crain's cleveland business

By JOEL [email protected]

If you have a smart phone andenjoy watching Cleveland Cavaliers,Cleveland Browns or Cleveland Indians games at those teams’ respec-tive venues, you’ve encountered theproblem.

Upload a photo to Facebook at aBrowns home game? Tweet aboutthe Indians from Progressive Fieldon Opening Day? Send to Instagram

a photo of the Cavaliers’ new courtat this Tuesday’s home openeragainst Washington?

Good luck!The Cavaliers, though, have a

solution on the way. The team soonwill announce a Wi-Fi buildout atQuicken Loans Arena as part ofwhat team spokesman Tad Carpercalls a larger digital platform up-grade, details of which still are beingironed out.

By CHUCK [email protected]

The Ohio Third FrontierCommission wants to startmaking big grants again.

The next annual budgetfor the Third Frontier pro-gram — an initiative designedto boost Ohio’s economythrough investments in technology— could include $50 million setaside for larger projects designed tohelp the state establish itself as astrong player in various technologysectors, said Norm Chagnon, deputychief of Ohio’s Office of Technology

Investments.The commission’s goal is

to fund more projects likethe Cleveland-based GlobalCardiovascular InnovationCenter, said Dr. Chagnon,who credited the ClevelandClinic-led center with helping launch several healthcare-related startups.

The commission has yet to approve formally its proposed $236million budget for fiscal 2013, whichbegan July 1. However, at thegroup’s monthly meeting last week,it voted to approve the general

$2.00/OCTOBER 29 - NOVEMBER 4, 2012

Entire contents © 2012 by Crain Communications Inc.

Vol. 33, No. 42

07447083781

742 INSIDE

Auto recyclers fight a new bill that would allow more access to auctions ■■ Page 3PLUS: MED MART UPDATE ■■CLINIC AND INDIA ■■ & MORE

NEW

SPAP

ER

Cavs planning large Wi-Fi network rollout at The Q

Third Frontieragain may aim at bigger grants

◆ What’s next on the to-do list?◆ Residents feeling at home

◆ The HealthLine helps◆ Full coverage: PAGES 11-18

www.CrainsCleveland.com/Euclid

For-profit Chancellor U. cuts oft-critical accreditor, eyes anotherBy TIMOTHY [email protected]

Chancellor University in SevenHills voluntarily is severing ties withits longtime accrediting agency —an organization that has beensharply critical of the operations atthe for-profit college formerlyknown as Myers University.

By Oct. 11 of next year, Chancel-lor no longer will be accredited bythe Higher Learning Commissionin Chicago, which twice in the lastthree years has rapped the univer-sity on its knuckles for what the accrediting body characterized asailing finances, faulty leadershipand less-than-stellar academic offerings.

Chancellor president RobertDaugherty, who has maintainedthe university is improving on allfronts, said in an interview lastweek that Chancellor was in “activediscussions with other accreditorsthat are more consistent with themission and values of our university.”However, he wouldn’t disclose thoseaccreditors or describe the ways in

which their approaches would alignmore closely with Chancellor’s mis-sion.

The Higher Learning Commis-sion on two occasions — one as recent as last June — issued “show-cause” orders against Chancellor,which required the university to proveit deserved continued accredita-tion. Without accredited academic

offerings, the university’s studentswouldn’t be eligible for federal financial aid — a critical revenuestream for Chancellor and all for-profitcolleges.

However, the Higher LearningCommission this month lifted itsmost recent show-cause order, thoughneither officials at Chancellor nor

See GRANTS 0

See WI-FI Page 21

See CHANCELLOR Page 8

HOW A NEWEUCLID AVENUE

CHANGED CLEVELAND

SPECIAL REPORT

STEPHEN HERRON PHOTOS

Investments could better create, attract jobs

Chagnon

20121029-NEWS--1-NAT-CCI-CL_-- 10/26/2012 1:31 PM Page 1

OCTOBER 29 - NOVEMBER 4, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

THE WEEK IN QUOTES“That’s all contenttalking about yourbrand that you couldbe missing. In a smallmarket like Cleve-land, that’s very important.”— Nader Ali-Hassan, a socialmedia marketing strategist atCleveland digital marketing firmRosetta. Page One

Booking blues? Not at convention centerEvent commitments jump; medical mart more than 50% leasedBy JAY [email protected]

Nine months from its plannedopening, the under-constructionCleveland Convention Center has44 conventions booked, up from 26four months earlier, and the adjacentmedical mart is more than 50%

leased and filling quickly, CuyahogaCounty Council was told last week.

At a council meeting last Tuesday,Oct. 23, Jim Bennett, senior vicepresident of MMPI Inc., the Chicagofirm hired by Cuyahoga County tooversee construction and operationof the $465 million project on andunder Cleveland’s Mall, was partic-

ularly optimistic about the medicalmart leasing.

“It’s moving much faster than afew months ago,” he told council.“We’ll have no problem filling thebuilding.”

The complex is scheduled to openin July 2013, ahead of schedule andon budget.

At that meeting, Mr. Bennett said of the 95,000square feet of leasablespace in the medical martbuilding, 25 tenants havesigned leases for a total of50,000 square feet. He toldcouncil that “lurking around”are prospective tenants whoare showing interest in leas-ing a total of 125,000 square feet —well in excess of the 45,000 square

feet available.Later, Mr. Bennett told

Crain’s that he expects toannounce two major ten-ants this Wednesday, Oct.31, during the three-dayCleveland Clinic InnovationSummit that starts today,Oct. 29.

Mr. Bennett also said hewas negotiating with one prospect

“Many of our cus-tomers count on us toinnovate for them.We’re constantlygrowing into newmarkets.”— Blaine Davidson, vice president of sales, Chemical Solvents Inc. Page 9

“This has been therise and fall and riseagain of a greatAmerican street.”— Chris Ronayne, president ofthe nonprofit University CircleInc. Page 11

“(Civic leaders)wanted connectivityto the major institu-tions. … What wasmost important tothe community,however, was eco-nomic development.”— Joe Calabrese, general man-ager, Greater Cleveland RegionalTransit Authority. Page 16

METAL SEALFIRES ON ALLCYLINDERSRebound in auto industry, continuedgrowth in guns fuels Mentor company

By DAN [email protected]

Take a comeback from the automotive industry, mix itwith a national obsession withfirearms and throw in a little

Northeast Ohio machining know-howand technology and you get … big growthfor Metal Seal Precision LLC in Mentor.

The company is in the midst of movinginto new digs — a 160,000-square-footbuilding on Corporate Boulevard that it bought for $3.4 million at the end of 2011 — so it can move much of its operations under one roof this year and accommodate its recent rapid growth.The company has a 50,000-square-footoperation on Tyler Boulevard in Mentorand a 70,000-square-foot plant inWilloughby. The Willoughby operationwill remain open.

“Everything from Mentor is cominghere, and some of the stuff in Willoughbyis coming here,” said Metal Seal presi-dent John Habe IV of the new space.

The company owns and operates morethan 300 pieces of equipment, most of it

DAN SHINGLER

Metal Seal Precision LLC president John Habe IV at the company’s new 160,000-square-foot space — which won’t be empty for long.See SEAL Page 9

Automotiverecyclersfear effectof new billSalvagers fight addedaccess to auctionsBy GINGER [email protected]

Auto recyclers in Ohio are tryingto dismantle a legislative effort tochange rules about who can buy carsat salvage auctions.

Senate Bill 273 would allow any-one — including body shops and individual consumers — to bid oncars sold at salvage auctions, aprocess that for now is restricted tobuyers with state-authorized identi-fication cards. Such cards currentlyare issued only to auto recyclers, butthey would be discontinued if thebill passes.

Auto recyclers say passage of thebill would give an unfair advantageto unlicensed bidders, who aren’tsubject to the same state and federalregulations as salvage dealers onmatters such as fencing, liquid disposal and licensing. They alsoworry the increased competitionwould hurt their business and raiseprices on salvage cars.

“We just want a fair playing field,”said Jim McKinney, president of the Ohio Auto and Truck RecyclersAssociation and general manager of Milliron Auto Parts, an auto recyclerin Mansfield.

Insurance companies and autoauction operators see things differ-ently, saying, essentially, that theplaying field only will be level withpassage of SB 273. The bill, spon-sored by state Sen. Keith Faber, R-Celina, passed the state Senate inApril and is set to be voted on by theHouse after the Nov. 6 elections.

“The net effect is (the current system) limits competition,” said PaulNelson, regional manager for CopartInc., a Texas-based online reseller ofused and salvaged vehicles. Mr. Nelson, whose company runs onlinesalvage auctions across the UnitedStates, characterized Ohio as one ofthe most restrictive states when itcomes to salvage auctions.

The restricted competition in thecurrent system means insuranceand auction companies make less

See RECYCLERS Page 20

See CENTER Page 22

Bennett


h how I wish we had a JohnAnderson in this year’s presi-dential race.

I would even enjoy a RossPerot.

Heck, I’d even take a Russell Means.I can imagine what you’re thinking.

Where the devil is this guy going withthis idea? What on earth do acongressman, a billionaire anda Native American activist/ac-tor have in common?

Russell Means, who led theviolent, anti-government uprisingat Wounded Knee, S.D. and later was known for acting aswell, passed away last week. AsI heard the news, I realized Ihad forgotten a couple thingsabout him, namely that he hadlived in Fairview Park for four years andhad run for president as an independent.

John Anderson, a former Illinois con-gressman, ran for president as an inde-pendent in the Jimmy Carter-RonaldReagan race.

Ross Perot founded Electronic DataSystems and sold it to General Motors for

scads of cash, then founded Perot Systems,built it up, and sold it to Dell for billions.He later became a thorn in the side of themainstream candidates in the 1996 pres-idential race.

We know that no independent orthird-party candidate has won the pres-idency. We know that the major media

outlets do not consider theircampaigns as seriously as thosemounted by the Republican andDemocratic parties’ candidates.

But what those independentcandidates did was force the“mainstream” candidates tothe middle. That’s what I wishwe had this year.

I do not believe, and somepolls underscore this, that Mitt Romney is as personally

conservative as the Tea Party faction hasforced him to become in this campaign.Of course, that has made him change positions regularly and opened him tolegitimate criticism.

And I also believe Barack Obama is toosmart to believe that all the ills facing ourcountry will be solved if we can just get

those wealthy Americans to pay more.Having no independent candidate

allows the most extreme (loudest) factionson both sides of the political debate tohave a bigger, more influential role.

Bill Clinton’s success as a two-termpresident was in part due to his ability toattract great support from middle-of-the-road Americans, those smart enoughto vote by issue and by candidate irre-spective of their political party affiliation.

Few people remember George Bush’sleadership on immigration reform andthe AIDS epidemic in Africa, two issuesnot generally associated with the conser-vative wing of the GOP.

That’s what I wish we had in this campaign. Everyone I talk to is fatigued atbest — and nauseated at worst — by thenon-stop barrage of TV commercialstearing at the other candidate. There is a Libertarian in the race but the majornews media give him short shrift because of a lack of money. We need acredible third choice — that would makethe two major-party candidates be morethoughtful about what the middle classreally wants and needs. ■

44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM OCTOBER 29 - NOVEMBER 4, 2012

Fair dealT

he business sense Jack Schron brings toCuyahoga County Council is coming inhandy in figuring out how and when tospend the revenue the county will rake in

from its share of casino taxes.Mr. Schron, the longtime president of tool maker

Jergens Inc. in Cleveland, deserves an atta-boy forpresenting compromise legislation that takes a cautious, equitable approach to the use of the casino tax windfall. It’s a proposal that gives CountyExecutive Ed FitzGerald much of what he wantswhen it comes to putting those dollars to work in atargeted way, yet also affords members of CountyCouncil the opportunity to tap into a chunk of themoney as they see fit.

Mr. FitzGerald for months has pushed a plan todirect the casino taxes toward economic developmentefforts in and around downtown Cleveland. Theidea is to leverage that big pot of cash by applying it to projects and initiatives that strengthen the county’s urban core, rather than see it spent in dribsand drabs throughout the county in ways that don’tproduce a big impact.

Various members of County Council have hadtheir own ideas of how to use the money, which hasbeen estimated at about $10 million a year. They’veadvocated applying the tax revenue to scholarshipsfor county residents and economic developmentprojects countywide.

Mr. Schron’s compromise plan gives each sidehalf a loaf, but it doesn’t stop there. It also wiselycalls for county officials to wait to spend the casinomoney until they can get a handle on how muchbread there is to dole out.

With the amount of tax revenue thrown off by theCleveland and Toledo casinos declining steadily inthe months since they opened last May, it’s hard toknow how much money the county can afford tocommit to economic development. Under the compromise plan, the county would stash its casinocash away until July 2014; at that point, the moneywould be available for the next two years for down-town economic development, as Mr. FitzGerald hasenvisioned.

Starting in July 2016, the money would convert touse on a countywide basis.

County Council members have reserved the rightto spend the casino cash before those dates, but wehope they abide by them. As Mr. Schron knowsfrom his business experience, the more cash reservesthe county can store, the greater the likelihood thatit will be able to make investments of significance ineconomic development.

That’s Mr. FitzGerald’s goal, and it is one to whichall county officials should aspire.

VoteWhether you favor a particular political party

or are as independent in your thinking asthey come, take advantage of your right to

vote. In this particular election cycle, every vote islikely to count, not just for candidates but also forvarious issues on the ballot. So, let your voice be heard.

FROM THE PUBLISHER

BRIANTUCKER

Desperate for a strong third candidate

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

O

TIFFANY GRONNElyriaNo. The only person I reallytalk about the elections with ismy husband and we usuallyagree.

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

THE BIG ISSUE

STEVE GILLBeachwoodNo. I think everybody has theirown personal beliefs as to whythey’re going to vote the waythey are. I don’t think it affectsmy ability to be friends or tohave frank discussions with myrelatives.

DARLENE MCKINLEYClevelandNo, because I don’t talk aboutelections too much at work oramong family.

TIM KALANShaker HeightsNo. Sometimes (there are)some family squabbles, butfor the most part, I try to keepan open mind.

Do your relationships with friends, families or coworkers deteriorate during election season?

20121029-NEWS--4-NAT-CCI-CL_-- 10/26/2012 10:53 AM Page 1

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Crisis situations will happen, so plan accordingly■ It is critical that organizations ofevery size heed the crisis planningadvice presented in the Oct. 15,Page 17 story, “Reputation-damagingevents occur frequently.” In thesedays of 24/7 instant news, whereTwitter and Facebook exponentiallyamplify crisis situations, organiza-tions must be prepared to vigorouslydefend their position in a wide vari-ety of venues, as well as media outlets.

Underscoring immediacy, yourbrand can face a significant reputa-tional challenge in the time it takesto bang out a feverish 140-charactertweet. Example: one foolish knee-jerk post from Kitchen Aid’s Twitteraccount during the first presidentialdebate resulted in negative head-lines screaming across print, web

and social media platforms fromcoast to coast. Kitchen Aid was rightin tweeting an immediate apology.When it comes to social media,company leaders no longer havethe luxury of gathering around atable to discuss strategy. There’ssimply no time.

Often, organizations will dutifullycreate an operational crisis plan,but lack a concomitant crisis com-munication strategy. What shouldyour organization do?

First, create a crisis plan withoutside communications counselwho brings an objective viewpointon your vulnerabilities to the table.

What are the most gut-wrenchingscenarios you might have to addressand how likely are they to occur?The threat of natural disasters, insider trading, medical mistakes,C-level sexual indiscretion and social media faux pas are enough tokeep any CEO awake at night.

Having a crisis communicationplan is an excellent first step, butcan you walk the talk? A plan is nogood gathering dust on a shelf —conducting tabletop drills to testthe plan and put your staff throughthe rigors of real-time crisis simula-tion will improve your chances ofresponding effectively when thereal thing hits. Testing is critical inmaking sure your team is ready.

Third, keep your ear to the rail

with a comprehensive monitoringprogram that closely watches newscontent delivery platforms — print,broadcast, web, mobile and social.Respond to trends by evolving yourstrategy. To be effective, your planmust be a living document.

And finally, have third-party crisiscounsel audit your current plan asit evolves, to make certain there areno chinks in your armor.

When your organization’s repu-tation is on the line, so is your bottom line. Strategic crisis commu-nication planning is your brand’smost effective insurance policy.

Bruce M. HennesManaging partnerHennes Paynter Communications

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Credit unions seek deeper bondsMembership growing,but institutions’ goalsnow include usage of diverse servicesBy MICHELLE [email protected]

Credit unions across Ohio aresnaring more new members, or cus-tomers, than they have for the betterpart of a decade, but mere growth inmembership isn’t all they seek: Anumber of local institutions are in-vesting in new systems and servicesto entice members — new and old —to develop fuller relationships withthem.

From June 30, 2011, to June 30,2012, Ohio credit unions added morethan 28,000 members, bringing totalmembership to 2.71 million, theOhio Credit Union League reportedthis month. That increase is 47%higher than the 19,000 new mem-bers added between June 2010 andJune 2011 and is more than threetimes higher than the 9,000 addedbetween June 2009 and June 2010,according to the league’s data.

As Ohio credit union membership

has increased, so too has the aver-age member relationship, the leaguereported. The metric, which repre-sents the total dollar amount of loanbalances and deposits per member,climbed to $12,293 as of June 30 —the highest it has been since at leastJune 2002 and up 5.9% from $11,603as of June 30, 2011.

“I think that shows that the newmembers that are coming in arealso taking a look at other productsand services the credit unions areoffering, taking a look at creditunions being their overall financialservice provider,” said Patrick Harris,league spokesman.

Increasingly, that’s the goal.“Back in the ’80s and ’90s, the

(boardroom) discussion may havebeen, ‘We added this many mem-bers,’” said Dave Fearing, senior vicepresident for credit union supportfor the Ohio Credit Union League.“Today, there’s a comma and it’salso, ‘Well, how many of these newmembers have checking accountsand loans and are using our services?’”

Nationwide, the rate of creditunion membership growth from thesecond quarter of 2011 to the second quarter this year was thefastest in more than a decade, saidMike Schenk, vice president of economics and statistics for theCredit Union National Associationin Washington, D.C.

“We think a lot of it has to do withBank Transfer Day and follow-onactivities,” Mr. Schenk said, refer-ring to the event last November thaturged bank customers to switch tonot-for-profit credit unions. “Thatsingle event really has snowballed.It’s created a tremendous amountof interest in and awareness of creditunions.”

With growth comes …From the early 2000s through 2008,

credit union membership growth inOhio was pretty flat and well belowthe national average, Mr. Harris said.

Becoming one-stop shops hasenhanced the ability of credit unionsto compete and grow, insiders say.

GenFed Financial Credit Unionin Akron, which grew its member-ship 9% in the last year, has addedmobile banking and remote andmobile deposits over the last coupleyears, said Kim Pallas, vice presidentand chief marketing officer.

Added Richard Todd, GenFedvice president and chief operationsofficer, “As we have more membersand more demand, we have theability to have more staff and moreservices.”

GenFed executives attributemuch of the institution’s growth toits charter change in spring 2011.With the change, the credit unionwent from accepting members onlyfrom specific employers to acceptingmembers from several counties, including Lorain, Summit and Medina.

Also growing is Cleveland-basedCentury Federal Credit Union,which over the last five years has enjoyed a membership gain of nearly13%, though most of that increaseoccurred from 2008 to 2009. Thatgrowth required the institution,with nearly $329 million in assets, tobecome more sophisticated and efficient in operations, said CEOSharon L. Churchill.

To that end, Century Federal acouple years ago bought predictivesoftware that enables it to better understand the effect of rates andproducts on its balance sheet, shesaid.

Focus on depth

A number of this region’s largestcredit unions, though, aren’t postingmembership increases. Many ofthem attribute the lack of gains to theirstrategy to close inactive accountsin favor of quality, not quantity.

“What a lot of credit unions arestarting to do is really aggressivelylook at their product penetration,”the Ohio Credit Union League’s Mr.Fearing said. “It’s not productive tocarry a $5 share (deposit) accountthat doesn’t utilize the services ofthe credit union.”

The Cleveland-based FirefightersCommunity Credit Union opensroughly 250 to 300 memberships a month, but it also closes about thesame number monthly, and some-times more, executives said. Sowhile the credit union’s five-yearmembership growth is 6.4%, itsmembership numbers actually havedropped two consecutive secondquarters.

However, its second-quarter assetshave increased each year since2009, according to data from theOhio Credit Union League.

In October 2011, FirefightersCommunity spent about $100,000on a customer relationship man-agement system to help it studywhat happens before accounts godormant and to target offers to cus-tomers who only have one accountwith the institution.

“It’s one thing to acquire an account — quite another to acquirea full financial relationship,” saidMichelle McGovern, its chief mar-keting and development officer.“Our strategic focus changed fromquantity to quality.”

Second-quarter membership atTaleris Credit Union Inc. in Brook-lyn Heights was down 32% com-pared to second quarter 2008, inpart because it, too, has been purginginactive accounts, said Robin D.Thomas, president and CEO. The needto improve profit margins drivessome of the purge, most of whichwas executed in 2009 and 2010, Mr.Thomas noted.

Viable option Although credit union member-

ship has grown, the slice of the U.S. financial assets pie that creditunions command remains onlyabout 6.5%, the Credit Union National Association’s Mr. Schenksaid. That figure has grown roughlyone percentage point since 1992, henoted.

Credit union observers are confi-dent their sector’s above-averagegrowth in recent years is sustain-able.

“I think more and more peoplewill experience the difference … andword of mouth is a strong motivator,”Mr. Schenk said.

Firefighters’ Ms. McGovern saidshe believes growth will be mostsustainable in the markets wherecredit unions offer products a consumer could find at, say, Bank of America. Those that rely on themomentum of Bank Transfer Daylikely will not enjoy as much sus-tained growth, she predicted.

Still, the Ohio Credit UnionLeague’s Mr. Harris doesn’t antici-pate the bank angst of recent yearswill lift anytime soon, largely because banks are increasing fees,he said. Credit unions also are increasing fees, he conceded, butmore often than not they’re chargingless, he said. ■


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the Higher Learning Commissionwould say why. The commission wasexpected to make its final ruling inFebruary about whether Chancellordeserved to remain accredited.

Still, the latest show-cause wasn’tlifted without leaving some bruises.Because it was handed down on theverge of peak enrollment season,Mr. Daugherty said, Chancellor did-n’t hit its enrollment targets as someprospective students might havebeen turned off by the HigherLearning Commission’s action.

Chancellor projected it would be financially self-sustaining fromits operations by December, but thedinged enrollment numbers forcedadministrators to adjust that fore-

cast to the first quarter of 2013.

Disputing Harkin’s findingsAccording to its website, the

Higher Learning Commission hasbeen Chancellor’s accreditor sincethe late-1970s, when the institutionwas known as Dyke College. Thecollege changed its name to DavidN. Myers College in 1996 and thenMyers University in 2001. The uni-versity was financially hard-pressedbut was bailed out in 2008 by privateinvestors, who then converted theinstitution into a for-profit enterpriseknown as Chancellor University.

Kevin Kinser, an academic whostudies for-profit universities at theUniversity at Albany-State Univer-sities of New York, said Chancellor


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Office 28,300 Sq. Ft.16035 Industrial Parkway continued from PAGE 1

Chancellor: Tough times for for-profits is a much different institution than theone the Higher Learning Commis-sion had overseen for decades.

As such, Mr. Kinser said, it couldmake sense for Chancellor to seekout accreditors more in line with theuniversity’s current priorities. Thereare accrediting bodies, for instance,focused on distance learning or busi-ness programs. The risk is that Chan-cellor still could carry the baggagefrom the times it locked horns withthe Higher Learning Commission.

“They’re coming in still needing toshow cause, so to speak, why a newaccreditor would want to take themon,” Mr. Kinser said.

Chancellor was also one of 30 for-profit institutions highlighted in awide-ranging and unflattering reportissued last July by Sen. Tom Harkin,an Iowa Democrat, on the for-profiteducation sector. The report con-cluded that there were signs Chan-cellor was “experiencing a crisis inmanagement as it continues to oper-ate at a loss and has failed to attractenough students to generate the revenue it needs to remain solvent.”

Mr. Daugherty, however, contendsthe evidence cited in the report, whichtook more than two years to compile,is out of date and not a reflection ofChancellor’s current health. Mr.Daugherty said Sen. Harkin’s com-mittee subpoenaed Chancellor forthe cited information less than amonth after he took the reins of theuniversity in June 2010.

It’s a ‘rebirth’Despite Chancellor’s public hard-

ships in recent years, the universityis in the midst of a “rebirth,” accordingto Michele Yurcich, the university’ssenior director of marketing and development. Chancellor recentlyrebranded itself with a new logo andwebsite that Ms. Yurcich said givesthe school a “modern” feel. Lastyear, it also moved from Cleveland’sMidtown area to an office park inSeven Hills off Rockside Road.

Chancellor also launched several“niche” academic programs, such asits master’s of management degreein social media, which Mr. Daughertyexpects will add steadily to the uni-versity’s enrollment, which at pre-sent hovers around 400 students.

The university in recent monthshas rolled out a handful of partner-ships with employers and communitycolleges — such as Eastern GatewayCommunity College in Steubenvilleand Mountain Empire CommunityCollege in Big Stone Gap, Va. — thatwill allow students to transition toChancellor to complete bachelor’sdegrees. Such arrangements beyondNortheast Ohio are expected to be aboon for the college’s enrollment, as theschool looks to grow in a region wherethe population remains stagnant.

Chancellor’s quest for growth —and thus financial stability — comesas the for-profit education businessis under duress in the wake of gov-ernment investigations, intensifiedpressure from accrediting bodies andan onslaught of negative publicity.

Strayer Inc. and Apollo Group Inc.— two giants of the for-profit educa-tion business — have seen steepearnings declines. Apollo, which operates the University of Phoenix,recently announced plans to shutter115 of its locations across the country,including its locations in Indepen-dence and Westlake.

“They were flying high a few yearsago, but now they’re coming backdown to earth,” the University of Al-bany’s Mr. Kinser said. ■



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machining equipment ranging fromlathes to computer-numericallycontrolled machine tools. It makesa broad range of parts, includinghousings for sensors that go intotrucks and automobiles, parts forfirearms such as the popular AR-15military-style rifle, and couplingsthat are used to install residential gasmeters on new homes. About 60%of its business is automotive, and20% is firearms parts, Mr. Habesaid.

Business has been good since thecompany was formed via the mergerof Willoughby-based Arrow Manu-facturing with Metal Seal and Prod-ucts in 2011. Mr. Habe said the dealwas done with $5 million in state financing that kept the company inMentor. The company is on track to book $30 million in sales thisyear, up 36% from 2011 sales of $22 million, he said.

Employment is growing alongwith sales, he said, and the companycurrently employs 214 people, upfrom 135 about one year ago.

Good aimBoth of Metal Seal’s major

product lines — automotive andfirearms parts — have been growingrapidly, but the firearms parts busi-ness is by far the fastest-growingportion of his business, Mr. Habesaid. The company makes bolt assemblies for rifles made by SturmRuger & Co. and by about 15 othermakers of versions of the AR-15,which is the semi-automatic, civil-ian version of the military’s M-16 rifle.

Metal Seal started making gunparts in 2009, but already this yearits firearms sales are on track to top$6 million, Mr. Habe said. Firearmsenthusiasts and those in the indus-try largely credit concern about guncontrol — which tends to rise whena Democrat is in the White House —with some of the increased demandfor civilian weapons.

Gun sales have spiked since President Barack Obama took officeand the National Rifle Associationwarned its members he would bethe “most anti-gun president inAmerican history.” So far, that’sproved to be a Chicken Little warning,but it hasn’t slowed demand forweapons.

But the president is likely not theonly reason for the spike in demand.With shooting sports gaining inpopularity, along with concealedcarry permits for handguns, thenumber of background checks requested by Americans attemptingto buy guns from licensed dealersalready was rising when PresidentObama took office.

During the second term of GeorgeBush’s presidency, the number ofbackground checks climbed 46% to 12.7 million in 2008 from 8.7 million in 2004. They’ve continuedto rise, hitting 16.5 million in 2011,and they’re on track to top thatnumber this year, according to FBIstatistics, as they’re up for everymonth of 2012 so far compared with2011.

In the world of AR rifles — whichby their very design require compo-nents made to tighter tolerancesthan many other weapons — theability to make parts that exactlyand consistently meet manufacturerspecifications is a big advantagewhen it comes to growing sales, Mr.Habe said.

Others are sharing in Mr. Habe’sgrowth in the firearms market. WynnAtterbury, owner of WMD Guns in Stuart, Fla., makes and coatsfirearms parts for gunmakers andother parts makers such as MetalSeal. Mr. Atterbury said his companyhas thrived since he opened it 18months ago, and that he’s beenwatching the gun business grow forlonger than that.

“I’ve been in the industry since2003. Especially with modern sporting rifles, there’s been a veryrapid growth phase since then. ...We’re seeing a strong resurgence ofhandguns and sporting rifles,” Mr.Atterbury said.

So far, 2012 is no exception, hesaid.

“Ruger has already surpassed amillion guns for the year in sales.The market’s been very strong,” Mr.Atterbury said.

Newer is betterMr. Habe said he’s also benefiting

from investing about $4 million innew machines this year, most of it precision CNC machining equip-ment.

“The other guys have older ma-chines, so they can charge a lowerhourly rate,” Mr. Habe said. “But wecan hold tighter tolerances than ourcompetition because we have newertechnology.”

Meanwhile, Metal Seal’s automo-tive business has come back strongfrom the industry’s 2009 crash thanksin part to rising automaker volumes.But the company also has bene-fited from updated vehicle designs,with newer vehicles requiring moresensors that use Metal Seal hous-ings.

As pollution control and mileagestandards become more stringent,Mr. Habe expects to see even moregrowth from the automotive sector.

“They’re putting more and moresensors on automobiles, and that’sgood for us,” he said. ■

continued from PAGE 3

Seal: Firearms supplieshelp boost bottom line

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Chemical Solvents sees something specialDespite cost, regulations, CLE outfit tackles blends Its customers include Sherwin-

Williams Co. and The Blaster Corp.and its competitors are Univar Inc.and Nexeo Solutions Holdings LLC.

Part of Chemical Solvents’ growthin its blended chemical business hascome from its willingness to performresearch and development for itscustomers, which often leads thecompany into new markets.

“Many of our customers count onus to innovate for them,” Mr. Davidsonsaid. “We’re constantly growing intonew markets.”

Cleveland-based paintmaker Sher-win-Williams Co. worked with Chem-ical Solvents’ R&D team to create anew lower VOC (volatile organiccompounds) commercial blendingformula. The formula, marketed asSprayon, is used as a cleaner for circuitboards and relay switches, and ismade at Sherwin-Williams’ DiversifiedBrands plant in Bedford Heights.

“CSI’s people and technical exper-tise have been invaluable resources toSherwin-Williams,” said Mike Conway,spokesman for Sherwin-Williams.

Chemical Solvents in Augustmade a $500,000 investment in newequipment, buying a multishaft mixerand more storage tanks to handle increased chemical blend business.The company annually invests $500,000into new equipment. ■

By GINGER [email protected]

Chemical Solvents Inc. is mixingup its sales by focusing on creatingspecialty blend chemicals rather thanits old staple — commodity chemicals.

The Cleveland-based chemicaldistributor is investing more re-sources into creating specialty blends,which in the last two years have represented a growing part of thecompany’s business. Its specialtyblends are custom-made chemicalcompounds used in paint thinning,paint purging and metal degreasing,among other things.

In 2010, specialty blends were only20% of Chemical Solvents’ sales. Today, that percentage has climbedto 40% and will continue to increase,according to Blaine Davidson, vicepresident of sales at Chemical Sol-vents. Blending business sales havegrown 150% in two years.

The switch has allowed the 100-person Chemical Solvents to hire 10people in the last two years and tobe on the lookout for two more employees. And, while Mr. Davidsonrefused to share annual revenue, hedid say the company this year is on

pace to eclipse its record 2011 salesof $70 million.

“We see an increased need formore and more blend and specialtychemicals as customers outsourcebecause of increasing regulations todeal with hazardous chemicals,”Mr. Davidson said.

Increased federal regulations havebeen both a blessing and a curse forChemical Solvents. While the com-pany must adhere to stricter regula-tions on emissions, its customersmust do so as well.

As federal rules make it harder to manufacture blended chemicals,Chemical Solvents is stepping in totake on that business, despite theadded headache.

“It just increases the cost,” Mr.Davidson said.

Because Chemical Solvents specializes in flammable blendedchemicals, it is better positioned tohandle more stringent regulationsthan its customers that don’t dealwith them on a daily basis, Mr.Davidson said. Chemical Solventshas a dedicated team dealing withregulations to ensure the companyremains compliant and performssampling, Mr. Davidson said.



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Peering over the fiscal cliff

A post electionanalysis:What is the potentialimpact on business?

Grants: Focus on quickness to market direction of the Third Frontier pro-gram, said Dr. Chagnon, whose officeis part of the Ohio Development Services Agency.

The agency, which until recentlywas called the Ohio Department ofDevelopment, allotted $50 millionfor larger Third Frontier investmentsbecause multiple commission mem-bers have voiced support for the ideaof backing bigger projects.

“They were for (making) a large,game-changing investment,” he said.

The smallest grant the commissionlikely would make under its newTechnology Commercialization Cen-ters program would be around $10million, though the commission alsocould decide to give all $50 million toone project — if the right one comesalong, Dr. Chagnon said.

The Wright stuffThe program would bear a resem-

blance to the Wright Centers of Innovation Program. Through theWright Centers program, the ThirdFrontier Commission in its earlyyears awarded grants ranging from$11 million to $28 million to 13groups of collaborators. The groups— which consisted of colleges, busi-nesses, hospitals and other research

continued from PAGE 1 institutions — submitted plans statinghow they would work together tocommercialize new technologies.

The commission also made one$60 million grant in 2006, to theGlobal Cardiovascular InnovationCenter, which it labeled a “WrightMega-Center of Innovation.” Today,the cardiovascular center’s 50,000-square-foot headquarters, locatedon Cedar Avenue across from theCleveland Clinic, houses severalyoung companies commercializingbiomedical technologies.

The cardiovascular center claimsto have created, attracted or capital-ized 40 companies and supportedthe creation of 500 jobs in Ohio, according to a recent report it pro-vided to the state. That project willserve as a model for the TechnologyCommercialization Centers program,Dr. Chagnon said.

“What appealed to us is howmany startup companies were created out of the GCIC,” he said.

However, the new program woulddiffer from the Wright Centers pro-gram in a few key ways.

For one, the new initiative, if approved, would focus on developingtechnologies that could be turnedinto products fairly quickly, Dr.Chagnon said. Some previous WrightCenter projects focused on oppor-tunities that were “further from themarket,” he said. Thus, according tometrics used by the commission,the Wright Centers program hasn’tcreated as many jobs as some otherThird Frontier programs that focuson near-term opportunities.

Plus, the Wright Centers programfocused on physical infrastructurebecause its grants typically includedstate dollars reserved for capital im-provement projects. The Technolo-gy Commercialization Centers pro-gram wouldn’t have that limitation.

Changes afootThe proposed budget also would

make a few other changes:■ It would set aside $15 million

for companies and other organiza-tions that want to create “a criticalpiece of infrastructure that could be shared,” Dr. Chagnon said. For instance, the commission last weekawarded $6 million to Honda,which will use the money to resur-face a high-speed test track thatcould be used by other auto-makersor even the government. That grantprovided “a perfect example” ofhow another new program — theproposed Technology Asset Grantsprogram — would work, he said.

■ The budget included $1 millionfor marketing, an amount that commissioners are thinking about increasing, Dr. Chagnon said. Thoughthe state of Ohio for years has pro-moted the Third Frontier throughthe media, the commission wants todo more traditional marketing to attract investors, entrepreneurs andcompanies to the state, he said.

■ The budget scrapped two pro-grams that never got off the ground:a $10 million Growth Fund that wouldhave gone toward the creation of investment funds designed to helpmore established tech companiesscale up, and a $1 million Micro LoanFund, which would have targetedsmaller projects.

Demand for the Growth Funddollars dried up because the moneywas to be awarded in conjunctionwith grants from a similar federalprogram; investors have had troubleaccessing the federal money, Dr.Chagnon said. The Micro Loan Fundwas nixed because it wasn’t a bigpriority — and because the ThirdFrontier already has “an awful lot ofprograms on the books,” he said. ■

Auto loan delinquenciesrise slightly at big banksBy JIM HENRYAutomotive News

Delinquencies on auto loans and charge-offs for bad loans arestill quite low, though a trio of thebiggest banks in auto lendingshowed a slight uptick in eitherdelinquencies, charge-offs or bothwhen they released quarterly earningsthis month.

Some analysts had predicteddelinquencies were bound to bottomout soon as auto lenders made moresubprime loans and competitionforced lenders to loosen standards.Still, any upticks in delinquenciesand charge-offs were considerablysmaller than the rise in automotivelending at the three banks: WellsFargo, Chase and Capital One.

From a dealership point of view,slightly higher delinquencies anddefaults are probably a positive sign.Looser standards mean it’s easier toget customers financed. In the longrun, though, higher delinquency ratescould encourage lenders to tightenthe screws on auto loans again.

That time is still a long way off,said Amy Crews Cutts, chief econo-

mist for credit bureau Equifax.“I do not expect higher defaults

over the next two years at least,” otherthan traditional seasonal increases,she said in an email this month.

Wells Fargo said its auto-loanoriginations were $6.3 billion for thequarter, up 20% from a year earlier.Delinquencies of 30 days or moreon indirect auto loans were 1.4% ofthe total, up from 1.3% a year earlier,the bank said. Charge-offs were 0.5%,down from 0.7%.

According to Experian Automo-tive, Wells Fargo was the second-biggest U.S. auto lender in the secondquarter after Ally Financial.

Chase’s auto lending unit, ChaseAuto Finance, reported its auto-loanoriginations were $6.3 billion in thethird quarter, up 7% from a yearearlier. Delinquencies of 30 days or more rose to 1.1% of the total from 1.0% a year earlier. Charge-offs doubled to 0.7%. Chase was theNo. 4 lender overall in the secondquarter, Experian said. ■

Jim Henry is a correspondent forAutomotive News, a sister publica-tion of Crain’s Cleveland Business.


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Development of HealthLine helps kick off revival of avenue that city’s elite once called home

By JAY MILLER and STAN [email protected], [email protected]

In mid-2011, Cleveland HeartLabInc. rebuffed a sale that wouldhave moved the young companyto Massachusetts, instead

deciding it would stay put in North-east Ohio.

The only question was: Where?Having grown from eight employees

to 80 in less than two years, the startup needed to leave its incubatorspace at the Cleveland Clinic. President

and CEO Jake Orville said he firstlooked at a number of suburban locations. Then he was introduced toFred Geis, a partner in the Geis Cos.real estate firm. Its Hemingway Development affiliate was beginningconstruction on the MidTown TechPark at 6700 Euclid Ave.

“It was a perfect match,” Mr.Orville said of the new 128,000-square-foot building that ultimatelyattracted the company to Euclid Avenue.

But before that decision ever

could have happened, there hadbeen decades of conversations andcollaborations that focused on a newtransit line and urban renewal.

Those meetings — 2,000 in all, beginning in the 1980s, according to Joe Calabrese, general manager ofthe Greater Cleveland RegionalTransit Authority — are the back story to Mr. Orville’s 2010 decision.

First, there was a discussion of asubway under Euclid, then a trolleyline. Those options were financially

Despiteprogress,still moreto be doneWork zones continueto replace dead zonesBy STAN BULLARD and JAY [email protected], [email protected]

Despite the millions pouredinto projects rangingfrom the new Museum ofContemporary Art Cleve-

land to the redo of long-neglectedcommercial buildings near PublicSquare as lofts, don’t look for con-struction crews to disappear fromEuclid Avenue any time soon.

Consider the new developmentsof the last few years the opening salvoin efforts to revive the street.

Weighing Euclid’s current condi-tion, Cleveland architect JonathanSandvick said, “There is an enormousamount to be done. There is moreto be done than is done.” His proof:parking lots downtown that giveway to fields of empty land east ofEast 55th Street where buildingsonce stood.

Look in the short term for somemajor projects to open, amongthem the $27 million Courtyard byMarriott on Cornell near Euclid thiswinter and the $50 million TinkhamVeale University Center at CaseWestern Reserve University’s campus in 2014. Look long-term for others, such as Cleveland State University’s new Center for HealthProfessions, a $47 million additionto Euclid at East 22nd Street.

Still other, bigger plans may takeyears to reach fruition, if they do.

In 1994, Euclid from the Inner Beltnear Cleveland State University toPublic Square was dubbed a deadzone. Now, the downtown dead zonehas diminished to a cluster of eight

See NEXT Page 14See RISE Page 17

STEPHEN HERRON/PLAYHOUSESQUARE

ABOVE: Present-day Euclid Avenue, looking east. BELOW: Roughly the same view, from about 1922. For more photos, go to www.crainscleveland.com/EuclidGallery.

A ‘great American street’ rises


1122 CRAIN’S CLEVELAND BUSINESS OCTOBER 29 - NOVEMBER 4, 2012SPECIAL REPORT: CORRIDOR OF CHANGE

Euclid

East 9th

CLEVELAND STATE

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East 55th

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HealthLine, Public SquareStarting at Public Square, the 6.8-mile, 58-

stop HealthLine passes through and con-

nects seven of the city’s districts: down-

town, PlayhouseSquare, Cleveland State,

Midtown, Fairfax, University Circle and

East Cleveland. Considered a bus-rapid

transit, the 4-year-old RTA line is largely

credited with many of the infrastructure improvements that

have helped spark the corridor’s revitalization. Indeed, during

a recent HealthLine tour for a transit contingent visiting from

Albuquerque, N.M., RTA general manager Joe Calabrese ticked

off all the developments taking place. “People are investing in

Euclid Avenue when they had not invested in Euclid Avenue in

years,” Mr. Calabrese said.

Union Club of ClevelandThe Union Club for more than a century

has been the place to be for the city’s

movers and shakers — and for the en-

tirety of that time, the organization has

called Euclid Avenue home. “There’s hard-

ly a figure in Cleveland’s past that wasn’t

a member of the club,” said William H.

Coquillette, today’s club president. The organization’s current

85,000-square-foot home was built in 1903, and it now features

such amenities as overnight guest rooms, meeting spaces, din-

ing areas, a ballroom and a fitness center. With an eye to the

future, the club recently purchased the lot next door, space that

currently is being used for parking. “Euclid Avenue has become

more of a destination,” Mr. Coquillette said. “I now feel very

good about being located here.”

Cowell & Hubbard

Restaurateur Zack Bruell still has patrons

come into his newest eatery reminiscing

about the purchase of an engagement

ring or other piece of jewelry. Once home

to the iconic Cowell & Hubbard jewelers,

the building was “in shambles” when Mr.

Bruell opted to open his fifth Cleveland

restaurant in the theater district space. “I could see what the

bones were,” he said. Of course, some of those old bones were

tougher to handle than others: A safecracker was needed for

the 6-foot-tall, 6,000-pound safe found in the old vault. Mr. Bru-

ell said Euclid Avenue is probably the most important street in

Cleveland. “This is the spine of the city,” he said. “It’s important

that this corridor get back to what it was.”

PlayhouseSquareWith 1 million visitors annually attend-

ing nearly 1,000 performances, Playhouse

Square is the second-largest performing

arts center in the country. That’s a big

turnaround for a group of theaters that

nearly met the wrecking ball. “I’m an opti-

mist,” said Art J. Falco, president and CEO,

who started with PlayhouseSquare in 1985 as finance director.

“I always knew we had the core to become a very dynamic area

… it really took private and public working together.” Today,

PlayhouseSquare, along with its development arm, is helping

to drive much of the change in the surrounding neighborhood,

helping to create office, retail and residential space. In its most

recent project, PlayhouseSquare partnered with Cleveland

State University and the Cleveland Play House for a $32 mil-

lion capital campaign to create three new theaters in the Allen

Theatre complex, as well as a new concourse from the garage.

Mather MansionThe 43-room Mather Mansion on the cam-

pus of Cleveland State University is just as

gorgeous today as it must have been in

1910 when it was built for more than $1

million — reportedly the most expensive

home on Cleveland’s Millionaires Row.

Home to industrialist Samuel Mather (his

wife, Flora, died before construction was completed), the house

features the detailed craftsmanship typical of its time, much of

which is preserved today. Owned by CSU since the 1960s and

empty since 2011, the administration now hopes to see the

structure converted into a boutique hotel with 50 to 60 guest

rooms. The plan had been to have the project completed by

fall 2013; however, that timeline may be pushed back as the

university is in the midst of firming up plans with a potential

developer, said Joe Mosbrook, the school’s director of strategic

communications. “The attention to detail is absolutely impec-

cable throughout the entire place,” he said.

CORRIDOR OF CHANGE

A look at how 10 Euclid Avenue locations — both old and new — are helping to link the corridor’s past to its future.

A lookold anpast to

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CASE WESTERN RESERVE

CLEVELAND CLINIC

East 79th

East 105th

Carnegie

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7 8 9UNIVERSITY HOSPITALS

ON THE WEB: Hear more on video about how these sites are fitting into the future of Euclid Avenue.www.CrainsCleveland.com/EuclidGallery

Agora complexFred Geis, a partner in Streetsboro-based Geis Cos. and Hemingway Development, is working to resur-rect the onetime Agora complex in a joint venture with the nonprofit development organization MidTown Cleveland. A dozen new tenants, and some 50 people, already work in the

structure since Hemingway and MidTown partnered ear-lier this year. The complex started life as the Metropolitan Theatre, an ornate vaudeville house, in 1913. Later, rock ‘n’ roll greats such as the Beatles and the Rolling Stones performed in the 1,500-seat WHK Ballroom or roamed the halls when the building was home to radio stations WHK and WMMS. Today, small suites go for as little as $600 monthly to land early-stage tech ventures and minority-owned enterprises as tenants. And, in deference to its mu-sic heritage, fledgling radio station WLFM 87.7 has moved into the building, and shows still are performed in the concert venue portion of the complex.

Pierre’s Ice CreamSince 1932, Pierre’s Ice Cream has remained within three miles of its original location near East 82nd Street and Euclid. One might even say the latest addition to its campus — a 35,000-square-foot factory that opened in June 2011 — is the cherry

on top, proof of the ice cream maker’s commitment to the corridor. Pierre’s current Euclid Avenue site was chosen as its headquarters home in the 1990s, after long-range plan-ning and an exhaustive search for “the optimum location,” said Shelley Roth, Pierre’s president. A site selection made long before revitalization plans were taking hold, Ms. Roth said the company saw beyond boarded-up buildings to

the location’s long-term benefits, including access to free-ways and a strong infrastructure. And, of course, there was a little bit of faith in the corridor’s potential. “There was a glowing vision of what Euclid Avenue could be,” she said. “It’s been exciting to witness.”

Dunham Tavern Museum

The Dunham Tavern Museum stands as a monument to the past — days when weary stagecoach travelers would stop in for a moment’s rest — yet it’s contributing to the makeup of today’s corridor. As part of a $1.4 mil-lion project, the Dunham Tavern Mu-

seum this year acquired and demolished a deteriorated industrial building adjacent to the museum. The 2.2-acre parcel, part of the original Dunham tract, will be preserved as green space for public use. Bill Ruper, board president, said the creation of the HealthLine helped tremendously in rejuvenating the area around the circa-1824 structure, which at one point was at risk of being torn down for a used car lot. “Back in the 1980s, no one really wanted to be here,” he said. “We had the vision to see that someday the whole area was going to turn around.”

Baker Electric Building

The electric vehicle charging station that sits outside the Baker Electric Building is both functional and sym-bolic of the building’s history. In the early 1900s, it served as a showroom for the Baker Motor Vehicle Car Co.’s electric cars. Today, the space is being

used by a number of technology companies, such as stem cell firm Arteriocyte Inc., and as well as other tenants, in-

cluding the Community of St. Peter. Richard Y. Pace, CEO of Cumberland Development LLC, purchased the Baker Electric Building in 2006, a decision he said was motivated in part by the Euclid Corridor investment. As one who sees potential in locations that allow workers a place to “live, work, play,” Mr. Pace said the current growth on Euclid Avenue fits the model. “That’s what the promise is of the health-tech corridor,” he said.

Museum of Contemporary Art Cleveland

The newest jewel on Euclid Avenue, the Museum of Contemporary Art Cleveland, is using its location as a springboard to its own future. Lo-cated on what executive director Jill Snyder calls “the last best loca-tion” on University Circle, the nearly

34,000-square-foot, four-story building is 44% larger than the museum’s previous rented space. Ms. Snyder said with the move, the museum’s annual budget will go from $1.6 million to $2.6 million, with earned income increasing from 7% to 25% of the budget. Additionally, yearly at-tendance is expected to increase threefold from 20,000 to 65,000, driven largely by pedestrian traffic, and 10 full-time equivalent employees have been added. “I’m so in love with this building,” Ms. Snyder said. “This was a build-ing that was created against all odds.”

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HISTORIC PRESENT DAY RESIDENTIAL

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Developers try to reverse retail declineBy STAN [email protected]

Get ready for some newdrives in the effort to reverse Euclid Avenue’slong, sad retail decline.

Gil Blutrich, president of Toronto-based Skyline International Devel-opment Inc., said his firm is preparingplans to recast the retail section ofthe Hyatt Regency Cleveland at theArcade as a boutique specialtycenter with a culinary focus.

“The idea is to make it a four-season extension of East FourthStreet,” said Mr. Blutrich, referringto Cleveland-based MRN Ltd.’s

revival of East Fourth as a restau-rant and entertainment centerwith upper-floor lofts.

In the case of the Old Arcade,which Skyline bought at a sheriff’sforeclosure sale last December, theupper floors will remain a Hyatt Re-gency, though it will be renovated.

Mr. Blutrich said his firm droppedthe idea of installing apartments inpart of the hotel because hotel occupancy is up, and he expectsmore gains after the opening of themedical mart and convention center.

He also would like to improve thelook of the Arcade’s two retail floors,which have been dogged for years byhigh vacancy. Skyline aims to start

seeking tenants and approvals soonand have the redo done in late 2013.

Retail space across from the Arcade, at Colonial Marketplace,also is amid a rethinking.

Richard Y. Pace, CEO of Cleveland-based Cumberland DevelopmentLLC, recently decorated the ColonialMarketplace’s halls with whiteboards for party-goers to list retailideas during a gathering to learnwhat retail uses downtown dwellerswould support. Mr. Pace just com-pleted a master lease for ColonialMarketplace’s first-floor retail area.

The Colonial Marketplace, whichjoined the Euclid and Colonial arcades when their upper floors became a Courtyard by Marriott hotelin 2001, also has battled vacancy.

Mr. Pace said he plans to employ alesson he picked up years ago as aWarehouse District landlord: Be flexi-ble on rent or terms rather than havehigh-cost, but empty, space.

MRN, which also has Euclidstorefronts such as the Corner Alleybowling alley, recently leased oneof its last vacancies to a Chipotle.

It is the second national foodconcern this year on lower Euclid,following a Potbelly SandwichShop, which moved into a store-front at Norfolk, Va.-based HarborGroup’s 515 Euclid parking garage.

Allen Wiant, vice president ofstrategic investment at Playhouse-Square Real Estate Services, hascompleted an exhaustive inventoryof retail spaces downtown to giveprospects an idea of what retailspaces are available — even if theyare outside the PlayhouseSquarenonprofit development group’sTheater District domain.

“I’d like to see them land on Euclid,” he said. “This collaborationamong property owners is a bigchange from 20 years ago.” ■

Next: Work driven bycounty move, hospitalsbuildings from East 12th to EastNinth streets.

The county’s roleThree of the largest properties

there are in play, though, thanks toCuyahoga County’s plan to shedunused real estate and consolidatedowntown county offices.

That puts back on the marketthe county-owned Ameritrustcomplex, which includes the bankrotunda, a 27-story empty officetower and the building at 1010 Euclid Ave., as well as adjoiningbuildings on Prospect Avenue.

Two proposals filed with thecounty by Landmark Managementof Cleveland, the only developer topublicly discuss its bid, call for a$100 million redo of the tower as a hotel and apartments, and 1010 Euclid to lofts. Across the street,the Huntington Building, 916 EuclidAve., also is in the mix. However,its owner, a company led by Mia-mi-based Optima Management,hopes to see it become a potentialhome for the county’s consolidat-ed office of 200,000 square feet.

What’s next for the Huntington,downtown’s largest office propertyby square footage, depends on thethe county office-space competition.

Chaim Schochet, investment executive at Optima, is coy aboutthe company’s plans.

“You’ve got to assume we are going after the county,” Mr. Scho-chet said. “Beyond that, I can’t sayanything else about the building’sfuture. Otherwise, everything is stillon the table.” Those alternativesmight include a hotel or residentialuse as well as trimmed-down offices.

Also able to accommodate thecounty is the Halle Building, 1201Euclid Ave., which owner Forest CityEnterprises Inc. has studied convert-ing to apartments. The Cleveland-based developer also filed a bid withthe county — for what, it won’t say.

Plans are afoot to restore the other four structures as lofts or hotelswith first-floor retail. A KimptonHotel is bound for the most promi-nent of the group, the SchofieldBuilding on the southwest cornerof East Ninth and Euclid.

If those projects go, said TomYablonsky, vice president of Down-town Cleveland Alliance and exec-utive director of Historic GatewayNeighborhood, they will solidify anew vision for lower Euclid as ahospitality and residential corri-dor.

Meeting demandsThe next major transformation

in the works is at and near the Euclid and East 55th Street railroadunderpass in Midtown.

Although the HealthLine projectupdated the streetscape, the railroadunderpass remains foreboding andmakes it harder to see all of Euclidas one development area.

Jim Haviland, executive directorof MidTown Cleveland, said thenonprofit is “putting our full courtpress” on to change the forlorn siteand iconic bridge.

It is seeking a grant to study con-nectivity and development potentialfor the underpass and pave the wayfor state and federal funds. Plans callfor painting the bridge, lighting upthe underpass and using some spaceas a “food truck plaza.” Rebranding

the underpass already is underway; MidTown calls it “PennSquare” to recall a train stationthat once operated there.

Just west, Fred Geis, a partner inStreetsboro-based Geis Cos. andHemingway Development, isworking to resurrect the onetimeAgora complex in a joint venturewith MidTown. On the eastern sideof the underpass, acres may some-day yield build-to-suit structuresfor growing companies.

Nearby is MidTown Tech Park, asuburban-style flex building Hem-ingway and the family of high-pro-file property owner John Coyneand his son, realty broker TerryCoyne, crafted for an urban site at6700 Euclid.

The building and Midtown werechosen as Geis’ foray into the urbanCleveland market because thehighway access, visibility andempty land create building oppor-tunities. Mr. Geis said his firm’s investments there total $70 million.And, while he looks forward toadding more new or renovatedbuildings, he plans to pace them soother developers can finish andlease their projects.

“There is demand,” Mr. Geis said,“but there is not unlimited demand.”

Thinking bigFarther east, developers hope to

break new ground in more waysthan one with Intesa, a $110 millionoffice, retail and apartment projectin a twin, 10-story tower complex.Proposed by Tony Panzica and PeterRubin, respectively principals ofPanzica Construction of MayfieldVillage and Coral Co. of Cleveland,the developers won a UniversityCircle Inc. competition to pursuethe Circle Drive site.

Intesa might rise just east of Uptown and border a building thatthe Cleveland Institute of Art plansto build next to its just-renovatedFord studios.

Mr. Panzica said talks are underway with several prospective officetenants. Commitments to lease 50%of the planned 131,000 square feet ofoffices are needed to win financing.

Intesa’s first floor will offer retailspace, continuing the retail offer-ings of Uptown.

Expect institutions to continuebig-ticket alterations to Euclid aswell. The Cleveland Clinic Founda-tion, which acquired the ClevelandPlay House building two years ago,will likely use its hallowed theatersas auditoriums. The Play House’sparking lots may yield an education-related building for Clinic employeesand a parking garage.

That’s the word from Bill Peacock,CCF’s chief of operations. Althoughclinical needs and Clinic financeswill drive use and size of newbuildings. Mr. Peacock counts sixtranslucent blocks that representpotential future buildings on Clinicgrounds visible from Euclid. That ishuge; the Clinic now operates adozen buildings on Euclid.

University Hospitals has put finishing touches on a $1 billionbuilding program that, among others, includes Seidman CancerCenter on Euclid. However, StevenStandley, UH chief operating offi-cer, said it may lease office spaceat Intesa.

“We’re just maxed out all thetime here,” Mr. Standley said. ■



OCTOBER 29 - NOVEMBER 4, 2012 CRAIN’S CLEVELAND BUSINESS 15

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For smart phoneusers, scan this QR,or “quick response”code, with any QRcode reader to view photos of someresidential options along Euclid.

ON THE WEB

Residential buildup has Euclid feeling a lot more like homeProperty owners try to keep pace with growing demand for apartmentsBy STAN [email protected]

There is a new hot ticket onCleveland’s Euclid Avenue.

Ari Maron, a partner inthe family-owned realty

developer MRN Ltd., reflects thatin the mid-2000s, acquaintancesphoned him directly in bids toscore scarce seats at shows at theHouse of Blues in MRN’s EastFourth Street Neighborhood.

“Since mid-2010,” Mr. Maronsaid, “they’ve been calling to askme to try and help them get into anapartment.”

With downtown apartment oc-cupancy at an incredible 97% thisJune, a little pull can help. Luckily,MRN has 87 suites going into theRosetta Building, 610 Euclid, thatwill be available next year. Earlierthis month, it also opened another140 at the Uptown mixed-use retailand residential complex on Euclid.

The last few years have spawnedan incredible change in context fordevelopment on Euclid Avenue, be-tween the city’s two largest employ-ment centers — downtown and Uni-versity Circle.

Chief among the drivers of thistransformation is the GreaterCleveland Regional Transit Au-thority’s HealthLine. Along pret-tied-up Euclid, new rentals hit themarket as the baby boom echogeneration, with a taste for urbanlife, sought housing as the attitudetoward home ownership soured.

Chris Sledzik, a resident ofStatler Arms Apartments, 1127 Euclid Ave., commutes to a subur-ban job as an account executive atMarcus Thomas LLC and sums upthe change succinctly.

“There was a whir that became abuzz and is now becoming a roar,”the 27-year-old says of young pro-fessionals flocking downtown. TheTallmadge native notes the rent ismore than a former Akron house;still, there are benefits, such as thedining and entertainment options.

“When I look out the window atthe lake in the morning, I know it’sworth it,” he said.

Euclid wasn’t built in a dayCleveland’s residential revival

was more than just good fortune.“This city has made its own luck,”

said architect Jonathan Sandvick,whose firm specializes in preservingold buildings.

Before the HealthLine opened in2008, the city had spent decadesfostering the downtown residentialpopulation.

Mechanisms for redevelopingcommercial buildings as apartmentswere painstakingly worked out after1992. Developers, accountants,lenders and city officials learnedhow to cobble together federal historic tax credits and multiplemoney sources to finance projects.

That expertise bore fruit on Euclid in anticipation of theHealthLine and in the years since.

Additionally, Tom Yablonsky, avice president of the DowntownCleveland Alliance and executivedirector of the Historic GatewayNeighborhood nonprofit, said Euclid’s status as the city’s historicmain street played a big role inhow things shook out for the newbus/rapid transit line.

Although skyscrapers and tall

buildings line Euclid downtown, aprofusion of two- to four-storybuildings survived from the 19th

century. “It still had the scale and look of

an old commercial street,” Mr.Yablonsky said. “It’s very pedestrian-friendly. Give life to the upperfloors, and the (street-level) floorscome back.”

Ironically, the idea of convertingold Euclid buildings to residentialuse was crafted in a study the cityof Cleveland commissioned in2000 as a way to bolster the officemarket, Mr. Sandvick said.

History in the makingThe next step came in 2006 as all

of lower Euclid became a historicdistrict so buildings could qualifyfor federal historic tax credits because they contributed to thedistrict as a whole. That meantbuildings would not have to qualify individually for credits.

That opened the door for somemajor projects, such as the onetimeTaylor department store to TheResidences at Six Six Eight apart-ments, which had been so alteredin two office makeovers it wouldnot have won historic tax credits.

Planners and officials added anextra incentive. Ohio’s new state historic preservation tax credithelped developers as lending tight-ened up. Thirteen residential projects between Cleveland Stateand Public Square are among 24there that have received such creditssince their 2007 inception, accord-ing to a study by Historic Gatewayand the Historic Warehouse DistrictDevelopment Corporation.

K&D Group, the Willoughby-based owner of more than 9,000apartments in Northeast Ohio, undertook the project at 668 Euclidas the street went through itsbus/rapid rejuvenation. At a costof $65 million, it was one of the lastlarge projects undertaken beforethe financial collapse in 2008.

Now, as lenders start fundingagain, K&D is undertaking one ofthe newest residential projectsnear Euclid, converting offices inthe Hanna Building Annex on East14th Street to 102 apartments.

Doug Price, K&D’s CEO, saidthere is a simple reason his firmcame back for another projectdowntown.

“There’s just no demand forsuites in the suburbs,” Mr. Pricesaid. “However, in downtown youare adding new residents every day.”

All on boardCleveland State and Case

Western Reserve universities alsoembraced goals to reshape the environments on Euclid near theircampuses, which added housingand commercial uses as well ascollege buildings. Additionally,University Circle Inc., the nonprofitdevelopment group that serves thecultural, educational and medicalhub, set a goal of adding 1,000units of housing; it’s now half there.

Where adaptive reuse providedthe mechanism for downtown,University Circle lacked the samestock of old commercial buildings,so construction came to the fore.

Among the results is Uptown,which MRN built on both sides ofEuclid Avenue at Mayfield Road in a deal with UCI and CWRU. The

contemporary architecture alsobreathes new life to Euclid with aclassic concept: first-floor store-fronts underneath apartments.

MRN pursued Uptown withCWRU and UCI because it decidedto follow public transit lines fromdowntown. Mr. Maron said Uptownoffered a walkable neighborhoodwith downtown-like attractions.The residential component of theproject is 80% leased, MRN said.

Among other pioneering projectsnear Euclid at University Circle arethe first 12 units of 59 at FairviewPark-based WXZ DevelopmentInc.’s Hazel 8. WXZ also plans morerentals near its recently sold-outCircle 118 condos at East 118th

Street and Euclid.WXZ is long-established in the

suburbs, but CEO Jim Wymer called

STEPHEN HERRON

The Statler Arms, on Euclid Avenue at East 12th Street, is one of a growing listof residential options.

University Circle “a wonderfulpocket” in the city because of itsstrong demographics.

Another project farther east atUniversity Circle, Circle East, is fully leased after a July opening.Since the project used federalfunds, tenants must meet moder-ate income restrictions, but canrent townhouses that cost$200,000 to build for as little as$960 monthly.

Wes Finch, CEO of Finch Group,

said Circle East was possible because the HealthLine fixed up thestreet’s look. His prior project atUniversity Circle, the renovation ofPark Lane Villa as market-rate apart-ments, catered to University Circle’sown strengths.

“This is an area with great jobconcentration and job creation andlittle housing,” said the Boca Raton,Fla.-based Mr. Finch. “I believeCleveland is one of the best-kept secrets in the country.” ■



WE ARE ROETZEL.

C L E V E L AND

Midwest Real Estate News

Dave Gunning Mark Sarlson Lewis Adkins and Al Salvatore

or visit us at ralaw.com/cleveland


HealthLine serves as catalystEconomic development along Euclid follows debut of hybrid transitBy JAY [email protected]

It’s Aug. 28 and Joe Calabrese isplaying tour guide. As he’sbeen doing several times amonth since the HealthLine

opened in October 2008, the gen-eral manager of the Greater Cleve-land Regional Transit Authorityhas a microphone in his hand.

He’s ticking off the specs of the$850,000 HealthLine vehicle he’sstanding in to a group of seven

Australian transit officials seatedon plush blue seats.

The Aussies, like transit officialsfrom Nashville, Tenn.; Albuquerque,N.M.; and elsewhere, have come totown to see what all the HealthLinefuss is about. Cleveland is one ofseveral stops on the group’s U.S.tour following a transit conventionin Las Vegas.

As Mr. Calabrese describes the63-foot-long, bend-in-the-middlevehicle, he points out that, despiteits rubber wheels, it’s a bit like a

Go to www.CrainsCleveland.com/EuclidGallery for avideo of our ride-along on the Health-Line and other multimedia features.

ON THE WEB

subway car. It has doors left andright — five in all — so passengerscan board on either side, dependingon the station configuration, and itoffers level entry — especially important for wheelchairs — fromelevated platforms.

Bigger than a standard bus, itcarries 100 passengers — 47 seated,53 standing — and is powered by ahybrid diesel-electric motor. Becauseof computer-timed lights, it movesup and down Euclid Avenue fasterthan a bus, shaving 12 minutes offthe 32-minute bus ride from PublicSquare to University Circle.

As Mr. Calabrese signals the operator, the vehicle moves off for atrip up Euclid Avenue.

Earlier, in a training room at RTAheadquarters on West Sixth Streetin Cleveland, Mr. Calabrese briefedthe group on the history of the $200million HealthLine and the thinkingbehind its creation. The line, he said,was from its beginnings in the 1980sseen as more than just a transit line.

“(Civic leaders) wanted connectivi-ty to the major institutions along thecorridor,” he said. “What was mostimportant to the community, howev-er, was economic development.”

A long roadIndeed, developer Fred Geis said

the transit project “gave companies

a focal point for everyone to steertoward.”

Mr. Geis is part of family-ownedGeis Cos. and a principal in Hem-ingway Development Corp. ofStreetsboro, which is developingMidTown Tech Park, a multi-buildingresearch/incubator complex at6700 Euclid.

Estimates of the constructionand development under way orplanned over the next few yearsalong the Euclid Avenue corridortop $6.3 billion, and the new linealso is succeeding in boosting tran-sit ridership along Euclid.

Planners began to think aboutlinking the city’s two major employ-ment centers — downtown and Uni-versity Circle — in the early 1970s.

A 1972 study by the Cleveland/Seven County Transportation/LandUse Study, the predecessor of theNortheast Ohio Areawide Coordi-nating Agency, a regional planningorganization, maps out a “EuclidTransit Corridor” between downtownCleveland and University Circle.Well-known urban planner LawrenceHalprin picked up on the conceptin his 1975 city master plan, the so-called Halprin Study, commissionedby the Cleveland Foundation.

A decade later, the Greater Cleve-land Regional Transit Authority andNOACA in a 1982 study identifiedthe Euclid corridor as the part oftown most in need of transportationimprovements and gave a namethat stuck for a decade — the “DualHub Corridor.”

A different routeA more comprehensive study by

the city planning department in1985 proposed several options, in-cluding a rail line that would includea short subway section that surfacedat the edge of downtown for astreet-car-like run to University Circle.

RTA and the city for several yearssought federal money for a $600 million subway/rail line. But the Federal Transit Administration (FTA)wouldn’t go for it. So planners turnedto a new concept gaining acceptancein Europe and South America — thebus-rapid transit, a rubber-wheeledvehicle that used city streets but operated more like a street car.

The community wanted some-thing more than a prosaic bus line,since the goal was putting youngprofessionals, who would be workingat high-tech or biomedical busi-nesses, in the seats.

“But we wanted something asrail-like as possible,” Mr. Calabresetold the Australians. “Somethingfast, simple, safe and first class.”

In addition to the transit improve-ments, however, community leaders saw the need for the physicalrebuilding of the streets and side-walks. An even higher priority wasthe desire to build something thatwould spur new development ofabandoned properties and the renovation of aging buildings.

The total cost of the plan acceptedby the FTA was $200 million, with at

STEPHEN HERRON

TRACKING HEALTHLINE’SRIDERSHIP

Passenger traffic on RTA’s HealthLinesteadily has increased since its inception in October 2008.

Time period Number

least $50 million going for streetscapeimprovements — everything fromnew pavement and sidewalks to newlighting and even artist-designedtrash cans. The utilities took thehappenstance of torn-up streets toupgrade telephone, fiber-optic, water and sewer lines.

That extensive roadway rebuildingmay have been the only downsideto the project — it tore up sidewalksand sections of pavement some-times for months, hurting retailbusinesses along Euclid and incon-veniencing drivers and pedestrians.

‘As good as we’ve seen’Joe Marinucci, president and CEO,

Downtown Cleveland Alliance, saidthe public’s sometimes negative reaction to construction of theHealthLine and its long-term dis-ruption of Euclid surprised him.

“It really showed us how importantEuclid is to the community,” he said.

The HealthLine name itself is anindicator of the impact the line ishaving. In spring 2008, shortly before what was then being calledthe Silver Line was to open, theCleveland Clinic and UniversityHospitals, the two major healthcare institutions along the line, paidRTA for naming rights.

The two hospitals agreed to pay atotal of $6.25 million over 25 yearsto brand the line.

The international Institute forTransportation & Development Poli-cy last year put the HealthLine at thetop of its list of U.S. bus-rapid transitsystems. The organization, which ad-vocates for environmentally soundtransportation planning worldwide,cheered the use of off-board fare collection, the smart use of dedicat-ed bus lanes, center-road transit stations and platform boarding,which allows wheelchairs to enterand exit without special equipment.

That kind of transit industry andurban planning praise is whatbrought the Australians to Cleveland,and it’s what brings transit officialsto town several times a month.

“Across the board, we’re lookingat a whole variety of systems,” saidMichael Apps, executive director ofAustralia’s Bus Industry Confedera-tion after his tour. “This is as goodas we’ve seen, if not the best.” ■

Oct. 07-Sept. 08 2.60 million*

Oct. 08-Sept. 09 3.76 million




* RIDERSHIP PRE-HEALTHLINE ON THE NO. 6 LINE


For smart phoneusers, scan this QR,or “quick response”code, with any QRcode reader to viewhistoric photos of Euclid Avenue.

out of reach. Finally, a solutionwas found in creating what’sknown as a bus-rapid transit line.

It was the first move in the modern-day transformation ofwhat historically has been Cleve-land’s main street — long agohome to Millionaires Row andonce a downtown destination forthe city’s elite.

“This has been the rise and falland rise again of a great Americanstreet,” said Chris Ronayne, presidentof the nonprofit University Circle Inc.

Return on investmentToday, sleek, 63-foot-long

HealthLine vehicles glide smoothlyalong Euclid Avenue like a rapidtransit or streetcar of old, thoughthey travel on rubber tires.

Based purely on its transit bene-fits, the HealthLine might be worththe $200 million investment fromfederal, state and local governments.The real return, however, is bettermeasured in broader economicterms, in well-paying jobs createdor dollars invested by the privatesector in physical development.

By that measure, the HealthLine,which just started its fifth year ofoperation, is looking like a runawaysuccess. Estimates vary, and continue to grow, but every tally ofthe value of the more than 100 newbuilding or renovation projects under way, or on a clear path togroundbreaking, is approaching, ifnot topping, $6 billion.

Some on that list, especially newbuildings at the Cleveland Clinic andUniversity Hospitals Case MedicalCenter, certainly would have hap-pened without a new Euclid Avenue.

But others — the MidTown TechPark, expansion plans by theCleveland Institute of Art, the

renovation of an old departmentstore into residences at 668 Euclid— were drawn to their locations bythe HealthLine.

“It was a catalyst in the purestsense,” said Hunter Morrison,Cleveland’s planning director from1981 to 2002, the critical planningyears for the HealthLine. “It’s thecombination of the (stylish vehicles),quality infrastructure, the discus-sions that went on (over the years ofplanning), the decision of the city tochange the zoning code and the will-ingness of the major institutions toengage in the planning process.”

As they considered the transitimprovements, planners also pickedup on a number of design principlesbroadly called “The New Urbanism,”a concept that promotes masstransit and believes that bringingactivity as close to the street aspossible invites foot traffic.

New zoning and design guide-lines were implemented, such asbringing buildings right to thesidewalk. The result: There is nochance demolished buildings canbe replaced by car dealerships, fastfood restaurants or parking lots.

It also meant a sprucing up of thestreetscape. Bike lanes were addedand Cleveland Public Art (nowLAND Studio), a nonprofit that ad-vocates for and even commissionsart for streets and building exteriors,was brought into the planning.

Euclid now has 1,500 new treesand benches and even fanciful stain-less steel waste containers — all ofwhich attract foot traffic.

Lighting the fireNo place is the HealthLine

having more impact than in Mid-town, a neighborhood that slowlyhad been struggling against declinefor several decades. In the years

OCTOBER 29 - NOVEMBER 4, 2012 CRAIN’S CLEVELAND BUSINESS 17

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Rise: Midtown sees fruits of Euclid Avenue labor partners without the HealthLine,”he said.

Avenue for changeAt Public Square, development

there, notably a clutch of newrestaurants, including the EastFourth Street restaurant row, owe a debt to the HealthLine, though other improvements, notably theHorseshoe Casino Cleveland, cer-tainly share the credit.

In between, Cleveland State University brought the front door ofits law school down to the sidewalkand built its new College of Educa-tion and Human Services buildingagainst the Euclid Avenue sidewalkjust east of East 24th Street.

Also, as part of its plan to becomea more residential campus, the university put new housing acrossthe street right up to the sidewalk.

Chris Warren, the city of Cleveland’schief of regional development, believes the HealthLine can spurthe growth of Cleveland State Uni-versity and the nondescript neigh-borhood around it, into what hecalls “College Town,” a lively vi-brant mixed-use neighborhood.

“In five years we could see a(new) identity for a state universitythat stretches from Payne Avenueon the north to Carnegie Avenue onthe south,” he said. “If that happensit will feed everything else (in thearea around the university).” ■

since funding for the HealthLine wassecured, old commercial buildingshave been renovated and residentialdevelopment is returning.

“Is it worth it? Yes,” said JamesHaviland, executive director of Mid-Town Cleveland Inc., a developmentnonprofit. “Real estate values havedoubled, and we’ve seen averagelease rates rise from $10 or $11 asquare foot to $12.50 a square foot.

In addition, Midtown is at the cen-ter of a stretch of Euclid, from Cleve-land State University to UniversityCircle, that has been given a shiny,new identity — the “Health-TechCorridor,” for which the city of Cleve-land and Cuyahoga County in 2010pledged a variety of incentives.

Later that year, the state of Ohiojumped in designating the corridoran “Ohio Hub of Opportunity andInnovation,” which brought with itpriority status for state developmentgrants and loans.

Along with the new designation asa center for health care and biomed-ical businesses, the hospitals agreedto encourage their vendors to set upoperations along the corridor.

Similar things were happeningelsewhere along the route.

The hospitals re-oriented theirexpansion plans to conform to theEuclid corridor plan. And in 2007,Case Western Reserve University,with a commitment from downtowndeveloper MRN Ltd., pulled thetrigger on a plan to develop 8½acres at Euclid and Ford Road intoa mixed-use district called Uptownthat would combine housing, retailshops, cafes and restaurants.

The Museum of ContemporaryArt and the Cleveland Institute ofArt jumped in and, according to Mr.Ronayne, by the time Uptown isfinished — with 250 residentialunits and more than 100,000 squarefeet of retail — the intersection willsee $250 million in investment.

“I think prospects are better todayfor that entire area than they havebeen for the last 50 years or so,” saidJohn Wheeler, the CWRU’s seniorvice president for administration. “Ithink you could honestly say theHealthLine sparked a lot of that.

“We would not have had the

ON THE WEB



What if this...

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Nonprofits a driving force behind Euclid redevelopmentOrganizations fix buildings, provide services anddo whatever they can to promote private projectsBy JAY [email protected]

In January, members of the LoConti family surprised com-munity advocates and musicfans alike when they agreed to

make a donation of their four-storyAgora Ballroom and office complexso that Hemingway Development,a division of Geis Cos. of Streets-boro, could redevelop the 99-year-old entertainment industry land-

mark at 5000 Euclid Ave.At the time, Hank LoConti told

Cleveland Magazine that hethought donating the $6 millionproperty could play a role in makingover the Agora’s Euclid and East55th Street neighborhood.

Fred Geis, a partner in Heming-way, said his firm hopes to refur-bish the building and bring in creative businesses — ones thatwould be attracted to a uniqueproperty.

It’s a big win for a section of theEuclid corridor that for decades haslacked focus and seen its buildingstock decline.

But it would not have happenedwithout MidTown Cleveland Inc.,one of a strong cadre of nonprofitorganizations that is helping to sustain and improve the city’sneighborhoods and provide privatedevelopers technical support in operating within an aging city. As anonprofit, MidTown Clevelandcould receive the building donationand turn around and lease it toHemingway Development.

Making a markThe 30-year-old MidTown Cleve-

land is one of several nonprofitsthat have played key roles in the development of the Euclid corridor.Most, like MidTown Cleveland, arecommunity development corpora-tions, or CDCs.

But both the arts-oriented Play-houseSquare and the ClevelandFoundation, long known for its support of the arts and health andsocial services, also have played key roles in shaping the transit corridor.

These organizations, and otherslike them, have given the city a reputation as having one of the best — if not the best — groups ofcommunity development nonprofitsin the country.

“Our observation from a nationalperspective is that Cleveland absolutely has one of the more advanced, effective community development corporation systemsin the country, particularly for a cityof Cleveland’s size,” said Mark McDermott, a Cleveland-based vicepresident of Enterprise CommunityPartners. “We’re looked to by other

cities and other funders who are interested in how to do this rightand have local nonprofits that arereally effective.”

Washington, D.C.-based Enter-prise Community Partners wasfounded by James Rouse, a shop-ping center and housing developer,to help communities and their non-profits develop and finance afford-able housing and other services forinner-city neighborhoods. Througha dozen regional offices across thecountry, it also provides loans andtax credit equity through a for-profitsubsidiary. It recently invested inthe Uptown development at University Circle.

Depending on the neighborhoodand the particular organization’shistory, these nonprofits may workon rehabbing or building newhousing; reducing crime; advocatingfor (or opposing) the building ofnew highways; buying land andholding it for later development; orrunning critical neighborhood services, such as day care centers orarts programs.

They sustain themselves withfoundation funding, membershipdues and federal community devel-opment grants, and they have wonthe trust and support of banks andother lenders when it comes time tomove a project from the planningstage to execution.

Different roles, same missionChris Warren, Cleveland Mayor

Frank Jackson’s chief of regionaldevelopment, said these nonprofitsbring together in their neighbor-hoods an unparalleled set of experi-enced, sophisticated and legitimatestakeholders.

“That’s enormously important tous,” he said. “The professional skillsets held by a number of CDCs inthis area are unique in the country.”

Mr. Warren is himself a productof the Cleveland community devel-opment system. He was the foundingdirector of Tremont West Develop-ment Corp.

Across the country, most CDCsemphasize housing programs of onestripe or another. Along the Euclidcorridor, though, these organizationshave more commercial interests.

In addition to MidTown Cleveland,four other organizations have playedimportant roles in the planning andexecution of development plansalong the Euclid corridor — theDowntown Cleveland Alliance, theHistoric Gateway Neighborhood,PlayhouseSquare and University Cir-cle Inc.

Each plays a different role, depending on the needs of itsstretch of the corridor.

Downtown Cleveland Alliance andthe Historic Gateway Neighborhood,unlike MidTown, can’t afford to buyand hold expensive properties in theheart of the city. Instead, the two re-lated organizations have helped de-velopers by orchestrating the cre-ation of landmark districts, such aslower Euclid. That kind of designa-tion, which requires a sophisticatedapplication and approval by the city’slandmark commission, makes it easi-er for a developer to qualify a build-ing for federal and state historic tax

credits.PlayhouseSquare, in addition to

operating theaters, is a land assem-bler and property owner. After theowner donated the six-story OnePlayhouse Square Building to Play-houseSquare’s foundation, it part-nered with ideastream, the operatorof radio’s WCPN and WVIZ-TV, tocreate the Idea Center, whichopened in 2006 and offers arts edu-cation programs and is home to thepublic broadcasting stations.

Long-range planningBeyond MidTown, which focuses

on the two-square-mile area betweenthe Inner Belt on the west and theCleveland Clinic on the east, is University Circle Inc., the grand-daddy of the CDCs.

It was created by philanthropistsin 1957 to bring some administra-tive order to the educational andarts organizations in a one-square-mile area around University Circle.The plan was for it to operate parkinggarages and shuttle bus service andprovide public safety and landscapingfor the 30-plus institutions withinits bounds.

By 1990, though, it had broadenedits scope — reaching beyond its origi-nal boundaries — and taken on therole of being an economic catalyst forthe broader neighborhood. In 2007,the nonprofit started a fundraisingcampaign, “Bring Back Euclid Avenue,” for new tourist way-findingsigns, street lighting and a visitor cen-ter, knowing that Euclid Avenue soonwould be transformed.

In addition, its ownership ofparking lot land is providing someof the footprint for the Uptown development.

The Cleveland Foundation,though not focused on a particularneighborhood, has played a keyrole in the planning and executionof the Euclid corridor project.

Since 2007, the foundation hastargeted $25.3 million to the corridor,including a $1.6 million grant tohelp construct the new Museum ofContemporary Art in UniversityCircle, a $1.9 million grant to theDowntown Cleveland Alliance tosupport its efforts to remake EuclidAvenue from Public Square to Play-houseSquare and a $4 million loanto help MRN Ltd. develop theUptown retail and residential district in University Circle.

“It was very proactive on ourpart,” said Lillian Kuri, the founda-tion’s program director for archi-tecture, urban design and sustain-able development. “It was verymuch a six- or seven-year strategicfocus.” ■

“Cleveland absolutely has one of the more advanced,effective community development corporation systemsin the country, particularly for a city of Cleveland’ssize.” – Mark McDermott, vice president, Enterprise Community Partners

For smart phoneusers, scan this QR,or “quick response”code, with any QRcode reader to viewa gallery of present-day photos of theEuclid Avenue corridor.

And to view our earlier special report, on West 25th Street and the Market District in Cleveland’s Ohio City neighborhood, visit www.CrainsCleveland.com/W25th.

ON THE WEB



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EDUCATIONJOHN CARROLL UNIVERSITY:Joan Coyne to assistant dean, graduate business programs, BolerSchool of Business.

FINANCELORAIN NATIONAL BANK: LeahGoodrich to assistant vice presidentand branch manager, North Ridgeville.S&T BANK: Stephen Hendricks tosenior vice president, commerciallending and regional manager; JamieTaylor to vice president, commerciallending; Steven Zickefoose to seniorvice president, commercial lending.

FINANCIAL SERVICEAPPLE GROWTH PARTNERS:Jason Bogniard to shareholder principal.DEIMLING FORBES & ASSOCIATESINC.: Thomas Alfonso to senior accountant. LEAGUE PARK ADVISORS: KarimBotros to director.

GOVERNMENTCUYAHOGA COUNTY: GregoryZucca to senior development financeanalyst, Department of Development.

HEALTH CAREBRAVO WELLNESS: Cheryl Tidwellto executive vice president, businessdevelopment. EMERITUS AT CANTON: CarolLynn Capocci to life enrichment director.

INSURANCEMEDICAL MUTUAL: Ray Muellerto executive vice president, chief financial officer.

LEGALDODD, L’HOMMEDIEU & MCGRIEVYLLC: Anthony J. Viola to of counsel. FISHER & PHILLIPS LLP: StefanieBaker to associate.

MANUFACTURINGLINCOLN ELECTRIC CO.: BruceChantry to director of marketing,North America. PSC METALS INC.: Ricardo Iriartto chief financial officer.

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Mark McCue to manager of rich media production, Dynamic DigitalContent.GREEN DOOR MEDIAWORKS:Chad Whaley to media specialist.

NONPROFITBUCKEYE INDUSTRIES: CarmenSiciliano to sales professional.CLEVELAND ANIMAL PROTECTIVELEAGUE: Maribeth Flowers to humane officer. FUND FOR OUR ECONOMIC FUTURE: Colette Taylor to managerof operations; Lisa Fuentes to manager of finance.

REAL ESTATEMARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES:Michael L. Glass to national director,National Manufactured Home Commu-nities Group.

RETAILSIGNET JEWELERS LTD.: JamesGrant to vice president, investor relations; Christina Janice to vicepresident, human resources compli-ance and associate general counsel.

TECHNOLOGYOECONNECTION: Tom Strain tomanager, applications.PREDICTIVE SERVICE: RalphDeLisio to executive vice president.

UTILITYFIRSTENERGY CORP.: Jon Taylorto vice president, assistant controller;Jason Lisowski to assistant con-troller, FirstEnergySolutions/First-Energy Generation; Kelley Menden-hall to vice president, strategy andplanning, FirstEnergy Solutions;Trent Smith to vice president, salesand marketing, FirstEnergy Solutions;Don Moul to vice president, com-modity operations, FirstEnergy Solutions; John Skory to regionalpresident, CEI; Dave Karafa to regional president, Ohio Edison.

BOARDSHELP FOUNDATION INC.: MichaelC. Brink (Tucker Ellis) to president;Julie Ann Sweet-Buntin to pastpresident; Eric R. Chance and TaraNieberding to vice presidents;William T. Beargie Jr. to secretary;JoAnn C. Hirsh to treasurer.

AWARDSCONTENT MARKETING INSTITUTE:Jackie Bebenroth (Muse ContentGroup) received the Content MarketingLeader of the Year Award.

OHIO HOTEL & LODGING ASSOCI-ATION: Antoinette Wimberly (Inter-Continental Suites Hotel) received theSupervisor/Manager of the YearAward, City of Cleveland.

Send information for Going Places [email protected].

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on the salvage cars they sell, Mr. Nelson said.

Roughly 100,000 scrapped cars are sold each year at Ohio salvageauctions to a pool of 1,000 licensedbuyers, according to Mike Toman ofThe Success Group, a Columbus-based group lobbying in favor of SB273.

Over the moonMr. Toman used college football

games as a way to illustrate the logic


HERBERT BUCKMANAND

PAUL Y. SHAPIRO

THE ATTORNEYS AND STAFF OF

MOURN THE PASSING OF THE FIRM’S LONGTIME PARTNERS AND FRIENDS

Two Solontech firmsadd space

Recyclers: If auctions open, prices could risecontinued from PAGE 3 behind the bill.

If Ohio State University could sell seats at its 102,000-seat Ohio Stadium only to 1,000 licensed fans,the university would be at the mercyof those fans in terms of pricing, hesaid. In much the same way, autoauction operators — and the insur-ance agencies that sell cars to thoseoperators — are receiving lowerprices for cars because of the limitedmarket of buyers, Mr. Toman main-tains.

Mr. McKinney said auto pricestypically rise 20% in states that haveopened auto auctions to everyone.

However, those higher prices,while beneficial to auction and insur-ance companies, will mean higheroperating costs for auto recyclers already dealing with lower sales, according to Allan Shaneyfelt, oper-ations manager at Broken WheelAuto Parts & Wrecking Inc. in Cleve-land.

“Bids would go (to) the moon,”Mr. Shaneyfelt said.Opening thepool of buyers to individuals andbody shops raises concerns about

safety for Mr. Shaneyfelt. For a car to be deemed a salvage

vehicle, the cost to repair the cartypically is greater than the value of the car, he said. In letting individ-uals take salvage cars to their back-yards to repair them, there’s a goodchance the repairers would cut cor-ners and sacrifice safety, he said.

“This is how people get hurt,” Mr.Shaneyfelt said. “We’ve seen someshady, shady things.”

However, Copart’s Mr. Nelsonsaid there are enough safeguardsbuilt into the bill to avoid suchproblems.

The legislation requires auctionoperators to register car purchaserswith the Bureau of Motor Vehicles.Existing law already requires buyersof cars from auctions to have vehi-cles inspected by the Ohio StateHighway Patrol before they’re takenon the road.

‘David versus Goliath’The only way for auto recyclers to

deal with the higher prices for carsthat would result from the bill’s

passage would be by absorbingthose costs or cutting staff, the recy-clers’ association Mr. McKinney said.Salvage dealers are limited by whatprices they can charge for used partsby the cost of new auto parts.

“It’s going to cost jobs for our industry,” Mr. McKinney said.

Milliron Auto Parts in the pastyear has had to lay off six people —the first time the company has hadto cut its now 26-person work forcein its 58-year history — because of2011’s mild winter and the weakeningeconomy.

Likewise, Broken Wheel in the last year laid off three people, leavingit with a 10-person staff, Mr.Shaneyfelt said.

If SB 273 goes into effect, Mr.McKinney estimates Milliron wouldneed to cut another 20% of its staffbecause it would be buying fewercars at higher costs.

“This is kind of a David versus Goliath fight,” Mr. McKinney said.“It’s very difficult to fight the insur-ance companies and the auctionhouses. We’re just small guys tryingto make a living.”

Consider the consumerThere are 794 licensed auto recy-

clers in Ohio, according to the OhioAuto and Truck Recyclers Associa-tion. They employ an average of 10to 15 people, Mr. McKinney said.

Sales at Milliron and other autorecyclers across the states are downabout 25% so far this year from 2011,he said.

“Now is not the time for this,” Mr.McKinney said of the bill. “If you doit now, you’re going to put a lot ofthese businesses out.”

The insurance companies disagree.Chuck Crist, Progressive Corp.’s

claims business leader for Ohio,Michigan and West Virginia, said ifinsurance companies are able to receive higher prices for the cars theysell at auctions, consumers in Ohiocould see lower rates on their insur-ance bills.

Added Charlie Conover, Ohioproduct manager for Progressive, inspeaking of the effects of the limitedcompetition at Ohio auctions, “Thisis something being borne on theconsumer.” ■

Allan Shaneyfelt,the operationsmanager at Broken WheelAuto Parts &Wrecking inCleveland, sayshe worries aboutsafety if thosewho face fewerregulations thanregistered buy-ers are allowedto participate inauto auctions.MCKINLEY WILEY

By STAN [email protected]

Call it the Solon shuffle. Through an affiliate, Solon-based

Pressco Technology Inc. paid $1.46million on Oct. 15 for the 26,000-square-foot former Valtronic Tech-nologies Inc. building at 6168Cochran Road in Solon.

Valtronic bought a larger buildingnearby on Fountain Parkway earlierthis year. Pressco also is nearby atleased space in Weston’s BentleyPark, 29200 Aurora Road.

David W. Cochran, Pressco vicepresident of strategic initiatives, saidin an interview last Friday, Oct. 26,that the company will retain its BentleyPark operations. It will use the newlypurchased building for research anddevelopment and to expand its oper-ations. He said the additional buildingalready was outfitted for its electron-ics-oriented work.

Pressco provides high-speed visioninspection systems for the food, bev-erage and container markets.

Peggy Weil Dorfman, the city ofSolon’s economic development man-ager, had predicted the Cochran Roadbuilding would not linger long on themarket after Valtronic announced itsmove in the spring. She estimated a6% vacancy rate at midyear in Solonfrom 7% at the end of 2011.

Solon enjoys a tighter market thanthe region generally, which has a 9%industrial vacancy rate, reports real-ty data firm CoStar. “It’s just what welove to see — companies in Solon ex-panding in Solon,” she said. ■



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Volume 33, Number 42 Crain’s Cleveland Busi-ness (ISSN 0197-2375) is published weekly, exceptfor combined issues on the third week of May andfourth week of May, the fourth week of June and firstweek of July, the third week of December and fourthweek of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2012by Crain Communications Inc. Periodicals postagepaid at Cleveland, Ohio, and at additional mailing of-fices. Price per copy: $2.00. POSTMASTER: Sendaddress changes to Crain’s Cleveland Business,Circulation Department, 1155 Gratiot Avenue, Detroit,Michigan 48207-2912. 1-877-824-9373.

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Wi-Fi: Offering high-density access no small, inexpensive task“This process has moved in stages,

which has been unavoidable due tothe complexity and size of the project,”Mr. Carper said. “More than likely,we will have a ‘1.0 version’ and thenwork toward a more comprehensive‘2.0’ version after that.”

The complexity also results in abig price tag, as many previous Wi-Fiprojects have ventured into the low- to high-seven-figure range. The Orlando Magic, for instance, paid $2million for Wi-Fi at their Amway Arena before the 2011-12 season, andpaid another $400,000 for upgradesthis offseason after fans experiencedsome lag time.

Some NFL teams have spent evenmore. Before this season, the NFLlaunched a pilot Wi-Fi program atfive stadiums: Lucas Oil Stadium inIndianapolis; MetLife Stadium inEast Rutherford, N.J.; the New OrleansSaints’ Mercedes-Benz Superdome;Gillette Stadium in Foxboro, Mass.;and the Panthers’ Bank of AmericaStadium in Charlotte.

The installation at the Superdomeoriginally included 600 access pointsand cost $8 million, according topublished reports; an upgrade willbring that number to about 1,000.Andover, Mass.-based EnterasysNetworks, which handled the Patriots’installation, said their project was amultimillion-dollar deal.

The NFL originally planned to extendthe Wi-Fi program to all teams bynext season, but instead is monitoringthe success or lack thereof of thosefive installations, all of which all havebeen different in scope and used dif-ferent telecommunications partners.

No easy processIn some instances, the Wi-Fi is run

through data connections alreadypresent at a venue, only expanded bya team’s telecommunications partner.That partner then studies seatingconfigurations to best place hundredsof access points throughout a buildingor stadium. Generally, an accesspoint would serve about 100 users,said Chuck Girt of Cleveland-basedOneCommunity, a nonprofit that pro-vides large-scale broadband access.

Of course, not all 20,562 fans atQuicken Loans Arena on Tuesdaynight will be looking to access the Internet all at once. But teams cantailor their networks to offer bettercapabilities in locker rooms, pressboxes or premium seating areas,such as the 96 suites at Quicken LoansArena where more sophisticated devices and applications, such asiPads for ordering food and drinks,are in use.

Mr. Girt said a large-scale projectlike at The Q would need to be at leasta 100-megabit connection, while atypical residential connection is onemegabit. Some of OneCommunity’sultra-high-speed projects approach10 gigabits, with faster speeds on thehorizon.

Enterasys — which currently istalking with other NFL teams not

continued from PAGE 1 included in the league’s pilot pro-gram, according to company spokes-man Jason King — has developed amore intensive Wi-Fi solution. The company installs miles of copperwiring, which serves as the powersupply for the access points andcarries data from the air into thewired grid at the stadium and ontothe Internet.

The difference lies in the numberof access points; Enterasys says itssolution features about one-thirdthe number of other projects,which can help control costs.

No matter which route a teamgoes, the technology allows for real-time monitoring and assistance capabilities. Mr. Girt said teams cantrack which areas carry the most

traffic and then can enhance net-work capability in higher-traffic areas or can install more accesspoints in a second phase of sorts,like the Cavs are planning and theMagic were forced to carry out.

Enterasys, too, tracks usage andsays its network at Gillette reachedas many as 15,000 concurrent usersat the team’s most recent homegame, Oct. 21 against the New YorkJets. (In a sign of the times, Enterasys— which can track who is usingwhat kind of device — said 111 ofthose people used BlackBerrys.)

Enterasys monitors social mediaduring games and reacts to com-plaints about service, which at timescan amount to a fan simply notknowing how to connect to the

Wi-Fi. It also employs a “Wi-Ficoaching staff” — employees in redjackets walking the concourses toanswer questions and help fanswho may need it.

Team opportunityElsewhere in town, teams have

Wi-Fi on their respective radars.Browns spokesman Neal Gulkis saidthe team continues to investigatethe issue, and while ideally it wouldlike to install the technology atCleveland Browns Stadium this year,more likely would do a 2013 rollout.

The Indians also have the Wi-Fiissue is “on the radar,” according toteam spokesman Curtis Danburg,but there’s no definitive timeframefor a decision.

They’d be wise to move forward,said Nader Ali-Hassan, a social media marketing strategist at Cleve-land digital marketing firm Rosetta.Mr. Ali-Hassan said teams losemarketing opportunities when theirfans enter their venues knowingthey’re going to be disconnectedfor the duration of the game.

“That’s all content talking aboutyour brand that you could be missing,” Mr. Ali-Hassan said. “In asmall market like Cleveland, that’svery important.”

Plus, teams must make the game-day experience enjoyable.

“If you’re unable to check fantasyteams, or social media, at stadiums,that’s a huge problem for fans andteams,” Mr. Ali-Hassan said. ■


TransDigm Group Inc.said it has entered into adefinitive agreement with

United Technologies Corp. to acquire the pump and enginecontrol systems business ofGoodrich Corp. for about $236million in cash.

Goodrich Pump & Engine Control Systems is based inWest Hartford, Conn., andmakes proprietary aerospacefuel systems for the businessjet, helicopter, military and commercial markets. Among the engine platforms using its prod-ucts are the General ElectricT700, the Honeywell T55, theRolls-Royce M250, the WilliamsFJ44 family, the Turbomeca Arrius/Arriel, and the Pratt Whitney Canada 210 engines.

United Technologies obtainedthe business when it acquiredGoodrich Corp. at midyear.

TransDigm said the acquiredcompany is expected to have2012 revenues of $195 million,with EBITDA (earnings before in-terest, taxes, depreciation andamortization) roughly in the lowteens as a percent of revenue.Aftermarket revenues make up55% of its revenue.

W. Nicholas Howley, chairmanand CEO of TransDigm Group,said the Goodrich unit’s products“are both a good fit with ouroverall strategy and also allowus to expand ... on a number ofsubstantial engine applications.”


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that was interested in a full floor ofthe four-story building “and anotherone called the other day and said,‘How about 12,000 square feet?’ ”

Apart from a handful of localnonprofits, MMPI has not announcedthe names of the tenants of themedical mart, saying those an-nouncements will be made whenthe tenants are ready. Many in thecommunity were disappointed whenthe early confirmed tenants wereannounced, because the list lackedany of the well-known medicalequipment companies that medicalmart promoters had said wouldflock to this new medical purchasingconcept.

Now, however, Mr. Bennett saysthat situation has been turnedaround. He told County Councilthat MMPI has a list of 84 activeprospects for the building, 46 ofwhich he described as prominentfirms outside Northeast Ohio.

Prior to Mr. Bennett’s arrival,MMPI had released a roster of tenants that listed mostly local institutions, including ClevelandState University, Cuyahoga Com-munity College and the nonprofitBioEnterprise Corp.

“If there was a worry, we’re prettycomfortable we’ve gone beyondthat,” Mr. Bennett told council.

As a result of the more robustleasing environment, Mr. Bennettsaid, MMPI can hold the line onlease rates. It no longer is offering adiscount of as much as 50% fromthe advertised rate of $26 a squarefoot for long-term leases. However,it does offer modest signing discountsand allowances for tenant improve-ments — measures that are typicalin the real estate business.

Events add upThe medical mart building

increasingly is seen as an adjunct tothe 235,000-square-foot conven-tion center, which puts Clevelandback in the regional and nationalconvention business. The aging andoutdated convention center this newcomplex replaces was uncompetitive.

Mr. Bennett told County Councilthat 17 conventions are booked intothe new hall for the last half of 2013,and 12 are set for 2014. That’s 10more and four more, respectively, thanwere booked when Mr. Bennett updated council four months ago.

Trade associations and conven-tion planners typically book threeto four years in advance, thoughsome groups book for more than a single year. For example, the Ohio Music Educators Associationannounced in August that it wouldbring its annual convention — withabout 9,000 attendees — to the newconvention center in 2015, 2017and 2019.

Mr. Bennett also reported MMPIhas 40 convention bookings pending.The pace of bookings should quicken,because meeting planners hesitateto commit before they can see a finished building.

The Cleveland trade show complex is getting a break in thatregard, though. The InternationalMedical Meeting Professionals Association is holding its annualmeeting in Cleveland next May,bringing about 200 people. That’sbefore the center opens, but associ-ation president Scott Graham saidthe group wanted to come to Cleve-land and he expects the group willget a hard-hat tour of the nearly finished building.

“We’re excited,” Mr. Graham said.

“We think that Cleveland is a greatspot. Most (medical meetings) arethe perfect size for (the new con-vention center); they average about2,000 attendees.”

What’s in a name?While it is probably most

important that Cleveland has anew, attractive convention center,the adjacent medical mart buildingalways has been the more intriguingand risky part of the project.

Initially, the county and MMPIexpected the medical mart wouldbe for the health care industry whatMMPI’s Chicago Merchandise Martis for the furniture industry — a national focal point where doctorsand people who outfit hospitalswith beds, MRI equipment andeven waiting room furniture wouldbrowse dozens of vendor showroomsor sales offices, thus saving them-selves trips to the series of tradeshows that accompany medicalmeetings and conventions.

But now the thinking is that thebuilding will serve as a catalyst forshowing the industry the latest inmedical and health care equipment.In addition to showrooms staffed byindividual companies, the buildingwill be a place where groups ofcompanies can collaborate on largedemonstration exhibits, such aswhat MMPI is calling “the operatingroom of the future” or state-of-the-art patient exam room.

It also will have space for contin-uous medical and health care edu-cation programs.

Another part of that strategy forthe building likely will be to dropthe term “medical mart.”

Mr. Bennett told County Councilthat members of his health care industry advisory committee andothers in the local medical commu-nity think the current name doesn’treflect accurately the repurposedbuilding.

“When are you going to start calling it something more like it is?”Mr. Bennett said he hears frequently.“Typically, they come back withsomething like, ‘health innovationcenter.’”

Now you’re thinkingThe more upbeat outlook for the

medical mart largely is the result ofthe strategic rethinking that beganevolving last spring.

The impetus for this change hascome from Mr. Bennett, who lastApril joined MMPI as Cleveland-based senior vice president. A man-agement consultant for most of hiscareer, Mr. Bennett has brought histalents as a specialist in strategicplanning to the project.

As a result, the convention centerand medical mart now have every-thing from mission and visionstatements to a group of strategicpriorities and “organizational ca-pacity requirements.”

In language drawn from thestrategic plan, Mr. Bennett toldCounty Council the goal is to “aspireto show the best of what is possibletoday in health care innovation, education and commerce.”

This new focus, Mr. Bennett believes, is a key to the turnaround.

“When you have a plan and astrategy, people respond better,” hesaid. “There is much greater will-ingness to commit.” ■

Center: Med mart name still likely to change “When you have a plan and a strategy, people respond better. There is much greaterwillingness to commit.” – Jim Bennett, senior vice president, MMPI Inc.


ON THE WEB Story from www.CrainsCleveland.com.

TransDigmscoops upGoodrich unit


McDonald Hopkins hosts its troops■ It isn’t unheard of for a law firm to hostevents and retreats for partners, accordingto most in the local legal community, butfew can lay claim to doing this.

McDonald Hopkins LLC this past week-end spent roughly $200,000 to have all itsemployees — partners, associates, adminis-tration and staff — partake in a weekend of entertainment and programming inCleveland, its headquarters city, said Carl J.Grassi, president. Not only did the law firmfund the transportation and lodging for its102 out-of-town employees, it paid for thetrip for their accompanying spouses andsignificant others, too.

Called “Stronger Together,” the weekend-long event coincided with the start of thenew fiscal year for the 265-employee firmand was the first all-firm event like it in McDonald Hopkins’ more than 80-year his-tory, Mr. Grassi said. Altogether, more than400 attended.

Among the events was dinner at the firm’soffice Friday, a private party Saturday atPickwick & Frolic Restaurant & Club and aprogram called “When Generations Collide,”presented by a company called BridgeWorksabout multigenerational gaps and how tobridge them.

Asked about the expenditures for travel,lodging and food, Mr. Grassi said, “Actually,it’s not that bad when you consider what itcosts us when we go out of town. We feelvery strongly about bringing the moneyback into the city and having people enjoyit.” — Michelle Park

University of Phoenix to ground two outposts■ Apollo Group Inc., the parent company ofthe for-profit University of Phoenix, plans toclose 115 locations across the country, in-cluding two in the Cleveland market.

An Apollo Group spokesman confirmedthe company plans to “phase out” the uni-versity’s operations at its learning centers inWestlake and Independence sometime nextyear. The University of Phoenix will continueto operate its campus in Beachwood, headded.

The decision affects fewer than 100 stu-dents.

“At the end of the day, itcame down to the demand anduse by students,” said ApolloGroup spokesman Ryan Rau-zon. “We’re just not seeing thetraffic and the use of those fa-cilities. We can better allocatethose resources online.”

While the university has stopped enrollingstudents at the Westlake and Independencelocations, the students still can use the facil-ities for now. University of Phoenix studentsenrolled at the Westlake and Independencelocations are encouraged to talk with theiracademic counselors or call 1-866-992-3302to determine how the planned closuremight affect them.

Planned closures, companywide layoffsand other cost-reduction initiatives are ex-pected to affect Apollo Group’s operatingexpenses by at least $300 million by fiscal2014. Nationwide, the closures are expectedto affect 13,000 students, or about 4% of the

university’s enrollment. — Timothy Magaw

Cleveland Clinic India isn’t on the horizon■ The Indian government was ready to offerthe Cleveland Clinic 50 acres of land in Punjabto build a sprawling health center, accordingto an account in The Indian Express, an Eng-lish-language daily newspaper published inIndia. But it’s a match that isn’t in the offing.

While the Clinic has expressed interest inextending its footprint overseas, as demon-strated by its planned hospital in Abu Dhabi,the health care juggernaut doesn’t appear to

be interested in the Indianproposition.

“We have no plans to moveforward on this,” Clinicspokeswoman Eileen Sheilsaid in an email.

The Indian governmentapparently was interested inluring the Clinic to its soil

because of the health system’s reputation asone of the world’s best cardiac care hospitals.

“Punjab is leading the country in cardiacdiseases mainly due to lavish eating habits,”deputy chief minister Sukhbir Singh Badalwas quoted in the Express as saying. “Tohave a hospital like Cleveland Clinic here forcardiac care and research makes sense.”

Meanwhile, the Clinic’s first overseas en-deavor — a 360-bed, multispecialty hospitalin Abu Dhabi, United Arab Emirates — is expected to open late next year. The Clinicsigned a 15-year agreement with MubadalaDevelopment to manage the hospital. —Timothy Magaw

WHAT’S NEW

THE COMPANY:The DavidRound Co.,StreetsboroTHE PRODUCT:All-stainless articulating jibcranes

The company says its new line of jib cranesis designed specifically for pharmaceuticalmanufacturing.

The cranes “are ideal for lifting bulk bagsor other materials up to 1,000 lbs. in cleanroom environments,” according to the com-pany. “Explosion proof models of these jibcranes are available to meet the electricalstandards required in hazardous environmentprocessing areas.”

David Round says the jib cranes feature fullyenclosed mechanical components, includinga wire rope hoist, gearbox and motor drum.Lift height and boom/knuckle configurationscan be varied to meet customer specifica-tions.

In addition, structural components “areprepared with a glass bead finish that is applied in a dedicated in-house metal treat-ment facility,” the company says. “This resultsin smoother, more hygienic surfaces that arefree of imperfections such as weld scars.”

David Round was founded in 1869. In addition to its line of specialized clean room-grade products, it makes standard chainhoists, jib cranes, winches and tractor drives.

For information, visit www.DavidRound.com.

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

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK OCTOBER 22 - 28

The big story: Diebold Inc. is suspending indefinitely its plans to construct a new globalheadquarters in Green. “As we’ve been analyzingour near- and long-term growth priorities, it has

become clear that investingmore than $100 million in aheadquarters facility is noteconomically feasible given theother priorities for the busi-ness at this time,” said ThomasW. Swidarski, Diebold’s presi-dent and CEO. The maker ofautomated teller machines,bank security equipment andelectronic voting machines

said it “has no plans to pursue new constructionoptions for its global headquarters, either inOhio or elsewhere, and is committed to remainingin its current location” in Green.

Seeking a spark: PolyOne Corp. agreed toacquire Spartech Corp. of Clayton, Mo., a pro-ducer of plastic sheet, compounds and packaging.Under terms of the acquisition agreement,Spartech stockholders will receive $2.67 in cashand 0.3167 shares of PolyOne common stock foreach share of Spartech common stock they own.PolyOne put the total transaction value at about$393 million, including the assumption ofSpartech’s net debt of $142 million. In the ninemonths that ended Aug. 4, Spartech reportedearnings of nearly $3.3 million, or 10 cents ashare, on sales of $862.6 million.

Have a heart program: The ClevelandClinic’s lauded heart care program continues toextend its footprint, as the health system inked adeal to offer its cardiac services at Saint VincentHealth Center in Erie, Pa. The affiliation is theheart program’s 10th beyond state lines and willtake effect Dec. 1. As part of the arrangement,the Clinic will lend its expertise in the field toSaint Vincent’s cardiologists. In addition, SaintVincent’s heart and vascular specialists will par-ticipate in training, conferences and educationalprograms provided by the Clinic.

Poised for growth: Diversified manufacturerAmetek Inc. of Berwyn, Pa., bought Micro-PoiseMeasurement Systems LLC, a Streetsboro company that provides test and measurementequipment for the tire industry, for $170 millionin cash. Micro-Poise is expected to post sales of$125 million this year. In addition to the Streets-boro headquarters, Micro-Poise has plants inTroy, Mich.; Beijing, China; and Lübeck, Ger-many. The Streetsboro company will becomepart of Ametek’s Electronic Instruments Group,which posted sales of $1.6 billion in 2011 —nearly half of Ametek’s $3.4 billion in sales lastyear.

This deal’s a gem: Signet Jewelers Ltd., theparent company of Sterling Jewelers in Akron,signed a definitive agreement to acquire Chicago-based Ultra Stores Inc. from Crystal FinancialLLC and its other stockholders for about $57 million in cash. Signet said it will not assume anydebt in connection with the acquisition. UltraStores, founded in 1991, is a jewelry retailer operating primarily in outlet centers, as well asin licensed jewelry departments.

Talk it out: American Greetings Corp. said itsboard of directors formed a special committee ofindependent directors to consider, among otherthings, the proposal made by members of theWeiss family and certain related parties to takethe company private. The Weiss family has proposed buying all the Class A and Class B common shares of American Greetings that it doesnot already own for $17.18 a share. AmericanGreetings said the special committee also is authorized to review and evaluate other optionsavailable to the company.


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

There’s nothing superabout these figures■ Our politicized debate about health caredoesn’t usually get around to this subject:people known as “super-utilizers,” who placea huge and costly burden on the med-ical system.

“Simply put, super-utilizers arepeople who overuse emergencydepartments and hospital inpa-tient services, making more visitsto those facilities in a month thansome people make in a lifetime,”The Washington Post reported.

Cleveland is one of six communities,The Post noted, in which the Robert WoodJohnson Foundation has made a total of $2.1million in grants to address super-utilizersituations.

Susan Mende, a senior program officer atthe foundation, told the newspaper thesepatients suffer from “multiple chronic complex diseases, including mental healthissues” along with “really difficult social sit-uations” such as inadequate — or nonexis-tent — housing. They also lack a primarycare physician or other medical home, sotheir health care is haphazard and uncoor-dinated, Mr. Mende said.

The Post said the first task facing grant recipients is to identify super-utilizers by“looking at emergency room data acrossmultiple hospitals.” Figuring out how toserve this population more efficiently is critical, the foundation said, because thesickest 5% of U.S. patients account for morethan 60% of health care costs.

Don’t feel bad aboutyour 40-hour work week■ That guy (or woman) who tells you he (or

she) works 60-plus hours a week is probablylying.

Harvard Business Review said people“overstate the number of weekly hours they‘usually’ work by 5% to 10%, with those onthe higher end being more likely to overes-timate,” according to a University of Mary-land study.

“By examining U.S. workers’ time diaries,the researchers found that people who

say they usually work 55 to 64 hoursper week are off by an average ofabout 10 hours; people who say they work 65 to 74 hours are overstating by about 20 hours,”Harvard Business Review said.

Respondents may inflate theirestimates because of a desire to

appear industrious, the research suggests.

In fashion, at least,Cavaliers lead the league■ The 2012-13 NBA season hasn’t startedyet, but the Cleveland Cavaliers already arebig winners. In the new “NBA Uniform Power Rankings” on Grantland.com, theCavaliers were at the top.

“If you’re playing basketball in Cleveland,you should be the happiest player in theNBA. You should. For a decade, it was maroon, maroon, maroon — and what happened? You got marooned,” wroteGrantland.com’s Wesley Morris.

“It’s been two years since you-know-wholeft. It’s time for a new you, and here it is:French’s mustard with Heinz script,” headded. “It’s young, it’s exciting, and when Isee it I immediately want to put the wholething on my hot dog. It’s only an alternateuniform, it’s true. But it’s one that saysthings are looking up: We’ve still got KyrieIrving, and we just know he’ll be thrilled tospend many nights for many years wearingthis and not totally ripping our hearts out.Right, Kyrie?”

Swidarski


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