar Aquatec,resin-based topcoat and an elastomericacrylic basecoat.

APV Engineered, which was founded in1878 and makes engineered products for avariety of industries, says the app offers “layers of easy-to-find information on the APV eCoolRoof product,” including product background; environmental specifics on conservation, sustainability and aesthetics;and case studies.

It also functions as a savings calculator,“which allows building owners, architects andindustrial designers to calculate their poten-tial energy savings with APV eCoolRoof versusa roof coated with a conventional elastomericacrylic coating,” the company says.

APV Engineered says the roofing system“can provide up to a 63% increase in life cycle energy savings for a structure, as wellas up to a 63% reduction in CO2 emissionsversus using an elastomeric acrylic product.”

For information, visit www.eCoolRoof.com.

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

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK APRIL 18 – 24

The big story: The state’s new higher educationczar is on board with Kent State University’splan to borrow $210 million to finance a $250

million capital improvementinitiative on the university’smain campus. The capital im-provement plan was scuttledlast fall by former Ohio Boardof Regents chancellor Eric Fingerhut, who opposed anew student fee that would beimplemented to fund the project; new chancellor JimPetro, though, already has

signaled his support for the initiative. Among theplanned improvements would be a redevelop-ment of the Kent campus’ “science corridor” toexpand educational and research opportunitiesin science, technology, engineering, mathematicsand medicine. Kent State expects to breakground on projects next fall.

Flight plan: Calling Cleveland Hopkins Inter-national Airport the doorway to the city, Cleve-land Mayor Frank Jackson laid out a $1.6 billionmaster plan for remaking the 86-year-old airfield. The plan would play out over the nexttwo decades and includes a modernization ofthe main terminal, a new hotel, moving walkwayson Concourse C and a new mini-terminal thatwill give passengers direct access to the remote Concourse D. The city also expects to expand and improve parking and the roadwaysinto and out of the airport; boost the capacity forair cargo handling; and upgrade facilities for aircraft maintenance.

Team players: The long-planned redevelop-ment of the Lake Erie waterfront could receive aboost from the Cleveland Browns. PresidentMike Holmgren said the team wants to play therole of catalyst in getting lakefront redevelop-ment going. However, he stopped short of sayingthe team will play a financial or developmentrole in bringing a mix of shops, offices and public uses to land north of the stadium nowused for shipping and storage. Browns specialcounsel Fred Nance made it clear that the teamwas offering a “concept,” not a full-blown plan.

The wait is over: The School of Law at CaseWestern Reserve University has identified itsnext dean, nearly three years since the last timethe university did not attach the tag “interim” tothe person holding the job. Lawrence E.Mitchell, a business law scholar at GeorgeWashington University, will become the newdean pending approval of the university’s boardof trustees. At George Washington, Mr. Mitchellis the Theodore Rinehart Professor of BusinessLaw and founding executive director of the Center for Law, Economics & Finance.

Finally the boss: Lee Fisher, the former Ohiolieutenant governor who also served as directorof the state’s Department of Development underformer Gov. Ted Strickland, was named presidentand CEO of CEOs for Cities. CEOs for Cities is aChicago-based group that assembles CEOs andother urban leaders to serve as catalysts forchange in American cities. Mr. Fisher assumeshis new job today, April 25.

This and that: Kichler Lighting in Clevelandacquired for an undisclosed price Teron LightingInc., a privately owned maker of commerciallighting products that is headquartered in thesouthwestern Ohio town of Fairfield. … Over-Drive Inc. of Valley View is working with Seattle-based Amazon.com to develop Kindle LibraryLending, a new feature that will launch later thisyear and will allow owners of the e-book readerto borrow books from more than 11,000 U.S. li-braries.


Excerpts from recent blog entries onCrainsCleveland.com.

New York Times piece about the increasinguse of hypnosis to help patients gain controlover their illnesses.

The lead anecdote came from KirstenRitchie, 44, an insurance marketing repre-sentative in Cleveland who nearly 20 yearsago had four tumors removed from herbrain. (Ms. Ritchie told the paper that theoperation and its aftermath were “horrific.”)

The news that she needed brainsurgery again was quite difficult.

“Determined to make her secondoperation a better — or at least lesstraumatic — experience, Ms. Ritchie… turned to an unusual treat-ment,” The Times reported. “At theCleveland Clinic’s Center for Inte-grative Medicine, she had four hypnosis sessions in the month before her procedure, during

which she addressed her fear of surgery. Shealso practiced self-hypnosis every day.”

Eventually, she said, “I got to a placewhere I felt a sense of trust instead of fear.”

In February, doctors removed a plum-size tumor from her brain. Ms. Ritchie toldThe Times that she woke up from the proce-dure feeling “alert and awesome.” She alsoattributes a speedy recovery and calm stateto her hypnosis sessions.

This aluminum firm is doingsolid business — in Atlanta■ Here’s one that got away.

“Novelis Inc. brought more jobs than expected when it moved its North Americanheadquarters from Cleveland to Atlanta,”according to the Atlanta Business Chronicle.

Novelis, an aluminum products compa-ny, announced in February 2010 it would ex-pand its Atlanta headquarters while consol-idating operations from Cleveland.

At the time, Novelis said it would add 135new jobs over two years. Novelis has insteadadded 150 new jobs and kept 90.

Gilbert

Petro


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