Print drives branding,online generates more leads

SPACE TO SPARESPACE TO SPARE

By STAN [email protected]

Get ready for recessionchic to remake the officemarket.

In the same way thatconsumers switched to fast foodfrom higher-priced restaurants,wary businesses shedding employees and slashing spendingare developing an appetite for office-market bargains.

With the planned Ernst & YoungTower in the Flats stalled due tothe financial crisis and other plansfalling aside, existing buildings

downtown suddenly look more attractive.

And with little suburban officeconstruction, the same focus onexisting buildings is occurring regionally. Online data providerCoStar says 13 million square feetof empty office space is availablein Northeast Ohio.

Paul Voinovich, a principal atoffice design firm Vocon Inc. inCleveland, said the environment issuch that “not only are existingbuildings becoming more of anopportunity, existing offices arebecoming more of an opportunity.”He said tenants want to make

existing offices work or upgrade atlittle added cost.

“It’s no longer a question of attracting and keeping employees,”Mr. Voinovich said. “It’s a questionof, ‘can our employees live withthis? They should be glad theyhave a job.’ It is a very differentoutlook from six months ago.”

Tenants now want short-termdeals of five years or less to benimble so they can adapt tochanges in the economy, said RicoPietro, a vice president at theCresco brokerage in Independence.Landlords need long-term leasesfor pricey updates or to construct

new buildings.Moreover, bargains are surfacing

as companies vacate offices wherethey still are on the hook for rent.

“There is a constant stream ofnew sublease space hitting themarket that is aggressivelypriced,” said George Hutchinson,CEO of Valley View’s Allegro Realty Advisors.

More empty space likely will hitthe market from business mergersand failures, such as when PNCBank of Pittsburgh consolidates operations with National City Corp.

“We could have an organicbuilding boom as this happens,”

said Al Wiant, a senior vice presidentin CB Richard Ellis’s Clevelandtenant representation unit.

Mr. Wiant said the market’schallenges worry him as a residentof the region.

“If you can put aside your self-interested motives as a mid-careerprofessional (who could makemore money if landlords are hungry), the community and thecity absolutely has to get a handleon this,” Mr. Wiant said.

CB put downtown vacancy at18% and suburban vacancy at 17%effective Jan. 1. CB calculates

With retailers’ mass exodus in full stride, real estate firms expect continued struggle to find tenants

REAL ESTATEI N S I D E

FEBRUARY 2-8, 2009 CRAIN’S CLEVELAND BUSINESS 11

12 GOODYEAR’SNEW AKRONHQ STUCK IN NEUTRAL AS CREDIT ISSUES STALL

PROGRESS. COMMERCIALANDINDUSTRIAL

JESSE KRAMER

Rockport Plaza on Center Ridge Road in Rocky River still is looking for a tenantfor the space Target vacated in the big retailer’s move to nearby Westgate.Randy Goodman, principal at the Goodman Real Estate Services Group, whichis handling the Rockport property, said the space will be hard to fill for a while.

CLOSING TIME

A look at some of the store closings due to major retailers exiting the Northeast Ohio market:

■■ Circuit City: In November, the embattled electronics company announced it would close six NortheastOhio stores, in Brooklyn, CuyahogaFalls, Elyria, Garfield Heights, MayfieldHeights and Mentor, and in January itclosed two area stores, in Canton andBainbridge Township.

■■ Value City: Three stores closed inFebruary, and three area locations —in Parma, Akron and Canton — closedin November when the company closed

all Value City stores.

■■ Linens-N-Things: The retailer closed stores in Aurora, CuyahogaFalls, Mayfield Heights, Avon andMentor.

■■ Steve and Barry’s: The discountclothing retailer closed four stores inSeptember, and in November closedits remaining stores in RichmondHeights, Akron and Canton.

■■ Bennigan’s: The company in Julyabruptly ceased operations, shutteringrestaurants in Mentor, North Olmsted,Elyria, Cuyahoga Falls and Canton.

By BRAD [email protected]

The retail industry has been takinga pounding in the battered economy, leaving a growingnumber of storefronts sitting

dark and empty.In recent months, Circuit City, Value

City, Linens-N-Things, Steve and Barry’sand Bennigan’s, to name a few, havegone out of business or significantly contracted their operations.

“2008 was not a great year for retail,and the projections look like 2009 is going to be worse,” said Tom Flynn, senior vice president of the CB RichardEllis retail sales division in Cleveland.

Later this month, CB Richard Ellis, oneof the world’s largest real estate firms,will release its annual report detailingjust how much vacant space there is inthe region. Mr. Flynn expects the num-bers will be worse than they were a yearago, although he couldn’t say yet justhow bad it will be.

While the recent rash of shutdownscertainly is notable, store closings aren’tuncommon, particularly in January afterthe holiday season, said Susan Godorov,vice president of marketing and lifestyleretail for Centro Properties Group, whichowns Midway Mall in Elyria and the newWestgate in Fairview Park.

Midway Mall lost its Dillard’s location afew years ago, and the retail area recentlylost a Circuit City, Steve and Barry’s andseveral other stores.

Compared to filling a smaller storefrontin a shopping center or strip mall, getting atenant in a cavernous big-box store or alarger anchor store isn’t quite as easy, saidKory Koran, Rocky River’s director of economic and community development.

“You definitely have to look to particularretailers that could take a large space, oryou look at nontraditional retailers, yousubdivide,” Ms. Godorov said.

Mixing it upFinding alternatives for vacant retail

See SPACE Page 13

See OFFICE Page 13

With glut of existing buildings, bargains available in office market

20090202-NEWS--11-NAT-CCI-CL_-- 1/29/2009 3:47 PM Page 1

12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM FEBRUARY 2-8, 2009

Executive Associate

Bradley H. Adams

Associate

Robert C. HartmanMichael Pascucci

Robert Speight

Heery International is proud to announce new appointments to Executive Associate and Associate. We applaud the high standards these individuals set and achieve on a daily basis. They are integral to our continued success.

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REAL ESTATE

New Goodyear HQ projectcaught in credit crunch By CHRISTINE [email protected]

Add the Goodyear worldheadquarters project ineast Akron to the list ofproposed developments

that have stalled due to the recentcredit freeze.

The $900 million, 600-acre project, originally scheduled tobreak ground this past fall, grewout of a partnership betweenGoodyear Tire & Rubber Co., Industrial Realty Group (IRG) ofLos Angeles, the state of Ohio, thecity of Akron, Summit County andthe Summit County Port Authority.

While the public financing portion of the project is in place,including a $30 million state taxcredit to Goodyear for the retentionof 2,900 jobs, the unwillingness ofprivate lenders to finance almostanything these days has left the development in limbo.

“The financial crisis in thiscountry is the thing that’s keepingus from closing,” said Debra Harrell, IRG’s senior vice presidentwho is overseeing the project,which if finished as planned wouldbe the biggest development inAkron’s history. Ms. Harrell said anew start date cannot be determineduntil the final leg of financing is secured.

The deal calls for IRG, a developerknown for its adaptive reuse of olderbuildings, to construct and lease toGoodyear global and North AmericanTire headquarters buildings. IRGalso plans to buy most of Goodyear’sexisting properties that the tiremakerwill lease back, including the com-pany’s Tech Center and the buildingwhere it produces NASCAR tires. A125-room Wyndham hotel, confer-ence center and spa also will be partof the first phase of construction.

Goodyear’s current headquartersand other buildings along East Mar-ket and River streets that IRG plansto buy are scheduled to be renovatedas part of the second phase of con-struction, which includes a retailtown center, offices, an industrialpark and residential components.That portion of the project has beendubbed Akron Riverwalk and willstraddle the Little Cuyahoga Rivernorth of Interstate 76.

Despite the brick wall IRG has encountered with private financing,the vested parties are proceedingwith site preparations. Environmen-tal cleanup already is under way,said Robert Bowman, Akron’sdeputy mayor for economic devel-opment, and critical infrastructureimprovements are forging ahead.

“Based on the high level of commitment in the plan by all parties, a number of long-lead projects related to the project willbe moving forward,” Goodyearspokesman Scott Baughman saidby e-mail. “These include associatedroadway construction projects, therelocation of a major sewer line …and the removal of an out-of-ser-vice power plant near Goodyear’sTechnical Center.”

The city of Akron in December secured a $3 million Clean Ohio Revitalization Fund grant for asbestos abatement, remediationand demolition of the old power-house. The city last spring also wona $750,000 Clean Ohio AssistanceFund grant to clean up and demolishthe 99 Seiberling Street building, alarge structure located in the heart ofthe planned mixed-use center.

Until the final financing piece fallsinto place, all involved are doingwhat they can. “We’re keeping thewheels on it, and unfortunately, thelenders are behind us,” IRG’s Ms.Harrell said. ■

A broad approach

Sally Levine,owner of LevineArchitecture &Design Ltd. anda proponent ofuniversaldesign, providedthe architecturalservices for thespace plan anddesign of AnyLab Test Now inRichmondHeights, atwhich she is pictured. Ms.Levine said she designed thatparticular spaceto make it easyto navigate.JANINE BENTIVEGNA

Proponents of forward-thinking universal designtout benefits enjoyed by majority of a space’s usersBy SHARON [email protected]

Architect Sally Levine, owner of Levine Architec-ture & Design Ltd. ofShaker Heights, is an

active proponent of universal design, the discipline that addresseshow thoughtful design can servethe broadest number of peoplewhile meeting specific user needs.

“Universal design is a framework,not a stylistic approach,” said Ms.Levine, who was first introduced tothe principles in 1997. “It can be incorporated into any style. It can beincorporated into every buildingtype. It can be expressed in anynumber of materials.”

Also known as inclusive designor design for all, universal designnot only addresses users’ diverseand changing physical and cogni-tive abilities, it aims to benefit allpeople who use a space or item.The approach can be incorporatedthroughout, from a building’s design and landscape to furniture,signage, technology and gadgets.

Universal design solutions canbe as simple as raising electricaloutlets so people with arthritis donot have to bend down.

Ultimately, the practice empha-sizes that the majority benefits froma universal design option developedto meet the needs of a focused usergroup. Consider the raised electric

outlets — toddlers cannot reachthem. And other users — some withback pain, others wanting to remainache-free — also reap the benefits.

“Universal design looks at thehuman condition, across theboard, and understands that it’sconstantly in flux,” said Ms.Levine, who also is a lecturer atCleveland State University andCase Western Reserve University.

Expanding usersAlthough universal design dates

to the 1950s, the movement didn’ttake off in this country until the late’80s, said Valerie Fletcher, executivedirector of the Institute for HumanCentered Design of Boston.

While not exclusively about accessibility and meeting Americanswith Disabilities Act requirements,universal design did receive a boostfrom the accessibility movement.But, universal design goes beyondmeeting a checklist of requirements.

“Since the ADA’s design guid-ance focuses on a small portion ofthe spectrum of ability, primarilywheelchair users, and does not apply to products or residentialdesign, universal design is morefar-reaching,” Ms. Fletcher said.

Big-handled flatware is an example of universal design thatfalls outside the scope of the ADA.

Stephanie FallCreek, presidentand CEO of Fairhill Center of Cleveland, a nonprofit organization

that focuses on successful aging, said larger flatware handles allow for better grasping among older peoplewith arthritis, and the design is alsoideal for dexterity-mastering childrenand the “average butterfinger.”

“And that’s what universal designmeans: Better for you, better forhim, better for her, better for every-one,” Dr. FallCreek said.

Ms. Levine has been an imple-menting and consulting architect atFairhill Center, a multi-tenant, circa-1928 campus. She designedthe center’s intergenerational playground and garden and advisesregarding the incorporation of universal design features.

Ms. Levine also encourages clientsto offer multiple lighting options, including on- and off-task lighting atdesks. Fluorescent lighting, she said,can’t serve all visual abilities.

To address current and futurehearing abilities, Ms. Levine recom-mends installing sound absorbentmaterials and small, private spacesamid a cubicled floor plan.

“The idea is that you prepareahead of time,” she said.

Catching onAs construction operations

director for Greater ClevelandHabitat for Humanity, ThomasMeyer includes universal designfeatures in the homes the organiza-tion builds for families in need.

In 2004, he became aware of universal design from attending alecture featuring Ms. Levine. He hasbeen instrumental in includingcounter space of different heightsbetween dining and kitchen areasof new Habitat homes.

Mr. Meyer, however, is in the minority of advocates, and for now,Ms. Levine may professionally beahead of the curve.

Further interest and incorporationof universal design is anticipated, butchange takes time.

Baby boomers, wanting to remain in their homes as they age,will be catalysts for adopting thisphilosophy, she said.

Also, universal design will increasingly be suggested by designprofessionals as it is taught at colleges, she added. While curriculahave expanded around the world, theUnited States is not a leader; courses,not majors, are offered at some universities, Ms. Fletcher said.

Misperceptions that the look isclunky, industrial and expensive alsomust be overcome, Dr. FallCreeksaid.

“We will have arrived when univer-sal design is the default and not theexception,” she said. “And we’re notthere yet.” ■


FEBRUARY 2-8, 2009 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 13

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space is exactly what many in the industry are doing, particularly atthe more traditional shopping centers, which have been strug-gling. The old Westgate Mall, for example, was torn down in 2006 tomake way for an open-air shoppingarea.

One of the tenants at Westgate —which has since dropped mall fromits name — is Target, which closed anearby location at Rockport Plaza inRocky River to open a larger store.

Randy Goodman, the principal ofthe Goodman Real Estate ServicesGroup, which is handling the Rockport property, said it’s a goodlocation, but it may be hard to fillfor a while. A deal to bring Best Buyto the plaza, which also has a shuttered grocery store, fell apart,and there aren’t many prospects onthe horizon for Rockport or any retail location, he said.

“It doesn’t matter how good aspace is, it’s not going to fill,” he said.

Erin Hershkowitz, a spokes-woman for the International Council of Shopping Centers, saidnecessity is forcing property ownersto look at less traditional tenantsand uses for their larger emptyspaces, including the creation ofsubdivisions, offices and residentialareas.

Those options have the benefit ofcreating a built-in customer basefor the stores that remain and mayoutlast a bad economy better than a

troubled retailer, she said.“The trend has really been

mixed-used development,” shesaid. “A lot of centers already haveincorporated hotel, residential, retail, office. So if they lose a retailerduring an economic downturn,they retain some other tenants.”

But an empty big-box store canhave other uses as well, said JuliaChristiensen, the Henry R. LuceVisiting Professor of the EmergingArts at Oberlin College, and authorof the book “Big Box Reuse.”

Some stores, for instance, havestipulations in their contractsdefining who can take over the

vacant space when they close astore, she said.

“You can bet a Wal-Mart buildingwill never be a Kmart building,” shesaid.

That’s prompted the transfor-mation of some empty stores intosomething entirely different. In hernative, Bardstown, Ky., Ms.Christiensen said an empty Wal-Mart was torn down and acourthouse was built on the land.

But the idea of remaking an existing structure into somethingentirely different can also help theplanet, she said.

“Reuse is one of the most

Space: Continued store closings likely powerful tools we have for fightingsprawl,” Ms. Christiensen said.

Treading waterExactly how long the retail

industry will have to endure thedownturn is anybody’s guess, although most experts say that itwill last at least until the fall, if notinto 2010. And things will likely getworse before they get better.

Over the past eight years or so,there was rapid expansion in theretail sector as retailers tried tograb more of the market share, butthat’s changing now, Mr. Flynnsaid, as companies look to theirbottom lines.

“You will see them shed the unprofitable stores,” he said.

Mitchell Schneider, president of

Lyndhurst-based First InterstateProperties Ltd., agreed. Mr. Schnei-der’s firm oversees properties suchas Avon Commons, SteelyardCommons and Legacy Village.

Of the approximately 4 millionsquare feet in retail space held byFirst Interstate, Mr. Schneider estimates his company has 97% to98% occupancy rate. The biggesthit the company took was the lossof a Linens-N-Things in Avon.

“I’m sure that we’ll fill the spaceeventually. It’s just a question ofwhen the economy turns around,”he said.

Mr. Flynn said retailers are nowin survival mode.

“The benchmark is going to beto not lose ground, not growth,” hesaid. ■

REAL ESTATE

continued from PAGE 11


Office: Clevelandhighlights cheapdowntown rentin sales pitches

companies could shed more than 2million square feet of office space.

However, Mr. Wiant believesthere is an opportunity lurking inthe bedlam: Owners of existingbuildings could quickly renovate ata much lower cost and catch thisnew frugality. A rent of $35 a squarefoot for a new building was a toughsell before; now, good space at $20a square foot is doubly attractive asexisting leases expire.

Drawn to the cityCapitalizing on bargain rents is a

city of Cleveland strategy, saidTracey Nichols, Cleveland directorof economic development. She noted that as a factor in recentdeals that attracted tech firms herefrom other regions.

With funds for tenant updatestight, she noted the city of Cleve-land’s vacant property initiative allows a company to obtain a partially forgivable loan of up to$300,000 to help retrofit officespace if a building is more than 40%vacant or it occupies an office emptied by more than 50 lost jobs.

The region might even catch a newtide rising in the recession. Mr. Pietrosaid there are multiple requirementsafoot nationally to combine opera-tions to slash costs that could be a fitfor the region’s cheap offices — andaid its economy. ■



LARGEST HOTELSRANKED BY NUMBER OF GUEST ROOMS

Rank

NameAddressPhone/Web site

Numberof

guestrooms

Number ofmeetingrooms

Meetingspace

(squarefeet)

1Kalahari Resort & Convention Center7000 Kalahari Drive, Sandusky 44870(877) 642-6847/www.kalahariresorts.com

884 25 95,000

2Hotel BreakersOne Cedar Point Drive, Sandusky 44870(419) 627-2106/www.cedarpoint.com

650 3 2,898

3Renaissance Cleveland Hotel24 Public Square, Cleveland 44113(216) 696-5600/www.renaissancecleveland.com

491 33 62,000

4Crowne Plaza Cleveland City Centre Hotel777 St. Clair Ave. N.E., Cleveland 44114(216) 771-7600/www.clevelanddowntownhotel.com

472 20 28,000

5Hilton Cleveland East/Beachwood3663 Park East Drive, Beachwood 44122(216) 464-5950/www.hiltonclevelandeastbeachwood.com

404 17 16,000

6Cleveland Marriott Downtown at Key Center127 Public Square, Cleveland 44114(216) 696-9200/www.clevelandmarriottdowntown.com

400 16 17,000

7Doubletree Hotel Cleveland Downtown/Lakeside1111 Lakeside Ave., E., Cleveland 44114(216) 241-5100/www.clevelanddowntownlakeside.doubletree.com

379 10 10,347

8Cleveland Airport Marriott4277 W. 150 St., Cleveland 44135(216) 252-5333/www.clevelandairportmarriott.com

372 16 15,500

9Holiday Inn Cleveland South/Independence6001 Rockside Road, Independence 44131(216) 524-8050/www.hiindependence.com

364 18 18,100

10Breakers ExpressOne Cedar Point Drive, Sandusky 44870(419) 627-2106/www.cedarpoint.com

350 NA NA

11Holiday Inn Strongsville15471 Royalton Road, Strongsville 44136(440) 238-8800/www.intercontinentalhotels.com

303 10 12,500

12InterContinental Hotel & Conference Center9801 Carnegie Ave., Cleveland 44106(216) 707-4100/www.cleveland-conferencecenter.intercontinental.com

299 13 35,000

13Cleveland Marriott East26300 Harvard Road, Warrensville Heights 44122(216) 378-9191/www.clevelandmarriotteast.com

295 15 15,000

14Hyatt Regency Cleveland at the Arcade420 Superior Ave., Cleveland 44114(216) 575-1234/www.cleveland.hyatt.com

293 9 7,100

15Sheraton Cleveland Airport Hotel5300 Riverside Drive, Cleveland 44135(216) 267-1500/www.clevelandairportsheraton.com

287 22 22,000

16Akron City Centre Hotel20 W. Mill St., Akron 44308(330) 384-1500/www.akroncitycentrehotel.com

274 20 18,000

17Embassy Suites Hotel Cleveland Rockside5800 Rockside Woods Blvd., Independence 44131(216) 986-9900/www.embassysuites-rockside.com

271 13 17,500

18Holiday Inn Elyria/Lorain1825 Lorain Blvd., Elyria 44035(440) 324-5411/www.holiday-inn.com/cle-elyria

250 6 9,552

19Hilton Garden Inn Cleveland Downtown1100 Carnegie Ave., Cleveland 44115(216) 658-6400/www.clevelanddowntown.stayhgi.com

240 14 20,000

19Sawmill Creek Resort & Conference Center400 Sawmill Creek Drive, Huron 44839(800) 729-6455/www.sawmillcreek.com

240 25 50,000

21Holiday Inn Hudson240 Hines Hill Road, Hudson 44236(330) 653-9191/www.holidayinn.com/akron-hudson

239 14 15,000

22Crowne Plaza Cleveland Airport7230 Engle Road, Middleburg Heights 44130(440) 243-4040/www.crowneplaza.com/clevelandarpt

238 14 16,000

23Castaway Bay2001 Cleveland Road, Sandusky 44870(419) 627-2106/www.castawaybay.com

237 8 7,691

24Cleveland Clinic Guesthouse9601 Euclid Ave., Cleveland 44106(216) 707-4200

232 NA NA

25Bertram Inn and Conference Center600 N. Aurora Road, Aurora 44202(330) 995-0200/www.thebertraminn.com

224 30 27,000

26Embassy Suites Hotel Beachwood3775 Park East Drive, Beachwood 44122(216) 765-8066/www.embassybeachwood.com

216 7 5,878

26Quality Inn and Suites Richfield4742 Brecksville Road, Richfield 44286(330) 659-6151/www.clevelandrichfieldhotels.com

216 6 30,000

28Sheraton Suites Akron/Cuyahoga Falls1989 Front St., Cuyahoga Falls 44221(330) 929-3000/www.sheratonakron.com

214 14 23,000

Rank

NameAddressPhone/Web site

Numberof

guestrooms

Number ofmeetingrooms

Meetingspace

(squarefeet)

29Comfort Inn Sandusky5909 Milan Road, Sandusky 44870(419) 621-0200/www.sanduskyhotels.com

209 1 2,200

30Ritz-Carlton, Cleveland1515 W. Third St., Cleveland 44113(216) 623-1300/www.ritzcarlton.com

206 11 24,466

31Wyndham Cleveland at PlayhouseSquare1260 Euclid Ave., Cleveland 44115(216) 615-7500/www.wyndhamcleveland.com

205 9 13,000

32Hilton Akron/Fairlawn3180 W. Market St., Akron 44333(330) 867-5000/www.akronhilton.com

203 16 17,000

33Hampton Inn Cleveland Downtown1460 E. Ninth St., Cleveland 44114(216) 241-6600/www.clevelanddowntown.hamptoninn.com

194 2 1,200

34Doubletree Cleveland South6200 Quarry Lane, Independence 44131(216) 447-1300/www.clevelandsouth.doubletree.com

193 11 9,400

35Sandcastle SuitesOne Cedar Point Drive, Sandusky 44870(419) 627-2106/www.cedarpoint.com

187 NA NA

36Sheraton Independence Hotel5300 Rockside Road, Independence 44131(216) 524-0700/www.sheraton.com/independence

179 10 10,000

37Quail Hollow Resort11080 Concord-Hambden Road, Concord 44077(440) 497-1100/www.quailhollowresort.com

176 15 15,708

38Marriott Residence Inn - Cleveland Downtown527 Prospect Ave., Cleveland 44115(216) 443-9043/www.marriott.com/cleri

175 5 3,400

39Residence Inn by Marriott Beachwood3628 Park East Drive, Beachwood 44122(216) 831-3030/www.marriott.com/clebd

174 2 1,300

40Hilton Garden Inn Cleveland Airport4900 Emerald Court S.W., Cleveland 44135(216) 898-1898/www.clevelandairport.gardeninn.com

168 5 2,004

40Red Rock Inn24801 Rockside Road, Bedford Heights 44146(440) 439-2500

168 2 4,000

42McKinley Grand Hotel320 Market Ave. S., Canton 44702(330) 454-5000/www.mckinleygrandhotel.com

166 9 10,500

43InterContinental Suites Hotel8800 Euclid Ave., Cleveland 44106(216) 707-4300/www.cleveland-suites.intercontinental.com

162 1 900

44Days Inn Cleveland Airport16161 Brookpark Road, Brook Park 44142(216) 267-5100/www.daysinn.com

158 4 4,500

44Fairfield Inn & Suites by Marriott3750 Orange Place, Beachwood 44122(216) 831-3300/www.fairfieldinnandsuitesbeachwood.com

158 1 1,250

44Residence Inn by Marriott Cleveland Airport17525 Rosbough Drive, Middleburg Heights 44130(440) 234-6688/www.marriott.com/cleoh

158 2 1,070

47Courtyard by Marriott5051 W. Creek Road, Independence 44131(216) 901-9988/www.marriott.com/cleci

154 3 1,584

47Courtyard by Marriott Middleburg Heights7345 Engle Road, Middleburg Heights 44130(440) 243-8785/www.courtyardclevelandairportsouth.com

154 3 945

49Quality Inn & Suites Youngstown4055 Belmont Ave., Youngstown 44505(330) 759-3180/www.showhotel.com/qualityinn/4450501

150 2 NA

50Radisson Hotel & Suites Cleveland Eastlake35000 Curtis Blvd., Eastlake 44095(440) 953-8000/www.radisson.com/eastlakeoh

148 11 12,000

51Holiday Inn Cleveland Airport4181 W. 150 St., Cleveland 44135(216) 252-7700/www.holiday-inn.com/cle-airport

146 8 6,196

52Hilton Garden Inn Cleveland/Twinsburg8971 Wilcox Ave., Twinsburg 44087(330) 405-4488/www.clevelandtwinsburg.gardeninn.com

142 8 12,000

52Radisson Hotel Cleveland Gateway651 Huron Road, Cleveland 44115(216) 377-9000/www.radisson.com/clevelandoh_gateway

142 10 5,400

54Holiday Inn Express Downtown Cleveland629 Euclid Ave., Cleveland 44114(216) 443-1000/www.hiexpress.com/clevelanddtnoh

141 4 3,471

55The Avalon Inn9519 E. Market St., Warren 44484(330) 856-1900/www.avaloninn.com

134 6 NA

56Comfort Inn Downtown1800 Euclid Ave., Cleveland 44115(216) 861-0001/www.choicehotels.com

130 1 850

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guaranteethese listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. The Book of Listsand enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com.

RESEARCHED BY Deborah W. Hillyerand Kim Ratliff-Null

20090202-NEWS--14-NAT-CCI-CL_-- 1/29/2009 10:48 AM Page 1

At Fifth Third Bank, total mort-gage applications — which includeboth refinancings and new homeapplications — for December 2008and January 2009 are up 60% fromthe like two-month period a yearearlier. Over the last two months,home purchases have made up between 10% and 30% of that volume, said Marty Garrity, seniorvice president and head of residen-tial mortgage at the bank, leavingthe rest to refinancing.

“Absolutely, volume is at record-level highs due to record-level lowsat interest rates,” Mr. Garrity said.“In my 20 years in business, I’venever seen rates this low.”

Last week, interest rates for 30-year fixed mortgages at a number oflocal banks were below 5%. Mr.Garrity said at Fifth Third, theyranged as low as 4.375%.

The savings, he said, could beconsiderable, especially with manyadjustable-rate mortgages set to reset this year and rates preparingto balloon.

“All the stars aligned,” Mr. Garritysaid.

Refinancing to a lower interestrate frees up more cash for the con-sumer and can help jumpstart theeconomy by allowing homeownersto spend more of their paycheckson other goods, Mr. Garrity said.

No time like the presentEven some banks that have had

little or no mortgage business in thepast are starting to get into thegame or bulk up their presence in it.

Liberty Bank chairman, presidentand CEO William Valerian said theBeachwood-based bank began doingmortgages Jan. 5 after deciding thatthey are one of the lynchpins to improving the economy.

Dell Duncan, president and CEOof Ohio Commerce Bank in Beach-wood, said his bank only has beendoing mortgages for about threeyears but is seeing increased activitythese days. He has closed about sixrefinances since the middle of December; normal volume in sucha timeframe would be about halfthat, Mr. Duncan said.

Despite the low rates, though,some possible refinancers may stillbe waiting for rates to drop evenlower. Bankers caution themagainst it.

“You’ll never find a better deal,”said Mark Fosnaught, senior vicepresident of retail banking for ParkView Federal Savings. “Anyone whothinks they should do it, should doit.”

Mr. Fosnaught said because ratesare so volatile, there is no way toknow how long it will be before they start to rise. With the demandto refinance so high, Park View chairman and CEO John “Jack”Male said, there is little downwardpressure on the rates currently.

“We’ve been inundated with applications,” Mr. Male said. “Mort-gage brokers are out of business.We’re that much busier.”

Do the mathMr. Garrity, at Fifth Third, also

said industry consolidation hashelped drive his business. That situation means many customerscoming in to refinance their homes— about 60% — have no prior rela-tionship with the bank.

However, not everyone who wantsto refinance a house can do so.

Tom Finnegan, president andCEO of FirstMerit Mortgage Corp.,said while he has seen applicationsfor refinancings triple since the endof November, he’s had to reject anumber of those applications, too.

Because many homeownersbought their houses at the marketpeak, the worth of the homes theypurchased has declined.

If the loans that people are seekingto refinance are worth more than ahome’s appraised value, any requestto lower the interest rate will be rejected. More than half the refinancerequests FirstMerit rejects, Mr.Finnegan said, are related to issueswith the property value of a home.

Even as people read about thedecline of value in the housing market, no one wants to believethat his or her own home has beenaffected, he said.

“It’s our biggest challenge now,”Mr. Finnegan said.

While refinancing can save a consumer hundreds of dollars amonth — Mr. Finnegan likened it toa permanent tax break — he alsostressed that FirstMerit and otherbanks are negotiating with home-owners and doing what they can tokeep people in their houses who areunable to reduce monthly paymentsto a manageable level.

“We try to go through as manysteps are we possibly can,” he said.“We try to restructure the deal.We’re not in the business of owningproperty.” ■

“Absolutely, volume is at record-level highs due torecord-level lows at interest rates. In my 20 years inbusiness, I’ve never seen rates this low.” – Marty Garrity, senior vice president and head of residential mortgage,Fifth Third Bank


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Fed’s interest rate cut hurts Legal Aid Cleveland nonprofit expects 80% dip in chunk of funds from interest-bearing escrow accounts

Refinance: Home value drop hurts somecontinued from PAGE 1

By ARIELLE [email protected]

The Federal Reserve’s last rate cutwas intended to stimulate the econ-omy, but it’s strangling Cleveland’sLegal Aid Society.

State money that’s used to fundthe organization is just a fifth ofwhat it was in 2007. The dropoff isthe result of interest rates that havefallen to near zero as the Federal Reserve Dec. 16 set the federalfunds rate — the rate at whichbanks lend to one another — to anunprecedented range of zero to0.25%.

In Ohio and elsewhere, a largeportion of the activity of Legal Aidsocieties is financed by Interest onLawyers’ Trust Accounts, or IOLTA.The money in these accounts consists of client funds held in trustby attorneys in interest-bearing escrow accounts; the interest is donated to statewide legal aid.

When interest rates were high,the accounts were a boon to thenonprofits that provide legal assis-tance to the poor. But now that theFed has dropped its target rate, Legal Aid societies are struggling tomeet their budgets.

In 2009, Cleveland’s Legal Aid Society expects to receive just$660,000 in IOLTA money to helpcover a budget that totals $8.5 million. In 2007, the society received$3.38 million in IOLTA funds.

Statewide, the numbers are nobetter. The Ohio Legal AssistanceFoundation expects to collect about$6 million in 2009 in IOLTA moneyafter taking in more than $22 million in 2007.

“And that’s pretty optimistic,”foundation executive director BobClyde said. “We’re trying to stemthe tide.”

Cleveland-area banks tend to provide more generous interest ratesthan do those in the rest of the state,Mr. Clyde said. He is trying to convince banks statewide to guaran-tee an interest rate of at least 1% onIOLTA money to keep the amountcollected from those accounts fromfalling any farther.

The local Legal Aid Society has asix-month reserve fund that it will dipinto to finance its programs amid ashortfall of more than $1 million,Cleveland executive director ColleenCotter said. She hopes rates go up orsome solution is found before thefund is drained completely.

In the meantime, the society is reducing training and advertising tokeep from cutting staff, as it antici-pates that the volume of aid requestswill increase as the economy remainstroubled.

“We’re at a difficult point, definitely,”Ms. Cotter said. “When folks have lessmoney, it’s harder for them.”

Already, the Legal Aid Society turnsaway at least half the people who qual-ify for services, or between 6,000 and8,000 people a year, because it doesn’thave the resources to handle them,Ms. Cotter said.

If the organization is able toweather the next two years by usingreserves, it likely will be able to survive going forward, said RichardPanza, vice president of the board oftrustees. But Mr. Panza said it was“impossible to say” if the nonprofit’sresources could carry it through.

David Kutik, president of the boardof the local Legal Aid Society, said thegroup is trying to leverage its resourcesby choosing cases that may have abroad impact.

He said Legal Aid is trying hard notto cut services further. It’s difficult, Mr. Kutik said, because most of the organization’s expenses are in its 95-person staff.

“It’s not like we’re spending lots ofmoney on expensive coffee andtrips,” he said. “We don’t want to layattorneys off; we don’t want to limitwhat attorneys can do.” ■



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capital spending and seeking otherways to cut costs in the year ahead.

It’s all in the timingBut whether this is the end or the

beginning of a destocking cycle is upfor some debate.

Economist Ken Mayland, presi-dent of ClearView Economics in Pepper Pike, said he believes industryacted quickly and aggressively to destock as soon as it became appar-ent that a slowdown was inevitable.

“One thing I think made the num-bers in October and November lookparticularly bad for the economy wasthis effort by companies to destock,”Mr. Mayland said. “More so this timethan ever before, the combination ofall the information technology andthe Internet, I think, has compressedtime. And (companies) were veryquick to pull the trigger.”

That contention might be sup-

ported by Omnova’s recent earningsannouncement. The Fairlawn-basedproducer of emulsion polymers, specialty chemicals and wallcover-ings said destocking had a negativeimpact last fall, but that destockingwas slowing and order volumes forchemicals began to increase again inJanuary.

That’s exactly what economistssuch as Mr. Mayland would like tosee happen. While destockingmight have amplified the negativeeffects of the downturn early on, restocking could amplify the rebound when the economy beginsto grow again, he said.

“Inventory destocking can’t goon forever,” Mr. Mayland said. “Atsome point, when the inventoriesare down to some minimal level,you have to start reordering.”

But not all agree that destockinghas been fully accomplished.

Eaton Corp. economist James Meil

said at a Jan. 12 presentation to theCleveland Association for BusinessEconomics that he believed inventorylevels had not fallen enough, partic-ularly among automakers and theirsuppliers. That situation might haveoccurred, in part, because they simply did not have the productionvolume necessary to use the inven-tory they already had.

And for those companies that diddestock, there also might be a less-than-desirable reason for their action: They might not have had access to the credit they needed inorder to buy new supplies, said NedHill, an economist and professor of

economic development at ClevelandState University’s Maxine GoodmanLevin College of Urban Affairs.

“Even if companies had orders ontheir books, the question is whetherthey could get the working capital topurchase the inventory to make theproduct,” Dr. Hill said.

Waiting for a signManufacturers say it’s been a

combination of reasons that has ledto destocking.

“We’ve got customers that have reduced their inventories,” said TomLittman, managing director of Kirt-land Capital Partners, which ownsfive companies that make productsranging from dump trucks to med-ical devices and plastic packaging.

“Sometimes we see (destocking) atthe end of the calendar year, whenthey are reducing their inventory foryear-end purposes — but it wasclearly a lot larger than normal last

year,” Mr. Littman said. “Our customers have reduced inventoriesand we have tried to match their requirements. Therefore, our suppli-ers are also seeing smaller orders.”

Observers say two conditions willneed to be in place before wide-spread restocking kicks in and buoysthe fortunes of inventory supplierseverywhere. First, companies mustsee signs that their business will im-prove. Second, they will need to findavailable credit when they decide topull the trigger on new orders.

For now, most observers don’tbelieve the positive signs are yet in place to spur widespread restocking.

“We haven’t seen it occur yet, butobviously it will come,” Mr. Littmansaid. “But people are still very conser-vative about how much inventorythey want to hold. I just don’t thinkcompanies are willing to start buildinginventories on the if-come.” ■

“Inventory destockingcan’t go on forever. Atsome point ... you havehave to start reordering.” – Ken Mayland, president, ClearView Economics

untangle paperwork.The governor’s pledge also aligns him with

the sentiments of many Ohio business people,who must navigate confusing state directivesand slow-moving permitting processes.

Joseph Mayernick, executive director of theGrowth Partnership for Ashtabula County,told Crain’s Cleveland Business about the hurdles a plastics company based in Ashtab-ula County faced when it started planning anexpansion of its manufacturing capacity. Mr.Mayernick said the company eventuallychose to put its new equipment in a southernstate, where it was able to get the machineryinstalled in six months.

“In Ohio, the same exact project might takenine to 12 months to get the permit to install,and then go through another process to get thepermit to operate that could take another 18months,” Mr. Mayernick said. “We need to beoperating at the speed of business. We reallyneed to be competitive.”

Linda Woggon, vice president of govern-mental affairs for the Ohio Chamber of Commerce, said her group’s members arelooking forward to reform legislation.

“What the governor did was a good firststep, and what the Legislature is doing on abipartisan basis is good,” she said.

Just what is small, anyway?The bipartisan task force, which held eight

meetings around the state and heard frommore than 50 witnesses, made 15 specific recommendations. First among them was a recommendation that the term “small business” be defined consistently throughoutOhio laws and regulations.

For example, the Ohio EPA’s small businessassistance program defines a small business asemploying 100 or fewer employees, yet otheragencies adopt the U.S. Small Business Administration definition, which can be 500 employees or more, depending on the industry.

“The result of these varying legal defini-tions is that small businesses are regulated inconsistently throughout Ohio law,” thereport says.

The recommendations also ask that it be easier for small businesses in particular to challenge the fairness of rules and their impacton small operations.

‘Cumbersome’ systemAmong other findings, the task force

reported Ohio makes it hard for businesses to

get the permits needed to install industrialequipment, collect and pay taxes and complywith safety regulations.

The process, the report said, “is cumber-some and takes longer than in other states.”

The report also said the state’s permittingsystems “give the impression that Ohio’s regulatory fees and fines are more about generating revenue than obtaining commonsense regulatory compliance.”

In an interview with Crain’s, Mark Wilson,whose Land Stewards LLC consultancy helpsfarmers and other rural landowners navigatestate paperwork, highlighted some of thesnarls he has helped clients untangle.

Mr. Wilson said one client, a very smallbusiness, had to get and pay for two separatestate permits for a septic system becausesome septic systems also are defined as underground injection wells, which are usedto dispose of industrial waste.

Mr. Wilson, who testified before the taskforce, said some farmers believe they’re askedto maintain unrealistic standards for waterquality in drainage ditches because of stateenvironmental laws.

“We have a public policy that directly conflicts with farmers’ rights to adequatedrainage,” he said. He was referring to a policyenforced by the Ohio Environmental ProtectionAgency that requires the water quality of all waterways, including manmade ditches usedby farmers to irrigate crops, be clean enough tosupport aquatic life.

“But these ditches are intermittent,” Mr.Wilson said. “When they go dry, they are des-tined to fail” the state water quality standard.

Environmentalists quarrel with some ofMr. Wilson’s characterizations, and the OhioEPA says some of the water quality permittingissues Mr. Wilson raised are governed by federal law. To that point, Mr. Wilson said thebroader problem of regulatory duplicationand inconsistency should be addressed by theGeneral Assembly.

“This needs legislative focus because theadministrative agencies in charge are notwilling to make any changes to their own administrative rulemaking,” he said. “It needsto be a legislative change.”

Ryan Augsberger, managing director ofpublic policy services at the Ohio Manufac-turers’ Association, agrees.

Regulatory reform “may not be the mostexciting thing going on,” but it is importantwork, Mr. Augsberger said.

“This is a difficult animal to skin.” ■


budgets this year, and you’ve got big moveshappening.

“They definitely have a sense of urgency withanything online,” said Goldstein Group presi-dent Joel Goldstein. “Anything search-engine-related, anything measurable. That’s wherethey’re putting what dollars they can.”

According to the survey, print advertising willaccount for 20% of the average b-to-b spendingbudget. While that percentage remains the single biggest item in the mix, it’s less than halfthe 47% anticipated to go toward onlinespending, which includes everything from banner and e-mail advertising to search enginemarketing, online video, social media and webdevelopment.

The commitment to online marketing atsome companies is huge. Mr.Goldstein cited the exampleof one unidentified companywith $600 million in annualrevenues that estimated morethan 80% of its 2009 advertisingbudget will go toward onlineefforts.

“It really is happening insome of the most conserva-tive business-to-business accounts,” saidMarilyn Chase, executive vice president,brand director at communications firmLiggett Stashower. “(And) it’s a much moreexciting process for us than ‘How much do you want us to spend on that ad and wheredo you want to run it?’ It’s a much more part-nered, deeper and richer branding strategy.”

Still, print advertising isn’t dead quite yet.Ellen Modock, manager of marketing

communication at Keithley Instruments Inc., a maker of sophisticated measurement instru-ments in Solon, said while there’s a shift towardonline spending, print still has its place.

“We use print advertising for our brandingintiatives, and we really use online advertisingas more of a lead generation tool,” Ms. Modock said. “Online, the real advantage forus is that we can attach metrics to it. We really can identify who’s clicking things,who’s downloading information, so it gives usa better tool for communicating.”

Ms. Modock could not offer specific dollaramounts regarding Keithley’s ad spending, butdid say its online spending “is much larger thaneven what we were doing just two years ago”even though its overall ad spending is littlechanged.

The Google factor

Dan Fiore, business development managerat North American Coating Laboratories inMentor, says he’s putting more efforts intopixels than pages these days as he posts customer testimonials and white papers online as soon as they’re available.

“The big reason we’ve immediately put themon the web site before we send them out to anybody or before we even hand them out at atrade show is that through Google searching,you’re able to pull up a white paper, or you’reable to pull up a testimonial,” Mr. Fiore said.“The success from the electronic (outreach) hasbeen much more than the success from theprint ads.”

David Honeycutt, director of e-business andmarketing communicationsat polymer producer Poly-One Corp. in Avon Lake, saysthe company has made a“definite shift” away from its already scant print campaigns, in part becauseof the high response rate toits online efforts.

“We get about 110 e-mailinquiries a month” thanks to PolyOne’s onlinemarketing, Mr. Honeycutt said. “And I wouldsay that better than 50% of those are tangiblebusiness opportunities, which is a really highnumber. Search engines are the biggestsource, and then industry sites are second.”

‘Where the value really is’Such experiences are requiring traditional

b-to-b publishers to adapt to a new world.Penton Media senior vice president of

strategy and business development WarrenBimblick said his company is benefiting fromseveral years of investing in and developing itsonline marketing offerings.

“The digital or online portion of our busi-ness is the growing part of our business, alongwith the conference part,” Mr. Bimblick said.“We have a (publication) brand called Busi-ness Finance that, for several years, more thanhalf of their revenue came from online.”

Mr. Bimblick noted that while print used tobe where advertisers launched their efforts, hefinds it more common now that marketing isfirst unveiled online and then followed withprint ads to drive readers to a web site.

“Online is where the value really is,” hesaid. “You don’t give that away for free.” ■

Inventories: Credit may have stymied access

Ads: Print drives branding,online generates more leads

State: Ohio’s current businessregulations hamper commerce


continued from PAGE 3continued from PAGE 3

“Online is where the value is. You don’t givethat away for free.” – Warren Bimblick, senior vice president of strategy andbusiness development, Penton Media


included in health care reform for itto be successful, and many believethe reform effort should and will startwith the stimulus package that thepresident hopes to sign by Feb. 16.

“The economic stimulus packagecan probably lay a lot of the ground-work for what’s going to happen,”said Leonard Marquez, director ofgovernment relations and federal affairs for the MetroHealth System.

The House version of the stimuluspackage includes $20 billion for furthering the development of elec-tronic medical records, which would

enable health care providers to sharepatient medical records immediately.As a result, Mr. Marquez said, healthcare providers could better coordi-nate patient care and reduce duplica-tion of services and tests, therebyhelping to achieve the government’sultimate goal of creating a health caresystem that is more efficient and lessexpensive.

The United States currentlyspends 16% of its gross domesticproduct on health care, comparedwith many other countries thatspend an average of 9% to 10%, saidThomas Strauss, president and CEO

of Summa Health System. However,Mr. Strauss said the United Statesalso has some of the worst patientoutcomes in the world, so there’s alot of room for quality improvement.

Mr. Henkel said the Clinic is one of many stakeholders pushingto provide all Americans with a so-called “medical home,” which consists of a primary care doctorwho would provide preventive careto patients and would coordinatetheir health care once they’re diag-nosed with an illness.

“The ongoing supervision of that person’s health is not ensured

unless you have a primary caredoctor or a medical home,” he said.

The Democratic Party’s versionof the stimulus package includes$600 million to train more primarycare doctors and nurses, Mr. Mar-quez said. Many new doctors havebeen shying away from primarycare for less-demanding and higher-paying specialties.

Mr. Strauss said it not onlyshould be a priority to provide basic care to every American, butalso to charge people with personalresponsibility for obtaining theirown health care coverage. For ex-

to about 121,800 households in theCleveland market, and is more thandouble the 3.57 rating the broadcastsaveraged over the same number ofgames in the 2007-2008 season.

Charlie Knudson, general salesmanager for Fox Sports Ohio, saidthe numbers mean that in this market, “When we have a Cavs gameon, we’re typically the No. 1 (show)overall.”

Perhaps more impressively, theCavaliers are the league leaders inlocal TV ratings for the first time intheir history. Figures provided byMr. Knudson show the San AntonioSpurs average a 5.8 rating in their

market, and the Los Angeles Lakersgarner a 4.4 rating. At the bottom ofthe rankings are the Los AngelesClippers, Charlotte Bobcats andNew Jersey Nets, all well below ratings of 1.0.

The last three months show momentum building for the broad-casts as the team began to domi-nate opponents and to compete forthe best record in the NBA.

While October 2008 attracted a6.62 rating compared with a 6.31 in 2007, November’s 6.92 ratingdwarfed the previous year’s 3.46. InDecember 2007, the Cavs garnered a3.47 rating, which ballooned to an8.34 in December 2008, and through

the first half of January, Cavaliersgames were attracting almost one in10 households in the market, earninga 9.67 rating, almost triple the 3.42rating they saw in 2008.

“One of the strongest barometersof interest in any team franchise is ratings,” said Cavaliers presidentLen Komoroski. “Being able toreach that top spot for the first timespeaks volumes.”

And while the Cavs deepen theirfan base locally, they’re also growingtheir reach regionally, Mr. Komoroskinoted. He said 27% of the team’s individual ticket sales have comefrom outside the state, and broadcastdeals beyond Northeast Ohio are

paying off, too.“Even in markets like Columbus,

we’re getting a 1.4 (Nielsen televi-sion) rating,” he said.

Though most of Fox Sports Ohio’sgame-night commercial slots weresold before the season started, thehigher ratings and subsequent demand for advertising airtime hasbuoyed the station at a time when adrevenues are tough to come by.

Henry Ford, who just has succeededSteve Liverani as the station’s generalmanager, wouldn’t give specificnumbers regarding advertising revenues, but said the station is holding its own.

“I’d say we’re doing well,” said Mr.

Ford, who has worked in markets onboth coasts and most recentlyworked in Detroit. “When the teamperforms this way, it allows us to out-perform our expectations.”

Sales manager Mr. Knudson saidthe Cavs’ record and TV ratings areeven drumming up new business.

“If you have a highly rated program, people want to talk toyou,” he said. “We have a numberof new partners, and we have newpeople we’re talking to, even nowthis late in the season. Whoever’sout in the marketplace spending,they simply cannot avoid the factthat the Cavs’ ratings are tremen-dous.” ■


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Cavs: Team’s appeal outside NE Ohio plays into successcontinued from PAGE 1


Reform: Obama’s openness offers industry leaders hope ample, he said, companies could payinto a fund that would help providebasic coverage to everyone if theycan’t obtain coverage themselves.

“If you are going to have a companyin this country, you’ve either got togive coverage to your employees orpay into this fund that gives coveragefor everyone,” he said.

The Obama administration nodoubt will need time to sift throughthe multitude of ideas on the table,Mr. Marquez said.

“Even if reform doesn’t happenimmediately, we have people whoare willing to work with us,” Mr.Marquez said. “It’s night and daycompared to where we were a fewyears ago. It’s almost like DisneyWorld, people are so happy.” ■


How big is small? Ask Magnet■ Cleveland’s Manufacturing Advocacy &Growth Network, or Magnet, is looking toattract more small manufacturers, in part by upsizing its definition of what a smallcompany is.

Magnet’s Community of Smaller Manu-facturers has begun offering its benefits andservices to manufacturers with annual rev-enues of up to $25 million. Prior to January,companies had to have sales of $10 millionor less to be eligible for the program.

Expanding the eligibility brings another900 Northeast Ohio manufacturers into theCommunity’s universe of potential newmembers, said Magnet program director Steve Gonosey.

There are 89 area manufac-turers currently signed up forthe program, paying either$175 a month, $500 a quarteror $2,000 a year for member-ship. Of those, 68 companies areactive in the program, meaningthey meet each month with oneof the program’s five regional coordinators.

The coordinators work with and coachthe companies on concepts such as leanmanufacturing, growth planning, productmarketing and exporting. Leaders of thecompanies also meet quarterly with CEOsfrom other member companies to sharebest practices.

Mr. Gonosey said he hopes to bring thenumber of active companies up to 100 thisyear. He also hopes the Community’s existing

services, along with new flat-fee service“modules,” will help him attract new partic-ipants. The service modules allow membersto pay $5,000 for discounted consulting services provided by area accounting firms,law firms and other professional serviceproviders.

For the flat-fee, manufacturers can choosefrom a menu of consulting packages that includes business improvement planning,performance benchmarking, information system planning or a slew of other consultingservices. — Dan Shingler

A partnership fit for a King

■ Kent State University has inked a$3.4 million deal to send instruc-

tors to King Saud University inSaudi Arabia to teach studentsthere about entrepreneurship.

The first phase of the partner-ship is slated to start Feb. 15 — thebeginning of King Saud’s semester— and will continue through June2010. A team of seven Kent State

professors will teach King Saud students thebasics of idea development, planning, man-agement, marketing and seeking public andprivate capital.

Kent State hopes the partnership willopen the door for the university to forge tieswith more educational institutions in theMiddle East. If the agreement is successful,Kent State and King Saud could work together on other academic programs.

“This is a major step forward in continuing

the diligent work of expanding Kent State’sglobal footprint,” said Steve Michael, KentState’s vice provost for diversity and academicinitiatives. “Saudi Arabia is an important playerin the financial and policy worlds.”

King Saud chose Kent State over numerousproposals from universities in Asia, Europeand North America. — Shannon Mortland

Guess we shouldn’t quit our day jobs■ Mary Anne Sharkey, former communica-tions director for ex-governor Bob Taft anda former reporter and editor at The PlainDealer, put newspapers’ woes in context ata seminar the Cleveland Chapter of the So-ciety of Professional Journalists held Jan. 24to help jobless journalists retool.

“I’m really concerned for the society as awhole,” said Ms. Sharkey, now a Cleveland-based writer and government crisis-handler. “Who’s going to cover City Hall? Orthe school board? How are we going to knowwhat the government’s really doing? Thatconcerns me more than the method of delivering the news.”

She also offered a juicy story from herColumbus days.

Telling ex-journalists they could impactpolicy by diving into government, she notedMr. Taft’s “Third Frontier” program for financing technology initiatives came fromthe need to say something important — forhis third State of the State address.

About half the 52 people in the audiencewere veteran broadcasters and newspaperreporters looking for work. — Stan Bullard

WHAT’S NEW

COMPANY: Moen Inc., North OlmstedPRODUCT: 1255 Duralast cartridge

Moen says the “heart and soul” of a goodfaucet is its cartridge, and for the first timein nearly 30 years, the company is making achange in this key piece of equipment.

The new 1255 Duralast ceramic-disc cartridge “provides a consistently smoothhandle feel for the life of the faucet,” the company says. It’s smooth handle move-ment, according to Moen, that offers precisecontrol of the single-handle faucet and allowsa user to fine-tune temperature balance.

The new cartridge will be featured in morethan 100 Moen single-handle faucets (bothkitchen and bath) this year. Specific featuresof the cartridge include a stainless steel shaftand pin, overmolded seals to ensure integrityand leak-free performance, and compact dimensions to enable broader design oppor-tunities and sleeker, modern faucet styles.

For information, visit www.moen.com.

Send new product information to managingeditor Scott Suttell at [email protected].

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK JANUARY 26 – FEBRUARY 1

The big story: Studentsand a gaping budget deficitwere at the top of Gov. TedStrickland’s agenda in theState of the State address. Toclose a $7.3 billion budgetgap, the governor said he willcut $3.2 billion from a statebudget that was about $52 billion in 2008. To do so, hewill reduce the budgets ofmany state programs by 10%to 20% and will increase manyfees, fines and penalties. Gov. Strickland alsosaid the state will take on a larger share of the financial burden of education from local schooldistricts, though he offered no hint as to wherethe money will come. He also said he wants toextend the school year to 200 days from 180days.

Let’s roll: Under an agreement that could yield$2.5 billion in revenue over its life, Parker HannifinCorp. said its Parker Aerospace unit has been chosen by Rolls-Royce as a supplier for its TrentXWB engine program. The Rolls-Royce Trent XWBis the sole engine currently available to power thenew Airbus A350 XWB family of aircraft. Parker saidRolls-Royce already has received orders for morethan 1,000 Trent XWB engines.

Then there were two: Eaton Corp. reorga-nized its businesses into two sectors — Electricaland Industrial — with a vice chairman and chiefoperating officer for each sector. The changes tookeffect Feb. 1. The diversified manufacturer saidThomas S. Gross was named vice chairman andchief operating officer – Electrical Sector. CraigArnold was named vice chairman and chief operating officer – Industrial Sector. In addition,Richard H. Fearon was named vice chairman andchief financial and planning officer for Eaton. Mr.Fearon had been executive vice president and chief financial and planning officer.

An Affinity for dealmaking: Private equityfirm Morgenthaler Partners has entered into apartnership with Michael DiMino, the former CEOof lawn care products company Lesco Inc., to formAffinity Specialty Apparel. Affinity will be based inCleveland and will focus on acquiring companieswith established brands in the uniform and specialty apparel market. The new company willdraw on the expertise of Mr. DiMino, who besidesrunning Lesco is a former president of Uniforms toYou, one of the largest direct sale uniform compa-nies in the United States prior to its acquisition byCintas. Morgenthaler said it and Mr. DiMino havecommitted $25 million in equity capital to the venture. Mr. DiMino will serve as its CEO.

Fresh vision: The Cleveland Clinic announceda multimillion-dollar expansion and renovationplan for Lakewood Hospital. The Vision for Tomorrow plan is a multiyear project in which the400-bed hospital will be transformed to offer onlyprivate patient rooms, will expand outpatient care,will forge more partnerships with community organizations on wellness programs, will strengthenmanagement of chronic diseases and will betteralign Clinic services and community doctors withthe hospital.

Nosedive: Traffic at Cleveland Hopkins Inter-national Airport was off 9.2% in December and3.1% for 2008, ending what was a year to forgetfor the airline industry. Passengers through theairport totaled 792,646 in December, down80,694 from a year earlier. For all of 2008, Hopkinshandled 11,106,194 passengers, 352,704 fewerthan in 2007.

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


Excerpts from recent Editor’s Choiceblog entries on CrainsCleveland.com.

CHOICE BITSThey’re driven to succeed,despite budget pressures■ Greater Cleveland Regional Transit Authority boss Joe Calabrese was one of theprimary voices in a Jan. 27 Los Angeles Timesstory examining the financial pressuresfaced by transit agencies across the country.

Those pressures are leading to servicecuts in most big cities, including Cleveland,even as bargain-hunting consumers step uptheir use of public transit.

Mr. Calabrese summarized the situationnicely: “For the layperson, it’s very difficultto understand that if ridership is at all-timehigh levels, how can we be cutting service?”

In Northeast Ohio, RTA ridership increasedfor the sixth consecutive year in 2008.

“But like every major public transit systemin the country, Cleveland’s (transit system) relies on both fares and tax revenue for funding— and county sales taxes, a key component ofthe budget, have plummeted in the stalledeconomy,” the Times reported.

“In the last 13 months, Cleveland ridershave seen their fares raised twice and servicescut by 8%,” the newspaper added. “Calabresesaid another fare increase and 6% service cutmay be necessary this year.”

The newspaper noted that the shrinking taxrevenues “are particularly painful to transitsystems that continue to be hammered byhigh fuel costs: Many of them, Calabrese said,are still locked in to high-price fuel contractsthat they thought were good bargains whengas was $4 per gallon.”

He’s willing to give morethan just a little bit■ Progressive Corp. chairman Peter B. Lewisearned a spot on the Slate 60, an annual listingof the largest charitable contributions of theyears.

Mr. Lewis was ranked No. 54 on theSlate.com list with $29.7 million in donationsin 2008 to “more than 90 nonprofit organiza-tions in the areas of the environment, humanrights, progressive causes and youth.”

Slate.com found a statistical anomaly: In 2007, the Slate 60 comprised donations totaling $7.8 billion, while in the worse economyof 2008, the total was $15.8 billion.

It turns out there was a relatively simpleexplanation.

“Upon closer examination, it’s apparentthat the breadth and depth of our economiccrisis is such that even the wealthiest Ameri-cans are giving cautiously,” the online maga-zine reported.

“Most obviously, the great bulk of the givingon this year’s list comes from those whohave died. An unprecedented eight of thetop 11 gifts are bequests, including the lateLeona Helmsley’s $5.2 billion gift at No. 1 andthe late James LeVoy Sorenson’s $4.5 billiongift at No. 2. In all, 13 of the 61 contributionsappearing on our list are bequests, accountingfor $11.6 billion of the $15.8 billion total.”

FILE PHOTO/MARC GOLUB


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