crain's cleveland business

By MICHELLE [email protected]

Ohio Savings Bank has been informed by its regulator that itslending in Northeast Ohio is insuf-ficient and needs to improve — afix that the head of its parent com-

pany expects to come “relativelyquickly” as the bank ramps up a newmarketing strategy that’s alreadyunder way.

The Federal Deposit InsuranceCorp.’s evaluation of Ohio Savings,a division of New York CommunityBank, hasn’t been made public.

However, a copy of the 130-pagereport obtained by Crain’s from thebank reveals the institution received“needs to improve” ratings in twoof its five markets: Ohio and Florida.The rating is one step above thelowest rating of “substantial non-compliance.”

“The fact that this happened wasa bit of a surprise,” said JosephFicalora, president and CEO of NewYork Community Bancorp.

“The fact is, it’s unacceptable,”he said. “People are being delegatedto fix the problem.”

At issue is the bank’s performance

as it pertains to the CommunityReinvestment Act, which requiresthat banks meet the credit needs oftheir entire communities, includinglow- and moderate-income neigh-borhoods, consistent with safe andsound operation.

$2.00/DECEMBER 12 - 18, 2011

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VOL. 32, NO. 50

Ohio Savings reprimanded by regulator for insufficient lending

See LENDING Page 21

INSIDECombating the wet weather

Northeast Ohio winemakers were forced to deal with a recordamount of rain, but are confident their production levels won’t be affected. Read that story and more in our monthly Small Businesssection. PAGE 15

ALSO INSIDE: ■ In Cleveland’s Midtown neighborhood, a resurgence in

commercial activity. PAGE 3

Ben Venue idlesBedford planttemporarilyDrug maker, which employs 1,300, cited by regulators for quality control failuresBy CHUCK [email protected]

Rogue metal particles. Unsterilizedgloves. A can that most likely con-tained urine.

Dozens of quality control issuesraised by regulators have pushedBen Venue Laboratories Inc. to shutdown temporarily all manufacturingand distribution operations at itsheadquarters in Bedford.

The pharmaceutical manufacturer,which employs about 1,300, madethe decision to stop producing anddistributing drugs during an inspec-tion conducted last month by regu-latory agencies from the United States,the United Kingdom and France.

The November inspection high-lighted several quality control issues

related mainly to a sterile filling processBen Venue uses to make injectabledrugs in the North complex of itsoperation at 300 Northfield Road.

After the inspection, the Euro-pean Medicines Agency issued a recall for three drugs that weremade at the plant and shipped tocountries in the European Union. Italso recommended that no new patients in the EU begin using afourth drug made in Bedford.

The U.S. Food & Drug Adminis-tration, which participated in theinspection, over the past year has issued two reports that identified atotal of 59 quality control concernsat the plant.

One of the 11 issues documentedin an FDA report released last week

INSIDE THE REPORTA Federal Reserve Bank of Cleve-

land report from Nov. 29 posits thateconomic uncertainty is limiting smallbusiness hiring. A portion of the re-port (a full version of which can befound at http://tinyurl.com/748leag):

“While the downturn and weak recovery certainly had a large negativeeffect on small business hiring plans,policy uncertainty has exacerbated thiseffect. In the summer of 2011, the netpercentage of small business ownersplanning to hire would be 6 percentagepoints higher if it were not for policy uncertainty.

“That is, either 6% more small businessowners would be planning to hire (or6% more small business owners wouldnot be planning to lay off workers), werepolicy uncertainty not currently an issue.”

MARC GOLUB

Fady Chamoun, the president and CEO of Aladdin’s Eatery Systems, says policy uncertainty has caused him to exercisemore caution in his expansion plans.

HOLD THE HIRES?Report: Policy uncertainty deters

small businesses; locally, opinions splitBy MICHELLE [email protected]

Arecently released study by local researchers that indicates economicpolicy uncertainty is a drag on theexpansion plans of small businesses

isn’t universally affirmed by small businessowners in Northeast Ohio, who seem split onthe real impact of such uncertainty.

The study from Federal Reserve Bank ofCleveland research director Mark Schweitzerand Case Western Reserve University pro-fessor Scott Shane, released Nov. 29, foundthat policy uncertainty at the federal levelhad statistically negative effects on small

See HIRES Page 8

NEXT WEEK: IN TIME FOR THE HOLIDAYS, THE PERFECT GIFT — CRAIN’S ANNUAL BOOK OF LISTS.

See IDLES Page 6

20111212-NEWS--1-NAT-CCI-CL_-- 12/9/2011 1:44 PM

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22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM DECEMBER 12 - 18, 2011

REGULAR FEATURES

CORRECTIONS

Classified..............22Editorial................10

Going Places ........11List: Banks ..........20

‘WHO TO WATCH’NOMINATIONS

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Subscriptions: In Ohio: 1 year - $64, 2 year - $110.Outside Ohio: 1 year - $110, 2 year - $195. Single copy,$2.00. Allow 4 weeks for change of address. Forsubscription information and delivery concerns sendcorrespondence to Audience Development Department,Crain’s Cleveland Business, 1155 Gratiot Avenue,Detroit, Michigan, 48207-2912, or email to [email protected], or call 877-812-1588(in the U.S. and Canada) or (313) 446-0450 (all otherlocations), or fax 313-446-6777.Reprints: Call 1-800-290-5460 Ext. 125

Keith E. Crain: ChairmanRance Crain: PresidentMerrilee Crain: SecretaryMary Kay Crain: TreasurerWilliam A. Morrow: Executive vice president/operationsBrian D. Tucker: Vice presidentRobert C. Adams: Group vice president technology, circulation, manufacturingPaul Dalpiaz: Chief Information OfficerDave Kamis: Vice president/production & manufacturing

G.D. Crain Jr. Founder (1885-1973)Mrs. G.D. Crain Jr. Chairman (1911-1996)

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Publisher/editorial director:Brian D. Tucker ([email protected])Editor:Mark Dodosh ([email protected])Managing editor:Scott Suttell ([email protected])Sections editor: Amy Ann Stoessel ([email protected])Assistant editors: Joel Hammond ([email protected])SportsKathy Carr ([email protected])Marketing and foodSenior reporter: Stan Bullard ([email protected])Real estate and constructionReporters: Jay Miller ([email protected])GovernmentChuck Soder ([email protected])TechnologyDan Shingler ([email protected])ManufacturingTim Magaw ([email protected])Health care & educationMichelle Park ([email protected])FinanceResearch editor: Deborah W. Hillyer ([email protected])

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QUALITY IS JOB ONEYou might think it would be easier to hirequality employees now than in years past dueto the glut of unemployed workers. But according to Aon Hewitt, you’d be wrong. Theconsulting firm’s survey of 1,328 human re-sources executives found that “organizationsare finding it difficult to find quality hires.”Here’s how respondents answered the following question:

How effective is your organization at hiring more productive employees?

Extremely effective 5%

Very effective 23

Effective 51

Somewhat effective 18

Not effective 3

■ A Dec. 5, Page One storyon Ohio’s oil and gas businesscontained incorrect informationwith respect to the severancetaxes imposed by the state ondrillers. As stated in the story,drillers currently are taxed at aflat rate of 2.5 cents for everythousand cubic feet of gas thatproducers extract and sell. Ex-pressions of that tax as a percentof revenues were off by a factorof 10 due to miscalculation.

The effective severance taxrate is 0.75% when gas is soldfor $3.30 per MCF. It would

decrease to 0.56% of revenuesif the price of gas increases to$4.50 per MCF and to 0.31% ata price of $8 per MCF.

■ In a Dec. 5, Page 5 story,the name of a new joint venturebetween Akron GeneralHealth System and SignetEnterprises was misidentified.The correct name is IntegratedWellness Partners. Doug Ribley, Akron General’s vicepresident of health and well-ness, also was misidentified asa doctor.

We’re looking for technology up-and-comers for “Who to Watch: Tech-nology,” slated for publication Jan. 16.

If you think you know who will beamong those leading the NortheastOhio tech scene of the future, drop anemail to sections editor Amy AnnStoessel, [email protected], or call216-771-5155. Please send in yoursuggestions by Friday, Dec. 16.

There are no hard and fast requirementsfor this section, other than the candidateneeds to exhibit the kind of potentialthat makes him or her someone towatch in the field of technology.

Mark your calendars for future sec-tions: “Who to Watch: Finance” (April23); “Who to Watch: Health Care” (July16); and “Who to Watch: Law” (Nov. 26).

20111212-NEWS--2-NAT-CCI-CL_-- 12/9/2011 1:38 PM Page 1

But a funny thing happens: In thecourse of your conversation, youfind out your neighbor is paying acouple dollars less than you everygame, which for your two ticketsadds up over the course of the sea-son.

The Cavs make no apologies forrewarding different customers dif-ferently, based on any number ofvariables.

And because those variables varyso much from customer to cus-tomer, the team is hesitant to placea generic figure on the amount ithas lowered season ticket prices forthe 2011-12 season, which has beenabbreviated to 66 games from 82because of the protracted collectivebargaining dispute between NBAowners and players.

Mr. Carper said the decline inprices for season ticket holdersranges in percentage terms from the

“low single digits into the low double digits.” Price decreases forsingle-game tickets — which wenton sale last Saturday, Dec. 10 — arein the same range.

“It comes back to being market-driven and maximizing revenue,”Mr. Carper said, noting that easierways to track consumer buying pat-terns make the process smoother.“Combine those things and itmakes smart business sense. Ulti-mately, the marketplace has theability to impact the price. Dynamicpricing asks what (are tickets) worthtoday? Teams just needed to getsmarter about it.”

The variables in figuring pricesare many, and as customers meetcertain requirements, the price oftheir season tickets is lowered incre-mentally.

Early renewal — a way for the

DECEMBER 12 - 18, 2011 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES

“There are some inter-esting opportunities forwinemakers to createsomething special.”— Donniella Winchell, executivedirector, Ohio Wine ProducersAssociation. Page 15

“If you’re going to wasteyour time watchingwhat the government’sgoing to do, you’rewasting time you couldhave spent growingyour business.”— Tom Hobson, president,Abanaki Corp. Page One

“We put a lot into ourparty every year, thebest food ... wine —we go for seven hours.”— Rob Falls, owner, Robert FallsPublic Relations. Page 15

“Employees dice, chopand prepare the ro-maine lettuce, but whatdoesn’t go into the bur-rito goes into the (foodscraps) containers.”— Ian Rosby, sales team manager,Rosby Resource Recycling Co.Page 7

Midtown Tech Park, 6700 Euclid Ave: The first tenants earlier thisyear moved into this property redone by Hemingway Development, a partner-ship of James Doyle and the Geis brothers. The building is 70% leased, ac-cording to Hemingway.

So, what’ll it take to keep United hub?Companies want details of airline’s thinkingbefore they set policies favoring its flights By JAY [email protected]

Brian McKeighen is wonderingwhat’s next, and he is not alone.

Mr. McKeighen is among a groupof corporate traveler planners who

have been champing at the bit asthey wait to hear from the GreaterCleveland Partnership what theircompanies can do to retain atCleveland Hopkins InternationalAirport the hub operation of themerged United Continental airlines.

So, they have begun to take mattersinto their own hands.

“Has there been any follow-up?”Brian McKeighen, group procure-ment, fleet and travel leader ofWestfield Group of Westfield, askeda reporter in a Dec. 1 interview.“Has anyone said what it’s going totake to keep the hub?”

Mr. McKeighen said the onlythings he knew about a plannedmarketing effort by GCP, which is

Cleveland’s chamber of commercegroup, to build support for theUnited hub came from an Oct. 3story he read in Crain’s. The storyoutlined GCP’s plans for a marketingcampaign that would encouragebusinesses to set policies allowingtraveling employees to chooseUnited for air travel even if it meanspaying slightly higher airfares.

Mr. McKeighen said a number ofhis travel manager peers at other

companies know the value of thehub and have been eager for specificinformation on what kind of response will be needed to con-vince United to keep the hub. Thatinformation would help the man-agers set their companies’ travelpolicies, he noted.

Consequently, Mr. McKeighenset up a meeting for 17 of his cohorts with Todd Payne, chief of

WEB OF INVESTMENTS INTERSECTS IN MIDTOWN

Redevelopment within health care and technology corridorspurred by creative financing among public, private entities

By JAY [email protected]

Can there be any surer signthat a neighborhood is at-tracting the interest of sub-urbanites than the potential

arrival of a new restaurant with anoutdoor patio?

If that’s so, then Cleveland’s Mid-town really may be on the rebound.

Greg Frost, owner of Frost BuildingMaintenance Co. of Warrensville

Heights, said he believes a restau-rant makes sense for the first floor ofa building he bought earlier this yearat the northwest corner of East 69th

Street and Euclid Avenue. The GeaugaCounty resident said he will put a newsubsidiary of his business, whichspecializes in exterior rehabilitationof old buildings, on the upper floors.

Mr. Frost’s work has taken himthrough Midtown over the years,and he has watched it change.

Northwest corner of East 69th Street and Euclid Ave.:Businessman Greg Frost said a restaurant makes sense for the ground levelof his building at East 69th Street and Euclid Avenue; a new subsidiary of hisWarrensville Heights-based Frost Building Maintenance Co. will comprise theupper floors.

See MIDTOWN Page 13

See UNITED Page 4

See CAVS Page 14

Cavs drop season, single-game prices But with ‘variable’method, just how muchremains to be seen

By JOEL [email protected]

Feb. 19, 7:15 p.m.You’re sitting in the lower bowl for

the Cleveland Cavaliers’ Sundaynight game against the SacramentoKings, a rare laugher for the goodguys. You get to talking with the fellow season ticket holder in therow behind you, and agree that theteam’s decision to “significantly” decrease prices — as Cavsspokesman Tad Carper put it in theDec. 12 edition of Crain’s ClevelandBusiness — after the Cavs’ lost sea-son of 2010-11 was a wise move.

Agora, 5000 Euclid Ave.: Another Heming-way project, theformer concerthall is being marketed as theOffices at PennSquare.

Former Warner & Swasey building, 5701Carnegie Ave.: Hemingway is working with the cityof Cleveland on an environmental cleanup of this site,which once housed a thriving machine tool business.

RUGGERO FATICA PHOTOS


“You’re going to see a robust community educa-tion campaign rolling outin the new year.” – Rob Recker, senior vice presidentfor marketing communicationsand membership development,Greater Cleveland Partnership

marketing and air service develop-ment with the Cleveland Airport System, which oversees Hopkins, toget more details on their own. Thatmeeting was held last Wednesday,Dec. 7.

After that meeting, Mr. McK-eighen immediately sent a letter toUnited Airlines president Jeff Smisekasking for information on what itwould take for United to retain theCleveland hub. He got a phone callthe next day from Greg Hart, a Unitedsenior vice president, who offered toset up a meeting for travel plannersin the region with United officials.

Mr. Payne said he was impressedthat Mr. McKeighen could get thatquick of a response from so senior aUnited executive.

Rob Recker, GCP senior vice pres-ident for marketing communica-tions and membership develop-ment, said last Thursday, Dec. 8, thatGCP’s marketing campaign is onschedule and will move beyond itsown members into the broader busi-ness community in the next fewweeks.

“Right now we’re crafting that total campaign message which willbe unveiled in January; it’s kind of been the quiet phase of the campaign,” Mr. Recker said. “You’regoing to see a robust community education campaign rolling out inthe new year.”

Tick, tick, tickThe clock is ticking on Cleveland’s

efforts to convince United to retainthe hub at Hopkins that has been operated for more than two decadesby Continental Airlines, with whichit reached a merger agreement inMay 2010.

Only nine months remain before


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TAXDavid R. Tavolier Volume 32, Number 50 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for com-

bined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July,the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland,OH 44113-1230. Copyright © 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio,and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’sCleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373.

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continued from PAGE 3

United: Hub status key to vitality

the expiration of a short-term agree-ment struck in September 2010 byformer Ohio Attorney GeneralRichard Cordray with United to keepthe hub at Cleveland Hopkins in exchange for dropping an antitrustinvestigation into the merger. Underthe deal, the airlines agreed to main-tain 90% of their flights at ClevelandHopkins for two years, with mainte-nance of the flights beyond that timedependent on passenger levels andother benchmarks.

The new United so far is living upto that agreement.

When the airline last Septemberannounced systemwide service cutsof about 5%, Hopkins came throughlargely unscathed. The companyalso has agreed to maintain otheroperations, which include a mainte-nance operation, at Hopkins for fiveyears.

Hopkins was home to one of threehubs of Continental, along Newarkand Houston. However, with themerger, the new United has eightdomestic hubs, and Hopkins is thesmallest. Some observers believe theCleveland hub is redundant becauseof United hubs in Chicago andWashington, D.C.

A consultant to the city of Cleve-land, InterVistas Consulting Groupof Bethesda, Md., estimated earlierthis year that if United opted to elim-inate the Hopkins hub operation, thenumber of nonstop destinationsfrom Cleveland could be cut in half,to 35 from 70, and the airport couldlose as many as 120 of its 350 dailyflights.

GCP sees the hub at Hopkins as a

critically important economic devel-opment tool because of the value ofdirect and frequent flights to busybusiness travelers. The lack of an airline hub at Cincinnati/NorthernKentucky International Airport, for instance, was a factor cited inChiquita Brands International Inc.’sdecision last month to move toCharlotte, N.C., from Cincinnati.

‘We’re going to get there’The list of companies participating

in GCP’s hub marketing programwill be publicized when the cam-paign goes public in January, according to Mr. Recker, who saidthe campaign will include media advertising in business publications,digital business marketing and socialmedia. He would not disclose thebudget of the campaign until afterit’s been approved by the GCP boardthis week.

The plan GCP will roll out nextmonth will ask companies to add apricing guideline to company travelpolicies to allow their employees to buy a United ticket even thoughthe price might be higher than acompeting airline’s comparable ticket. GCP is suggesting that largecorporations allow their employeesto pay as much as $300 more for aUnited ticket. It is suggesting tosmall and midsize companies thatthey approve spending up to $200more per ticket.

The “United for United” cam-paign also suggests that companiesfavor Cleveland when they holdmeetings and training sessions, thusspurring air traffic through Hopkins,where United is the dominant carrierand handles about 70% of all passen-ger traffic.

“I think we’re going in the right direction,” Hopkins’ Mr. Payne saidabout the GCP plan. “Maybe we’renot as far along with regard to thehard policies the companies aremaking, but we’re going to getthere.” ■


“I personally believe that this one is bigger than both.” – Will Moore, founder, Suturenetics Inc. and two other tech companies

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NE Ohio suits med tech startup well Entrepreneurial duo’sdevice for incisionscould ‘change medicine’ focuses more on product develop-

ment, patenting and regulatory issues, was part of the startup teamat four other companies that wereacquired.

Mr. Johnson, of BioEnterprise,has kept in touch with Will Mooresince they became sales representa-tives for Johnson & Johnson in themid-1970s. When he saw on LinkedInthat Mr. Moore had started Suture-netics, Mr. Johnson called him tosuggest he grow the company inNortheast Ohio.

“I think maybe the bigger oppor-tunity for us is that we get him,” Mr.

Johnson said.The Moores, who previously lived

by Lake Tahoe, which straddles theCalifornia-Nevada border, said theywere attracted to the region becauseof health care institutions such asthe Cleveland Clinic and UniversityHospitals, the area’s low cost of livingand state programs that provide financing to technology companies.

They also said a big reason theymoved was because they wanted tohelp create jobs in a region thatbadly needs them.

“That was an exciting factor forus,” Ms. Moore said. ■

By CHUCK [email protected]

Will and Patricia Moore have helpedlaunch and sell several medical tech-nology companies over the past 30years.

One grew to employ 750 people.Another employed about 1,000.

Their newest company, Suture-netics Inc., has even more potential,according to Will Moore.

“I personally believe that this oneis bigger than both,” he said.

Of course, it has a long way to go.The husband-and-wife team, whomoved to Beachwood from Californiaa few weeks ago, are the only twoemployees of Suturenetics.

They expect that situation to changesoon. Their first product — a hand-held device designed to make theprocess of stitching up surgical inci-sions faster and easier — already hasbeen tested on about 100 patients.

Now, the duo plans to raise a fewmillion dollars so they can start man-ufacturing the device and selling it inlimited quantities in mid-2012. Thecompany aims to begin a broaderpush to sell the product and varia-tions of it by mid-2013.

The device is shaped like a hand-gun with two barrels that alternatelypump in and out as the surgeonsqueezes and releases its handle.The clamp at the end of one barrel isused to grip the surgical needle asthe surgeon guides it through the skin.Then the other barrel moves forwardto grab the tip of the needle so thesurgeon can pull it through. Finally,the first barrel emerges again to grabthe needle and restart the process.

The method is four or five timesfaster than stitching an incision byhand, according to early tests, and itfrees the surgeon’s other hand, whichcould be used to hold the suture linesteady.

“This is going to change medicine,”Patricia Moore said.

No strangers to successThe device is exciting, but the

Moores’ track record is even moreimpressive, said Bob Johnson, vicepresident of business developmentfor BioEnterprise Corp., a nonprofitthat assists health care companies inNortheast Ohio.

The Moores in 1989 started NatusMedical Inc. to commercialize a device designed to simplify the testingprocess used to determine if smallchildren have hearing problems. Thecompany, based in the San FranciscoBay area, went public in 2001 andhad sales of about $219 million in2010, a figure that includes revenuefrom several companies Natus hasacquired over the past 10 years.

The Moores also played key rolesin launching Nellcor Inc., which created a product that takes readingsof oxygen levels in a patient’s bloodwithout penetrating the skin. Thecompany went public in 1986 andemployed about 1,000 people in thelate 1980s. Today Nellcor, which alsowas founded in the Bay Area, isowned by Covidien plc, an Irishmedical products company.

Will Moore, who specializes inbusiness management and marketing,also was one of the first employees ofblood pressure monitor developerAMR Inc., which was sold to Johnson& Johnson. Patricia Moore, who



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said the company’s quality controlunit failed to follow established procedures when investigating anunknown liquid found in a can in astorage area in the North plant. Labtests indicated that the can con-tained urine.

The FDA identified 48 other issuesin a report it released last May. Forinstance, the agency said Ben Venuehad failed both to figure out whymetallic particles ended up in sev-eral batches of two drugs made at theplant and to fix the problem, whichgenerated nine customer com-plaints between August 2006 andFebruary 2010.

Health Canada, which regulatesdrugs sold in that country, last August announced it had bannedimports of 17 drugs made at BenVenue’s Bedford plant because ofquality control problems there. Inan Aug. 17 letter addressed to Cana-dian health care providers, theagency said the ban could cause asupply shortage of those drugs.

Both the European MedicinesAgency and Health Canada continueto allow imports of essential drugsthat are made only by Ben Venue.

Ben Venue now is conducting aplant-wide assessment to “fully understand the potential impact” ofthe quality control issues and to fixthem, according to an announce-ment the company made followingthe November inspection.

In an email last Wednesday, Dec.7, to Crain’s, Ben Venue spokesmanJason Kurtz said the company does“not have a timeframe for when

manufacturing will resume; howeverwe are working to identify and imple-ment any appropriate corrective actions as quickly as possible.”

Ben Venue makes drugs marketedby companies such as Johnson &Johnson and Pfizer. However, oneday after Health Canada announcedits import ban, Ben Venue announcedplans to exit the contract manufac-turing business over the next severalyears. Instead, the company said, itplans to focus entirely on producinggeneric, injectable drugs sold by itsBedford Laboratories division.

Mr. Kurtz said in a second emailthat the decision to exit contract man-ufacturing was made “to improveour compliance position and focuson our core Bedford Laboratories’generic injectable business.” He alsonoted that no employees have beenlaid off because of the shutdown.

Ben Venue recently hired GeorgeDoyle III to replace Tom Murphy ascompany president. Mr. Kurtz didnot respond to an email askingwhether regulatory issues drove thechange in leadership.

Ben Venue, a division ofBoehringer Ingelheim GmbH ofGermany, has expanded its Bedfordplant significantly over the past several years. The company informedthe city about the shutdown, saidMichael Mallis, Bedford’s directorof economic development.

Conversations with the companyleft Mr. Mallis feeling assured thatBen Venue will fix the problems.

“We have full confidence thatthey’re doing everything they needto do,” he said. ■


Idles: No timetable for restart



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Area recycler now a Chipotle partnerBrooklyn Heights composting specialisthelps popular chainwith food scrap effortBy KATHY AMES [email protected]

Chipotle Mexican Grill is wastingno time in advancing its mission of serving “food with integrity” by expanding its nascent food scrapcomposting program, the largestrollout of which began last May inNortheast Ohio.

Chipotle’s composting partner-ship with Rosby Resource RecyclingCo. in Brooklyn Heights so far involves 28 regional eateries, and theDenver-based fast-casual restaurantchain is working to establish the pro-gram in all of its more than 60 storesin Northeast Ohio.

“Even food scraps have a purpose,and Cleveland was a perfect place forus to expand our compost program,”said Caitlin Leibert, Chipotle’s sus-tainability coordinator. “We worktirelessly to procure the very bestfood from the very best sources. Itonly makes sense to continue treatingour food with integrity after it hasserved its purpose.”

Chipotle will begin this Thursday,Dec. 15, unveiling the compostinginitiative and partnering with neigh-boring recycling companies inCincinnati and Columbus in Ohioand other markets nationwide thatinclude Atlanta, Boston, New York,Portland, San Francisco and Seattle.

Chipotle aims to slice its trash volume by 30%, said Amber Gallihar,account executive with Lief & KarsonCommunications in Beachwood,which is Chipotle’s public relationsagency for Ohio and five other states.

Three times a week, Rosby ResourceRecycling picks up bins of foodscraps, which include items rangingfrom bell pepper stems to avocadopits, at each of the participatingChipotle restaurants in NortheastOhio.

“Employees dice, chop and pre-pare the romaine lettuce, but whatdoesn’t go into the burrito goes intothe containers,” said Ian Rosby, therecycling company’s sales teammanager.

“The participation at these restau-rants has been great,” he noted.

Rosby charges Chipotle a fee forfood scrap bin removal. The materialthen is ground up and mixed intosoil or other landscaping materialthat Rosby sells to landscapers,farmers or other businesses.

Chipotle says its goal is to ensurethe composted food scrap material is used by organizations located within a certain distance of eachrestaurant.

“By diverting our food scraps fromthe landfill, and keeping them within100 miles of the restaurant, we areable to further our mission of foodwith integrity,” Chipotle’s Ms. Leibertsaid.

Chew on thisThe investment is “cost neutral”

for the restaurant chain, accordingto Ms. Leibert. Because Chipotle’strash volume is lower, it can rebid itstrash services at a reduced level andtherefore a lower cost, which com-pensates for payments it makes tothe recycling companies, Ms. Leibertsaid.

“We see this as an investment,”she said.

Chipotle’s regional compostingprogram will benefit the efforts ofEntrepreneurs for Sustainability(E4S) and Summer Sprout, a Cleve-land-based community gardeningprogram.

Chipotle began the compostingprogram years ago in Denver. About

50 stores nationwide were compostingfood scraps by the time the programexpanded in May.

By the end of this year, about 250Chipotle eateries will be composting,and the company says its goal is tomore than double that amount bythe end of 2012.

“It is our ultimate goal to get everysingle Chipotle composting,” Ms.Leibert said. ■

PHOTO PROVIDED

The Warrensville Heights Chipotle, from which Brooklyn Heights-based RosbyResource Recycling helps haul away food scraps.

Riverside acquires Chicagomanagement consultant

The Riverside Co. private equityfirm said it has bought HR SolutionsInternational Inc., a Chicago man-agement consulting firm, as an add-onto a portfolio company it acquiredlast fall.

Terms of the purchase of HR Solu-tions were not disclosed. The com-pany is an add-on to Avatar Interna-tional LLC, a provider of patient-satisfaction surveys based in LakeMary, Fla., that Riverside bought inSeptember. Both HR Solutions andAvatar “use surveys as a mechanismto measure their customers’ perfor-mance in their respective areas of expertise,” according to Riverside.

HR Solutions serves a wide rangeof industries, but derives about halfits revenue from health care cus-tomers, Riverside said. It designs sur-veys and administers them primarilythrough email or other web-baseddelivery. Customers access the datathrough an online reporting tool that“provides detailed and customizableresults as well as actionable recom-mendations,” Riverside said.

Sarah Roth, a Riverside principal,said in a statement that the acquisi-tion of HR Solutions “allows Avatar

RECENT ACTIVITYThe Riverside Co. has made

25 acquisitions this year, including four in the last quarterso far.

The others: ■ CPA Site Solutions, a

Vermont-based provider of onlinemarketing tools for certified publicaccounting firms

■ Keymile-Group, a telecom-munications service provider basedin Hannover, Germany

■ Ormond Beach, Fla.-basedEmergency CommunicationsNetwork Inc., which delivers mes-sages to citizens or predeterminedgroups in specific geographic areasto communicate about weather,missing persons and other vital information.

to build its employee engagementservice offering. ... This acquisitionwill help Avatar develop solutions forcustomers that reflect its fundamentalbelief that engaged employees are anecessary component of deliveringgreat patient care.” ■



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Hires: Sluggish economy may be more limiting than policies business owners’ plans to hire andto make capital expenditures duringthe period from 1986 to 2011.

In the summer of 2011, the studysays, the net percentage of smallbusiness owners planning to hirewould have been six percentagepoints higher if it were not for policyuncertainty. The results for capitalexpenditures are similar, the re-searchers wrote. The study specifi-cally cited the failure to resolve theU.S. debt ceiling dispute promptlyand the associated unclear futurecourse of federal expenditures andtaxes for the uncertainty.

The researchers’ measure of policy uncertainty — created by atrio of other economists — contains

three components: newspaper cov-erage of policy-related economicuncertainty, the number of federaltax code provisions set to expire infuture years, and disagreementamong economic forecasters.

“In our view, policymakers shouldtake seriously the widespread anec-dotal reports that policy uncertaintyis adversely affecting small busi-ness owners’ expansion plans,” thereport sated.

Tom Hobson doesn’t buy the report’s conclusions. Rather, he’sconfident small businesses, whichhe regards as those with less than$20 million in annual sales, aren’tdelaying expansion because oflooming policy uncertainties.

“Jeez, if I were to wait for policy

and what politicians are deciding,I’d be out of business by now,” saidMr. Hobson, president of AbanakiCorp., an Auburn Township manu-facturer that recently broke groundon an expansion.

“I got to be honest with you, I don’tknow any small business ownerswho base their decisions on policy,”Mr. Hobson said.

Abanaki, which makes pollutioncontrol equipment, is adding about5,000 square feet to its existing 10,000-square-foot operation, Mr. Hobsonsaid. The privately held company,which does not disclose sales fig-ures, employs between 25 and 30.

Mr. Hobson, who’s also a memberof the global board of the Entrepre-neurs’ Organization, a nonprofit

dedicated to advancing the cause ofentrepreneurship, said he looksstrictly at how his sales and leadsare doing to determine what courseof action to take with his business.

“If you’re going to waste your timewatching what the government’sgoing to do, you’re wasting timeyou could have spent growing yourbusiness,” Mr. Hobson said.

‘Don’t think twice’Aaron Grossman’s perspective is

similar to Mr. Hobson’s. The presi-dent of Alliance Staffing Solutions,a staffing and recruitment firm inIndependence, hasn’t seen eco-nomic policy uncertainty inhibitthe growth of companies using hishiring services.

continued from PAGE 1 Mr. Grossman also hasn’t alloweduncertainty to slow his own company’sgrowth: Alliance Staffing has nearlydoubled its employees to 60 sincelate 2010, and its revenues have increased to $35 million this yearfrom $25 million in 2010, he said.

“We’re a small business here inNortheast Ohio, and we’re growing,”he said. “I don’t think twice abouteconomy policy because I take theopportunity and I’m running.”

It doesn’t surprise PhilipNoftsinger that a number of smallbusiness owners dispute that eco-nomic policy uncertainty has a bearingon their growth.

“Are they concerned about whatthey perceive to be a growing regula-tory environment? Absolutely,” saidMr. Noftsinger, president of the CBizPayroll Services unit of CBiz Inc.,which produces a monthly indexthat tracks the employee counts ofabout 3,000 clients. “But is that reg-ulatory environment what’s affectingthem right now, today? Is that what’saffecting them next quarter? No.”

While economic policy uncertaintycan be a factor for why small busi-nesses aren’t hiring, Mr. Noftsingermakes this point: “If we were in anenvironment of high consumer demand and there was a lot of eco-nomic activity out there, I don’t believe economic policy paralysis …would necessarily slow down hiring.”

Afraid of ‘clowns’The study’s researchers tackled

the topic because the Cleveland Fedhad heard from a variety of businesscontacts that they were very con-cerned about policy uncertainty, Mr.Schweitzer said.

Fady Chamoun, for one, says economic policy uncertainty is a reason for the deceleration in expan-sion of Aladdin’s Eatery Systems, aLakewood-based restaurant chain ofwhich he is president and CEO.

The goal had been to grow to 50Aladdin’s by 2014, but instead of doing it in roughly three years, it maytake five or six, Mr. Chamoun said.

“We don’t know what’s going tohappen, so we’re being careful,” saidMr. Chamoun, whose company operates 30 Aladdin’s restaurants,plus others of a different name, atpresent. “It’s not clear what the nextpolicies will be. When you see thegovernment spending so muchmoney, somebody’s going to pay forthat. You don’t know how that’s goingto play out.”

Mr. Chamoun says he hears simi-lar concerns from other small busi-ness owner brethren and the tenantsin the Lakewood strip Aladdin’s owns.

“We’ll wait until the next presi-dential election and see what happens,” Mr. Chamoun said. “Hope-fully, things will loosen up a little bit,confidence will come back.”

Roger Sustar straddles the fence.On the one hand, the owner of

Fredon Corp. in Mentor says thestudy’s conclusion is a “realism.”

“We’re scared … about everythingthat’s going on with these clowns,”he said of policymakers. “They haveno idea what they’re doing.”

But, on the other hand, the manu-facturer of precision machiningparts has hired nine people sincethis time last year, bringing its totalto 87 employees.

“We have hired a few people, andit scares the crap out of me when wedo that because our payroll keepsgrowing,” he said. “There is uncer-tainty, but sometimes, you just haveto do what you think is right.” ■


20111212-NEWS--9-NAT-CCI-CL_-- 12/8/2011 10:19 AM Page 1

As we dig out the winter coatsand dust off the snow shovels,April might seem like a long wayoff. But for Terry Stewart and his

team at the Rock and Roll Hall of Fame andMuseum, it’s right around the corner.

In early April, rock music’s eyes will befocused on Cleveland for the inductionof the 2012 class, among themthe Beastie Boys, Red Hot ChiliPeppers and Small Faces/TheFaces. It again will be a grandweek and a half for Cleveland,and it’s going to be a whirlwindof activity, with the unveiling ofthe Rock Hall’s Walk of Fame,dedication of the new Rock andRoll Hall of Fame Library andArchives on Tri-C’s downtowncampus, the Grateful Dead exhibit opening and the induction cere-mony.

The staging of this ceremony, with its television coverage, is an expensive undertaking, and it wouldn’t be donehere without the leadership of ClevelandMayor Frank Jackson, who offered his

support in exchange for a commitmentthat the ceremony be held in his city ona regular basis. It’s fair to say that a lot oflocal Rock Hall fans still would be gripingabout the event always being in New YorkCity had Mayor Jackson not stepped in.

But the mayor and the other local supporters know how much this event

means to Cleveland, and withall the work being done on bigdowntown projects such as themedical mart and conventioncenter, the new casino and theFlats East Bank office tower andhotel, Cleveland and the regionwill receive a ton of media attention, which is great.

Heck, it’s already begun. Early this month the front pageof the Sunday business section

of the New York Times carried a lengthystory on the latest choices for the RockHall, and the first paragraph was terrific.It read: “Old rock ‘n’ rollers don’t fade away.They just hope for a nod from Cleveland.”

The story went on to explain howmany of the groups that have been

inducted saw great spikes in their recordsales soon afterward. I know — isn’t thatterm “record sales” quaint, you might bethinking. Well, it’s how I think; old habitsdie hard, it seems.

The story went on to note that thesales boost is immensely valuable, giventhe freefall that has hit the music recordingindustry. Total sales have dropped by ahalf, to less than $7 billion, in just 10 years.

But get inducted in the Rock and RollHall of Fame, and your record sales jumpby 40% to 60% in the weeks after the announcement. Now, that will get yourattention, even if you are accustomed tofame and big bucks.

And what’s fascinating is how theseinduction choices get debated by fansand critics alike, with many of the samegripes each year. Why not Rush? How canyou ignore Kiss? What about Joan Jett andthe Blackhearts? Bon Jovi? And on and on.

But that’s terrific, because so manypeople care so much about this institu-tion, and the music it represents. And itshall of fame is right here in our town.How much better can it get? ■


Shop talkT

he allure of 6,000 good-paying jobs is hard topass up. However, we fear the state of Ohiocould end up with a serious case of buyer’sremorse if it succeeds in its efforts to

convince Sears Holdings Corp. to move its head-quarters to the Buckeye State from Illinois.

Gov. John Kasich acknowledges that Ohio hasmade a pitch for Sears, which isn’t happy about thetax climate in its home state. He and other state officials have declined to provide details of Ohio’soffer, though Illinois’ governor, Pat Quinn, has putthe package of incentives at $400 million.

A big push for Sears by Ohio wouldn’t be out ofcharacter for the Kasich team, which has been aggressive in its efforts to keep and attract jobs. Justlast week, the Ohio Tax Credit Authority approved$60 million in tax breaks for what the governor saidwas a record 30 companies. The state said projectstied to those tax credits should create 3,501 jobsover the next few years and retain another 10,539.

That’s cheery news on its face. But as Crain’smanaging editor Scott Suttell highlighted Dec. 2 inhis Editor’s Choice blog on our website, job-creationtax credits issued by Ohio and many other states often have failed to produce the levels of employmentpromised by the companies that received them.

“In Ohio alone, the state Tax Credit Authority approved job-creation tax credits for 2,059 projectsfrom 1993 to 2009,” according to an analysis by TheAssociated Press of nearly two decades of data.“Records show that some worked, but nearly halfwere terminated or canceled before completion.”

The AP’s story on its findings quotes Jerry Good,deputy chief of Ohio’s Division of Strategic BusinessInvestment, as saying, “It’s very difficult for anyoneto make the call of how any company is going toperform.” That statement may be true in many cases. In the case of Sears Holdings, plenty of warning signs exist that the company that owns theSears and Kmart retail chains may have seen its bestdays and could face significant trouble ahead.

Just last Monday, Dec. 5, Moody’s Investors Service lowered its credit rating on various Searsdebt from an already-lousy Ba3 to an even lowerjunk status of B1, and warned that the rating couldbe downgraded yet again. Moody’s said the negativerating outlook “primarily reflects uncertaintiesaround the company’s ability to arrest recent salesweakness and negative trends in operating margins,noting the company has recorded year-over-yeardeclines in EBITDA for the past seven fiscal quarters.”

Sears is a shadow of the retail megaforce it was forthe better part of the 20th century, before the rise ofWalmart. The numbers show a company in decline,with its revenue falling 18% to $43.3 billion in 2010from $53 billion in 2006, and its net income plunging91% over that same five-year period, to $133 millionfrom nearly $1.5 billion. What’s more, its operatingcash flow dropped more than 90% in just one year,to $130 million in 2010 from $1.5 billion in 2009.

Is Sears the caliber of company that the stateshould lavish with incentives, and are the odds goodthat the investment will pay off over the long haul ifit does? If the state can’t respond with a hearty “yes”to both parts of the question, it shouldn’t do a deal.

FROM THE PUBLISHER

BRIANTUCKER

Rock Hall event will take center stage

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

PECOLA POINTERClevelandI think they should renew it.That was a great thing thisyear.

➤➤➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.

THE BIG ISSUE

KEVIN FOLEYBrunswickKeep it. Everybody needs it.It’s a little bit of extra moneyfor everyone.

DAVID WILSONParmaAbsolutely — keep it in place. Idon’t think that given our current economy people canstand to see their taxes go upat a loss from their pocket-book. I think Congress will renew it.

BRIGITTE LOWEBedfordI think they should, given general economic conditions.It won’t benefit me that much.It’s a good short-term solutionfor the economy, although nota long-term one. At this point,short-term solutions are needed.

President Obama’s Social Security payroll tax cut is set to expire at the end of the year. Should Congresslet it lapse?



Vorys, Sater, Seymour and Pease LLP

1375 East Ninth Street 2100 One Cleveland Center Cleveland,Ohio 44114 216.479.6100 vorys.com

THERE WERE THE LANDOWNERS,

AND THE NEIGHBORS, AND THE ENVIRONMENTALISTS

AND THE ZONING BOARD.

THERE WERE THE HUNTERS, AND THE FARMERS,

AND THE FEDERAL REGULATIONS AND THE LAND USE RESTRICTIONS.

THERE WERE EXCAVATION AND RECLAMATION ISSUES.

THERE WERE AESTHETIC ISSUES.

AND THERE WERE THE BIRD LOVERS,

AND THE BAT LOVERS AND THE NOISE HATERS.

AND THEIR ATTORNEYS.

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LARGE-SCALE WIND FARM IN OHIO?

WE FIGURED IT OUT.

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Pragmatism needed infederal budget brouhaha■ This letter is in response to BrianTucker’s Nov. 28 commentary, “Apox on the cowards in Washington,”which upbraided members of Congress for failing to deal with thefederal deficit.

The vast majority of people in theUnited States and outside the country just scratch their heads andmuse, “What in the world are theseguys thinking?” The reality is thereare two major issues in play: No. 1,the 2012 election, and No. 2, theideological bent of a significantnumber of our elected officials inCongress who feel that it’s theirmission to change the way the U.S.operates. As a consequence, neitherparty alone can muster enoughvotes to pass any meaningful legis-lation on the spending, revenue anddebt issue.

Progress will only come when the“pragmatists” in both parties cometogether and formulate a plan thatthe president can sign and that willsatisfy neither the ideologues northe extreme partisans in either party, but can generate enoughsupport to pass. Only then can weexpect to begin a process of reigning

in our debt through some combina-tion of spending reductions andrevenue increases.

While the winding down of ourinvolvement in Iraq and Afghanistanwill help the budget, it will not be enough. We will need some fun-damental changes in our entitle-ment programs to make them self-sustaining. How we deal with theneeded revenue enhancements tofully balance the budget will becomethe next task, and there are severalgood proposals out there.

While I share Mr. Tucker’s frus-tration and the disgust of the majority, I at the same time realizethat only when Congress and thepresident accept the problem as anurgent national issue and not a partisan or ideological one will theycome together and do what we haveto do. They need to trust the vastmajority of us will understand theneed to do hard things and not punish them for doing the rightthing.

Don EsarovePresidentCypress Corp.

LETTER

GOING PLACESJOB CHANGESFINANCEFIFTH THIRD BANK, NORTHEASTERNOHIO: Richard Kretschman to busi-ness banking team lead.

FINANCIAL SERVICEFIRSTCREDIT INC.: William Lindalato collections training manager;Heather Gordon to client supportand commercial insurance billing specialist; Brenda Johnson-Young,Jody Bailey, Eric Compan and SteveHill to patient account managers. LEAGUE PARK ADVISORS: RahulMadan Mohan and Daniel Son toanalysts. SKYLIGHT FINANCIAL GROUP:Michelle Pryor to director of newplanner development; StephanieTaylor to marketing coordinator;Caitlin Rice to agency compliancecoordinator; Elaine DeStephano toagency services representative. SS&G HEALTHCARE SERVICES LLC:Michelle Moon to practice manager;Sharree Bench, Christy Pelamati,Christy Wilson, Deanna Herman,Michele Riesen, Tina Howells,Michelle Simpson, Carol Kline andJill Ulbricht to billing specialists. SS&G WEALTH MANAGEMENT LLC:Kimberly Nelson to administrativeassistant.

LEGALKASTNER WESTMAN & WILKINSLLC: Julie A. Trout to associate. REMINGER CO. LPA: Julian Emerson, Amanda Gatti andJonathan Krol to associates.

MANUFACTURINGMID-WEST MATERIALS INC.:Bradley K. Robbins to vice president,commercial division.

MARKETINGDIX & EATON: Kris Dorsey to vice

president, senior art director; AnnLentz to vice president, director ofproduction services. SEGMINT INC.: Thomas C. Tylerto executive vice president. STERN: Randy DeMuesy to associate creative director.

NONPROFITCATHOLIC CHARITIES HEALTH &HUMAN SERVICES: SamanthaMealy to director, marketing andcommunications. CLEVELAND FOUNDATION: KayeRidolfi to senior vice president, giftplanning and donor relations; MonicaBrown to director, human resources;Danielle Hanna to human resourcesmanager.INTERNATIONAL INSTITUTE OFAKRON: Jim Dudziak to director offinance and business. MANUFACTURING ADVOCACY &GROWTH NETWORK: Michael R.Morgenstern to chief developmentofficer. PRESIDENTS’ COUNCIL LLC: Deborah E. Perkins to president.

REAL ESTATETRANSACTION REALTY: ViktorGavrylyuk to sales associate.

RETAILFIT ONE: Chuck Herman to directorof sales and distribution.

SERVICEEXPERIENT: Marianne Schmidhoferto strategic sales executive, corpo-rate markets.

TECHNOLOGYSOCIUS: David Warren to directorof business development.

BOARDSADOPTION NETWORK CLEVE-

EmersonSonMohan

RobbinsKrolGatti

LAND: Bernadette Kerrigan (Centerfor Families and Children) to chair;Anita Miller to first vice chair; NicoleK. Wilson to second vice chair;Joshua L. Berman to secretary;John Zaranec to treasurer.

AWARDSADOPTION NETWORK CLEVELAND:Danita Harris (NewsChannel 5), Terrell Howard and Kate Livingstonreceived Triad Advocates of the YearAwards; Estes Turner received theFounder’s Award.

Send information for Going Places [email protected].



Wednesday, November 30, 6:30 p.m., Recital Hall.

THROUGH JANUARY 8, 2012

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Med Mutual offers twist on ‘buy local’Big insurer’s internal database offers employeesan easier way to patronize business partners

By TIMOTHY [email protected]

When asked how large his salesstaff is, Medical Mutual of OhioCEO Rick Chiricosta without hesita-tion says 2,600 — the size of theCleveland-based insurer’s entirework force.

And in hopes his army of employeesaround the country will continue to spread Medical Mutual’s goodname, Mr. Chiricosta has encouragedhis employees to shop as much aspossible from the insurer’s clients.

If the “Mutual Appreciation” ini-tiative goes as planned, Mr. Chiri-costa expects it will boost customerloyalty and perhaps stir a little activityin the local economy.

Consider it an “I’ll scratch yourback, if you scratch mine” sort ofarrangement.

“It’s real simple,” said Mr. Chiri-costa, who hatched the idea. “Theone thing we bring to the table thatour competition doesn’t is that wehave 2,000 people who live (inNortheast Ohio). From a conceptualstandpoint, we’re saying, ‘Let’s reward

the people who are choosing us.’”Late last month, Medical Mutual

rolled out an interactive database onits companywide intranet that allowsemployees to search the insurer’s clientlist based on geography and servicetype. Employees are asked to keepreceipts and log their purchases fromthose clients in order to win prizes.

Medical Mutual employees as oflate last week had logged $688,699 in purchases from the company’sclients.

Clients, not surprisingly, approve.“I think that’s fantastic their CEO

would come out to their employeesand encourage them to do businesswith the partners,” said ChrisMarhofer, operations manager at theRon Marhofer Auto Family, one ofthe insurer’s clients. “If you can cre-ate relationships like that, it helps usall out. It creates a better businessenvironment for both parties.”

Mr. Chiricosta said the initiative

also presents his company with adistinct marketing advantage. Forone, he has instructed his employeesto remind the companies with whichthey’re doing business that they’repatrons largely because of their connection with Medical Mutual.

“It’s a great concept, and executingit and keeping momentum is goingto be the challenge, but I think it canmake a big difference from a salesstandpoint,” he said. “It could reallyplay well when you’re sitting downwith a significant customer.”

Buy local, do goodNortheast Ohio business leaders

said they were unaware of othercompanies with programs such asMedical Mutual’s. However, theynoted there’s a recent influx of “buylocal” campaigns by trade organiza-tions and other nonprofit groupsgeared at spurring growth in the regional economy.

The Council of Smaller Enterprises,for instance, runs a website armedwith a searchable database of localbusinesses. Also, Cleveland Inde-pendents, a local nonprofit, runs adirectory of independently ownedrestaurants in the area.

Rosanna Miguel, an assistant professor of management at JohnCarroll University’s Boler School ofBusiness, said she sees such pro-grams as “more of a reaction to thefears people have about the economy,and the fact that it’s something wefeel we don’t have control over.

“We can’t do a lot whole lot tomake things better other than support the local community and organizations,” she said.

Joe Roman, president of the GreaterCleveland Partnership chamber ofcommerce group, said the advantageof “buy local” campaigns is that theyfoster relationships between con-sumers and businesses. But, in theend, he said, it’s up to each businessto prove its value in the market —not just through a buy local marketingblitz — in order to cement their rela-tionships with consumers.

“If Medical Mutual’s programworks and creates new relationshipsand the relationships are useful forboth parties, that would be a win foreverybody,” Mr. Roman said. ■

“From a conceptualstandpoint, we’re saying,‘Let’s reward the peoplewho are choosing us.” – Rick Chiricosta, CEO, Medical Mutual of Ohio


“I said to myself, if any place is going to develop positively, it’s goingto be this strip in between” down-town and University Circle, he recalled. “This was the best place tobuy a fixer-upper and have somekind of assurance that you’re goingto be near some good activity.”

The intersection that grabbed Mr.Frost’s interest is looking like it couldbecome the heart of a bustling newbusiness district in the years ahead.Right now, more than a half-dozendevelopment deals are in progress or are on the horizon nearby, with asignificant amount of the activitycoming from companies usually focused on the greener pasturesalong suburban interstate highways.

These developers are attracted towhat’s called the Health-Tech Corri-dor, a stretch along Euclid Avenuefrom downtown to the medical com-plexes emanating from UniversityCircle. And the activity is happeningin spite of the reluctance of devel-opers to get involved in older, urbanneighborhoods, such as Midtown.Land there is expensive and puttinga deal together can inflict “consider-able brain damage,” as one developerput it, because of environmental andfinancing concerns related to inner-city properties.

Midtown even has grabbed the attention of one prominent developerwho has spent 20 years mining fertileground in the southern suburbs.

“We’ve started to look but wehaven’t done anything at this point,”said Neil Viny, a principal with theDalad Group. “We’re looking but wehave yet to grab something.”

Catching Mr. Viny’s eye in partic-ular is the work of Hemingway Development, a partnership of JamesDoyle and Greg and Fred Geis ofStreetsboro-based Geis Cos. that hasproduced the first significant newconstruction in Midtown in morethan a decade. Earlier this year, ten-ants began moving into their Mid-town Tech Park, which has 128,000square feet of office and lab space at6700 Euclid Avenue. Mr. Geis saidlast week the building is 70% leased.

A stack of fundsAfter years of planning and

construction, this stretch of EuclidAvenue was rebuilt by the GreaterCleveland Regional Transit Author-ity to accommodate its HealthLinebus rapid transit line, which wasbilled as a tool that would helpredevelop the area between down-town and University Circle.

But to make that redevelopmenthappen in a recession is requiring anunprecedented effort by public offi-cials from all levels of government.

Part of the effort is clearing awaythe red tape to allow developers toproceed with as little extra effort aspossible so projects progress nearlyas smoothly as building on pristine— and lower-cost — farmland.

The other important element isthe high level of publicly subsidizedfinancial assistance available for thisneighborhood at a time when pri-vate capital for real estate develop-ment is hard to find.

At a Nov. 30 meeting of a group ofgovernment agency and nonprofitofficials, financial executives and developers at Midtown Tech Park,Hemingway’s Mr. Doyle describedthe layers of public financial assis-tance received to make possible thenew building plus the renovationthat has begun at an adjacent buildingat 7000 Euclid.


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Midtown: Collaborations paying off“We tried to do this in late 2008,

2009, when the market was flat,”Mr. Doyle told the group. “Therewas not a conventional loan to behad, much less a real estate loan.

“That’s certainly what triggeredthe need to partner up with publiccapital,” he said.

Mr. Doyle went on to list the layers that went into what he called“the capital stack” — a low-interestfederal Housing and Urban Devel-opment loan, New Market TaxCredits awarded by the federal gov-ernment, a Cleveland Core Citiesloan, a state Jobs Ready Sites grantand county environmental cleanupgrants and loans. Those publiclysubsidized financial products com-prised well more than half the $30

million in financing for the Hem-ingway projects.

Coordinated effortsThe high level of public financial

support for Midtown Tech Park waspossible because of several publicsector efforts.

In April 2010, local and state offi-cials were beginning to execute theirstrategy for what formally was dubbedthe Health-Tech Corridor. The cityof Cleveland and Cuyahoga Countypledged a variety of incentives fordevelopers. Then, in June 2010, thestate of Ohio got on board, desig-nating the corridor an “Ohio Hub ofOpportunity and Innovation,” whichbrought with it priority status forstate development grants and loans.

And the last piece fell into placein July when Cleveland was namedone of six cities in a pilot federalprogram called “Strong Cities,Strong Communities.” That pro-gram is designed to coordinate thedevelopment efforts of a number offederal agencies with local officialsto further streamline the public reg-ulatory and financing process.

This rare government collabora-tion is beginning to pay off.

Last February, a partnership ledby Mr. Frost paid about $460,000 for three parcels on the north side of Euclid at East 69th for less than anacre. He said he plans to tear downa house on the north end of hisproperty and restore the three-storybrick building that will remain into ahome for Frost Architectural Preser-vation Inc., a new subsidiary of FrostBuilding Maintenance, in additionto the restaurant.

Hemingway Development is pur-suing additional projects in the dis-trict.

It has begun marketing a redevel-opment of the four-story buildingthat housed the Agora night club at5000 Euclid as the Offices at PennSquare and, a block south of Euclid,is working with the city of Clevelandon the environmental cleanup ofthe 160,000-square-foot Warner &Swasey Building, a former machinetool factory at 5701 Carnegie Ave.

Cumberland Development is eye-ing a property on the north side of Euclid now owned by RTA to take theoverflow from its existing Baker Elec-tric Building business incubator.Meanwhile, local architect and realestate investor Richard Bowen isplanning a $35 million mixed-useproject at 6600 Euclid that could include a medical office building, retailing and a senior living center. ■



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Cavs: Marketplace influences pricesCavaliers to create more certainty intheir season ticket base — is morevaluable for the Cavs than waitinguntil two weeks before the season torenew, thus resulting in a reward.Opting to receive tickets via Veritixand its FlashSeats website, which areowned by Cavaliers owner DanGilbert, allows the Cavs to bettermonitor sales and attendance trendsand earns customers another notch.

Want an even better discount? Payyour entire invoice up front, ratherthan through a payment plan. And,of course, the starting point for allthese variables is longevity: Thelonger a customer has bought ticketplans, the better off he or she is.

‘Hard work ahead’Before last season, the Cavaliers

earned the highest season ticket renewal rate in franchise history, asfans were forced to renew before LeBron James left. Those commit-ments resulted in official averagepaid attendance of 20,112, or 97.8%of capacity.

Based on Crain’s research — theCavaliers cite league policy in notdiscussing publicly their renewalrates and raw season ticket numbers— the team last year likely started

with a season ticket base of morethan 13,000 full-season equivalenttickets.

The Cavs will not meet that num-ber this year, Mr. Carper acknowl-edged, though he declined to specifywhat percentage of the team’s sea-son ticket base renewed. He said theCavs’ season ticket business likelywould rank in the middle of the packin the NBA.

“We realize we have a lot of hardwork ahead of us,” Mr. Carper said.“We’re going to have to earn this.”

If the Cavs don’t achieve theirgoals, it won’t be for lack of trying.

In addition to the varied incen-tives listed above, the Cavaliers alsooffered a 2012-13 price freeze forseason ticket holders who renewedbefore the NBA owners locked outplayers on July 1, the day the sides’prior collective bargaining agree-ment expired.

What’s more, the team offered incentives to fans who kept funds already paid for 2011-12 season tickets with the team during thelockout: 5% of whatever money theyhad in a Cavs account, whereas fans who asked for a refund of what-ever they had paid received a 1%bonus.

Avoiding the scrambleMr. Carper said a “huge majority”

of customers who already madesome payment on this season choseto keep their money with the team.That’s in keeping with a trend in prosports, according to Barry Kahn,CEO of QCue, a ticket pricing spe-cialist in Austin, Texas, that countsabout 30 teams among its clients, including about half of Major LeagueBaseball.

Mr. Kahn said those payment retention efforts have helped teamscombat the “negative impact” of thelockout, and the Cavs in particularcombat the departure of Mr. James.

“That way, they’re not scramblingon the season ticket front,” Mr. Kahnsaid, noting the quick turnaround —about a month — between the endof the lockout and Christmas Day,when the season will start.

Just how well all the Cavaliers’ efforts worked for this season will beevident early on. Ticket brokers often serve as a good barometer forhow the arena might look when the season opens, and Scott Merk,owner of Merk’s Tickets in BrookPark, said many individuals andcompanies upon whom he callswhen customers request tickets havescaled back their season ticket pur-chases.

“That’s less access for me, andmeans that the Cavs will have moreinventory to push,” Mr. Merk said. ■

continued from PAGE 3 “It comes back to being market-driven and maximizingrevenue. Ultimately, the marketplace has the ability toimpact the price. ” – Tad Carper, spokesman, Cleveland Cavaliers


By DAN [email protected]

Both the weather and theeconomy might be frightfulfor some as 2011 comes toan end, but that doesn’t

mean it’s not party time.Some professional party planners

and businesses that hold holidaycelebrations for their employeessay their year-end events are tooimportant to Scrooge them up. After all, they say, it’s often the onlytime during the year when every-one from an organization actuallygets together in one place.

That’s the case for the Clevelandlaw firm Calfee, Halter & Griswold,said Anne Cummings, head ofclient services and firm sponsor-ships and organizer of its big holi-day event.

“It’s just too important not todo,” Ms. Cummings said.

Calfee has lawyers in Clevelandand Columbus (and it recently announced the opening of an officein Cincinnati), and many of themdon’t see each other throughout the year, she said. Even in the indi-vidual offices, employees can workall year focused on different clientsand not spend much time with oneanother.

“This is really our one time to geteveryone together,” Ms. Cummingssaid.

So, the firm has not curtailed itstradition. It watches expenses sothey don’t get out of hand, but itstill throws a festive event, usuallyat a fancy location.

This year, Ms. Cummings said,the event was at The Union Clubdowntown in early December (so asnot to conflict with school playsand family gatherings), though nextyear Calfee will use the party toshow off its new downtown offices,which the firm will occupy in Janu-ary 2012. After that, it likely will goback to another Cleveland venue.

SMALL BUSINESSI N S I D E

DECEMBER 12 - 18, 2011 CRAIN’S CLEVELAND BUSINESS 15

19 TAX TIPS:IRS HELPS WITHMISCLASSIFIEDEMPLOYEES.

GRAPE EXPECTATIONSRecord year of wet weather damaged some harvests, but hardy winemakers

upbeat on taste, character of products made from this year’s fruit

By KATHY AMES [email protected]

Northeast Ohio’s vintners have weath-ered a particularly troublinggrowing season for grapes,with the wettest year on

record damaging vineyards and threat-ening product quality.

Mildew, disease and rot were tough toovercome. Waterlogged grapes had diffi-culty reaching maturity and thereforeweren’t as ripe. Some grapes were unsalvageable.

“This year caught us off guard. It wasnot a pleasant growing season,” said LeeKlingshirn, a winemaker at KlingshirnWinery in Avon Lake. “The weather ruined about 60% of my berries.”

But winery owners are used to going with MotherNature’s flow and say the weather anomaly won’thave a significant impact on wine production.

PHOTOS PROVIDED

The wettest year on record made it difficult for Northeast Ohio winery owners to combat the effects of mildew, disease and rot on vineyard grapes. But winemak-ers have certain vineyard protection processes in place to mitigate damage. They say they aren’t overly concerned with how this year’s harvest will impact wineproduction and quality and even expect some pleasant surprises when their products are bottled.

See WINE Page 19

Tina Fowler, a vineyard crew member at Madison-basedChalet Debonne Vineyards, works to protect the vines fromrain and impending winter frost.

FILE

PHO

TO/R

UGG

ERO

FAT

ICA

FAR LEFT: NickFerrante, awinemaker atFerrante Wineryin Geneva, sayspatrons likelywon’t notice achange in thetaste of winemade with thisyear’s grapes.

LEFT: Rain didn’tdeter wine enthusiastsfrom sampling products fromsuch wineriesas Debonne. See HOLIDAY Page 16

Firms stillfind valuein holidaypartiesCelebrations restrained,yet foster camaraderie

“Less is more witheverything. That’s whatwe’re discovering thisyear.”

– Christine Krausedirector of marketing and

development, Executive Caterers


“We like to use the event to helppromote other local businesses, sowe go to a different one every year,”Ms. Cummings said.

The event always is nice, Ms.Cummings said, but its real value isin getting nearly all of the firm’s 300employees together, where they notonly can share camaraderie, butalso can feel appreciated for theirefforts throughout the year.

‘Less is more’ But, perhaps not by choice, other

businesses are cutting back. For example, an American Express pollof its business-owner customersfound that only about 35% of smallbusinesses will throw a party thisyear — the lowest percentage in the10-year history of the survey.

That number has been dropping,according to American Express,along with year-end bonus payouts,due to the economy.

But some who make their livingoff the party business say holidaycelebrations are starting to comeback in Northeast Ohio, even if theydo so with new budget constric-tions.

For example, Executive Caterersat Landerhaven is hosting about thesame number of business holidayparties this year as in the years before the recession — and even afew more than it’s held in the pasttwo years, said Christine Krause,


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SMALL BUSINESS

Holiday: Parties used to show employees appreciationcontinued from PAGE 15

director of marketing and develop-ment for the gala party center inMayfield Heights.

But there are parties, and thenthere are parties, and while someclients still have the big, ritzy affairs they’ve always had, the trendis toward simplification mixed withsome frugality, Ms. Krause said.

“Less is more, with everything.That’s what we’re discovering thisyear,” she said.

Ms. Krause said Executive Cater-ers even toned down the decora-tions a bit this year, noting that themove is a reflection of current styles

celebrates Christmas like the char-acter from “A Christmas Carol,”right down to his generosity toward his employees.

“We’re going in the opposite direction,” Mr. Falls said. “We’renot cutting back at all.”

Mr. Falls also had his party early, and this year he took his 40employees to the Table 45 restau-rant, where they were treated to afull-blown dinner party completewith food, a live jazz trio and goodwine personally picked out for the occasion by their wine-lovingemployer.

Mr. Falls admittedly revels in theevent, which generally includes agame in which there are no losersand which often results in $100 billsbeing flung by a laughing Mr. Fallsat the game’s winners. One year,the game entailed a quiz show withsuch difficult questions as, “What isyour favorite color?”

Like others, Mr. Falls said hethoroughly believes the party is the best way not only for his staff toget a chance to fraternize, but forhim to show his appreciation for ayear’s worth of hard work.

So, like his “Christmas Carol”model, Mr. Falls doesn’t skimp.

“We put a lot into our party every year, the best food, the bestwine — we go for seven hours,” hesaid.

And, yes, Mr. Falls said, part ofplanning that party does involvehiring cabs and drivers.

“You have to make sure everyonegets home safely,” he said. ■

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Deck the hallsERC, a Mayfield Village-based

human resources organization, recently surveyed companies in Northeast Ohio regarding holidayparties and other seasonal practices with 152 employers responding.

Here are some highlights: ■ 73% of organizations are plan-

ning a holiday party this year, with67% budgeting the same amount ormore as last year for the party.

■ 72% of employers say theirholiday parties are catered.

■ 69% say only employees areinvited.

■ 41% of employers in-dicated their holidayparties will be heldon the companypremises, with 52%saying their holidayparties will be at an ex-ternal location.

■ The most common week employers cite for having a holidayparty in 2011 is the third week ofDecember. The second most com-mon week was the second week ofDecember.

■ 35% of employers are holdingholiday parties on a Friday, and32% are having the parties on

Thursday. Fewer employers are having

their holiday parties on aweekday.

■ The majority of employers —51% — are having their holiday par-ties during lunch. Evening parties werethe second most common (39%).

■ Most employers reported thathuman resources is responsible forplanning holiday parties. Some(19%) report that employee commit-tees/task forces are involved in theplanning. Top management and theCEO sometimes are involved.

SOURCE: ERC

rather than cost cuts. The trick, shesaid, is to make sure that just because things are simple doesn’tmean they also aren’t elegant,tasteful and, in the case of foodand beverages, delicious.

For instance, she said, someclients might go for macaroni andcheese on the menu instead oftruffle mashed potatoes. But, if themacaroni and cheese is the bestanyone’s ever had, and the serviceand presentation are impeccable,no one cares whether it cost less toserve, she said.

“Scaling down has become anart, not just for our customers, butfor us,” she said.

Like Ms. Cummings, Ms. Krause

said many of Executive Caterers’clients see their year-end events as too important to give up. Even during the recession, she said, moreclients by far cut back on theirspending than canceled theirevents.

Fezziwig comes to lifeSome, however, refuse to budge

at all — and when it comes to holi-day parties, “scaling down” or“cutting back” are not in their vocabularies.

Among them is Rob Falls, ownerof Robert Falls Public Relations inCleveland and affectionatelyknown to some who have workedfor him as “Fezziwig” because he

IN BRIEFOPEN FOR BUSINESS: The Fran-chise Consultants, an affiliate of TheBusiness Alliance Inc. of Seattle,has opened an office in ConcordTownship. The firm’s president isGlenn Heffner, who has more than10 years’ franchise experi-ence as the previousowner of ProFormaCreative Communi-cations, also of Lake County.The Franchise Consultants offersclients a wide selection of franchises

for sale, representing a variety ofsizes, descrip-tions, styles,prices, full- andpart-time opportu-nities and smalland large invest-ments.

MAKE IT YOURSELF:Textile Republic, a venture

founded by Cleveland-based siblingsKimberley Osborne-Milstein and

Brian Osborne, has launched an online platform that enables artists tohave textile patterns used on custommerchandise. Textile Republic is a man-ufacturer and marketer of on-demand,fully customized products such asbelts, picture frames, coasters, lug-gage tags and more. Artists submit designs to http://textilerepublic.com, and visitors to the site vote ontheir favorite patterns through a Face-book “Like” icon. The number of votesdetermines which patterns are used on merchandise, with artists receiving compensation of 7% to 10%of sales.


The Sisters of Charity Health System lights the way for health and human services in Northeast Ohio through: Mercy Medical Center,

St. Vincent Charity Medical Center, St. John Medical Center1, Sisters of Charity Foundation of Canton, Sisters of Charity Foundation of Cleveland,

Early Childhood Resource Center, Joseph’s Home, Building Healthy Communities, Catholic Community Connection2, Light of Hearts Villa3,

Regina Health Center, and Independent Physician Solutions. LE ARN MORE AT SISTERSOFCHARI T YHE ALTH.ORG

1Owned jointly with University Hospitals, 2Shared sponsorship with Catholic senior living, education and charities, 3 Shared sponsorship with Sisters of Charity of Cincinnati



SMALL BUSINESS

JAMESKUREK

ADVISER

Be cognizant of latest employment law standardsT

he employment law land-scape continues to change,making it critical for employers to respond.

Compliance with the numerousstate and federal laws that impactthe employment process has becomemuch more complicated, and theconsequences of failing to complywith those laws has become moresevere.

Employment litigation is a majorpart of federal and state court dock-ets, and it appears that the growthin that area will continue into theforeseeable future.

And while there have been manychanges, below are a few of themost prevalent of which employersshould be aware.

■ Posters stating rights: Effec-tive Jan. 31, the National Labor Relations Board will require employers to notify employees of their rights under the NationalLabor Relations Act.

A poster must be placed in the office where it can be seen by employees and posted on an intranetor Internet site, if personnel policies

at work were either telephone orwritten memos.

Now, virtually every employeehas a computer and another formof electronic communication, suchas an iPhone or BlackBerry, allowingthem to always be connected towork and co-workers.

Texting has replaced picking upthe telephone for many people, andemail and voice mail long havebeen the norm.

These changes demonstrate theneed for employers to keep up withnew technologies in order to effec-tively manage all forms of commu-nication. However, various legalquestions have developed regardingthe management of employee communication.

For instance, the NLRB has chal-lenged some employers’ efforts tolimit such forms of communica-tion.

The NLRB recently found thatcertain types of electronic commu-nication between employees canamount to “protected concerted activity,” which cannot be legallyprohibited. For example, emails andvoice mails have become increasingly

are posted there. This poster states that employees

have the right to act together to improve wages and working condi-tions; form, join and assist a union;bargain collectively, also to refrainfrom these activities.

It also provides examples of unlawful conduct. This rule appliesto all private-sector employers sub-ject to the National Labor RelationsAct, excluding agriculture, railroadand airline employers.

The posters, though, are only the beginning of the changes.

■ Communicating differently:Not long ago, the primary methodsby which employees communicated

prevalent as evidence in varioustypes of employment litigation, including sexual harassment anddiscrimination claims. Unfortu-nately, employees often feel com-fortable with making inappropriatestatements using media that pre-serve those statements for use insubsequent litigation.

Hence, it is critical that an employer develops a policy thatdefines the types of communica-tion considered inappropriate.

■ Communication not the onlyarea that has changed: For manyyears, as long as an employer keptadequate records for the timenonexempt employees were per-forming their duties at the work-place and paid them at least mini-mum wage (plus overtime whenappropriate), there was little expo-sure to a wage and hour claim.

However, the rapid evolution of the workplace has resulted induties often being blurred betweenexempt (ineligible for overtime)and nonexempt (entitled to over-time) positions.

The pressure to improve customerservice also has sometimes resultedin work being performed that isnot properly recorded, such asworking during unpaid breaks torespond to customer requests. Increasingly, employees are per-forming work that is compensableeither from home or remote loca-tions.

These and other situations haveresulted in the need to clearly

define exempt positions and moni-tor the circumstances under whichcompensable work is being per-formed.

■ Expanded definition of disabilities: Complexity also hasdeveloped in the area of accom-modating people with disabilities.

Although a disability was initiallynarrowly defined, and thereforegenerally recognizable to an employer, the definition of a disability has been greatly expandedthrough the Americans with Disabilities Act Amendments Act(ADAAA), which has broadenedthe definition to include manymore medical conditions.

As a consequence, requests fortime off or other job accommoda-tions require a more structured andcomplex evaluation to ensure com-pliance under existing disabilitylaws. In addition, to support a claimthat certain physical or mental requirements are essential to aparticular position, job descrip-tions now need to be written to include the job’s physical andmental requirements.

Ultimately, it is critical that anyemployer carefully review all of itsemployment policies and practicesto make certain that it has madeevery reasonable effort to complywith existing employment laws. ■

Mr. Kurek is a partner in the Cleve-land office of Fisher & Phillips. Herepresents employers in all aspectsof labor and employment law.

GRANDOPENINGSE.NOPI ENRICHMENT CENTER 23600 Mercantile Road, Suite F Beachwood 44122www.enopicleveland.comMary Beth Golombek, a public schooleducator with more than35 years’ experience,has opened the firstE.nopi EnrichmentCenter in Ohio.E.nopi is an es-tablished supple-mental educationprogram in mathematics, reading andwriting that is targeted to childrenages 4 to 16. Working with certifiedteachers, children attend at least one45-minute session each week foreach subject. The student/teacher ratio is 4-to-1. “The Enopi programfinds the level at which a child can workcompetently and confidently and buildsfrom strengths into new skill areas,”explains Mrs. Golombek, who will direct the operation of the BeachwoodE.nopi Enrichment Center with herhusband, Joe.Phone 216-292-3667Fax [email protected]

ANNA MIA19059 Lake RoadRocky River 44116Diana E. Maiola, a native Clevelanderand graduate of John Carroll University,has opened a boutique in Rocky River.The location gives Ms. Maiola a venueto showcase her jewelry collection —pieces from Italy as well as those shedesigns. In addition, the Rocky Riverlocation will give Ms. Maiola a place

from which to manage tours to Italy,an additional business venture — Ital-ian Tours & Travel by Diana — thatshe started in 2001 as an offshoot ofher jewelry business. In businesssince 1996, Ms. Maiola also is chang-

ing the name of herbusiness from Gold-max to Anna Mia,which is the name ofher jewelry line

that’s inspired byher mother. Theboutique will be

open 11 a.m. to 5 p.m. Mondaythrough Friday; 10 a.m. to 3 p.m.Saturday; and by appointment. It willoffer full jewelry services, and hostessparties can be held at the boutiquefor those unable to host in their homes.

[email protected] www.goldmaxbydiana.com

PINK LOTUS YOGA 18103 Detroit Ave.Lakewood 44107www.pinklotusyoga.comMarcia Camino is founder and directorof Pink Lotus Yoga. She has prac-ticed yoga for nine years and has taughtmore than 1,200 hours of yoga classesand workshops since becoming certi-fied in 2005. The studio offers lunch-time, evening and weekend classesas well as weekend workshops.

216-632-0816

To submit a new business, emailsections editor Amy Ann Stoesselat [email protected] or call 216-771-5155.


“There’s always wine in thepipeline,” said Donniella Winchell,executive director of the Ohio WineProducers Association. “Wine takesa couple years to mature, and mostwineries have a partially full cellar.”

Wine made from this year’s grapeslikely will not be bottled until, at theearliest, next spring; in other cases,it could be years, winemakers said.

The grapes from this year’s harvest likely will materialize in theform of lighter red blends or sweeterwines, but the Rieslings andchardonnays will reflect a moreclassic, cold-weather climate, beinglighter in flavor and character.

“There are some interesting opportunities for winemakers tocreate something special,” Ms.Winchell said. “They’ll need to workwith what they have in the cellarand blend it. Being in the cellar of awinemaker is a continuous journeyof exploration. Wine is part scienceand part art.”

When it rains, they pourTotal precipitation levels this

year have far exceeded the averageannual snow and rainfall for the region, according to the NationalWeather Service.

As of Dec. 4, Cleveland HopkinsInternational Airport reported 60.63inches of rain and snow for theyear; normal precipitation levels asof that date are about 36 inches.Akron-Canton Airport reported53.70 inches as of Dec. 4, about 17inches above the norm.

The lower precipitation levels inNortheast Ohio’s southern regionhave helped buoy wine productionat both the Winery at Wolf Creek inNorton and Troutman Vineyards inWooster, said owner Andy Trout-man, who measures precipitationlevels at each of his vineyards.

“The grapes harvested in Woosterwere actually very good,” he said.“We had half the amount of rainfallthat we did 30 miles to the north.The longer the sun’s out, the moreripe the grapes are.”

Mr. Troutman also gets grapesfrom six other Ohio growers as wellas some from out of state to supple-ment production. He said the volume of wine produced this yearactually is up over previous years.

“We planted some vineyardsthree or four years ago, and (thegrapes) came into production thisyear, which was kind of deceiving,”Mr. Troutman said.


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IRS program offers reliefto firms that may havemisclassified employees

The IRS has unveiled a newvoluntary compliance program to offer relief fromexposure to federal employ-

ment taxes to businesses that haveimproperly classified their workersas independent contractors. Underthis program, employers who vol-untarily change the classification oftheir workers from independentcontractors to employees essentiallywill not be penalized and will notbe subject to audits for prior years.

The terms of this new programare extremely favorable and shouldbe considered by any business using independent contractorswhose status as such is questionable.

Some businesses may characterizetheir workers as independent con-tractors in order to avoid payingemployment taxes. If those workersshould be classified as employeesunder the tax law, this creates a sig-nificant tax risk to the business.

There has been significant focusby the IRS and other governmentalagencies over the last few years onwhether businesses are appropriatelycharacterizing workers as employeesor independent contractors.

The IRS and other governmentalagencies have recognized that partof the misclassification problem iscaused by employers who believethat they may have misclassified aworker, but who are reluctant tochange the classification due to theexposure to additional taxes for prior years (and in many cases formultiple employees).

Partially in response to theseconcerns, the IRS announced a program under which employerswill not have to worry about pastfederal tax issues caused by themisclassification as long as they arewilling to treat the workers as employees on a go-forward basis.

In order to qualify for this pro-gram, the business must:

■ Be presently treating the workers as nonemployees.

■ Have satisfied the Form 1099reporting requirements for theseworkers for the three years precedingthe year that a request for participa-tion in the program is filed.

■ Not have any current disputewith the IRS as to classification issues, nor be under examinationby the IRS, Department of Labor orany state agency relating to classifi-cation issues.

■ Have complied with the resultsof any prior examination by the IRS,Department of Labor or state agencythat addressed worker classificationissues.

The firm must agree to pay 10% ofthe employment tax liability thatwould have been due on compensa-tion paid to the workers for the mostrecent tax year and agree to an exten-sion of the statute of limitations.

The business will not be liable forany penalties or interest on thisamount, and the business will notbe subject to an employment taxaudit with respect to the classifica-tion of the workers for prior years.

In order to apply for this program,

a business should complete and fileForm 8952 — Application for Volun-tary Classification Settlement Pro-gram. While there are a number ofrequirements for qualification, theterms of this offer are very favorable.

For instance, if an employer chan-ges the classification of one employ-ee, the status of all employees withthe same duties must be reclassified.

Unlike other “safe harbor” provi-sions providing relief for employerswho have misclassified workers,this program does not require thatthe business have a “reasonable basis” for treating the worker as anindependent contractor.

Many advisers appropriately ad-vise their clients to exercise cautionwith their decision to participate inthis program. A business consideringrelief under this program must realize that it is not binding on anystate or other governmental agency.

Misclassification of workers can lead to a number of issues notinvolving the IRS, including issuesrelating to employment laws, workers’ compensation and the Employee Retirement Income Security Act (ERISA). Employersstill will be required to address anyissues created in these areas by themisclassification of the worker.

In addition, the business willhave a significantly higher employ-ment tax burden going forward forthose reclassified employees.

Despite these concerns, giventhat misclassification can create asignificant tax exposure, employersshould carefully evaluate whether totake advantage of this program. ■

Mr. Grassi is president of McDonaldHopkins LLC.

Companies can escape penalties for past years

CARLGRASSI

TAX TIPS


Wine: Artisans will exercise creativityStill, there were grapes on his

vineyards that either went bad ordidn’t reach the level of idealripeness, which will affect thewine’s flavor profile.

“We’ll have to supplement thesugar somehow,” he said.

Tony Debevc, owner of ChaletDebonne Vineyards, said theMadison operation’s red winesproduced with this year’s grapeslikely will be sweeter, like a rosé,and end up as a blended productto be sold at a lower price.

Hot, dry weather like the condi-tions in 2010 is ideal for producingthe flavor-intense, full-bodied redwines, he said.

“We’re saving our 2010 redwines for 2012,” said Mr. Debevc,whose operation is one of thelargest growers in the state, with172 acres of vineyards. “They’resome of the best we’ve produced.”

Despite the monsoon’s degrada-tion of some of the 20 acres atKlingshirn Winery’s vineyards, Mr.Klingshirn said to his surprise thequality of some grapes was optimal.

“I think we may run a little low onRiesling next year, but any of thegrapes (harvested) could be readyto bottle by next spring,” he said.

Nick Ferrante, a winemaker atGeneva-based Ferrante Winery,said patrons likely won’t notice achange in taste in his wines, whosevarieties made with this year’s grapeswill be supplemented with sugar.“We do that routinely,” he said.

Arnie Esterer, owner of MarkkoVineyard in Conneaut, said he growsand sources all his own grapes,which are spread out over 15 acres.

“We don’t modify our product.We let the grapes do their ownthing,” he said. “The grapes pickedthis year will be bottled and sold in2013 or 2014. It just depends onhow the wine turns out.”

Loss preventionLocal winemakers said they are

able to combat the moisture pene-tration to a certain point with nets,sprays and field drain systems.

However, the consecutive daysof soggy spring weather made itdifficult to spray the vineyards reg-ularly to prevent disease andmildew from damaging the grapes,Mr. Klingshirn said.

Mr. Debevc said about two-thirdsof Debonne’s vineyards incorporatea subterranean tile system thatdrains excess moisture from the soil.

Those vineyards fared much bet-ter than the one-third acre that isminimally or not tiled, with the tiledcrop yielding some of the opera-tion’s best varieties of cabernetsauvignon, cabernet franc, merlots,chardonnays and Rieslings, he said.

Still, the wet weather didn’tdampen the spirits of wine enthu-siasts, the Ohio Wine ProducersAssociation’s Ms. Winchell said. “I’mguessing traffic to local wineries wasup 7% or 8% over 2010,” she said.“The wine business is thriving.” ■



BANKS IN NORTHEAST OHIORANKED BY DEPOSITS(1)

Northeast Ohiodeposits (millions)

Rank

NameAddressPhone/Website 6-30-2011 6-30-2010 % change

Offices inNE Ohio

Employees(companywide)

6-30-2011 Holding company Top local executive

1KeyBank NA127 Public Square, Cleveland 44114(216) 689-3000/www.keybank.com

$13,396.2 $13,395.3 0.0% 124 15,351 KeyCorpCleveland

Beth E. Mooneychairman, CEO, KeyCorp

2PNC Bank1900 E. Ninth St., Cleveland 44114(216) 222-2000/www.pnc.com

$9,184.6 $8,767.3 4.8% 158 49,372 PNC Financial Services Group Inc.Pittsburgh

Paul Clarkregional president

3Huntington National Bank917 Euclid Ave., Cleveland 44115(800) 480-2265/www.huntington.com

$8,422.1 $8,171.1 3.1% 152 10,356 Huntington Bancshares Inc.Columbus

Daniel P. Walsh Jr.president,Greater Cleveland region

4FirstMerit Bank NA106 S. Main St., Akron 44308(888) 384-6388/www.firstmerit.com

$7,560.5 $7,136.0 5.9% 128 3,028 FirstMerit Corp.Akron

Paul G. Greigchairman, CEO

5Charter One1215 Superior Ave., Cleveland 44114(216) 566-5300/www.charterone.com

$6,124.0 $6,941.5 -11.8% 111 15,914 Royal Bank of Scotland Group PLCEdinburgh, Scotland

Kenneth E. Marblestonepresident,Ohio region

6JPMorgan Chase & Co.1300 E. Ninth St., Cleveland 44114(877) 302-4273 /www.chase.com

$5,326.6 $4,791.4 11.2% 96 191,202 JPMorgan Chase & Co.New York

James M. Malz, president, CEO,Ohio market; head, Middle Marketcommercial banking

7Fifth Third Bank600 Superior Ave. E, Cleveland 44114(216) 274-5300/www.53.com

$4,216.5 $4,402.7 -4.2% 88 20,953 Fifth Third BancorpCincinnati

Jerry Kelsheimerpresident, CEO, Fifth Third Bank,Northeastern Ohio

8U.S. Bank NA1350 Euclid Ave., Cleveland 44115(216) 623-9300/www.usbank.com

$2,299.7 $2,057.0 11.8% 111 59,768 U.S. BancorpMinneapolis

Alan Zangpresident,Northeast Ohio market

9Lorain National Bank457 Broadway Ave., Lorain 44052(440) 244-6000/www.4lnb.com

$983.6 $975.4 0.8% 20 260 LNB Bancorp Inc.Lorain

Daniel E. Klimaspresident, CEO

10The Farmers National Bank of Canfield20 S. Broad St., Canfield 44406(330) 533-3341/www.fnbcanfield.com

$652.8 $635.8 2.7% 13 281 Farmers National Banc Corp.Canfield

John S. Gulaspresident, CEO

11Citizens Banking Co.100 E. Water St., Sandusky 44870(419) 625-4121/www.citizensbankco.com

$521.7 $529.7 -1.5% 12 295 First Citizens Banc Corp.Sandusky

James O. Millerpresident, CEO

12Middlefield Banking Co.15985 E. High St., Middlefield 44062(440) 632-1666/www.middlefieldbank.com

$515.3 $475.8 8.3% 8 102 Middlefield Banc Corp.Middlefield

Thomas G. Caldwellpresident, CEO

13Cortland Savings and Banking Co.194 W. Main St., Cortland 44410(330) 637-8040/www.cortland-banks.com

$391.4 $371.2 5.4% 14 149 Cortland BancorpCortland

James M. Gasiorpresident, CEO

14Citizens BankOne Citizens Banking Center, Flint, Mich. 48502(800) 676-6276/www.citizensbanking.com

$348.5 $375.7 -7.2% 14 1,957 Citizens Republic Bancorp Inc.Flint, Mich.

Jamie Lynchcommunity president; president,commercial banking

15First National Bank112 W. Market St., Orrville 44667(330) 682-1010/www.fnborrville.com

$337.4 $311.7 8.3% 14 112 National Bancshares Corp.Orrville

David C. Vernonpresident, CEO

16First National Bank of Pennsylvania166 Main St., Greenville 16125(800) 494-2265/www.fnb-online.com

$302.4 $283.5 6.7% 11 2,183 F.N.B. Corp.Hermitage, Pa.

Stephen J. GurgovitsCEO

17Andover Bank19 Public Square, Andover 44003(440) 293-7605/www.andoverbankohio.com

$271.8 $253.9 7.0% 8 93 Andover Bancorp Inc.Andover

Martin R. Colepresident, CEO

18Portage Community Bank1311 E. Main St., Ravenna 44266(330) 296-8090/www.pcbbank.com

$223.2 $194.8 14.6% 2 53 Portage Bancshares Inc.Ravenna

Richard J. CoeCEO

19Farmers Savings Bank111 W. Main St., Spencer 44275(330) 648-2441/www.fsb-spencer.com

$205.2 $186.6 10.0% 2 27 NA Thomas W. Leepresident, CEO

20Liberty Bank NA2351 Edison Blvd., Twinsburg 44087(330) 425-3033/www.libertybankna.com

$193.0 $223.0 -13.5% 3 44 NA William A. Valerianchairman, president, CEO

21Western Reserve Bank4015 Medina Road, Medina 44258(330) 764-3131/www.westernreservebank.com

$171.1 $185.7 -7.9% 3 36 Western Reserve Bancorp Inc.Medina

Edward J. McKeonpresident, CEO

22Premier Bank and Trust6141 Whipple Ave. NW, North Canton 44720(330) 478-1000/www.mypremierbankandtrust.com

$154.0 $139.2 10.6% 4 59 Excel Bancorp LLCSaint Clairsville

Rick L. Hullpresident, CEO

23Independence Bank4401 Rockside Road, Independence 44131(216) 447-1444

$143.7 $144.8 -0.8% 1 24 Independence BanccorpIndependence

Christopher Mackpresident

24Consumers National Bank614 E. Lincoln Way, Minerva 44657(330) 868-7701/www.consumersbank.com

$132.9 $116.6 14.1% 6 110 Consumers Bancorp Inc.Minerva

Ralph J. Lober IIpresident, CEO

25Buckeye Community Bank105 Sheffield Center, Lorain 44055(440) 233-8800/www.buckeyebank.com

$126.1 $133.6 -5.6% 1 26 Buckeye Bancshares Inc.Lorain

Bruce E. Stevenspresident, CEO

26Sutton Bank3 S. Main St., Attica 44807(419) 426-3641/www.suttonbank.com

$120.0 $112.6 6.6% 5 92 Sutton Bancshares Inc.Attica, Ohio

Eric A. Gillettvice chairman, CEO

27Lake National Bank7402 Center St., Mentor 44060(440) 205-8100/www.lakenationalbank.com

$106.3 $82.4 29.0% 1 23 NA Andrew L. Meinholdpresident, CEO

28Croghan Colonial Bank323 Croghan St., Fremont 43420(419) 332-7301/www.croghan.com

$99.3 $83.0 19.5% 3 146 Croghan Bancshares Inc.Fremont, Ohio

Rick M. Robertsonpresident, CEO

29Ohio Commerce Bank24400 Chagrin Blvd., Beachwood 44122(216) 910-0550/www.ohiocommercebank.com

$82.5 $63.5 30.0% 1 21 NA Dell R. Duncanpresident, CEO

30The First National Bank of Bellevue120 North St., Bellevue 44811(419) 483-7340/www.fnblifetime.com

$78.9 $71.7 10.0% 2 40 First Bancshares Inc.Bellevue

Dean J. Millerpresident, CEO

Source: Federal Deposit Insurance Corp., www.fdic.gov, Summary of Deposits reports. Crain's Cleveland Business does not independently verify the information and there is noguarantee these listings are complete or accurate. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Banks with deposits inAshland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties are included in this list. Onlydeposits from those counties are used for the NE Ohio deposit numbers.

RESEARCHED BY Deborah W. Hillyer



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Lending: Bank making more serious marketing push According to the performance

evaluation, “The bank’s lending activity in the Ohio assessment areais low when compared to thebranching network and deposit sharein Ohio. Specifically, while 11.7% ofthe bank’s total deposits are fromwithin the Ohio assessment area,only 1.4% of the loans were from thesame area.”

However, the report also notedthat when it comes to residentialmortgages, “the bank is extending agood portion of loans to low- andmoderate-income borrowers.”

In addition, the FDIC found a“poor level” of qualified communitydevelopment investments and grantsin the bank’s Ohio assessment area,and called its performance in retailbanking poor as well. The reportspecifically makes note of themuch-opposed closure of a branchnear Shaker Heights.

Bankwide, New York Community’srating dropped to satisfactory in thelatest FDIC evaluation from the outstanding mark it received in2008, bank officials said. Its ratings inNew York, New Jersey and Arizonawere satisfactory, though the newestreport calls its performance in Ari-zona “marginally adequate.”

The vast majority of banks receiveeither satisfactory or outstandingCRA ratings, FDIC spokesman DavidBarr said.

Mr. Ficalora expects the fix forOhio Savings Bank to come “rela-tively quickly” and certainly by thetime of the next exam, which histor-ically has taken place about every

three years.

End of the ‘de-risking’ phaseIn what executives say is a move

unrelated to the CRA ratings, NewYork Community Bank is deployinga new marketing strategy. Its goal isto gain greater visibility and to issuemore loans in the more than 270 bankbranches it operates in five states.

The bank’s new strategy will deliver “more of a bold statement thanwe’ve made in the past,” said CindyFlynn, executive vice president andchief administrative officer of NewYork Community Bancorp.

“This is the first time in this mar-ketplace where we’ve gone out” anddone marketing and promotions,Ms. Flynn said. “Our goal is to growour deposits in all our markets.”

New York Community, which hascompleted 10 acquisitions in thepast 10 years, has focused histori-cally on growth by acquisition. Assuch, it has had little use for marketingand campaigns, Ms. Flynn said.

Its new strategy so far has spawneda Switch & Save marketing campaignintended to acquire the deposits ofnew households. The bank is pro-moting its free checking accountand is offering a 10-day CD that’s tiedto the six-month CD rate and allowsdeposits and withdrawals every 10days. The product’s minimum balance of $1,000, Ms. Flynn said, islower than is typically required.

Also, during the holidays, eachbranch is holding four weekly drawings for free Nook e-readers forpeople who simply walk into anybranch and fill out a sweepstakes

continued from PAGE 1 entry form.New York Community officials say

the lower CRA ratings in Ohio andFlorida are the result of a transitionperiod that occurred after New YorkCommunity in December 2009 acquired failed AmTrust Bank, whichin Ohio it renamed Ohio SavingsBank — the name by which it wasknown for most of its existence. Itentered Ohio, Florida and Arizonavia the acquisition.

“There is definitely a transitionperiod where you are just trying tostabilize yourself,” Ms. Flynn said.

From mid-2008 to the present, thebank was “de-risking” its balancesheet, according to Ms. Flynn. OhioSavings no longer was originatingloans and putting them on its bal-ance sheet, though it was originatingloans and selling them, she said.

Now that the bank is at a pointwhere it believes it has achieved stability, it’s focused on increasingits single-family and multifamilymortgage lending in this market. Ithas not done multifamily lendingpreviously in Ohio but will expandit here next year, Ms. Flynn said.

Change brings challengesThough he said it’d be unfair for

him to comment directly on New

York Community’s ratings, Sal Maio-rana, a former Federal Reserve Bankexaminer who has examined banksfor CRA compliance, said it isn’t far-fetched to blame worsened ratingson a transition like the one NewYork Community has undergone.

“A lot of times when change occurs and institutions are kind ofoperating new business strategies,things fall through the cracks,” saidMr. Maiorana, chief risk officer anda senior vice president for GeaugaSavings Bank. “When you’re in a stateof transition, it’s very easy to notcross a ‘t’ or dot an ‘i.’”

CRA ratings can affect a bank’sability to open new branches or expand operations, said FDICspokesman Greg Hernandez.

A lower CRA rating also can impact an institution’s reputationin a market, Mr. Maiorana said.

“People read that and they say,‘Oh, you’re not lending to blacks orHispanics’ … it does create a prob-lem,” he said. “Right or wrong,that’s what happens.”

The Ohio Fair Lending Coalitionhas been a vocal critic of Ohio Savings’ lack of lending in this region and its closure of the branchin Cleveland’s Larchmere neighbor-hood in December of last year.

In a recent news release, AlannaFerguson, a leader of the Ohio SavingsNeighborhood Alliance of the coali-tion, was quoted as saying, “Just because Ohio Savings is now ownedby an out-of-state bank does not allow New York Community to put ared line through our community,and not reinvest our deposits backinto the community.”

The fair lending coalition is planning a protest at Ohio Savings’Cleveland headquarters after Jan. 5,when the FDIC is scheduled to re-lease publicly the bank’s CRA rating.The group wants the bank to offer,among other things, a loan productmarketed to the community and lo-cally processed and administered.

“I think the goal here is … to makesure they improve their lending herein Greater Cleveland,” coalition director Chip Bromley said. He saidhe hopes to see the bank “truly takeits place at the table and work oncredit issues in our community.”

For its part, the city of Cleveland’sDepartment of Finance and Depart-ment of Community Developmentrecently recommended to ClevelandCity Council that it not use New YorkCommunity as a depository for thecity’s active deposits during 2012-13.

A Nov. 4 report cited both the clo-sure of the Larchmere branch, whichthe city had opposed, and the bank’sloan-to-deposit ratio for not recom-mending New York Community. ■



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Price gets rightto the point■ K&D Group CEO Doug Price gave a plea— or perhaps a hard sell — as he spoke tothe Greater Cleveland Mortgage Bankers As-

sociation last Tuesday,Dec. 6, at The UnionClub of Cleveland.

Most of Mr. Price’s remarks recounted theWilloughby apartmentcompany’s growth fromeight units to more than9,000. He noted that K&D’sgrowth came first fromloans with savings and

loans, then via federal-backed financing.The latter is now iffy because of concernsover the future of government-sponsoredentities such as the Federal National Mort-gage Association and Government NationalMortgage Association, better known as Fred-die Mac and Ginnie Mae, respectively.

Now, Mr. Price said, local banks need tostep forward to fund additional downtownapartments like those that K&D wants to do— and that the market apparently needs —due to record-high occupancy levels.

“You can’t go to New York City to get financing for these projects,” he said. “It’sup to the people in this room to do it.”

He closed simply: “Lend money.”As he thanked Mr. Price for speaking at

the session’s end, Jack Branden, a GuardianTitle agent and association’s president, said,“Message delivered. Whether it’s heard,only time will tell.” — Stan Bullard

And now, a bit of sports talk talk■ A month after a 19% jump in market share,ratings at established all-sports radio stationWKNR-AM, 850, fell in October, to 4.0 from4.4. That figure represents a 9% drop in thelistening audience tuned in to the station,according to data provided by Baltimore-based Arbitron Inc.

And it appears WKNR, better known asESPN Cleveland, is getting a stiffer challengefrom its new competitor, CBS Radio’s newsports talk station, WKRK-FM, thoughWKNR still owns the genre as CBS attemptsto establish itself in Cleveland.

CBS’s station, better known as Sports Radio 92.3 The Fan, saw its share climb to1.2 in October from 0.8 in September. Thatrise seems to reflect what Tom Herschel,CBS Radio’s senior vice president and market manager in Cleveland, told Crain’slast month, when WKNR experienced abump in WKRK’s first full month measuredby Arbitron.

“(September was) the first full ratingmonth we’ve had, and people still are dis-covering the station,” Mr. Herschelsaid then. “The feedback we’re gettingfrom listeners and advertisers is allpositive.” — Joel Hammond

Shape your messagearound this app■ A local startup is encouraging companies to shy away from givingtheir employees or customers the

traditional box of chocolates or companycalendar over the holidays and instead givethe gift of wellness with a yoga app.

The Mobile Yogi, a Cleveland companythat has developed a line of smart phone applications offering yoga tips, is opening aline of business aimed at allowing compa-nies and other organizations to put theirmarks on its mobile yoga apps. With MobileYogi’s how-to yoga videos at the heart of theapps, companies and groups easily can addtheir own logos, links or whatever other content they wish before shipping them offas holiday gifts.

“It allows the company to deliver the applications with their brand and their messaging,” said Sebastian Holst, who developed the apps along with wife, Dawn.“There seems to be a lot of interest.”

Mobile Yogi also is pitching its services to local yoga studios that don’t have the resources to develop their own apps butwould like to offer such services to their customers.

The company launched consumer versions of the apps last May. Though theapps have reached more than 20,000 users

around the globe, the idea was to refineand validate the content for users. Thecore business model, Mr. Holst said, isthe business-to-business services thecompany started pitching this month.

“This is a business we’ll scale,” Mr. Holst said. “There are literallythousands of yoga studios and

companies around the world whomight be interested.” — TimothyMagaw

WHAT’S NEW

COMPANY: Akhia, HudsonTHE OCCASION: Its 15th anniversary

The public relations and marketing commu-nications agency was founded in November1996 by its president, Jan Gusich (above), ather dining room table. She says her goalfrom the start was to serve clients’ needs“beyond their expectations,” and that remainsthe agency’s operating philosophy.

Akhia started with two employees andthree clients. It now has 29 employees andmore than 30 clients.

For information, visit www.Akhia.com.

COMPANY: National MortuaryShipping, ClevelandTHE OCCASION: Its 30th anniversary

The company, founded in 1981 by RobertP. Smith, works with hometown funeral directorsto aid families dealing with a difficult situation— death away from home.

National Mortuary offers removal services,domestic shipping, international shipping, removal and embalming, livery, direct crema-tion, disinterment and graveside services, amongother services a funeral director might need.

For information about the company, visitwww.NatlMortuaryShipping.com.

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK DECEMBER 5 - 11

The big story: AmTrust Financial ServicesInc., a property and casualty insurer based inNew York that already has an operation in SevenHills with 245 employees, is planning to estab-

lish a big office in down-town Cleveland that even-tually could house as manyas 1,000 workers. Subject tovarious approvals, AmTrustintends to set up offices inside the building at 800Superior Ave. (left) that oncehoused the former McDon-ald Investments brokeragefirm. An affiliate of AmTrustbought the largely vacant23-story building earlierthis year for $7.5 million at

an online auction and has committed to spendingat least $20 million to upgrade the property,which includes a parking garage.

Raising the stakes: As expected, the Ritz-Carlton hotel in Cleveland is changing hands.Forest City Enterprises Inc. agreed to sell the206-room Ritz-Carlton at Tower City Center to asubsidiary of Rock Ohio Caesars LLC for a totalof $36.5 million, which includes a $2.5 millionpayment by Rock Ohio under a previous optionagreement between the two companies. RockOhio Caesars is the joint venture of Caesars Entertainment Corp. and Rock Gaming LLC,which is owned by Cleveland Cavaliers majorityowner Dan Gilbert, that is creating the Horse-shoe Casino Cleveland in the former HigbeeBuilding that’s part of the Tower City complex.

Bargain buy: An investor and hotel operatorbased in Canada acquired the Old Arcade anddowntown Cleveland Hyatt Hotel for the mini-mum bid of $7.7 million at a Cuyahoga CountySheriff’s foreclosure auction. Skyline ClevelandAcquisition LLC, formed by Skyline AcquisitionInternational Inc. of Toronto, was the winningbidder for the 1890-vintage Cleveland landmark.The Arcade property was redeveloped a decadeago at a cost of $60 million to accommodate thehotel, but a recent appraisal for the sheriff’s office valued it at $11 million, which triggeredthe minimum selling price at $7.7 million understate law.

Afoul of the feds: Invacare Corp. said theU.S. Food and Drug Administration requestedthe company negotiate and agree to a consentdecree related to what Invacare described as“previously disclosed inspectional observations” atthe company’s corporate facility and its wheel-chair manufacturing plant in Elyria. Invacaresaid the FDA proposed a consent decree thatwould require suspension of certain operationsat the facilities until they are determined by theFDA to be in compliance.

Group effort: In its new role as the regionaloffice in Northeast Ohio for the state’s JobsOhiobusiness development program, Team NEOannounced that six proposals to stimulate jobgrowth and economic development in the region have received preliminary approval for financing from its board of trustees. Pending final documentation and approval, grants totalingnearly $3 million will be issued by Team NEO.The largest grant, for $2 million, would go to ajoint regional retention and expansion programinvolving five groups.

Young, man in charge: William A. Young Jr.,a former Cleveland Clinic administrator, wasnamed president and CEO of St. John MedicalCenter in Westlake. Mr. Young, who most recentlyserved for more than five years as chief operat-ing officer at the Clinic’s South Pointe andMarymount Hospitals, will replace Cliff Coker,who announced in April he would retire at theend of the year.


BEST OF THE BLOGSExcerpts from recent blog entries onCrainsCleveland.com.

Let’s hear itfor the 2%■ Northeast Ohio is home to two of the 100businesses on Forbes.com’s list of America’smost promising companies.

The privately held up-and-comers “havecompelling business models, strong manage-ment teams, marquee customers, strategicpartners and precious investment capital,”Forbes.com said.

At No. 50 on the list is Mesocoat Inc. ofEuclid, which provides metal coating andcladding to protect pipes, platesand bars from corrosion and wear inextreme environments.

Forbes.com said Mesocoat,founded in 2008, has raised $13.5million in private equity andgrants. CEO Andrew Sherman, 47,was appointed to the U.S. Depart-ment of Energy’s Hydrogen SafetyPanel. Mr. Sherman also has beeninvolved in 11 startups, foundingthree of them.

Coming in at No. 67 is ABSMate-rials of Wooster, a maker of “reac-tive glass” that separates pollutants andother molecules from water and air. ABS-Materials has raised $11 million in venturecapital. CEO Steve Spoonamore, 46, hasfounded or co-founded 14 companies.

MOVband pedometer is astep in the right direction■ Chagrin Falls serial entrepreneur BlakeSquires has joined the fight against obesityin a big way.

Forbes.com profiled Mr. Squires, whopreviously co-founded Findaway, a companythat makes a digital audio book playercalled the Playaway. His new product is a

kid-friendly, wristwatch-style pedometercalled the MOVband.

“The MOVband uses the same technologythat most more-expensive pedometers do:a 3D accelerometer in a solid state chipset,”Forbes.com reported. “But its slimmed-down features (the only data you can inputare age and the time) mean that theMOVband, priced at $20, sells for about athird of what it costs for the competingNike+ Sportband.”

Mr. Squires said, “Pedometers are expen-sive and complicated. We said there’s anopportunity to create a better, simpler pe-dometer at an inexpensive price point.”

Nearly 2,000 students and faculty in Cha-grin Falls walked a combined187,000 miles in three weeks in Oc-tober as part of a program begun by the school district twoyears ago to improve children’s fitness. The MOVband “helped getstudents excited about taking10,000 steps a day.”

Mr. Squires said he has been approached by a financial servicescompany that wanted MOVbandsfor its 100 employees. He’s also intalks with a Coca-Cola distributor.

Be glad these aren’t your(flesh-eating) neighbors■ A Wall Street Journal roundup of new fiction included kind words for a story collection from a former Clevelander — andthe best story, apparently, turns Clevelandinto a zombie wasteland.

The book is “After the Apocalypse,” byMaureen F. McHugh. The Journal called it“superb” and said the collection’s finest story is “The Naturalist.”

The story features Gerrold Cahill, a con-vict who, like other prisoners, “has been leftto die in the sealed-off Cleveland ZombiePreserve.”

ABSMaterials’Steve Spoonamore

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