Kasich’s plan is taxing nerves of some
20140317-NEWS--1-NAT-CCI-CL_-- 3/14/2014 4:07 PM Page 1 $2.00/MARCH 17 - 23, 2014 Kasich’s plan is taxing nerves of some Governor’s latest proposal is criticized by leaders who would prefer spending cuts By JAY MILLER [email protected] Gov. John Kasich’s latest proposal to ratchet down Ohio’s personal income tax is being questioned by key groups in business and conservative quarters, which would prefer to see the governor pair those cuts with reductions in spending rather than offset the lost income tax revenue with hikes in other taxes. They also note that Kasich is spending more on state government than his predecessor, instead of reducing its size to make it more efficient, as he suggested he would do during his 2010 campaign for governor. “We love the idea of reducing the state income tax,” said Greg Lawson, statehouse liaison and policy analyst for the conservative Buckeye Institute. “It’s the right move, but we need to get to cutting government spending.” Some teas partiers also are nipping at the governor’s heels. Tom Zawistowski, executive director of the Portage County Tea Party, com- plained that the governor isn’t cutting taxes broadly as his group would like. “When you look at the total body of work of Gov. Kasich, it looks to us like he’s just shifting the burden elsewhere,” said Zawistowski, who last year ran unsuccessfully for chairman of the Ohio Republican Party. “Our problem is the governor is trying to be the one picking winners and losers,” Zawistowski said. “That’s just not right.” The Kasich administration is undeterred by the criticism. “We’ve said all along that we believe the biggest hindrance to job creation in the state is the personal income tax,” said Kasich spokesman Rob Nichols. “We will continue to look for ways to drive that down and make Ohio more competitive.” See TAXING Page 7 Northfield Rocksino believes it’s perfectly positioned to attract biz in crowded market By TIMOTHY MAGAW [email protected] W ROCKIN’ THE SUBURBS CONTRIBUTED PHOTO Huey Lewis and the News drew a sold-out crowd to the Hard Rock Rocksino in Northfield on Jan. 24. hile many Clevelandarea concert venues are hitching their stars to the city’s rebounding urban core, Jon Lucas of Hard Rock Rocksino in Northfield believes his ticket to success is being almost 20 miles southeast of downtown. “There’s still some resistance to going down- Lucas town. … This enables us to attract from both markets,” said Lucas, president of Rocksino, which sits squarely between the Cleveland and Akron markets. “That to me is important. It has to be a really knockout act for an Akron customer to drive all the way downtown.” And so far, Lucas — a 30-year veteran of the casino business — appears to be right. 11 See ROCKIN’ Page 22 0 NEWSPAPER 74470 83781 7 SPORTS ONE OF A KIND The Browns’ setup under former CEO Joe Banner might have been the NFL’s most unique ■ Page 5 Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 11 20140317-NEWS--2-NAT-CCI-CL_-- 2 3/14/2014 10:52 AM CRAIN’S CLEVELAND BUSINESS Page 1 WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com First Place Now proud Bank. to be Talmer Bank and Trust. 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Plus tax, title, license and doc. fee (MSRP: $50,500) CLASSIC DRIVECLASSIC.COM 20140317-NEWS--4-NAT-CCI-CL_-- 4 3/14/2014 10:52 AM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 FOR SALE 2 ACRE CBD DEVELOPMENT SITE WEST 9TH ST, DOWNTOWN CLEVELAND, OHIO /RFDWHGLQ&OHYHODQG·V +LVWRULF:DUHKRXVH'LVWULFW -XVW\DUGVDZD\ IURPWKH)ODWV(DVW %DQN3URMHFW 5LJKWQH[WWRWKH%LQJKDP DQG1DWLRQDO7HUPLQDO $SDUWPHQWV For more information contact our licensed real estate salespersons: Terry Coyne 216.453.3001 [email protected] Richard Sheehan 216.453.3032 [email protected] Visit TerryCoyne.com 1350 Euclid Ave, Ste. 300 Cleveland, Ohio 44115 Executive Search Firm Ownership Opportunity Under the brim at a local hat fabrication company Graffiti Inc. continues to invest in technology and branch out By RACHEL ABBEY McCAFFERTY [email protected] Succeed the Founder of this 24 Year Old National Firm ¤ Northeast Ohio location ¤ National retainer clients ¤ 16 person staff 5-10 years “C”suite and retainer experience essential. 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Riley, Cleveland Managing Member $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI mcdonaldhopkins.com Volume 35, Number 11 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2014 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’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136 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. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 482079911, or email to [email protected], or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. 20140317-NEWS--5-NAT-CCI-CL_-- 3/14/2014 3:49 PM MARCH 17 - 23, 2014 Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM 5 Randall Park to be transformed Lichter’s plans for industrial park win positive reviews By STAN BULLARD [email protected] Industrial Realty Group LLC is readying the nuclear option for longsuffering Randall Park Mall in North Randall. Plans by the big developer to level most of the largely empty, 2.2-millionsquare-foot enclosed mall and most empty buildings nearby would yield sites for a nearly 100-acre industrial park near major highway interchanges. Stuart Lichter, chairman and president of Industrial Realty Group, told Crain’s the transformation of the Randall Park site would not be a case of creating industrial space in North Randall simply because that’s what the company does with defunct properties. Rather, he said, “We think the retail (interest) has moved on.” “Ask yourself, ‘What is this good for?’” Lichter said. “Go in each direction and you are right by a highway. We were able to assemble the property at an attractive rate. We will be able to offer it as land, even though it’s costly to tear down the buildings.” Industrial Realty Group successfully has converted empty big-box stores to industrial use nationwide, Lichter said. The best-known local example is the former Super Kmart in Euclid, which it bought and converted to warehouse space in 2004 and continues to operate today. It also has mined aging retail districts in Akron for such projects. In North Randall, the company would offer industrial users sites for build-to-suit projects and would build industrial properties that it leases in advance, Lichter said. The company may even build on a speculative basis, without a tenant in tow, but it has not yet decided whether to go that route. The industrial park would house both manufacturers and distribution centers, he said. See RANDALL Page 6 INSIGHT Talis gets green light to grow its business Cleveland Clinic spinoff is expanding anesthesia software By CHUCK SODER [email protected] BACK IN ORDER Browns’ front office structure under former CEO Joe Banner was outlier in copycat league By KEVIN KLEPS [email protected] T he Cleveland Browns’ organizational structure under CEO Joe Banner wasn’t just “cumbersome,” as owner Jimmy Haslam described it when he fired Banner and general manager Mike Lombardi last month. It was also the only one of its kind in the National Football League. Crain’s analyzed the setups of the league’s 31 other teams and Banner found there is a common way of structuring a front office in the NFL. One method no other organization is using is the Browns’ previous structure of a CEO with no ownership stake who had the final say over both business and football matters. The Browns’ “streamlined” approach, as Haslam called it, post-Banner and Lombardi is a setup now used by 21 teams. It involves an executive in charge of business operations, who is Browns president Alec Scheiner, and a general manager — in the Browns’ case, Ray Farmer — who runs football operations. Farmer was promoted Feb. 11, when the surprising shakeup was announced. “I wouldn’t say ‘better’ — it’s probably more common,” said Scheiner of the restructured front office. “NFL owners are not corporate entities. So you’ve got family members in charge, and they’re almost all involved because of that. “But on almost every occasion,” Scheiner continued, “you have a business head, a GM and a head coach reporting directly to the owner. It’s much rarer where you have the structure we had before.” There are 17 executives listed as the CEO of an NFL team. Twelve of the 17 are either the majority owner or part of the ownership group, and the other five carry the combined title of president and CEO. There are no NFL teams where the jobs of president and CEO are separate and neither is part of the ownership group, and where there is a general manager to boot. That was the Browns’ former setup, under which president Scheiner, GM Lombardi and former head coach Rob Chudzinski all reported to CEO Banner. Not that the approach couldn’t have worked. “Every team is different,” said Andrew Brandt, an ESPN and Sports Illustrated NFL analyst, and a former vice president of the Green Bay Packers. “The key is open and honest communication between departments — the football side and the business side.” See ORDER Page 21 Dr. Wolf Stapelfeldt is proud of all those little green squares that pop up on screen whenever he shows off the software that he helped create for the Cleveland Clinic. Each square represents a patient undergoing anesthesia. Green Stapelfeldt means the patient is doing well. And over the past four years, Stapelfeldt has watched those pretty green squares replace many of the other colorful squares that pop up when a patient’s vital signs are out of whack. “When we started out, this thing was lighting up like a Christmas tree,” he said. The software — which now is used in all the Cleveland Clinic’s operating rooms — has done a lot to help the hospital system take better care of patients undergoing anesthesia, Stapelfeldt said. Now he and his colleagues at Talis Clinical are selling the technology to other hospitals. The Cleveland company, which spun off from the Clinic just over a year ago, is working with about 20 U.S. hospitals that have shown an interest in the software, according to Gary SEE IT FOR YOURSELF To watch a video of Talis Clinical’s software, which helps hospitals take better care of patients undergoing anesthesia, go to: tinyurl.com/l8a7a9r Colister, president and chief operating officer at Talis. Among them is St. Louis University’s hospital system. A few months ago, the system recruited Stapelfeldt Colister from the Cleveland Clinic on the premise that he would help the institution implement the technology. On Jan. 2, Stapelfeldt — who continues to serve as chief medical officer for Talis — became chairman of the department of anesthesiology and clinical care medicine at the university’s School of Medicine. “The entire leadership team (in St. Louis) has completely bought in,” said Stapelfeldt, who had been chairman of general anesthesiology and vice chairman of surgical operations at the Clinic. Both Stapelfeldt and Colister say the software is a significant innovation in the world of anesthesia. The Clinic as an organization seems to agree: Although the Clinic didn’t mention Talis by name when it put together its list of the top 10 medical innovations for 2014, the description for the technology that took fifth place describes Talis’ software. Plus, the Clinic’s version of the system also appears in a video promoting the innovations on the list. 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The separately owned Power Sports Institute, which provides training for mechanics with an emphasis on motorcycles, will fit with his company’s plans, Lichter said. Singing hosannas seventy-fifth Real estate industry experts are thrilled with Industrial Realty Group’s plans for the property now occupied by the two-story mall, which closed in 2009 after years of decline. Eliot Kijewski, senior vice president at the Cresco Cushman Wakefield brokerage, is overjoyed that Industrial Realty Group recently completed the last of four transactions to gain control of most of the mall site. “Thank God they bought it,” Kijewski said, referring to Lichter and his Ohio partner, investor-broker Chris Semarjian in Richfield. “They know what they are doing,” Kijewski said. “As far as distribution space goes, I don’t think there is a better place in Northeast Ohio. Look at the proximity to Akron, downtown Cleveland and highways. It’s a dynamite location.” Kijewski and other observers see it as a favorable outcome for the site at an opportune time. Regional industrial vacancy stands at 8.8% compared with 9.9% a year ago, and it’s still heading downward. Moreover, in the bustling southeast 440.526.8700 [email protected] www.cbscuso.com Providing Commercial Loan Financing in Partnership with Area Credit Unions SM AIR CHARTER SERVICE AIRCRAFT MANAGEMENT Northern Ohio's Largest Air Charter Service Serving the area with 4 Beechjets and 2 Hawkers • In-flight Wi-Fi Now Available • www.FlySkyQuest.com • 216-362-9904 suburbs where North Randall sits, the market for new distribution space with ceilings of more than 24 feet has 4% vacancy, down from 9% a year ago, according to statistics from the Newmark Grubb Knight Frank brokerage. Fred Geis, a principal of developer Geis Cos., which has built multiple industrial parks throughout the region, also likes the site. “It’s the right thing at the right place,” Geis said. Terry Coyne, head of Newmark Grubb’s Cleveland industrial unit, agreed. “Based on vacancy rates, there has to be a lot of demand,” Coyne said. “Everything competitive is being absorbed. Prices (for leases and sales) are up, which will support construction of new product.” ‘Time for some new stuff’ Putting dead or ailing malls to new use is becoming more common than just 10 years ago, though they typically are reconfigured for continued shopping use, as is the case in the makeover underway at Parmatown in Parma and as was done at Westgate in Fairview Park. However, Randall Park Mall is in an area with multiple shopping centers and high retail vacancy, and it suffered when newer projects went up in the Macedonia area. The most compelling reason for tackling the ailing mall, Lichter said, is current market conditions. “We think it’s time for some new stuff to be built in the Cleveland area,” Lichter said. “Look around; there’s very little available.” Industrial Realty Group’s nearest property to the Randall Park site is Heritage Business Park in Euclid, which is mostly occupied, he said. Lichter’s company is no novice at big conversion projects. Industrial Realty Group, which is based in Downey, Calif., owns more than 80 million square feet of property, mostly industrial. It is best known for slicing up former auto plants and other factories for multiple users, but it has diversified over the years into office space, corporate headquarters, hotels and residential properties. Persistence pays off The company’s interest in North Randall is not a recent development, Mayor David Smith said. Lichter first expressed interest in the village in 2003, the mayor said, when what’s now Thistledown Racino was for sale; the race track would become part of the Rock Ohio Caesar joint venture between entrepreneur Dan Gilbert and casino giant Caesars Entertainment Corp. However, Lichter stayed in touch through the years and contacted the village about the mall last year. “Unlike other developers who came to us with their hand out, Lichter came and asked what the city wanted to do,” the mayor said. Industrial Realty Group has yet to ask for incentives, but the village is prepared to give them. The property needs to be rezoned to industrial use from retail, but Smith said the village council supports the concept. He said the mall’s ring road can serve the property’s new industrial use. ■ Talis: Software gives digital map of patients continued from PAGE 5 Guidance for caregivers Jonathan Mokri MARCH 17 - 23, 2014 The so-called advanced clinical guidance system — the product’s name is ACG-Anesthesia — is designed to help anesthesiologists keep track of multiple patients at once. The software can be set up so that if something is wrong with a patient, his or her caregivers can receive alerts via text message, email, pager and/or flashing buttons that appear within the hospital’s electronic medical record system. Caregivers then can pull up a digital map that gives them a quick glance at how all their patients are doing. For instance, if a patient’s blood pressure drops too far during surgery, their square would turn from green to red, the color for hypotension. With a click, the caregiver can check the patient’s medical history and learn more about whatever conditions he or she might have. Other systems for anesthesiologists do offer alerts, but Colister says he knows of no other software that gives them such a deep look at how all their patients are doing. Neither does Dr. John Abenstein, president-elect of the American Society of Anesthesiologists in Park Ridge, Ill. However, a growing number of companies and organizations are working on different types of decision support systems that can be used to monitor multiple patients at once, according to Abenstein, who received a description of the software taken from this story. His employer, the Mayo Clinic, is among them. The giant hospital system has developed software designed to monitor patients in its intensive care units. The software has helped the Mayo Clinic keep a closer eye on patients on ventilators in the ICU, he said. As a result, the rate of lung injuries caused by ventilators dropped from about 10% to less than 1%, Abenstein said. A similar system designed for anesthesiologists probably would have a big impact on both patient care and productivity, he said. “If done properly, you would be able to care for more patients per physician, per day,” Abenstein said. Like tools in a cockpit The technology behind the ACGAnesthesia software was developed by two teams, working independently. The Clinic’s Anesthesiology Institute in 2008 tasked George Takla — who now is Talis’ chief technology officer — with starting to develop a new electronic record keeping system. That same year, Dr. David Brown was named chairman of the institute. He hired Stapelfeldt to build a decision support system for the institute, and later the two technologies were woven together. While flying his own plane, Brown realized that pilots and anesthesiologists have a lot in common. Both have to keep track of a large number of different factors, and if they’re tired or distracted, people’s lives are at risk. So, while flying cross-country on autopilot, Brown started taking notes on how the institute could give anesthesiologists tools like the ones in his cockpit. Caregivers still make the decisions, but Colister noted that computers “can be far more vigilant than the human mind in managing all that data.” Plus, a person can’t be in two rooms at once. The ACG-Anesthe- sia software should help anesthesiologists manage that situation, according to Stapelfeldt. “Historically, you’d just walk room to room, and you hope to be in the right place at the right time,” he said. Executives, and investors Talis is led by CEO Roger Hungerford, who bought a majority stake in the company in February 2013. Hungerford, who lives in New York state, is the founder of Sigma International of Medina, N.Y. In 2012, Baxter Healthcare bought that company, which sells an infusion pump designed to help caregivers avoid errors when administering intravenous medications. Colister served as vice president of business development for Sigma from 2007 to 2012. The Kent State University graduate also invested in Talis, as did Scott Miller, one of Sigma’s investors. Several Clinic employees who helped develop the technology joined Talis soon after the startup was formed. In May 2013, the company moved into a newly renovated office on the third floor at 6555 Carnegie Ave., part of the MidTown Tech Park Campus. Talis, which has about 20 employees, spent much of the last year improving its technology and assuring it would work with the many software products that different hospitals use, Colister said. The company also wanted to make sure ACG-Anesthesia is ready if federal regulators ever start holding medical software products to the same quality standards that other health care technologies must meet. “We are coming at this more like a medical device,” he said. ■ 20140317-NEWS--7-NAT-CCI-CL_-- 3/14/2014 3:56 PM Page 1 MARCH 17 - 23, 2014 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM 7 Taxing: Ohio Business Roundtable backs governor’s changes continued from PAGE 1 Last Tuesday, March 11, Kasich unveiled his mid-biennium review, or MBR, traditionally a mid-course correction in the two-year state budget that Kasich has expanded into an opportunity for tax policy changes. The centerpiece of the review is a pro- Kasich posed $2.6 billion reduction in personal income taxes over three years that mainly would be produced by an 8.5% across-theboard income tax decrease. That decrease would follow a 10% income tax cut over three years that the Legislature approved last summer. However, the income tax cut would be offset by $2.4 billion in tax increases. The hikes would include a 15% boost in the Commercial Activity Tax (CAT) rate; an increase in the severance tax paid on oil and gas production; a 48% jump in the state’s tax on cigarettes, to $1.85 per pack from $1.25; and a new tax on electronic cigarettes. The 1,600-page mid-biennium review does not appear to raise or lower significantly the level of spending approved in the 20142015 budget that Kasich signed last June. That two-year, $62 billion budget included the 10% income tax cut, but that lost revenue was offset with a rise in the state sales tax to 5.75% from 5.5%. While the governor’s budget proposals have not raised income tax rates, the state budget continues to grow under Kasich. In 2011, Kasich signed off on a $55.6 billion budget for fiscal years 2012-2013, which was $5.5 billion higher than Ted Strickland’s 2010-2011 biennial budget. The increased spending has been supported by increases in state revenue as Ohio has emerged from the recession. The General Assembly began hearings on the mid-biennium review last week and expects to complete action before it adjourns in June. Low-rate CAT lovers Business groups’ support for the budget proposals would be higher if they didn’t come, in part, at the expense of businesses, particularly in the raising of the Commercial Activity Tax. The Ohio Society of Certified Public Accountants wasn’t ready to take a public position last week on the increase in the CAT, though it’s unlikely the group welcomes the increase. “We expect there may be concerns about the precedent this proposal could set — raising the CAT rate in exchange for lowering the income tax rate,” the group’s vice president for communications, Amy Johnson, said in an email. “We’ll be monitoring the progress closely and weighing in after we’ve had adequate opportunity to speak with our members.” However, in a Feb. 20 post on its website that reported a CAT increase was in play, the trade group said it maintains its “longstanding position supporting the CAT’s very low rate (0.26%), which is achieved through maintaining a very broad base. The CAT has been recognized nationally as an appealing tax for the business sector because of its “We expect there may be concerns about the precedent this proposal could set — raising the CAT (Commercial Activity Tax) rate in exchange for lowering the income tax rate.” – Amy Johnson, vice president for communications, Ohio Society of Certified Public Accountants simplicity and very low rate.” Kasich is proposing a CAT increase to a rate of 0.30%. Unlike a business income tax that is based on profits, the CAT is a tax on business gross receipts — the total sales of goods and services, with no deduction for the cost of doing business. In other words, a company that’s losing money still pays the tax, which is justified because of the low rate. Even the Ohio Chamber of Commerce, which ended its position of neutrality in the governor’s race in 2010 to endorse the Republican Kasich over Democratic incumbent Ted Strickland, is questioning the proposed changes. “We have concerns about a CAT increase because it’s the primary business tax that a large percentage of our members pay and because it’s levied at multiple levels of the supply chain,” Dan Lavin, the chamber’s assistant vice president for tax and economic policy, told The Columbus Dispatch. The Buckeye Institute’s Lawson also has concerns about an increase in the CAT, which was created in 2005, when he was a legislative aide. “The problem was always that the CAT tax was supposed to be a broad-based, low-rate tax,” Lawson said. “The whole fear was that because it’s such a small rate, it’s an extraordinarily tempting target (for increase).” The Ohio Business Roundtable, though, is supporting the budget changes without qualification. “Fact-based analysis conducted by Ernst & Young for the Roundtable shows that the governor’s reform package taken as a whole will improve Ohio’s overall business tax competitiveness, even when considering a tax increase on the commercial activity of business,” Roundtable president and CEO Richard Stoff said in a statement. Hitting ‘the sweet spot’ Kasich’s lack of spending cuts and his administration’s practice of lowering some taxes while raising others even has caught the eye of the Americans for Tax Reform, the Washington, D.C.-based group that, in the words of its own website, “opposes all tax increases as a matter of principle.” “Kasich’s taking a step in the right direction by trying to reduce the state income tax rate,” said Will Upton, state affairs manager at the organization, which was founded by Grover Norquist and asks politicians to sign a no-tax-increase pledge. “Unfortunately, there is a lot of tax shifting in this. “It’s kind of scratching the surface of tax reform but not really digging down into what you need to do,” Upton said. Kasich signed the organization’s Taxpayer Protection Pledge in 2010. Nichols defended the level of spending the governor has set. “At the same time, we have a bunch of people saying we’re spending too little,” he said. “When you’re getting popped from both sides, you know you’ve found the sweet spot.” ■ Key Tower and its ownership are pleased to announce a lease with THERE’S NO BUSINESS LIKE YOUR BUSINESS. Vorys, Sater, Seymour and Pease is a full-service corporate law ÀUPWKDWZRUNVZLWKDOONLQGVRIEXVLQHVVHVWRKHOSWKHPJURZ :HUHFRJQL]HWKDW\RXUEXVLQHVVLVXQOLNHDQ\RWKHU$QGZKDWD FRLQFLGHQFH³EHFDXVHRXUODZÀUPLVXQOLNHDQ\RWKHUWRR Blue Point was represented by Jones Lang LaSalle Brian V. Conroy Columbia Property Trust was represented by its building management and leasing firm For leasing information, call John Klayman or Cindy Greiner at 440-871-4800 www.JRESgroup.com Columbia Property Trust is one of the nation’s largest office REITs, focused on investing in and managing high-quality commercial office properties in primary U.S. markets. Higher standards make better lawyers.® For more information, visit vorys.com. Vorys, Sater, Seymour and Pease LLP 1375 East Ninth Street 2100 One Cleveland Center Cleveland, Ohio 44114 106 South Main Street Suite 1100 Akron, Ohio 44308 www.ColumbiaPropertyTrust.com 20140317-NEWS--8-NAT-CCI-CL_-- 8 3/14/2014 10:53 AM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 GOING PLACES JOB CHANGES ARCHITECTURE BIALOSKY + PARTNERS ARCHITECTS: David W. Craun to principal; Brandon Garrett and Paul Taylor to associate principals; Ryan Parsons and John Guzik to senior associates. CONSTRUCTION METIS CONSTRUCTION SERVICES LLC: Steven P. Brandle to vice president, construction; David E. Wright to vice president, development. ENGINEERING CT CONSULTANTS INC.: Brian T. Bisson to senior project manager, water/wastewater division. PREDICTIVE SERVICE: Matthew Setzekorn to president, Engineering and Energy Solutions; Susann Geithner to global sustainability manager. Brandle Wright Geithner & Trust. Gregory D. Waller to analysts. FEDERAL RESERVE BANK OF CLEVELAND: Loretta J. Mester to president, CEO. HEALTH CARE KEYBANK: Brian Hamp to vice president, relationship manager, Key Private Bank, east Ohio district. FINANCIAL SERVICE CIUNI & PANICHI INC.: Joshua Schering to staff accountant. KING & ASSOCIATES LLP: Gregory J. Robida Jr. to tax specialist. FINANCE SKODA MINOTTI: Jason Moon and Jackie Beckman to paraprofessionals; E. Harris Lee to accountant; Thomas Lund to senior staff accountant; Devon Trivisonno, Dana Pikovnik, Tiffany Menosky and Carleigh Machock-Dissell to staff accountants. CHARTER ONE: Timothy J. Swanson to head, Private Bank WESTERN RESERVE PARTNERS: Brandon F. Carnovale and PROFESSIONAL SERVICE INDUSTRIES INC.: Alagaiya Veeramani to vice president. Bisson AULTMAN NORTH CANTON MEDICAL GROUP: Leslie Murphy, M. D. to board-certified family medicine physician. Beckman Hamp MANUFACTURING AVERY DENNISON: Nick Tucci to vice president, general manager, Reflective Solutions. POLYONE CORP.: Cathy K. Dodd to vice president, marketing. INSURANCE MARKETING BRITTON GALLAGHER: Entertainment Insurance Division-Rick D’Aprile to senior vice president, Gene Berger, Rodney Gerbers and David Gallace to vice presidents; Tammy Catterton, April Merino and Jennifer Wolfe to account managers. RAZOR MARKETING: Robert Goldfarb to president. LEGAL NONPROFIT NORTH AMERICAN GURUKUL INC.: Lynn Kennedy to executive director. REAL ESTATE GALLAGHER SHARP: Hannah M. Klang to associate. CRESCO: William D. Saltzman to executive vice president, director of office services. SINGERMAN, MILLS, DESBERG & KAUNTZ CO. LPA: Jacqueline A. Hoelting to associate. TECHNOLOGY WIRELESS ENVIRONMENT: Mark Moore to vice president, sales. Klang Tucci Robert Cahen to secretary/treasurer; Laura Frye to vice president, resource development; Marge Zellmer to vice president, professional development; Betsey Kamm to vice president, membership; Pamela Willits to vice president, communications; Beth Brown to immediate past president. ORT AMERICA CLEVELAND REGION: Eric Rubin (Cedar Brook Financial Partners) to president; Gary Desberg to vice president; Mitchell Frankel to treasurer; Suellen Kadis to secretary; Robert Fein and Steve Lurie to executive committee at-large members; David Kornbluth to past president. WESTERN RESERVE ROWING ASSOCIATION: Jeffrey Zabor (Brooks & Stafford Co.) to president; William Rickman to vice president; Frank Campbell to secretary; Laura Loesch to treasurer. AWARDS BOARDS We Proudly Accept. ASSOCIATION OF FUNDRAISING PROFESSIONALS, CLEVELAND CHAPTER: Tim McCormick (McCormick Consulting) to president; Sharon Martin to president elect; SITECORE: Josh Jenkins (Paragon Consulting) received the Most Valuable Professional Award. Send information for Going Places to [email protected]. COMING UP Send us your ‘Who to Watch’ nominations Crain’s Cleveland Business in 2014 is continuing its series of “Who to Watch” sections. The second section of the year, scheduled for publication April 28, will highlight up-and-comers in finance. If you think you know who will be among those leading the Northeast Ohio finance sector of the future, drop an email to sections editor Amy Ann Stoessel, [email protected], or call 216-771-5155. Please send in your suggestions no later than noon on Monday, March 24. There are no hard and fast requirements for this section, other than the candidate needs to exhibit the kind of potential that makes him or her someone to watch in the field of finance. Mark your calendars for future sections: “Who to Watch: Law,” June 23; and “Who to Watch: Education,” Nov. 24. Thank You to Our Clients for Helping Us Achieve 2014 Benchmark Litigation’s Ohio Firm of the Year. We Solve Problems. Effectively. Efficiently. Consistently. 36 South Fr anklin Street Chagrin Falls 440-571-7777 ulmer.com We are a different kind of business law firm. Learn about us at www.gertsburglaw.com, or call us to discuss your legal matter. 20140317-NEWS--9-NAT-CCI-CL_-- 3/13/2014 3:58 PM Page 1 MARCH 17 - 23, 2014 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM REBECCA R. MARKOVITZ PHOTOS Clockwise from top left: An employee supervises as an embroidery machine completes a logo on a hat; sewing machine operator Phan Hoang sews taping into baseball hats; the brim is attached to a hat; a variety of “Made in the USA” tags that can be added to orders; embroidery thread at the factory; supervisor Etelka Kiss cuts out hat panels for assembly. Graffiti: Looking to grow continued from PAGE 4 It moved from Terminal Tower in the heart of downtown to 3111 Carnegie Ave. in 1987 and slowly expanded into three buildings with manufacturing and storage capabilities, as well as a small showroom. The company has around 65 employees, about half of whom live within 10 minutes of the plant, Mr. Miller said. The hats Graffiti makes still require plenty of hands-on work in a business that increasingly relies on automated manufacturing. Producing its caps from start to finish not only gives Graffiti control over their quality, but also over the design process. Instead of buying an already assembled cap and bending it to fit into a sewing machine, as operations manager Robert Hatfield said many of its competitors do, Graffiti embroiders and dyes each of its cap parts flat. The company uses a process called dye sublimation that allows it to print a color-fast design onto paper and press it into the fabric. Graffiti also has its own in-house art department that can work with companies to design and adapt logos to be embroidered onto to their hats or other products. The company does a lot of custom work for organizations that include labor unions, the military and the U.S. Postal Service, as well as private label work. The company’s product offerings have expanded over time, and it still offers other customizable items, such as shirts, that it buys from outside vendors. But caps make up about 60% of Graffiti’s business, Mr. Miller said. Annual sales at Graffiti are about $5 million, he said, and its goal is to reach $6 million in sales by 2015. In 2009, Graffiti started producing its own knit hats, a business that Hatfield said has been growing 25% to 30% a year. Mr. Miller said the key to such expansion is to stick with what’s familiar; the commercial knitted products could be made by the same employees and sold to the same distributors. Now, the company is focusing on increasing its visibility. Graffiti updated its website in March, graffiticaps.com, to include the pricing structure for the caps, which was missing on the site. The website also features an online showroom to highlight new and existing products, Hatfield said. In addition, Graffiti recently launched a wholesale website, at an address it wasn’t willing to disclose, that will let other vendors sell domestic baseball caps, Hatfield said. It won’t be Graffiti-branded, but it will sell Graffiti products. All-American appeal Steve Carr, owner of Carr Textile Corp. in Fenton, Miss., and a supplier to Graffiti, said Graffiti has “survived and thrived” in a tough industry that has been changed in recent years by imports. Carr estimated there were 120 headwear manufacturers in the United States about 10 years ago. Today, he thinks that number is closer to 20. He said Graffiti has made it because the owners are highly involved, and the company always is looking to change with the times. Mr. Miller said the recession was tough for Graffiti, but he noticed that once it was over, people started buying more domestically made products. He thinks there is a patriotic component to it, though the increased cost of shipping imports has played a big role, too. Mr. Miller said his company has survived in part because of the nature of baseball caps, which boast an all-American image. They’re a good value, they come in a variety of styles and one can never have too many, he said. “For the money, it’s a wonderful value to help represent people’s companies” with Graffiti’s hats, Mr. Miller said. In Partnership With: ćVSTEBZ"QSJMtBNBN Progressive Field The Business of Baseball In conjunction with Crain’s “Twenty Years of Gateway” section, this intimate breakfast gives a behind-the-scenes look at the business of Indians baseball. Tickets include: Exclusive Q&A with Bob DiBiasio, Mark Shapiro & Brian Barron t#FIJOEUIFTDFOFTUPVSTBU1SPHSFTTJWF'JFMEt t#SFBLGBTUCVČFUt Tickets on sale now! CrainsCleveland.com/Indians 9 20140317-NEWS--10-NAT-CCI-CL_-- 10 3/13/2014 4:20 PM CRAIN’S CLEVELAND BUSINESS Page 1 WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 PUBLISHER/EDITORIAL DIRECTOR: John Campanelli ([email protected]) EDITOR: Mark Dodosh ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Shifty move G ov. John Kasich likes to portray himself as a tax-cutting crusader. It is a misleading representation. He is more an illusionist, a master of taxation sleight of hand. The reality is, the governor is a tax shifter. He is adept at transferring the burden of taxation from one party to another while giving the appearance of reducing taxes. Shifting the load is how he can balance a state budget that grows year after year even as he beats the drum for lower individual income tax rates. Consider last year. The governor pushed for a 20% across-the-board income tax cut phased in over three years. The Legislature gave him 10%. Their generosity goes back to Kasich’s first budget, which he put together amid a still-slow economy in 2011. That’s when the governor eliminated an $8 billion budget deficit in part by slashing to the tune of a few billion dollars the amount of state money that traditionally had gone to cities and school districts. Even though the economy had regained some of its footing by last year and the state was awash with cash as tax receipts rebounded, Kasich and the Republican-led Legislature didn’t restore the money the cities and schools had been denied two years earlier. Instead, they used the bonanza to offset revenue they would be losing by enacting the income tax cuts. And what of the local governments and schools that felt the budget pain that the state passed down to them? The loss of state support has meant fewer police officers and teachers, less general fund money to fix potholes, and cuts to academic programs and extracurricular activities. Now, a year later, the governor is proposing yet another across-the-board income tax cut, this one totaling 8.5% over three years. To cover the nearly $2.2 billion in income tax lost to the cuts, Kasich wants to raise the Commercial Activity Tax by 15%, increase the severance tax on oil and gas production to 2.75%, and boost Ohio’s cigarette tax by 48%. The governor justifies shifting the tax burden by saying that letting Ohioans keep more of their hardearned pay helps make families and communities stronger. But that logic must not apply to the families of smokers, the vast majority of whom are Ohioans of modest means. It’s one thing to ding smokers with a small tax hike. It’s another to gouge them. And by raising the state cigarette tax to $1.85 a pack from the current $1.25, a two-pack-a-day smoker would shell out another $438 a year in taxes. By contrast, a couple with two children that earns $73,000 a year would pay $356 less in income taxes in 2016 than it did in 2011 if the proposed income tax cut is added to the one already in place. It’s likely a smoker is subsidizing that family’s tax break, as only 20% of smokers live in households that earn $50,000 a year or more. We’d like to believe most Ohioans think their fellow citizens should pay their fair share of taxes and no more. In that spirit, we’d suggest that paying another 60 cents a pack for smokes hurts a guy whose job it is to park cars way more than the smoker who just dropped off his BMW to be parked. Don’t shift the burden to the little guy. FROM THE PUBLISHER Random, but definitely interesting, thoughts Some odds and ends: JOHN back — 12 times. ■ Compliance isn’t cheap — ■ Black market for smokes? Two executives from a small CAMPANELLI — If Gov. John Kasich gets his local bank told me recently way and the state raises the that in 2013 they spent about cigarette tax 60 cents to $1.85 $500,000 more to comply with a pack, Ohio’s taxes on federal regulations than they smokes will be $1.25 more a did six or seven years ago. That pack than Kentucky’s and equates to about 10% of the $1.30 more than West Virbank’s profits. A few years ginia’s. That means a carton of back, the same institution was cigarettes will be at least forced to spend $50,000 to $12.50 cheaper across the retrofit ATMs for vision-imOhio River. I imagine there paired customers, including drive-up might be a few full car trunks on the reATMs. turn trip. ■ Impossible — Dan Gilbert and Quicken Loans are offering $1 billion (payable in 40 annual installments) to anyone who can pick a perfect NCAA bracket. Warren Buffett’s Berkshire Hathaway is insuring the contest for an undisclosed sum. If you can pick tournament games with 60% accuracy (a pretty decent accomplishment in itself), the odds of filling out a perfect bracket are about 1 in 95 trillion. How much of a long shot is that? A stack of 95 trillion brackets, printed on office paper, would reach the moon and ■ A surprise that isn’t — So it turns out that the GOP might not have that “young voter problem” after all. Polling indicates that voters who turned 18 after Barack Obama became president aren’t fans of the president. Mitt Romney actually beat Obama among 18-, 19- and 20-year-olds in 2012, according to a blog item from The Washington Post last week. This is not without precedent. Voters who come of age during tough economic times and low presidential approval numbers (the Carter years, for instance) tend to sup- port the opposition party. If times are good and the president is popular (Clinton in the 1990s, for example), young voters support the party in power. ■ Hyperbole alert — Earlier this month, The Plain Dealer ran what it called an “unprecedented” editorial urging the Cleveland Indians to retire Chief Wahoo. I nodded my head a bit when I read it — the same reaction I had last November when I read the editorial in Crain’s Cleveland Business urging the same thing. ■ Virtual tipping — Starting Wednesday, you can tip your Starbucks barista from your iPhone. You’ll be able to add 50 cents, $1 or $2 up to two hours after your purchase. I fear that making tipping easier might lower gratuities. Half the change and dollar bills in the tip jar are not from good service, but from shame avoidance (who wants to be seen stiffing a barista?). This mobile-tipping thingy allows people to say, “I’ll take care of you on the app” … with their fingers crossed. ■ Finally — My favorite email PR pitch from the past month: “Are ‘selfies’ causing head lice infestations? Michigan business owner thinks so.” ■ TALK ON THE WEB Re: Gov. Kasich’s tax plans ■ As an Ohioan I am always disgusted with this governor. You want us to quit smoking? Now you want to tax an appliance that can help us with that. … You try to confuse us with lowering the state income tax, which is horrendous, but raising the tax on tobacco. Why not penalize the alcohol some more? Drunk drivers are all over the road! Ohio has taxed us to death. The state is a mess. End the madness already. — Minnieme Re: Kelly Blazek, continued ■ While I have no problem with Kelly bashing, to an obvious certain extent, I can see the point Ginger Casey was making in her March 10 Personal View, “Blazek bashing went too far.” That said, people aren’t destroying Kelly for saying “no,” and if she had said no in a socially acceptable fashion, this Reader responses to stories and blogs that appeared on: www.crainscleveland.com never would’ve become what it has. Had she said, “Thank you for the interest, but I only connect with people whom I know,” and then had her response posted, nobody would’ve seen any way to blame her. At that point, it clearly would’ve been a case of sour grapes on behalf of the person who couldn’t take a polite “no.” Kelly is not being destroyed for what she said, but for how she said it. — Jim Abbott Re: Rising meat prices ■ Where’s the beef? Not on too many plates, as Americans are wisely choosing alternative diets. Even the fast-food restaurants are diversifying their menus. — Jerry Masek Re: Cleveland’s sorry streets ■ How sad, or symbolic, that one of the very worst blocks … is East 6th Street between Lakeside and St. Clair — the block going to the front door of City Hall. The claim that the $2 million a year for FirstEnergy Stadium upgrades won’t hamper services needs to be explored. We have an election coming for the sin tax, and these issues are not helping. — 171939 Re: COSE’s new focus ■ I joined COSE 20+ years ago, mainly because of the health insurance. Over the years, I’ve attended many COSE educational and networking events that helped me make connections with other entrepreneurs, resulting in new business that I would not have gained otherwise. Although I stopped using the COSE health insurance provider five years ago, I’ve maintained my membership for their other services. Best $300 investment I make each year. — Mark Madere 20140317-NEWS--11-NAT-CCI-CL_-- 3/13/2014 3:19 PM Page 1 MARCH 17 - 23, 2014 PERSONAL VIEW Valuable lessons might have been overlooked in Blazek controversy By JOHN ETTORRE S CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM ome years ago, I worked at a university, where the student newspaper periodically ran stories testing the boundaries of good taste. For days afterward, I would hear complaints from some faculty and staff members who thought these young people must be taught a lesson. Often, it could be boiled down to this: with freedom comes responsibility. These were indeed teachable moments. College students should learn that lesson. But it also served as a bridge to suggest that their elders should be using these situations to engage in Socratic dialogue with students, not punish them, and that some equally important lessons might also be learned by those elders, including the importance of freedom of expression. I was recently reminded of all that by the Kelly Blazek story. When the online job bank operator harshly responded to a young woman hoping to connect with her on Linkedin as part of her goal of relocating to Cleveland, only for Blazek to have her response subsequently posted online, it touched a deep nerve on social media. That soon crossed over to major media outlets, quickly exploding into a national, and then international, story. It wasn’t the kind of message that those intent on solving regional brain drain might have hoped to send. Bob Hatta, formerly known as Northeast Ohio’s talent czar while Ettorre is an Emmy-winning writer, editor and writing coach who has been writing about the regional economy for more than 25 years. You can follow him on Twitter at @workinwithwords. at Jumpstart, spoke for many when he observed on Twitter that “the whole Kelly Blazek debacle has wrecked my day.” Why did this story spread like wildfire? One key reason is that it played into a rich subtext, one that doubly resonates in this tight job market: the inherent friction between Baby Boomer incumbents and millennial generation hopefuls. I’ve known Blazek a little over the years, and happen to be among her now-infamous 960-plus contacts on Linkedin. But I also have two sons in their 20s. Even as I blanched over a fellow Baby Boomer’s harsh blanket dismissal of an entire generation for their sense of entitlement, I also found myself nodding in agreement with her larger point: that younger people need to better understand the human element behind networking and treat it with greater care. You can’t really understand this story unless you grasp how essential Linkedin has become as a vehicle for finding jobs, and if you’re in sales or in business for yourself, you’re looking for a job every day. While Facebook has become the better-known show horse, Linkedin has quietly become the workhorse, the virtual backbone of the job market. Still, this virtual platform is only at its most effective when combined STAY CONNECTED ■ Crain’s on Twitter: @CrainsCleveland ■ Crain’s on Facebook: Facebook.com/CrainsCleveland ■ Crain’s on LinkedIn: linkedin.com/company/crain’s-cleveland-business ■ Crain’s on Instagram: instagram.com/crainscleveland ■ Crain’s daily e-newsletters: CrainsCleveland.com/register with real pre-existing relationships. But the lesson that some young people might understandably take from this sad chapter — that wellconnected elders don’t really matter in their job search — is dead wrong. While Linkedin makes it easier to reach out to contacts, it doesn’t supersede the need to make human contact, and to personalize your outreach. After all, isn’t that what job seekers valued most in Blazek’s listserv? This wasn’t just another online job board, but one moderated by a wellinformed industry veteran. In the end, everyone lost here. A free service valued by thousands of job-seekers in a still-challenging job market will probably never be available again. A professional reputation now lies in ruin. Perhaps worst of all, thousands of young job-seekers might well use this situation as a reason to avoid reaching out to older, well-connected professionals who might have been of considerable help. We’ll never know how many doors might have been opened, nor how many potential mentors have been lost in the process. I hope we can instead use this as a teachable moment — one that reminds all of us to be kinder in our virtual conversations, more charitable with our personal networks, and more mindful of how solid professional networks are built, one person at a time. After all, when they’re built the right way, these networks can sustain us for a lifetime. ■ 11 Put Your Best (Square) Foot Forward. 1301 E. Ninth St. Cleveland, OH Interested in leasing the best views in Cleveland? Contact: David C. 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Opens May 10 20140317-NEWS--12-NAT-CCI-CL_-- 12 3/13/2014 2:41 PM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 Anderson International is ‘buried’ with booming business By EDWARD NOGA Rubber & Plastics News Anderson International Corp. executives knew an expansion of the company’s plant in Stow was inevitable when the machinery maker relocated there. They just didn’t know “inevitable” meant two years. Blame it on faster growth than expected by the manufacturer of dewatering and drying equipment for synthetic rubber producers. The company has gone to 130 employees from 50 since it moved from its Cleveland plant to Stow. “We’re buried,” said Lenny Trocano, president of the privately held company as he walked through the busy machine hall. The building is packed with equipment and work in progress. Trocano and Paul Kohntopp, Anderson’s vice president and general manag- Trocano er, said they were aware the 78,200-square-foot building wasn’t perfect when the company acquired it in 2011. “We knew in our gut we should have bought bigger,” Kohntopp said. “This was smaller than what we came from,” an aging structure on Cleveland’s East Side, Kohntopp said. “But we are definitely more ef- ficient here,” with a well-thoughtout floor layout, he said. The Stow site has an extensive system of overhead cranes, vital for a company that handles extremely heavy parts and equipment, Trocano said. And the steel structure includes an area that obviously could accommodate an expansion — a back wall that will be extended to accommodate another 24,000 square feet on the 10-acre site. Kohntopp termed the cost of the project “substantial.” The company will rearrange storage and open areas for machinery, including new equipment. The project, slated for completion this fall, also will add some offices. Overseas focus Anderson has marched to the beat of a different drummer than much of U.S. manufacturing in multiple ways. For one, most of the company’s customers are overseas. Trocano said its export sales of equipment for synthetic rubber producers have climbed to 84% of total shipments from 70% five years ago. “I think that trend is going to continue,” he said. The rapid and enormous growth of the synthetic rubber industry abroad accounts for much of that business for Anderson, the executives said. Anderson’s customers are in 90 countries, including in LEGAL NOTICE To all individuals and businesses that accept American Express cards: Notice of a class action settlement. Si desea recibir esta notificación en español, llámenos o visite nuestra página web. Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York. Settlement Agreement by calling the toll-free number below. This notice is authorized by the Court to inform you about an agreement to settle two class action lawsuits that may affect you. The cases - In re American Express Anti-Steering Rules Antitrust Litigation (II), No. 11-MD-2221 and Marcus Corp. v American Express Co. et al., 13-CV-07355 - are in the U.S. District for the Eastern District of New York. These cases allege that certain rules applicable to merchants that accept American Express cards violate antitrust laws and resulted in merchants paying excessive fees. The Court has not decided which side is right because the parties agreed to settle. You do not need to file a claim to receive the benefits of the rule changes provided for by the settlement. If you want to seek monetary damages related to American Express’s existing merchant rules, you can pursue those claims consistent with the dispute resolution provisions contained in your card acceptance agreement. No money will be distributed to the class. Who’s included? The settlement applies to a class comprised of all merchants that accept American Express cards at any location in the United States (including at a physical merchant location, online or via a mobile application) as of or after February 12, 2014, onward. What are the Settlement terms? The settlement will require American Express to change its rules to allow merchants who accept American Express cards to charge customers an extra fee or “surcharge” if they pay with an American Express credit or charge card under certain conditions including that any such surcharge apply to all credit and charge card transactions. The specific rule changes and terms of the settlement are explained in detail in the court-approved, longform notice (“Notice”) and the Class Settlement Agreement, which are found at the case website (www.AmexMerchantSettlement.com). You should review these documents carefully. Your legal rights are affected even if you do nothing. You can also obtain copies of the Notice and Class Your options. You may object to the settlement by June 6, 2014. The Notice available at the case website explains how to object. Regardless of whether you object, if the settlement is finally approved, you will be bound by the Court’s final judgment and the releases explained in the Class Settlement Agreement, which is available at the case website. Court hearing about the Settlement. The Court will hold a hearing on September 17, 2014 to consider whether to approve the settlement and the request by the attorneys for the class for attorneys’ fees, expenses, and service awards up to a maximum total of $75 million. You do not need to appear at the hearing or hire your own attorney. But you can if you want to, at your own cost. The Court has appointed Friedman Law Group, LLP, Reinhardt, Wendorf & Blanchfield, and Patton Boggs LLP to represent the class. Questions? For more information about the settlement you should visit the website (www.AmexMerchantSettlement.com) or call 1-866-686-8694. WWW!MEX-ERCHANT3ETTLEMENTCOMs 1-866-686-8694 China, India, the Middle East and Russia. Those are the regions where new synthetic rubber capacity is coming online. In the United States, Anderson’s business typically is spare parts and some replacement of existing lines, Kohntopp said. Another characteristic of Anderson is that it “doesn’t do cheap,” Trocano said. “We don’t compete as the lowestcost supplier,” he said. ‘If you want the cheapest equipment, go elsewhere.” There are plenty of companies eager to produce equipment and parts such as Anderson’s. But when a client is spending hundreds of millions of dollars to establish a plant, it wants the real thing, he said. That’s why Anderson’s equipment is all over China. Trocano said Anderson doesn’t outsource its work, buys castings made in the United States, and, most importantly, builds entire finishing lines. “The engineering companies (that synthetic rubber producers hire) want a single source,” he said. Anderson has partners to provide automation, bailers, conveyors and other ancillaries. Because it does so much foreign business, Anderson is attuned to working with the Ex-Im Bank, the official U.S. export/import credit agency, and has contracts with firms that deal with certification throughout the world. Kohntopp said different regions have different requirements. In Europe, for example, the imported equipment needs the CE marking, indicating it meets European Union directives. “The differences in the requirements aren’t that great, but they all have their own tweaks,” he said. Demand for full lines Trocano said Anderson had four or five engineers when he joined the company, before it made the push into providing finishing line packages. “Now we have 21, and that doesn’t include industrial engineers,” he said. “Selling complete finishing lines requires much more engineering, because you are dealing with bigger engineering companies that have all sorts of requirements.” Trocano said the relocation to a modern building in Stow helps in obtaining necessary staff. Kohntopp said while the company still can attract talent from Cleveland, the new location gives it more access to people experienced in CNC-based machinery. Anderson still has equipment operated manually by machinists, and such operators are difficult to find, Kohntopp said. Anderson’s capital investment is in CNC equipment, and the people to handle it. The machinery maker also has invested in sophisticated 3D software. Its engineers can provide a complete picture of a plant layout, enabling a client’s engineering contractors to know how the finishing line fits into the entire project. “I don’t think there are many competitors that can do that,” Trocano said. ■ Noga is a contributing editor at Rubber & Plastics News, a sister publication of Crain’s Cleveland Business. 20140317-NEWS--13-NAT-CCI-CL_-- 3/13/2014 12:01 PM Page 1 CRAIN’S CLEVELAND BUSINESS 13 LISA HANEY MARCH 17 - 23, 2014 More than 200 filmmakers and other special guests attend the film festival Only 13% of attendees in 2013 went to a single screening — most went to two to five More than 6,000 middle school and high school students attended the festival in 2013 as part of the FilmSlam program This year’s program guide is 196 pages – 16 pages larger than last year In all, 68 countries are represented in this year’s films The first festival was organized by Jonathan Forman and ran from April 13 to June 2, 1977 The event moved in 1991 from the Cedar Lee to Tower City Cinemas A FILM FEST UNREELED An in-depth look at the Cleveland International Film Festival IN THIS SECTION ALSO ONLINE There’s a bunch of characters behind the scenes ........................... Page 14 Just 12 days, but millions of dollars in economic impact ................. Page 15 The goal each year is ‘better, not bigger’ ...................................... Page 16 Planning the event is a year-long job ............................................ Page 18 Cleveland looked at as ‘a filmmaker’s festival’ ............................... Page 19 Go to www.crainscleveland.com/film for additional coverage, including: A gallery of images from film festivals past Historic program guide covers and behind-the-scene photos Video promotions from the CIFF’s early days Daily featured films with trailers 20140317-NEWS--14-NAT-CCI-CL_-- 12:03 PM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 PHOTOS BY JASON MILLER 14 3/13/2014 L-R: Bill Guentzler, Beth Steele Radisek, Debby Samples, Debbie “Sheepie” Marshall, Mallory Martin, Patrick Shepherd, Marcie Goodman A CAST OF CHARACTERS A closer look at the people who make the festival possible ou don’t have to be crazy to work here. We’ll train you.” Those words appear on a small plaque that hangs in the entrance to the Cleveland International Film Festival’s modest office space in Ohio City. Given to the staff by longtime volunteer Thom Duke, who recently died, the conversation piece is located just below a display case — filled with Pez dispensers. If you spend any amount of time with the seven full-time staffers who orchestrate the never-ending details of the film festival, it doesn’t take long to realize that no truer words could be used to describe this office and the people in it. Don’t worry, though. It’s hard to believe that anyone among “Y this close-knit, inside-joke-fueled group would take offense. Working under the direction of executive director Marcie Goodman, this gang — which includes Patrick Shepherd, Mallory Martin, Bill Guentzler, Debby Samples, Debbie "Sheepie" Marshall and Beth Steele Radisek — spends nearly every waking moment together from January until March putting together film aficionados’ annual rite of spring. The rest of the year? They take walks, travel, go bowling, go out to dinner and generally can’t stay away from each other. When they aren’t crafting goofy nicknames for each other — like “Pat-cie” (the combination of Shepherd and Goodman), or “Billy Puppy” (Guentzler) — they use a word like family to MARCIE GOODMAN DEBBIE “SHEEPIE” MARSHALL BETH STEELE RADISEK EXECUTIVE DIRECTOR OFFICE MANAGER AND MEMBERSHIP DIRECTOR SPECIAL PROJECTS DIRECTOR Years at film festival: 1987-1994 and 1998-present Primary responsibilities: Nagging Favorite part of the festival: Closing night Biggest surprise from last year: We were blown away by our audience’s willingness to “figure it out” with regard to parking. So many patrons took the RTA, which remains “the easy way” for traveling to this year’s festival. DEBBY SAMPLES MARKETING DIRECTOR Years at film festival: 11 Primary responsibilities: Spreading the word on the CIFF Favorite part of the festival: Just being at the festival with people from all parts of the community and with guests from all over the world. The energy is so positive. Most memorable filmmaker visit: It’s not possible for me to choose. We are fortunate to have an audience that truly loves independent film, and our guest filmmakers can see that in the packed theaters and hear it in the questions asked at the Q&As following their screenings. Because of that connection, our guest filmmakers are nothing short of extraordinary when interacting with our audience, volunteers and staff. describe their relationships. “What’s better than working with some of your best friends,” said Marshall (whose nickname, “Sheepie,” is the only one to make it on her business card.) As for Goodman, her belief in her staff is unwavering — even if it means a fight now and then. “I have complete faith in everything my staff does,” Goodman said. “I watch in astonishment with what these six people do.” And she — and the rest of the staff — know that what they share with their co-workers is something special. "We all realize this is a once-in-a-lifetime experience," she said. — Amy Ann Stoessel BILL GUENTZLER Years at film festival: 7 Years at film festival: 3 years full time (14 years volunteering/seasonal staff) Primary responsibilities: Keeping the wheels greased and the members happy Primary responsibilities: Volunteer coordinator, FilmSlam director, entry coordinator Favorite part of the festival: The energy you feel just walking into Tower City Center Favorite part of the festival: Far and above, FilmSlam (an education program ) Most memorable CIFF moment: In April 2010, my dad passed away unexpectedly. At the following 35th CIFF, the festival was gracious enough to let me … dedicate one of the films in the program to his memory. I chose “The Hedgehog,” a film based on a book and with a main character whose greatest pleasure in life was reading. I thought this was very fitting and with the overarching message of the film being to live life to the fullest. As part of the dedication I introduced the film before each screening and explained a little bit why I chose it to honor the memory of my dad. There were some former students of my dad (a former English teacher) in the audience who sought me out after the screening to share … their memories of him. Even complete strangers with no connection to me or my family found me to tell me what a beautiful film I had chosen. Not only was this personally very touching, but I think it really speaks to our amazing and loving audience and to the all-inclusive and embracing community that the festival brings together and builds among our audiences. I think that is something very unique to our film festival. One country not represented in a film that you would like to see: Vatican City. I would love to see a film in our festival from the smallest country in the world. As far as I know, we have never even had one submitted. I would be intrigued to see what someone from Vatican City would make — a short, documentary or feature? And what the heck would it be about? ARTISTIC DIRECTOR Years at film festival: 15 Primary responsibilities: Watching movies Favorite part of the festival: Watching movies Number of movies watched in a year: More than 600. MALLORY MARTIN ASSOCIATE PROGRAMMER AND PROJECTION MANAGER PATRICK SHEPHERD Years at film festival: 3 full time/2 seasonal ASSOCIATE DIRECTOR Primary responsibilities:Programming the festival along with artistic director Bill Guentzler and choreographing the projection of films in the booth at Tower City Cinemas Years at film festival: 16 Primary responsibilities: Fundraising and community engagement. Favorite part of the festival: Our programming enables us to bring people from every walk of life to downtown Cleveland every spring. Without the film festival, Clevelanders would be: Less sleep-deprived for 12 days every spring. Many of our patrons see six or seven films a day from 9 a.m. until 1 a.m. I don’t know how they do it. Favorite part of the festival: Meeting all the visiting filmmakers and seeing how amazed they are at their packed screenings. If you were a film director, you would be: Miranda July, because she’s awesome — writer, director, actress and artist who I can’t wait to see more films from. — Compiled by Kathy Ames Carr Responses were edited for brevity and clarity SUPPORTING ROLES The staff of the film festival effectively grows from sevHe balances his film festival duties with his job en full-time staffers to more than 1,000 in the days and as a teaching artist for the Center for Artsweeks leading up to the event. Inspired Learning. He also has a studio in CleveIn all, there are more than 800 volunteers and 200 land’s ArtCraft Building. seasonal staffers lending a hand this year to put on the His 40-hour pre-festival workweeks begin in Deannual festival. Their efforts range from support on the cember and turn into 12-hour days during the 12office side to working with the crowds at Tower City. day festival, with usually one day off during that Mark Yasenchack, for example, started as a volunteer stretch. “Believe it or not, I actually don’t get to in 2000, but has since expanded his duties, becoming watch many films,” Yasenchack says. Wynveen Yasenchack business operations manager in 2003. Barb Wynveen, meanwhile, is an example of “I was hooked,” says Yasenchack, who works in a seasonal cathe hundreds of volunteers who help coordinate other festival logispacity overseeing a staff of 50 involved with ticket sales. tics, including those that take place during the actual course of the festival. As a “Movie Mogul” seat holder, Wynveen — who signs up for three shifts of four hours — makes sure seats are vacant for top-tier donation level guests. “The VIPs pay a lot of money to have their seat held until they show up,” she says. She also ushers in attendees and keep lines organized. “This is a finely tuned machine; it’s so organized in every capacity,” says Wynveen, who also works as a patient navigator for Cleveland-based Carmella Rose Health Foundation. “Every volunteer is slotted carefully. There’s no waste of — Kathy Ames Carr time.” 20140317-NEWS--15-NAT-CCI-CL_-- 3/13/2014 1:59 PM Page 1 MARCH 17 - 23, 2014 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM 15 It’s a hit! Annual impact pushes $5 million By MICHELLE PARK LAZETTE [email protected] Imagine this report were a documentary instead, filmed to illustrate the economic impact of the Cleveland International Film Festival. It might start with a close-up of the potato-crusted quiche at the J. Palen House bed and breakfast, where 11 of 12 rooms occupied on the weekends during last year’s festival were booked by people headed to the annual event. A wide shot of the Rapid traveling toward downtown might be next, as it’s filled on average with thousands more riders, and a tracking shot following a server, juggling the demands of a larger-than-normal crowd, could reflect what many a restaurateur says is their reality during the 12-day festival. For some, such as The Ritz-Carlton, Cleveland, the economic impact of the event can be measured in rooms that sell out at a rate not seen during other wintery weeks. For the Greater Cleveland Regional Transit Authority, the impact was evident last year in a 13% increase in ridership on rail lines during the festival: 20,000 more passengers on its Red Line, compared to average ridership, and 6,600 more on its Blue and Green lines. For restaurants in Tower City and elsewhere, it’s additional meals and drinks served. “When you get 100,000-some people to leave their house (and go to the city), you’re automatically strongly impacting every business there,” said Alan Glazen, president of A-Z Taverns Inc., which owns Ontario Street Cafe downtown, XYZ the Tavern in Cleveland’s Gordon Square neighborhood and ABC the Tavern (Ohio City/Uptown). “The winter’s over, and here comes spring, and the film festival gives us a good start.” ‘It’s a lot of new faces’ As the number of people flocking to the festival has risen to recordbreaking numbers, the economic impact of the film festival has grown, according to Cypress Research, a statistical consulting firm out of Shaker Heights. It estimated as of 2013 that the windfall for the city of Cleveland had climbed roughly 77% to $4.8 million from $2.7 million in 2007, and had doubled for Cuyahoga County to $2.8 million from $1.4 million during the same period. The woman serving the potatocrusted quiches at J. Palen House in Ohio City will tell you the impact is tremendous and growing for her inn. Four years ago, owner Diane Miller said she could attribute maybe two weekend bookings to festival-goers. Last year, she could attribute 11 of 12 weekend bookings during the event to people involved in it. One hailed from Germany. Unlike a Cleveland Browns game, to which visitors may dedicate only part of one day, film festival patrons, “while they’re here in Cleveland, they go to that festival the whole time,” said Pat Cirillo, president of Cypress Research. “We can attribute a lot of the spending that they do while they’re here to the festival,” she said. “Most of the money that people spend almost exclusively is in Cleveland.” And, all of it occurs at a particular- ly beneficial time, small business owners say, given how winter tends to slow business. Only one Rapid stop away from downtown, Ohio City bustles with festival traffic, said Sam McNulty, who owns five restaurants there that get “noticeably busier.” “Even more importantly, it brings a lot of folks who are new to the city,” said McNulty, owner of The Market Garden Brewery, Nano Brew Cleveland, Bier Markt, Speakeasy and Bar Cento. “It’s a lot of new faces, which we’re always happy to see.” Return on investment Important to consider along with the dollars spent by festival-goers is the money it costs to produce the film festival, Cypress Research’s Cirillo said. If it cost $10 million and generated less than half that in impact, for example, Cirillo would argue it’s not successful. According to film festival staff, the festival’s total revenue and support for fiscal year 2013 totaled $2.7 million. If you narrow it down to just the $206,535 in government grants the festival received, about which the average taxpayer would care most, “the ROI (return on investment) is fantastic — at least a 1,000% return,” Cirillo wrote in an email. Factor in also $757,000 in foundation support, since that money theoretically could support other causes such as education, and the return on investment still is two to three times — “which any corporation I know of would take in a heartbeat,” she wrote. “So, (it’s) easy to argue that the city/county is better off if the CIFF exists than if it didn’t,” Cirillo continued. “Would the city/county collapse if the CIFF did? No. But all things like this require investment, and these numbers suggest that the CIFF is a good investment.” Even though 95% of festival patrons are from the Buckeye State, a surprising number still book hotels and make a “staycation” of it, according to Patrick Shepherd, associate director of the festival. Leah Knapp has done it. The public relations manager for Erie Insurance and her husband for several years have taken a few days off work and, in a good year, see 20 movies, she said. The University Heights residents tended — before their infant daughter was born — to even stay downtown, and try to eat at locally owned restaurants, Knapp said. Their spending decisions echo what the economic impact study done in 2007 revealed: It found that, on the aggregate, patrons spent the most money at restaurants, then hotels, then other activities while in Cleveland. “Getting the extra business during the slower time helps smooth out the demand for the year,” said Mark Raymond, owner and operator of The Cleveland Hostel, which opened 18 months ago in Ohio City and counted 25 bookings last year by film festival patrons, and 18 as of early March for this year. The hostel has 15 rooms, including 10 that are private. On the other end of the spectrum, the 205-room Ritz-Carlton regularly sells out during the event, accord- ing to Lynn Coletto, director of sales and marketing. Businesses in and around Tower City, such as the Ritz, benefit the most, said Shepherd, but as the festival adds and/or retains screenings at other places, such as the Beachland Ballroom and Capitol Theatre in Cleveland’s Gordon Square district, he said the economic impact theoretically expands. Glazen, a co-founder of the festival and a funder now, says it definitely does. His restaurant, XYZ the Tavern near Capitol Theatre, “definitely is impacted” and staffs up for dinner early and drinks late during the film festival. His Ontario Street Cafe across the street from Tower City also sees business rise roughly 30% thanks to festival-goers, he said. 80% increase in bookings on weekdays when the festival is taking place compared to a regular week, according to Miller. That tends to mean a 50% more profitable month, she estimated. The 75 merchants at Tower City, which includes local, regional and national restaurants and shops, see “nice monthly increases” in their Dollars, cents and more Some can cite hard numbers for the economic impact they enjoy. All the extra Rapid passes sold during the film festival generate probably $130,000 for the Greater Cleveland RTA, spokesman Jerry Masek said. The J. Palen House sees about an sales, said Lisa A. Kreiger, Tower City’s general manager for retail and a film festival board member. “When the film festival is here, there’s just a buzz and an energy in the center,” she said. “The merchants look so forward to the film festival each year. A lot of the guests do spend money at Tower City.” While a Horseshoe Cleveland spokeswoman said it’s difficult to determine the reason people visit the casino, which opened in May 2012, Kreiger said she saw it herself: people with festival lanyards walking the casino’s bright, blinking interior. “It used to be after midnight, there was nothing to do, and so now with the casino being open 24/7, they (festival-goers) can see a movie and then they can go and they can gamble,” she said. Many business owners described, too, the festival’s impact beyond dollars and cents. “It’s one of those cultural events that the ripple effects are seen citywide — both economically and in a way, spiritually,” Ohio City restaurateur McNulty said. “It’s great for the psyche of Cleveland to have this nationally renowned film festival.” Brag. Boast. Be a show-off. Toot your horn to Cleveland’s best business audience in town. Place your ad in Crain’s. March 31 April 7 Focus: Finance Wealth Focus: CIO of the Year List: Money Managers Ad close: March 27 Management List: Patent -Holding Companies in Northeast Ohio Ad close: March 20 April 14 April 21 Focus: Second Stage/Small Focus: Health Care/The Business of Cancer Care List: Largest Acquisitions of 2013 Ad close: April 10 Business List: Commercial Contractors Ad close: April 3 PREMIERING APRIL 6 “This Week in Crain’s” Weekly Webcast For more information on advertising and webcast sponsorships, contact Nicole Mastrangelo at 216-771-5158 or [email protected]. 20140317-NEWS--16-NAT-CCI-CL_-- 16 3/13/2014 12:05 PM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 Festival’s goal is to be ‘better, not bigger’ By SCOTT SUTTELL [email protected] lobby and adjacent walkway. “This is a passionate group of people who love the festival,” Goodman said of the volunteers. “It’s important for us all to be on the same page with customer service. The customer’s always right, and whatever we can do to make it better, we want to do it.” M oviegoers at the Cleveland International Film Festival can see a lot of what the world cinema has to offer — 185 feature films and 168 short subjects, representing 68 countries, over 12 days of fun with the lights off. What they don’t see: All the work that goes into pulling off an event that has seen attendance rise 165% in the past decade and that now boasts an annual budget of $2.5 million. Executive director Marcie Goodman, associate director Patrick Shepherd and five other full-time staffers operate with a simple mantra: “Better, not bigger.” It’s one that they simultaneously manage to achieve and subvert. The festival continues to program better films and provides an experience in which 89% of 2013 festival attendees had been to a previous year’s festival, according to a 2013 survey by Patricia J. Cirillo/Cypress Research Group. At the same time, the event does get bigger each year. Last year, it added a day, and this year, more satellite venues. And it all comes together quickly. It’s a year-round effort with a crush of intense work from January through the end of the festival, which this year runs from March 19-30. Artistic director Bill Guentzler and associate programmer Mallory Martin travel to film festivals in the Unit- In love with the movies ed States and around the world to find material for Cleveland’s festival. But, as Shepherd notes, the “tight windows” of working with film distributors to book the “newest and best” films compresses the work cycle for the staff. “I’m jealous of the organizations that have six- to 12-month lead times,” Shepherd said. The tight-knit CIFF staff “goes from seven to more than 700” employees “almost overnight,” Goodman said, when it adds seasonal staff and volunteers who handle duties such as helping festival attendees get to where they need to be and managing the lines snaking through the Tower City Cinemas Getting better is what CIFF has been doing since 2003, a year when the festival opened a day after the start of the war in Iraq and attendance fell 13% to about 35,000 admissions. Goodman said a combination of cost-cutting, more aggressive fundraising efforts and new programming strategies helped get the festival back on solid ground, and last year, more than 93,000 people attended the event. A fun way to raise money, she said, has been through “Film Feasts,” a series of themed parties and gatherings for film lovers — often in a supporter’s home — to celebrate movies. All proceeds from those events directly benefit the film festival. Shepherd said about 40% of the $2.5 million budget comes from earned income, comprising ticket sales, CIFF memberships (ranging in price from $25 to $950) and filmmakers’ entry fees. The rest of the budget is filled by contributed income, from corporations — the festival’s lead sponsor, once again, is Dollar Bank — as well as foundations, individual donors and government sources. Cuyahoga County’s arts tax, for example, provides about $150,000 to the film festival, Goodman said. The tax money helps to serve an event that draws substantial support from Cuyahoga County residents. According to 2013 attendee data, 25% of the 93,235 attendees were from the city of Cleveland, and 69% were from Cuyahoga County. More than 90% of festival attendees are from Northeast Ohio. And it’s a dedicated group. In the survey measuring the engagement of last year’s festival attendees, 22% said they viewed films for just one day of the festival — which means 78% came for two days or more. Four percent — about 3,700 people — attended every day of the festival. “Cleveland’s a remarkable movie town,” Goodman said. Cleveland — and beyond Shepherd said the city of Cleveland has “assets that few other places have” for a film festival, most notably a venue, in Tower City Cinemas, where “90% of our programming is under one roof in the center city.” Tower City presents one big challenge for CIFF — parking is always in short supply during festival days. However, a partnership with the Greater Cleveland Regional Transit Authority helps mitigate those problems. There’s a full page of RTA information in the CIFF program guide, and RTA fare cards can be bought on the festival’s website. CIFF draws its content from all over the world, so it’s only appropriate that the festival itself branch out a bit with screenings of films outside Tower City. Many of the Cleveland Cinemas theaters — the Cedar Lee in Cleveland Heights, the Capitol on the West Side and the Apollo in Oberlin, for instance — will host CIFF screenings, as will the Beachland Ballroom in the Waterloo District on Cleveland’s East Side and the Hanna Theatre at PlayhouseSquare. One of CIFF’s most ambitious programming efforts outside Tower City takes place in Akron. On Thursday, March 27, CIFF will present its second annual Day and Knight in Akron, a full day of programming that includes eight screenings taking place at the Akron Art Museum and the AkronSummit County Public Library. That event is presented with the lead support from the John S. and James L. Knight Foundation, with additional support from the Akron Community Foundation and the GAR Foundation. Dennis Scholl, vice president/arts for the Knight Foundation, said the Akron event last year was a big hit. “If you didn’t buy early, you couldn’t get a seat to any of those screenings,” Scholl said, noting that he stood in the back of the theater to watch some films. 20140317-NEWS--17-NAT-CCI-CL_-- 3/13/2014 12:10 PM Page 1 MARCH 17 - 23, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 17 Tech upgrades, new sites for 2014 By SCOTT SUTTELL [email protected] MCKINLEY WILEY Phyllis Harris is executive director of the LGBT Community Center of Greater Cleveland. Community partners offer extra boost to programming The Cleveland International Film Festival’s community partnership program allows local organizations to support films that address topics related to their missions. For instance, at this month’s festival, the LGBT Community Center of Greater Cleveland is supporting “The New Black,” a documentary about marriage equality and the African-American community. Phyllis Harris, the LGBT organization’s executive director, said the group traditionally supports films from CIFF’s “10% Cinema” sidebar, featuring work of particular interest to the gay, lesbian, bisexual and transgender community. The organization is using social media and its database or more than 5,000 email addresses to spread the word about “The New Black,” which she said offers a strong message about marriage equality “and that fact that these are basic rights, not special rights.” She’ll have a chance to speak before the film, so the program gives the organization a chance to reach out to all audience members — those already affiliated with the group and those with no ties. “It’s a great opportunity to expose people to ideas,” Harris said. The program carries similar benefits for the Cleveland chapter of The Links, a volunteer service organization focused on enriching and sustaining the culture of African-Americans. That organization is a community sponsor in support of “Alice Walker: Beauty in Truth,” about the Pulitzer Prize-winning activist-author of “The Color Purple.” Jennifer Coleman, a member of The Links’ Cleveland chapter and its past president, said she has been attending the CIFF for more than 20 years and always finds “wonderful, diverse programming.” Movies are both a great setting for discussion of meaty topics and for casual conversation among friends. Last year, Coleman said, the organization supported a documentary about Anita Hill, who came to Cleveland and ultimately took part in a small reception after the film at the Renaissance Hotel. “That was a pretty memorable discussion,” she said. — Scott Suttell Marcie Goodman knows the time is coming when the Cleveland International Film Festival, which has seen attendance rise 165%, to 93,235 in 2013 from 35,173 in 2003, no longer keeps drawing ever-larger crowds. And she’s fine with that. “Growth is expensive,” says Goodman, the film festival’s executive director. “We love seeing more people come to (the festival) every year. But we know that it’s not always going to keep climbing, and that’s OK. That’s not the only measure of a successful event.” Indeed, Goodman says, “If everyone who comes (to the film festival) has a great experience, then we were successful.” She and the fulltime film festival staff, including associate director Patrick Shepherd, have been working 90-hour weeks since Jan. 2 to fine-tune that experience for visitors this year and beyond. “We already have a list of what we can do better in 2015,” Shepherd says. For 2014, though, a big change already is in place that should enhance the experience of filmgoers — and bolster the film festival’s bottom line going forward. The festival has converted nine theaters at Tower City Cinemas to digital projection, an undertaking made possible by a $500,000 loan from the George Gund Foundation. The project also includes new sound systems and screens, further optimizing the viewing experience. CIFF owns the equipment, which is housed at Tower City Cinemas on a year-round basis. Tower City Cin- ‘Augmented reality’ adds twist to traditional film guide A less-grandiose technological upgrade this year, but one that’s fun and a little whimsical for the smart phone generation, involves an old-fashioned film festival staple: the printed program guide. The guide this year makes use of “augmented reality,” a technology that enables mobile devices to recognize live objects and then activate video or graphics. The Wall Street Journal reported in March that marketers, print publishers and retailers increasingly are using augmented reality to “test new ways to promote their brands on ever-present mobile devices.” For the Cleveland film festival, digitally curious users can download an app called Layar, point their smart phones at the festival proemas pays CIFF a rental fee to use the equipment for the 353 days of the year it’s not used by the festival. Tower City Cinemas, which is run by Cleveland Cinemas, has 11 theaters, 10 of which the film festival uses each year. (One already had been converted.) It’s an expensive undertaking, Goodman said, but it’s a necessary one, as the digital revolution in the film world makes it impossible to program a large film festival such as Cleveland’s without the latest technology. Without the Gund loan, the festival would have had to rent digital equipment, Goodman said. The festival expects to be able to cover the cost of the loan in two festival years. Deena Epstein, senior program gram guide and then watch video and graphics unfurl on top of the objects on screen. (And make sure the sound is up on your phone, too; there’s a fun song that goes with the presentation.) On your phone’s home screen, you can put the Layar app next to the film festival’s own app, which offers news updates on CIFF, descriptions of all films, the full film schedule, a customizable “my schedule” feature, and a daily blog. — Scott Suttell officer at the Gund Foundation, which has been a financial supporter of the film festival since the 1980s, said foundation officials meet periodically with CIFF staff members to discuss ways to strengthen the event. When the prospect of a loan to cover the digital conversion was raised, Epstein said, “It seemed like such a logical fit, both financially and for programming.” But wait, there’s more Out of the realm of technology, the festival aims to improve the viewer experience this year by offering more neighborhood screenings than ever before. Besides reSee NEW, Page 19 WHERE ACADEMIC EXCELLENCE MEETS THE REAL WORLD All of our core classes begin with a real-world business challenge posed directly from Northeast Ohio-based companies, large and small. And unlike other MBAs, our integrated track courses are team taught by expert faculty. We combine several business disciplines into each class to empower you to quickly assess real-world business problems and implement the best solutions. Learn more and apply: go.jcu.edu/mba 20140317-NEWS--18-NAT-CCI-CL_-- 18 3/13/2014 CRAIN’S CLEVELAND BUSINESS 12:18 PM Page 1 WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 PREPARING A SEQUEL As the curtains close on one festival, planning for the next has already begun... 20140317-NEWS--19-NAT-CCI-CL_-- 3/13/2014 12:22 PM Page 1 MARCH 17 - 23, 2014 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM Festival scores rave reviews nationally By JENNIFER KEIRN [email protected] As is the case with most of the cultural assets in Northeast Ohio, too many of us don’t realize what we have right under our noses. The Cleveland International Film Festival is no different — it’s regarded by many outside of our region as one of the strongest film festivals in the country, and it is larger in the sheer number of films screened than even the iconic Sundance Film Festival in Park City, Utah. “(CIFF is) known as a very strong festival,” says Susan Halpern, executive director of the Columbus Film Council and a former filmmaker. “The fact that they’ve built an audience that will see six films a week is hard to do. I am in awe of them.” Halpern hasn’t visited CIFF in a while, but she’s observed its growth over the years into an event that fills a unique niche in the U.S. film festival circuit. Halpern and Steve Felix, executive director of the Akron Film and Pixel Festival, are hard-pressed to even name an event that might be considered competition for the CIFF. Lots of diverse films, enthusiastic audiences and a true indie vibe are what helped CIFF land on IndieWire’s list of the top 50 film festivals in the world, which praised the event’s “hospitality and eager audiences.” These factors also are what Halpern and Felix say places the Cleveland International Film Festival in a category of its own. “I would have a hard time thinking of a comparably-sized city that has a festival that’s so well-attend- ed,” said Felix. “By the numbers, they’re second to none based on how they support a film festival.” Filmmakers welcomed here Director Carlo Guillermo Proto traveled to more than 30 film festivals with his film “El Huaso,” including to CIFF in 2013. Getting a film selected here had been a goal of Proto’s since film school, when his professor spoke highly of it. “Cleveland is very down to earth,” he said. “It’s an incredibly humble and nonpretentious city and that reflects on the festival itself.” That’s the same kind of sentiment Halpern hears from filmmak- New: Free day this year continued from PAGE 17 turning to venues such as the Akron Art Museum and the Capitol Theatre on Cleveland’s West Side, this year’s festival is adding screenings at the Beachland Ballroom on the East Side, the Hanna Theatre downtown and the Valley View Cinemark theater. The latter represents the first time the festival has ventured into a chain cinema. “It’s a big part of our mission to serve a diverse community, and (these screenings) are a great way to reach out to new audiences,” Shepherd said. Another new element of this year’s film festival is something everyone can embrace: free movies. The Cleveland Foundation, as part of its series of gifts to the community in celebration of its centennial, is underwriting a free day at the festival on Monday, March 24. More than 40 different films — half of which will start at 5 p.m. or later — will be shown that day on eight screens at Tower City. Tickets are required to attend screenings that day; those wishing to attend can reserve two tickets per movie for a maximum of four films. Robert E. Eckardt, executive vice president for programs and evaluation at the Cleveland Foundation, said other film festivals across the country have experimented with free days, to great success in terms of building future audiences. “It’s an opportunity to tell your story differently, and to a new group” of attendees, Eckardt said. Like Epstein at the Gund Foundation, Eckardt said the chance to introduce an innovation at the film festival is particularly exciting because of the event’s primacy in the region’s cultural landscape. “There’s an incredible vitality to this event,” he said. Making it a destination Laurie Kirby, president and chief creative officer of the International Film Festival Summit, which describes itself as “the largest international organization representing the film festival industry” and runs an annual conference examining trends in the festival business, said Cleveland’s innovations are encouraging and continue what she called “the great success story” of the festival. Nationwide, she said, film festival best practices are capitalizing on technology. For instance, some are using smart phone apps to improve ticketing practices and the logistics of crowd management. Cleveland’s festival also features more than 200 guest filmmakers who will speak before or after screenings. “It’s all about making a festival a destination and giving people a reason to leave the home theater and see movies and talk with a movieloving crowd,” she said. ers who participate in the Columbus International Film + Video Festival. “Filmmakers say, ‘Everyone is so nice here,’ but that’s what we do. We’re the Midwest,” she said. “Midwest audiences want to talk to the filmmaker. They want to engage. That’s something they may not find in New York or Los Angeles.” Filmmakers spend a lot of money traveling to film festivals, said Halpern, so finding such a hospitable environment at CIFF makes it an appealing place to appear. “The whole pretension of filmmaking and festivals is out the window in Cleveland,” said Proto. “I enjoy that and appreciate that.” Big film festivals like Sundance may draw independent films, but they’re often powered by Hollywood talent and quickly picked up by major studios. “Cleveland is more diverse, more of a true indie film festival,” Felix says. “There’s more opportunity here for filmmakers who are just coming up.” Case in point — a 2011 grant of $150,000 from The Academy of Motion Picture Arts and Sciences allowed CIFF to create the Focus on Filmmakers program to spotlight minority or less visible filmmakers. This year, the grant will be used to emphasize films from the lesbian, gay, bisexual and transgender (LGBT) community. The Local Heroes Competition supports films about Ohio, made in Ohio or by Ohioans, while the Central and Eastern European Film Competition highlights films from those regions. “Cleveland is definitely at the top for a festival to attend as a filmmaker,” said Proto. “They treat filmmakers really well, and I’m looking forward to hopefully coming back.” A regional draw Felix knows plenty of film lovers from the Akron-Canton area who take off a week of work and get a hotel in Cleveland to immerse themselves in the CIFF screenings. It’s not just a fun pastime, he said. It’s a point of regional pride. “When I go, it makes me feel good about Cleveland and Northeast Ohio in general,” Felix said. “It raises the spirits of the city, and I think that lasts all year round. It’s something to look forward to all year.” 19 WHAT THE FILMMAKERS SAY … Past participants talk about what makes CIFF special LISA RUDIN Producer, “Love, Sex and Missed Connections” “I remember walking into the theater the first time our film had been screened at the 2012 Cleveland International Film Festival and wondering what all these people were doing there. Why are they here to see our little movie? The next screening, the line was out the theater, then they added a theater and another date.” RYAN WHITE Director, “Good Ol’ Freda” “I probably traveled to about 25 film festivals with ‘Good Ol’ Freda,’ and I’d have to say the thing that made CIFF really unique were the audiences. The crowds were extremely passionate about not just my film, but all the films I saw. ... I’m pretty sure nobody left the room during the credits. Freda (Kelly, 11-year secretary for The Beatles) still talks about the fest and the people there a year later.” CARLO GUILLERMO PROTO Director, “El Huaso” “I’d always wanted to present at the Cleveland International Film Festival. My professor in film school in Montreal always spoke highly of it. It’s a filmmaker’s festival. They really focus on the filmmakers ... When you are making films, you usually have your head down and there aren’t a lot of resources or people to talk to. Cleveland makes it possible for you to do that.” — As told to Jennifer Keirn 20140317-NEWS--20-NAT-CCI-CL_-- 20 3/14/2014 2:48 PM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 Baldwin Wallace names leader of business admin division By TIMOTHY MAGAW [email protected] Baldwin Wallace University has tapped John P. Lanigan to lead its division of business administration after Linda Bluso said she would vacate the post after less than three years to pursue other opportunities in business and law. At present, Lanigan serves as director of Baldwin Wallace’s Center for Innovation and Growth. Before joining Baldwin Wallace last year, Lanigan retired as an executive vice president and chief marketing officer for BSNF Railway Co., a Berk- ON THE WEB Story from: www.crainscleveland.com shire Hathaway company headquartered in Fort Worth, Texas. His appointment is effective March 31. Lanigan, a graduate of the U.S. Coast Guard Academy, earned his MBA from Baldwin Wallace. Besides his work at BSNF, Lanigan held posts at Schneider National Inc., a large truckload motor carrier. He also served as president and CEO of Logistics.com from 2000 until 2002. The company eventually was sold to Manhattan Associates, a publicly traded logistics software firm. “He brings an impressive background of leadership in military service, large publicly held companies and a technology startup that will serve us well in this important position,” said Baldwin Wallace president Robert Helmer in a statement. Baldwin Wallace did not say where Bluso would be headed, but indicated she would available to assist with the transition. Bluso joined the university in April 2011. Previously, she was partner-incharge for the Cleveland office of law firm Brouse McDowell. “He brings an impressive background of leadership in military service, large publicly held companies and a technology startup that will serve us well in this important position.” – Robert Helmer, president, Baldwin Wallace University, on John P. Lanigan “We are grateful for the leadership Linda Bluso has provided during her time here,” Helmer said in the statement. “In just under three years, she has led efforts to reshape the physical setting for our programs, refine our academic programs in business and to connect the business community and our alumni with our business program. She also has provided helpful insights for strategic planning for the business program and the broader university. We wish her well.” Meanwhile, Baldwin Wallace named Lacey Kogelnik interim director of the Center for Innovation & Growth. Kogelnik has served as the center’s growth practice director since 2011. ■ NORTHEAST OHIO INVESTMENT BANKS LISTED ALPHABETICALLY(1) Company Address Phone/Website Year founded # of local investment bankers BellMark Partners LLC 635 W. Lakeside Ave., Suite 606, Cleveland 44113 (216) 575-1000/www.bellmarkpartners.com 2009 Boenning & Scattergood(2) 3333 Richmond Drive, Suite 345, Beachwood 44122 (216) 378-1430/www.boenninginc.com Headquarters Specialties Chief investment banker(s) Top local executive Title 9 Cleveland Merger advisory services, restructuring, valuations and fairness opinions, strategic alternative reviews Dave Gesmondi Dave Gesmondi managing director 1914 4 Philadelphia Banking, insurance, water and infrastructure, manufacturing, retail and consumer products, health care, public finance Charles Crowley Michael Voinovich Charles Crowley Michael Voinovich managing directors Brown Gibbons Lang & Co. LLC 1111 Superior Ave., Suite 900, Cleveland 44114 (216) 241-2800/www.bglco.com 1989 24 Cleveland Mergers and acquisitions advisory services, debt and equity placements, financial restructurings, valuations, fairness opinions Michael E. Gibbons Michael E. Gibbons senior managing director, principal Bruml Capital Corp. 1801 E. Ninth St., Suite 1620, Cleveland 44114 (216) 771-6660/www.brumlcapital.com 1986 5 Cleveland Merger advisory services, sell-side and buy-side transaction advisory services, raising private capital, valuation and fairness opinions Robert W. Bruml Andrew S. Gelfand James R. Deitzer Robert W. Bruml president Candlewood Partners LLC 526 Superior Ave. East, Suite 1200, Cleveland 44114 (216) 472-6660/www.candlewoodpartners.com 2001 7 Cleveland Capital formation, real estate, intellectual property, advisory services, mergers and acquisitions, restructurings, and ESOPs Glenn Pollack William Vogelgesang Steve Latkovic Steve Latkovic managing director Carleton McKenna & Co. 1801 E. Ninth St., Suite 1425, Cleveland 44114 (216) 523-1962/www.carletonmckenna.com 2001 5 Cleveland M&A advisory (sell-side), capital raising and valuation advisory Paul H. Carleton Christopher J. McKenna Dominic M. Brault Paul H. Carleton, managing partner; Christopher J. McKenna, managing director Chautauqua Consulting 8365 King Memorial Road, Kirtland Hills 44060 (440) 520-5864/www.chtaqua.com 2010 2 Kirtland Hills Manufacturing, distribution, industrial products and service businesses nationwide Richard Sippola Richard Sippola president Cohen Capital Advisors 1350 Euclid Ave., Suite 800, Cleveland 44115 (216) 774-1100/www.cohenca.com 2004 1 Cleveland M&A advisory services - manufacturing, electrical equipment, telecommunications, metals, business services, health care, specialized consulting services James Lisy James Lisy managing director EdgePoint Capital Advisors 3700 Park East Drive, Beachwood 44122 (216) 831-2430/www.edgepoint.com 2000 11 Beachwood Manufacturing, distribution, technology, chemicals, transportation, industrial products, health care Thomas Zucker Dan Weinmann Paul Chameli Thomas Zucker president Emprise Partners 3201 Enterprise Parkway, Suite 200, Cleveland 44122 (216) 292-0003/www.emprisepartners.us 1989 1 Cleveland A merchant-banking firm which provides middle market buy-side representation to corporations and private Mathew J. Hanson equity groups. Over 50 buy-side transactions completed. Evarts Capital LLC 20600 Chagrin Boulevard, Suite 495, Cleveland 44122 (216) 991-1201/www.evartscapital.com 1975 2 Merger and acquisition advisory services, sell-side and Shaker Heights buy-side transaction advisory services, capital placement Todd Peter and financial restructurings Harris Williams & Co. 1900 E. Ninth St., 20th floor, Cleveland 44114 (216) 689-2400/www.harriswilliams.com 1991 6 Richmond, Va. Sell-side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets William P. Watkins advisory services William P. Watkins managing director, head of business development Holmes Hollister & Co. 1111 Superior Ave. E., Suite 1400, Cleveland 44114 (216) 937-2320/NA 2000 3 Cleveland General industrial, transportation, specialty materials, Internet, for-profit education John B. Hollister III Douglas Q. Holmes John B. Hollister III partner KeyBanc Capital Markets 127 Public Square, Cleveland 44114 (216) 689-4119/www.key.com/corporate/capital-markets/ keybanc-deals.jsp 2003 115 Cleveland Consumer, health care, industrial, oil and gas, utilitiespower and renewables, real estate, technology, public sector and diversified industries NA Randy Paine president Laux & Co. 672 W. Liberty St., Medina 44256 (330) 721-0100/www.lauxco.com 1994 NA Medina Boutique investment banking firm providing middlemarket, privately-held companies with comprehensive financial and strategic advisory services William J. Laux William J. Laux president League Park Advisors 1100 Superior Ave. East, Suite 1650, Cleveland 44114 (216) 455-9985/www.leaguepark.com 2010 12 Cleveland Mergers and acquisitions, recapitalizations, capital raising, and outsourced corporate development J.W. Sean Dorsey J.W. Sean Dorsey, founder, CEO Brian E. Powers managing director MelCap Partners LLC 1684 Medina Road, Suite 102, Medina 44256 (330) 239-1990/www.melcap.co 2000 4 Medina Middle-market investment banking firm focusing on M&A advisory, private placement of debt and equity capital and general advisory services Albert D. Melchiorre, Robert T. Pacholewski, Marc A. Fleagle, Kevin W. Bader Albert D. Melchiorre president Merkel & Associates Inc. 29325 Chagrin Blvd., Suite 101, Pepper Pike 44122 (216) 831-1440/www.merkelandassociates.com 1986 4 Pepper Pike Manufacturing, distribution, business services NA Nicholas B. Merkel, president Pete Peterson managing director ParaCap Group LLC 6150 Parkland Blvd., Suite 250, Mayfield Heights 44124 (440) 869-2100/www.paracapgroup.com 2006 5 Cleveland Insurance, real estate, financial institutions, environmental services, energy, industrial Will Areklett Jeff Boyle Jason Wolfe Will Areklett, president Jeff Boyle managing director Red Hawk Associates Ltd. P.O. Box 24905, Cleveland 44124 (216) 245-7879/www.redhawkassociates.com 1998 3 Pepper Pike Mergers and acquisitions, corporate finance, debt restructuring David Brown David Brown managing director Vetus Partners 1300 E. Ninth St., Suite 600, Cleveland 44114 (216) 333-1840/www.vetuspartners.com 2006 NA Cleveland Distribution and logistics, engineered products, automation, controls and electrical products and services, specialty materials Jay K. Greyson Jay K. Greyson managing director, principal Western Reserve Partners LLC 200 Public Square, Suite 3750, Cleveland 44114 (216) 589-0900/www.wesrespartners.com 2004 27 Cleveland Mergers and acquisitions, capital raising, financial opinions and valuations, restructuring and bankruptcy Ralph M. Della Ratta Ralph M. Della Ratta managing partner Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of Jan. 1, 2014. (2) Office opened in January 2013. Mathew J. Hanson managing director G. William Evarts partner RESEARCHED BY Deborah W. Hillyer 20140317-NEWS--21-NAT-CCI-CL_-- 3/14/2014 3:19 PM Page 1 MARCH 17 - 23, 2014 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 21 Order: There is ‘no one formula’ for success in NFL, analyst says continued from PAGE 5 Different roads to winning There were reports of turmoil between Banner and Lombardi, and national media criticism of the Browns reached its highest point during the team’s 25-day search for Chudzinski’s replacement. Scheiner — who joined Haslam, Banner and Lombardi as part of the Browns’ traveling party during a quest that dragged on almost as long as some of the team’s quarterback controversies — said he didn’t sense that big changes in the executive suite were imminent after Mike Pettine was hired as head coach. “I was surprised, but I will say this: Any time you have the type of change we had at the end of this season, it’s not unreasonable to ask, ‘OK, are we properly structured?’” Scheiner said. Haslam’s answer to that question came just 18 days after the owner and Banner — the then-CEO who was viewed by many fans as someone who is every bit as power hungry as he is intelligent — introduced Pettine to the Northeast Ohio media. “Our fans just want us to win,” Scheiner said. “I think they’re savvy enough to know that if there are any obstacles internally to us doing well, then they will probably embrace some change. I think Joe and Mike are both really capable people. I think Joe is incredibly smart — one of the smartest people you’ll meet in the NFL. “But Jimmy also had a vision of how he wanted his company to op- erate, and I think it’s really important to Jimmy that we collaborate really well and we have a defined scope of responsibilities,” Scheiner said. “I think if you look at it now, you’ll see it is clearer and you can see how this will work.” Brandt, who negotiated player contracts and managed the Packers’ salary cap during a nine-year tenure that ended in 2008, said in his experience the two sides of an organization — football and business — most often are allowed to work on their own. But, Brandt said, “there’s no one formula” for success. Last season’s Super Bowl teams — the champion Seattle Seahawks and the runner-up Denver Broncos — have a similar setup to the Browns’ current regime. The Seahawks and Broncos each have a business head (Seahawks president Peter McLoughlin and Broncos president Joe Ellis) and an executive VP and general manager (Seattle’s John Schneider and Denver’s John Elway). The only difference: The Seahawks have a head coach, Pete Carroll, who controls the roster during the season. Schneider, the GM, runs the draft and free agency. “Look, it can be structured both ways,” Scheiner said. “But because our owner likes to be involved — he’s not involved to the level of (Dallas Cowboys owner) Jerry Jones or someone like that — I think it’s easier for him to have three people report to him (Scheiner, Farmer and Pettine) as opposed to one (Banner).” Cowboys connection Scheiner has worked in a front office that is structured almost as uniquely as the setup that was preferred by Banner. Prior to Banner luring him to Cleveland in December 2012, Scheiner spent eight seasons with the Cowboys, the last five as Dallas’ senior VP and general counsel. “America’s Team” has an owner, Jones, who is president and general manager. Jerry Jones’ son, Stephen, is chief operating officer and director of player personnel. Scheiner said he believes Haslam and Jones have two important characteristics in common — they are “dynamic” and “engaged.” “At some level, you could say that there are some roles that are better left to some people,” Scheiner said when asked about Jerry Jones’ doit-all approach. “You could argue that. But it is, in my opinion, very important that your owner is physical and engaged. Where I think Jimmy is really good is he’s very engaged, but he allows people to do their jobs.” Scheiner said Banner was “really helpful” in handling the Browns’ business matters during his abbreviated tenure, “but he was involved in football, too.” Banner was an outlier in a copycat league. He admitted as much in his first interview after his firing, when he told the Philadelphia Inquirer that he doesn’t “fit” in “every sense.” “I’m 5-foot-5. I weigh 130 pounds,” Banner told the newspaper. “The ré- sumé, the presence, the history do not fit what most would define as the right makeup for the job.” In Cleveland, it wasn’t Banner’s physical stature as much as the manner in which he presided over the front office that didn’t sit well with many fans. Of course, the Browns in the past have had traditional organizational structures that didn’t work, either. Scheiner, who is now the clear leader of a business operation that is overseeing a $120 million facelift of FirstEnergy Stadium and working on a redesign of the team’s uniforms, believes this one is different, however. “We’ve hired a lot of good people here,” Scheiner said. “It’s not hard to see Mike Pettine and Ray Farmer and feel really excited about us. I feel great about our future.” ■ 20140317-NEWS--22-NAT-CCI-CL_-- 22 3/14/2014 2:51 PM Page 1 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MARCH 17 - 23, 2014 Rockin’: Lucas says Rocksino can fill void left by The Front Row continued from PAGE 1 Rocksino officials said each show held at the 2,000-seat concert hall nestled inside the newly minted casino since its Dec. 18 opening has sold out. Coming gigs with progressive rock pioneer Todd Rundgren and the Experience Hendrix Project, a tribute act featuring blues pickers Buddy Guy and Jonny Lang and others, also sold out. Plus, few tickets remain for a show in late May with soft rock giants Chicago. The Rocksino’s blazing entrance onto the local music scene comes at a particularly healthy time for the concert industry. Although concert attendance soured on the heels of the recession, ticket sales appear to be on the upswing. Pollstar, a concert industry trade publication, estimates the North American concert business grossed a record $5.1 billion in 2013. In 2000, that number was $1.7 billion. Still, it hasn’t been an easy go for the concert business in the Cleveland market over the last several years, as the region’s stagnant population hasn’t been able to support the number of venues it once could. The Odeon in Cleveland’s Flats, for one, closed in 2006, and the Time Warner Cable Amphitheater on the east bank of the Cuyahoga River shuttered in 2011. Also, The Agora, the venerable concert club on Euclid Avenue on the East Side of the city, is a vestige of its former self. Lucas, however, is determined to buck that trend. “It’s not just about this venue,” Lucas said. “It’s about this whole facility and how to keep it relevant. Our job is to keep it fresh and keep fresh acts coming in.” The full package Lucas said the Rocksino’s Hard Rock Live venue fills a void in the eastern suburbs left by The Front Row, the legendary theater in Highland Heights with a revolving stage that closed in 1993. The Front Row, which hosted acts such as Sammy Davis Jr. and The Jackson 5, merged its operations with PlayhouseSquare to help bolster the theater district’s concert calendar and attendance. With The Front Row situated so deep in the eastern suburbs, it felt in some ways like the “poor stepsister” of Cleveland’s entertainment scene, said Jeannie Emser, who worked as the theater’s marketing director for 19 years. Emser said the theater’s owner, the late Larry Dolin, felt downtown was where everything was going to hap- pen in the future. “PlayhouseSquare had been courting us for some time to move our successful concert and speaker’s business to their facilities to help boost PlayhouseSquare attendance to more than a million annually,” said Emser, now PlayhouseSquare’s marketing and publicity manager. “Our move here accomplished that with flying colors.” PlayhouseSquare says its ticket sales and ability to secure acts so far have been unfazed by the entrance of the Rocksino in the market. “We are undergoing a dramatic makeover to our district,” said Cindi Szymanski, manager of brand communications for PlayhouseSquare. “That will set us apart from all other venues. As far as competition goes, there is already competition in the market” The success of the Rocksino, of course, isn’t squarely in the concert business. Gambling is the heart of the enterprise, though Lucas said the entertainment options are expected to feed that side of the business and vice versa. Besides its 2,200 video slot machines, the Rocksino has a number of dining options, including Bernie Kosar’s steakhouse. The Rocksino also recently announced it would open Club Velvet, a smaller club within the building that will host comedians, magicians and acoustic acts. “It’s not like you’re just going to Jacobs Pavilion or PlayhouseSquare or The Front Row that used to be here,” Lucas said. “We have all these other amenities here.” Cindy Barber, a longtime observer of Northeast Ohio’s concert scene and co-owner of the Beachland Ballroom concert club in Cleveland’s Collinwood neighborhood, said the Rocksino seems to be an appropriate venue for what she called soft-ticket acts that have played casinos for years. The Beachland, on the other hand, tends to host more eclectic acts and up-and-coming artists. However, Barber said the competition for patrons remains fierce. “There are too few people in Cleveland for the amount of choices we have,” Barber said. “We all have to fight for every audience member we get.” A leg up? Lucas said the bevy of entertainment options available beyond gambling at the Rocksino should give it a leg up on its competition, including Horseshoe Casino in downtown Cleveland and Thistle- down Racino in North Randall. That said, those other gambling outfits aren’t turning their backs on live entertainment, though they don’t necessarily have a 2,000-seat concert hall to snag big-ticket acts. The Horseshoe, for instance, introduced live entertainment at its second-floor Vintage 51 bar on Saturdays last summer, which was a “huge success,” according to casino spokeswoman Shannon Mortland. As a result, the Horseshoe added live shows on Thursdays and Fridays last fall. ThistleDown also boasts live entertainment at its Slush Bar five nights a week. Lucas said he believes hosting a diverse offering of shows is what will keep the entertainment side of the Rocksino from going stale. Lucas noted that the Rocksino isn’t interested in just attracting acts such as Huey Lewis and Engelbert Humperdinck that have played casinos for years. As proof, he said the Rocksino recently announced shows featuring liberal comedian Bill Maher and Alabama Shakes, relative newcomers to the roots rock scene, both of which should draw a younger crowd. “We’ve really tried to have a diverse selection of shows, so we’re not tapping the same pocketbook, so to speak,” Lucas said. ■ REAL ESTATE CLASSIFIED Phone: (216) 522-1383 Fax: (216) 694-4264 Contact: Denise Donaldson E-mail: [email protected] AUCTION ABSOLUTE AUCTION Stoneworks Granite & Tile INVENTORY REDUCTION THURSDAY, MARCH 20TH-10AM 5194 Richmond Rd., Bedford Heights, OH Preview Mon. 3/17 thru Wed. 3/19 10AM-3PM HOMEOWNERS, CONTRACTORS, & DECORATORS WELCOME! Over 500 Slabs of Granite Remnants, Travertine, Marble Tile, Décor. Stone, Air Comp., Tools, Hdwr, Wood Kit. Cab’s. Designer Furniture, Glassware, Book Shelves, Decorative Items. Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card COMMERCIAL PROPERTY 277 Martinel Dr., Kent BUSINESS SERVICES FLYNN ENVIRONMENTAL BE EFFICIENT Flex Space Building in Davey Industrial Park totally approx. 8341 Sq. Ft. Presently, vacant ready for immediate occupancy. Attractive 2-story lobby, excellent lab space. $375,000.00. UST REMOVALS • REMEDIATION DUE DILIGENCE INVESTIGATIONS Call Jeff Hunt 330-554-7349 W.W. Reed & Son Realty 330-673-5838 www.wwreed.com (800) 690-9409 THINKING OF SELLING? REAL ESTATE SERVICES Free Market Analysis No Upfront Fees See our listings at www.BidRosen.com 216.990.1831 www.BuddyBartonAuctions.com 330.464.1375 1-877-BID-ROSEN FORT MYERS, FLORIDA REAL ESTATE I can help you find a home or sell a home. For Lease www.empirebusinesses.com Dry $1,000.00 to $1,200.00/hour Speed- 400mph/ceiling- 41,000ft. Seats 6. 3 pilots available. 440-461-2202 Call 614-783-3937 Jeff Hathy, Realtor FOR SALE Jones & Co. Realty 239-322-6970 or [email protected] C. W. JENNINGS INDUSTRIAL EXCHANGE Established children’s indoor entertainment facility, profitable and well managed for sale by Receiver. LAND Global Expansion Consulting Construction • Acquisitions Exporting • Financing Including: • Unique inflatable play structures • Infant/toddler area for kids 3 years and under • Parent lounge, including complimentary WIFI and flat screen TV’s • Concession stand • Located in the greater Cleveland area For further details, contact the Court Appointed Receiver, Paul Downey at 216 896 9490 Follansbee, W.Va. (855) 707-1944 RECEIVERSHIP SALE List your Industrial, commercial, luxury property or Retail Space Here! Crain’s Cleveland Business’ classifieds will help you fill that space. Contact Denise Donaldson at 216.522-1383 Barry L. Stein Co. (412) 281-2700 DON’T FORGET: Crain’s Cleveland Business on-line @ CrainsCleveland.com For all the latest business news...online Also available: Signs & Printing: 330-492-6294 CHEAP FOR SALE - LARGE EXHIBIT DISPLAY BOOTH KITCHEN CABINETS Original cost over $125,000.00 new. $19,500 OBO. Locally Made ProMark Cabinets Call Mr. King for complete details and pictures. (216) 453-3654 330 777-5203 Warehouse Moving Sale FOR SALE - LARGE EXHIBIT DISPLAY BOOTH (330) 777-5203 Highly-automated. Profit $275,000. Ask $850K. Fuller & Associates, Inc. (serving No. Ohio for 33 years) FOR SALE Engine & Gear Oils, Antifreeze PSF, in Totes & 55 Gal. Drums. Also re-con 55 gallon drums, 5 gallon cans, HT pallets, misc. items. Very low prices. Bob. B-to-B Service Business in Stark County Sales > $800,000. Owner-Mgr. earns $230,000. Don Dreisig, Owner 20 acres, flat 500 feet on the Ohio River. Norfolk and Southern Rail service. BUSINESS FOR SALE Original cost over $125,000.00 new. $19,500 OBO. Call Mr. King for complete details and pictures. 330 777-5203 [email protected] Crain’s Executive Recruiter Local company looking for person who is proficient at Quick Books PRO Part time position paid hourly or by the project. Mr. King 330 777-5203 20140317-NEWS--23-NAT-CCI-CL_-- 3/14/2014 1:39 PM Page 1 MARCH 17 - 23, 2014 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM 23 THEINSIDER THEWEEK MARCH 10 – 16 The big story: PolyOne Corp. announced a coming change at the top of the producer of specialty polymers that is based in Avon Lake. PolyOne’s board named Robert M. Patterson, 41, as its president and chief executive officer, effective May 15. Patterson will succeed Stephen D. Newlin, 61, who will retire as president and CEO after more than eight years in the Patterson top job but will remain executive chairman of the PolyOne board. Patterson currently serves as PolyOne’s executive vice president and chief operating officer, Otto-matic: In a deal that will allow the company to exit Brazil, DDR Corp. agreed to sell its 50% ownership interest in its Brazilian joint venture to its largest shareholder, Alexander Otto, and his affiliates for $343.6 million. The Beachwood-based real estate investment trust that specializes in shopping centers said the portfolio of the joint venture, Sonae Sierra Brasil, consists of 10 regional malls totaling 4.6 million square feet. DDR said its original investment in the joint venture in 2006 was $147.6 million, with an additional $52.6 million financed from 2007 through 2009. New frontiers: Frontier Airlines is growing its Cleveland presence again. The discount airline announced six new nonstop destinations from Cleveland Hopkins International Airport, rapidly trying to capture passengers who until now had been flying on United Airlines. The new service will begin June 13 and will take Cleveland passengers to Atlanta; Fort Lauderdale, Fla.; Fort Myers, Fla.; Phoenix; Raleigh-Durham, N.C.; and Tampa, Fla. REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS MetroHealth looks to get insurance enrollment rolling ■ MetroHealth’s effort to get people to enroll in Medicaid or buy insurance on HealthCare.gov is hitting the road. This week, MetroHealth will unveil its “Enrollment on Wheels” — an RV the health system will parade around Cuyahoga County to encourage people to sign up for coverage. In an interview last month, MetroHealth CEO Dr. Akram Boutros hinted at the effort and said it isn’t a market play designed to pump more paying patients into the health system. Instead, it Boutros will benefit all the county’s health care providers. Unlike its experimental CarePlus Medicaid waiver program, patients who enroll won’t be required to go to MetroHealth for care. “The great thing is this will help all providers,” Boutros said. “These patients won’t have to just go to Metro.” — Timothy Magaw Ending distribution: The former headquarters of Barnes Distribution North America officially will close on or near Aug. 1, the owner of the operation said in a letter to the Ohio Department of Job and Family Services. In 2013, the Cleveland-based Barnes business was sold to MSC Industrial Supply Co., a distributor of metalworking and maintenance supplies. MSC last July announced plans to shut the operation at 1301 E. Ninth St. According to the March 3 letter, 97 employees’ jobs will be terminated. The layoffs are expected to take place between May 2 and Aug. 1. This and that: University Hospitals said it will invest $3.8 million into its 226-bed medical center in Geauga County. UH said the investments will support a revamped Orthopaedic Center, which includes a 12-bed unit on the hospital’s first floor. All the patient rooms will be private. … Materion Corp. received a letter from Gamco Asset Management Inc., a vehicle of well-known investor and money manager Mario Gabelli, stating its intention to nominate two director candidates for Materion’s board at the company’s annual meeting of shareholders, which is set for May 7. Software lets students put best foot forward online ■ The Cleveland Clinic continues to be the dominating fundraiser in the health care arena in Northeast Ohio. Last year, the health system, which boasts about $6.5 billion in annual operating revenue, brought in a healthy $173 million — a nearly 17% increase over 2012’s total of $148 ■ “Answer with Webcam” doesn’t let college officials give prospective students a hearty handshake. However, the software should give those officials a sense of how students speak and carry themselves, even if they can’t meet in person, according to a news release from DecisionDesk. The provider of application management software in Lakewood now offers Answer with Webcam through a partnership with LikeLive of Woodland Hills, Calif. Colleges that use the software create questions that WHAT’S NEW BEST OF THE BLOGS Clinic, UH keep raking in the gifts Excerpts from recent blog entries on CrainsCleveland.com. In the money: Kent State University’s trustees signed off on a number of measures, including raising room and board rates and a large performance-based bonus for its departing president, Lester Lefton. Lefton’s bonus — $106,538.92, or 25% of his base salary — will be paid July 1, the day after his retirement. With his retirement, Lefton will not be eligible for a longevity bonus. Lefton joined Kent State in July 2006 and will be replaced by Beverly Warren, the current provost at Virginia Commonwealth University. Trustees also approved an overall 3.9% increase in the standard, undergraduate double-room and board rates for next fall. The university said the increases would help offset the rising costs of maintenance, repairs, utilities and food. million. University Hospitals, the Clinic’s chief rival and the region’s second-largest health system, raised $118 million in 2013. UH is in the midst of a massive fundraising campaign it publicly launched in 2010. The health system had been looking to raise $1 billion but expanded its goal by $500 million in late 2012. The Clinic completed its own major fundraising campaign in 2010 with about $1.41 billion in its coffers. After the campaign, the Clinic’s annual haul declined significantly from its peak of about $180 million in 2008, but it has been climbing since 2010. According to Crain’s research, the Clinic brought in the largest gift among local health systems in 2013. Last March, it received a $10 million gift from an anonymous donor to support its heart and vascular program. — Timothy Magaw Reinventing Cleveland, and America COMPANY: TPC Wire & Cable Corp., Macedonia PRODUCT: Super-Trex Heavy-Duty Flex Crane Cable TPC, a supplier of wire, cable and connectors, has expanded its Super-Trex line of cables designed to work in harsh industrial environments. The company says the Super-Trex HeavyDuty Flex Crane Cable was designed specifically for crane and reeling use. Its heavy-duty, dual-pass jacket “contains a reinforcing aramid braid between the layers providing added strength and improving cable resistance to pulling and torsional forces,” according to TPC. The braid provides greater than 1,920 pounds of tensile load capability, which the company says “helps reduce ‘corkscrewing,’ or the twisting that causes a cable to bend abnormally and fail under tension, as well as premature cable failure common to standard multi-conductor cables.” The internal design is constructed with “finely stranded tinned copper conductors which are assembled with low-friction separators and left-hand conductor lay, and laylengths that are optimized for longer flex life and corrosion resistance,” TPC says. Product manager David Sedivy says the new reeling cable was designed “as a direct response to field failures.” He says it’s suitable for use in harsh industrial environments such as steel mills, wood and paper product manufacturing plants, and shipping/container ports. For information, visit www.tpcwire.com. ■ Josh Linkner, CEO of Dan Gilbert’s Detroit Venture Partners, shared some thoughts about the Midwestern economy and its future in a Forbes.com interview ahead of his appearance later this month at the magazine’s Reinventing America Summit in Chicago. Asked to rate his level of optimism about the U.S. economy on a scale of 1 to 5, Linkner told Forbes.com, “I’m at a 3 and 1/2.” Nonetheless, he says he’s “very optimistic that startups and technology will continue to create jobs and drive the economy, especially in non-traditional markets such as Detroit and Cleveland.” In those markets and elsewhere, he said, tech startups — particularly in the health care IT sector, a strong area for Cleveland — need to be the focus of economic development efforts. “We are on the verge on incredible innovation breakthroughs and this is the place to create wealth and opportunity,” Linkner told the website. He said policymakers — from President Barack Obama all the way down to the local level — and monied interests should “support entrepreneurs in every possible way. Provide capital and support to drive small business growth.” But there is one area of the tech sector that doesn’t excite Linkner. “I think social media is over-hyped,” he said. This beer is the bomb ■ There’s a whiff of 1970s-era Cleveland in a new beer brewed by 3 Stars Brewing Co. of Washington, D.C. candidates answer while they’re recorded by a computer’s camera. “The resulting video is embedded in the student’s online application, serving as a permanent record of his or her language skills, presentation and demeanor,” the release stated. DecisionDesk clients can license the software by itself or as an additional tool within the Lakewood company’s suite of application management products. — Chuck Soder From a hot list in D.C. to a hot job in Cleveland ■ A member of National Journal’s “Hill Hot List” in 2012 is the first executive director of the Group Plan Commission, the nonprofit that will implement the plan to make downtown Cleveland a more inviting place to explore. Jeremy Paris, a Shaker Heights native, returned to Cleveland more than a year ago from Washington, D.C., after serving as chief counsel for nominations and oversight for the Senate Judiciary Committee. There, he earned his place on the National Journal’s list of the top 15 attorneys guiding legislation through Congress. But Paris’ heart was in Cleveland, so he returned in 2012 to work as a special assistant to Cuyahoga County Executive Ed FitzGerald. At the top of Paris’ to-do list is hoping that Gov. John Kasich will include money in the coming state capital budget for a key Group Plan goal — building a pedestrian bridge from the Mall, across railroad tracks and the Shoreway, to the lakefront museums. — Jay Miller The Washington Post reported that 3 Stars on March 7 introduced Danny Greene Double IPA, a collaboration with Tim Adams of Maine’s Oxbow Brewing. It’s named after Danny Greene, the Cleveland mobster turned FBI informant who was killed by a mafia car bomb in 1977. “It’s something we were talking about while brewing with Tim,” said 3 Stars coowner Dave Coleman, a Cleveland native. “He hadn’t heard the story, and was a bit fascinated.” The Post said the beer uses Azacca, Amarillo and Centennial hops. C’mon get happy ■ Cleveland might be a factory of sadness, as comedian Mike Polk Jr. says, but the whole state is pretty much in the dumps. The Gallup-Healthways Well-Being Index since 2008 has looked at 55 measurements of physical and emotional well-being to gauge happiness in all 50 states. There’s a clear pattern for Ohio, which ranked 46th in 2013. In the last five years, the state has ranked no higher than 44th and no lower than 47th. So in short, we’re pretty consistently unhappy. In the latest rankings, Ohio was 48th in “life evaluation,” 44th in “emotional health,” 40th in “work environment,” 42nd in “physical health,” 45th in “healthy behaviors” and 28th in basic access to health care. But at least we’re not West Virginia! That state has ranked 50th in the index for each of the last five years. The five happiest states this year are North Dakota, South Dakota, Nebraska, Minnesota and Montana. 20140317-NEWS--24-NAT-CCI-CL_-- 3/14/2014 3:23 PM Page 1
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