Crain's Cleveland Business

By JAY [email protected]

Anticipating new responsibilities that will be thrustupon it by Gov. John Kasichs administration, Team NEOis doubling the size of its board of trustees as it antici-pates a need to build broad consensus for a regional economic development strategy it must present to Jobs-Ohio, the governors nascent job-creation nonprofit.

The state today, Aug. 29, is expected to announce formally that Team NEO, the business attraction groupcreated by the regions major chambers of commerce,will be the Northeast Ohio regional partner for JobsOhio.In that role it will be the agent for the states many busi-ness incentive programs,the place where mayors andbusinesses with expansionplans in 18 counties go toseek state tax credits, startupgrants and low-interest loans.

This is making Team NEO more a hub, a confedera-tion, for the major economic development groups inthe region, said Team NEO chief executive Tom Walter-mire in an meeting with Crains editors and reporters lastweek. Team NEO will be the interface with JobsOhioand the community. It will not be making investmentdecisions (for JobsOhio), but it will be deciding on projects that JobsOhio should go after.

Expanding the board, he said, will give Team NEOgreater ability to bring the entire region together as JobsOhio asks Team NEO to come up with a regionaleconomic strategy that will guide JobsOhio in the allo-cation of its investment dollars, tax credits and otherbusiness incentives.

$2.00/AUGUST 29 - SEPTEMBER 4, 2011

Entire contents 2011 by Crain Communications Inc.

Vol. 32, No. 35

074470010326

35 SPECIAL SECTION

PHILANTHROPYCleveland Sight Center, InfoCision Corp. team toprovide training for visually impaired Page 13PLUS: NONPROFIT M&A ACTIVITY FOUNDATIONS & MORE

NEW

SPAP

ER

Lawmakersstill leery ofKent plan tofinance fix

ANEASIERWAY TO PAY

Small businesses, nonprofits even the Girl Scouts find mobile credit card readers make their lives simpler

By CHUCK [email protected]

on Larson loves takingcredit card paymentson his smart phone.

Loves it.Its a frickin godsend.

It really is, he said.Mr. Larson is one of many area

small business owners who recentlyhave started taking credit card pay-ments with smart phones and tabletcomputers such as the iPad.

Nonprofits do it, too. For instance,

not only does Mr. Larson use IntuitInc.s GoPayment system when pro-viding business consulting servicesto his clients, but the Gorilla Group,an entrepreneurship organization hehelps run, uses a product called theSquare to take payments from peo-ple who attend its monthly events.

Neither system is much betterthan the other, said Mr. Larson, whois managing partner of consultingfirm MCF Industries in Cleveland.

However, for businesses and orga-nizations that dont move large

DSee PAY Page 9

See BOARD Page 5

See KENT Page 6

Some fear precedent ofacademic building feeBy TIMOTHY [email protected]

Some of the lawmakers who mustgive Kent State University the finalOK to borrow $210 million for a slewof campus upgrades arent sold yeton the schools proposal to financethe construction plan with a newstudent fee at a time when the cost ofhigher education continues to esca-late.

Gaining approval from the StateControlling Board, an oversight bodymade up of six legislators and an appointee of the governor, is the last ofmany hurdles Kent State must over-come before proceeding with a $250million renovation and constructionplan on its main campus in Kent.

All parties involved agree the ren-ovations are needed as the university

has more than$300 million indeferred mainte-nance. But comingto a consensuson how to pay forthe plan is prov-ing trickier thananticipated.

Approving themeasure, lawmak-

ers said, could open the floodgatesfor other state universities to imposesteep fee hikes for capital invest-ments something Kent State pres-ident Lester Lefton isnt convincedwould happen. Such fees typicallyare imposed for buildings such asstadiums or student unions, but notfor academic buildings, as Kent Stateproposes.

Converting student fees on thisscale to capital improvements isproblematic, said state Sen. TomSawyer, a Democrat on the control-ling board who represents KentStates district. To run a policychange of this magnitude throughthe controlling board is, by itself, aconcern for a number on the board.

Kent State had planned to go tomarket with the bond sale this summer

Team NEObroadensboard, eyesconsensusExpected role with JobsOhio fuels expanded representation

INSIDEGrowth on the menu

As demand for its frozen productsgrows, longtime Cleveland residentOrlando Baking Co. is bolstering itspresence in new and existing marketsand eventually plans to expand its facility.

Read more about the companysplans on Page 6.

Lefton

John AnthonyOrlando

INSIDE: A closer look at the new board members. Page 5

20110829-NEWS--1-NAT-CCI-CL_-- 8/26/2011 4:01 PM Page 1

Archer Awards reception coverage

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WERE IN A CRANKY MOOD

Ohioans are among the most unhappy people in the United States, accordingto the latest Gallup-Healthways Well-Being Index. The index, which runs on ascale of 0 to 100, is based on surveys with Americans in six areas: life evaluation, emotional health, work environment, physical health, healthy behaviors and access to basic necessities. The average score nationwide forthe January-June period this year was 66.4, down from 66.8 in the like period ayear ago. Here are the top and bottom five states for 2011:

State Index score State Index scoreHawaii 71.1 West Virginia 62.4

North Dakota 70.5 Kentucky 63.0

Alaska 69.4 Mississippi 63.6

Nebraska 68.4 Ohio 64.4

Minnesota 68.3 Louisiana 64.6

SOURCE: WWW.WELL-BEINGINDEX.COM

Read about the winners andview photos from the event,held Aug. 17 to honor theareas top human resourcesprofessionals. Page 8 HAL

STAT

A


AUGUST 29 - SEPTEMBER 4, 2011 WWW.CRAINSCLEVELAND.COM CRAINS CLEVELAND BUSINESS 3

THE WEEK IN QUOTES

More companies plan pay hikes in 2012But, modest 2.8% average increase lags cost of living index included in the survey. Raises willrange from a high of 3% for execu-tives to 2.5% for unionized produc-tion workers.

Although the size of the raises isslightly smaller than last years projections, fewer companies aresaying this year they wont hikeanyones pay, which indicates acontinuing decline in the numberof organizations that have resorted

to pay freezes in a tough businessclimate.

For example, there will be no payhikes for executives at 19% of thecompanies surveyed this year, adrop from 23% in the year-ago survey. This number peaked at 51%in 2009, two years into the recentrecession. The same trend appliesfor most of the other four job cate-gories in the survey.

The results this year are morepositive, said Katie Talerico, surveymanager for ERC, a group for human resources professionals thatis based in Mayfield Village.

Ms. Talerico said another pocketof strength was a greater number ofcompanies and organizations thatplanned hikes of more than 3%. Forexample, 56% of companies said executives would receive increases

By DAVID [email protected]

More Northeast Ohio employersare planning worker pay hikes in2012 as they continue to dig out of aprolonged economic slump, accordingto the annual compensation surveyconducted by the Employers ResourceCouncil.

The survey participants that planraises during the next 12 months areprojecting hikes that average 2.8%across all five job classifications

of more than 3%, compared with48% in last years survey.

ERC said 129 organizations partic-ipated in the survey. Of these, 54%were manufacturing companies,26% were non-manufacturing and20% were nonprofits. The majority ofthe participants, 54%, had from 51 to200 employees. The survey partici-pants were based in Cuyahoga, Lakeand Summit counties.

Manufacturers such as TalanProducts Inc. in Cleveland and Astro

INSIGHT

A lot of customersjust dont carry moneyanymore. Sue Majzun, product salesmanager for Girl Scouts of Northeast Ohio, which is using Intuits GoPayment system to sellcookies. Page One

JANET CENTURY

Our biggest challenge is finding more people, says Neil Gloger, CEO of Euclid-based InterGroup International, whichrecycles plastics and converts them to flakes or pellets that can be used to make plastic products.

PLASTICS RECYCLERWRAPPED UP IN GROWTH

Euclids InterGroup International to expand operations as demand for its repurposed materials escalates

By DAN [email protected]

Northeast Ohio long hasknown, even before DustinHoffman did, that fortunescould be made in plastics.

And its still true enough so that Euclid-based InterGroup Internationalalmost has tripled its annual revenues ineach of the last three years and is lookingfor a 200,000-square-foot building inwhich to expand in order to accommo-date its growth.

The difference is that InterGroup is onthe opposite end of the productionprocess from the one referred to in theDustin Hoffman flick, The Graduate.

See RECYCLE Page 17

MiddlefieldBanc Corp.may assertmore cloutInvestors see chancefor strategic buysBy MICHELLE [email protected]

If a private equity investors planpans out, Middlefield Banc Corp.could triple in size over the nexthalf decade as it becomes a vehi-cle to acquire other Ohio banks andas it grows its existing operations.

Bank Opportunity Fund, an affiliate of Hovde Private EquityAdvisors LLC in Washington,D.C., has agreed to buy $9.45 million of newly issued Middle-field Banc common stock in adeal that positions it to be thecompanys largest shareholder.

The way Eric D. Hovde sees it,theres opportunity to build thecompany into a meaningful fran-chise. Mr. Hovde, chief investmentofficer of the Bank OpportunityFunds investment adviser, envi-sions dramatic growth for thebusiness, which currently con-sists of Middlefield Banking Co.in Middlefield and Emerald Bankin Dublin, a suburb of Columbus.

He would like to build Middle-field Banc over the next five yearsfrom a company with $640 millionin assets into one totaling $1.5billion to $2 billion in assets. Theplan, he said, is to expand in andaround Geauga County, which isMiddlefields home, and theColumbus area.

We think there will be numerousacquisition opportunities, Mr.Hovde said, referring to commu-nity banks and potential transac-tions assisted by the Federal Deposit Insurance Corp.

We have institutions that wewould like to talk to, he said,though he declined to identify them.

Growth of existing operationsalso will be supported by the cap-ital provided, as it should enableMiddlefield Bancs subsidiariesto lend as other banks struggle,Mr. Hovde said.

Valuing Midwestern valuesBank Opportunity Fund aims

See BANK Page 17

See ERC Page 18

The Midwest has hadits hits, but isnt mak-ing big swings like otherparts of the country. Chip Headley, president and chief investment officer ofOrlando, Fla.-based mini-ware-house chain StorKwik. Page 9

Having a job, it givesme a sense of Im doing something formyself. It helps me tofeel better about me. Cheryl Garcia, a participantin the InfoCision/Cleveland SightCenter call center training program. Page 13

Really smart compa-nies know when theyreally need to (partici-pate in workplacefundraising).They wantto retain top talent,and its easier to sup-port local causes thanto market or advertise. Amy Pausche, Leukemia andLymphoma Societys NorthernOhio chapter. Page 16

There is nothing wewould not considerdoing. But (a foodchallenge) is probablymore my speed than atattoo. Mike Tomon, vice president ofsales and service for the Cleve-land Cavaliers. Page 17



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Volume 32, Number 35 Crains Cleveland Business (ISSN 0197-2375) is published weekly, except for com-bined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July,the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland,OH 44113-1230. Copyright 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio,and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to CrainsCleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373.

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Relocation may be on horizon forWarrensville Hts. marketing firmMarcus Thomasmum on plans tomove within cityBy STAN [email protected]

The Marcus Thomas LLC marketingfirm may be packing up its employees and their dogs to move to anew building rising less than a milefrom its Warrensville Heights home.

The integrated public relations,advertising, interactive and researchfirm isnt talking about the move.Neither is Greg Geis, a principal ofHemingway Development Co., whichlast week started putting up a wall fora new 40,000-square-foot building atits Hemingway on Richmond Busi-ness Park in Warrensville Heights.

The structure is one of two build-ings of similar size that Hemingwayis constructing at the business park,which is on the site of the former St.Jude Church. Due to a lacklustereconomy and tepid real estate market, such midsize commercialoffice buildings are a rarity.

Word of Marcus Thomas plannedexit comes from its current landlord,Jonathan Berns, a principal in ORGProperties, which has housed MarcusThomas since 2002 at 24685 EmeryRoad at Highland Business Park.

We hate to lose them, but at leasttheyre not going to Chicago, Mr.Berns said. We didnt have expan-sion room for them to add another20,000 square feet to their current office. We were also unsuccessfulwith plans for a new building at

Interstate Commerce Center, sotheyve leased with Geis.

Marcus Thomas has 121 employeesat its current, 26,400-square-foot office. Its 10-year lease expires nextyear, Mr. Berns said.

Wed like to keep them, but itsthe same thing as wanting to keepyour kids in the same size clothes,Mr. Berns said. They outgrow them.

Todd Morgano, director of publicrelations at Marcus Thomas, said ina phone interview last Thursday,Aug. 25, that company officials havenothing to say at this time. He saidparties other than just Marcus Thomasneed to be comfortable with theplans before they become official.

Hemingways Mr. Geis respondedto phone calls from Crains with anemail saying he would not discussthe buildings due to client confi-dentiality issues. The Geis Cos. development outfit serves as thecontractor for sister company Hem-ingways developments.

The sizes of the two buildings rising near Richmond Road are disclosed in minutes of the easternsuburbs June 22 Planning Commis-sion meeting, when the plans received city approvals. GregSeifert, Geis Cos. vice president ofconstruction and design, declinedto identify the tenants in detail tothe Planning Commission, thoughhe said one is a marketing firmwith about 120 employees and theother is an educational institution.

Reginald Owens, director of eco-nomic development at WarrensvilleHeights, declined to comment onparties negotiating tax incentiveswith the suburb for the buildingsbecause nothing has been intro-duced to the suburbs City Council.

We will not comment on any-thing we have in the pipeline, Mr.Owens said.

Existing space is scarceRobert Redmond, a managing

director at the Cleveland office of theMohr Partners brokerage, said itslikely that Marcus Thomas couldntfind existing, top-drawer space in theeastern suburbs, the tightest officemarket in the Cleveland suburbs.

The eastern suburbs are unusu-ally tight for the economy were in,Mr. Redmond said. Virtually nolarge chunks of space over 30,000square feet in size are available. Hesaid he recently had trouble finding3,000 square feet of class A space fora tenant on Chagrin Boulevard.

Online realty data providerCoStar estimates vacancy in theeastern suburbs at 10%.

Marcus Thomas has been proud ofits Warrensville Heights office overthe years, often calling attention toa casual atmosphere resembling aliving room to foster creativity anda setting where employees dogs arewelcome. A stylized dog graces thefirms introductory web page and ispart of the companys logo.

STAN BULLARD

Hemingway Development Co. is constructing two office buildings, one of whichis shown here, at its Hemingway on Richmond Business Park in WarrensvilleHeights. Marcus Thomas landlord says that the firm is exiting its current loca-tion in that city and is pursuing space at another new building in the park.

Register for free e-mail alerts andreceive:

The Morning Roundup: A col-lection of the days business newsfrom Ohios daily papers

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The board additions, Mr. Walter-mire said, will provide the leader-ship to make that happen.

Unstated by Team NEO is the needfor board members who are heavy-weight leaders in communitiesthroughout the region so that theprivate sector organization can winthe acceptance of local public officials for an economic strategythat will affect where and how stateincentives are invested.

Six of the 13 new trustees haveties to organizations outside Cuya-hoga County; thats a mix thatwouldnt hurt as Team NEO looksto overcome the perception amongsome political leaders that its aCleveland-centric body.

Among the big names added to theTeam NEO board are Virginia Albanese, president and CEO ofFedEx Custom Critical Inc. andchairwoman of the Greater AkronChamber of Commerce; AnthonyAlexander, president and CEO ofFirstEnergy Corp. and a boardmember of Akron Tomorrow; MarkFleiner, CEO of Rolls-Royce FuelCell Systems and a board memberof the Stark Development Board;and Paul Greig, chairman, presidentand CEO of FirstMerit Corp. and aboard member of Akron Tomorrow.

By design, the board includes nopublic officials, many of whom areprivately, if not publicly, unsure ofhow this new structure will affecttheir ability to bring jobs to theircommunities.

Only Akron Mayor Don Plusquellic

has made his concerns public. In aninterview three weeks ago, he toldCrains he would have preferred anorganization that allowed his administration to work as the inter-mediary between growing busi-nesses looking for financial helpand the state incentive programs.

But a key reason Gov. Kasich cre-ated JobsOhio as a nonprofit apartfrom government was to give itgreater freedom and flexibility todeal with businesses that want tokeep their business dealings private.Both Gov. Kasich and Mark Kvamme,the governors job creation pointperson, have said repeatedly thatsome companies have been reluc-tant to work with the states Depart-ment of Development because ofconcerns their dealings would become widely known.

Building bridgesThough JobsOhio itself is still

new and has yet to formulate clearguidelines for tailoring state assis-tance to specific regional needs,such as Northeast Ohios need toattract health care and engineeringtalent, Team NEO officials havesaid public officials and others withan interest in economic develop-ment will be involved in developingits regional strategy.

We believe that any effective regional strategy needs to have inputand buy-in from public, private andphilanthropic sectors, but the exactprocess for doing this is still to bedetermined, said Jenny Febbo,Team NEOs vice president of mar-

keting and communications.Ms. Febbo said Team NEO also will

be blending two existing economicdevelopment strategy studies for howto improve the regions prospectsinto whatever strategy it creates.

Advance Northeast Ohio, an eco-nomic competitiveness agenda devised by the Fund for Our Eco-nomic Future in 2007, sets key goalsfor the region that include bettereducating and training the regionswork force, improving governmentcollaboration, and expanding therole of minority- and female-ownedbusiness in the regions economy.

More recently, in collaborationwith the Brookings Institution thinktank, the Future Fund took thatbroad plan a step further. TheBrookings Northeast Ohio RegionalBusiness Plan highlights those busi-ness sectors that appear to have themost promise for growth in the region and suggests ways to developits research base and entrepreneur-ship abilities in those areas.

In Tom he trustsBrad Whitehead, president of the

Future Fund, said researchers whoworked on those two studies listenedcarefully to the needs of public offi-cials, and that hes confident TeamNEO will welcome public officialsinto its efforts to aid business.

Team NEO is talking about broadengagement in the execution of thework, Mr. Whitehead said.

Edward Hill, dean of the MaxineGoodman Levin College of UrbanAffairs at Cleveland State University


The largest pediatric health care provider

in NE Ohio.A K R O N C H I L D R E N S . O R G

continued from PAGE 1

Board: Public officials to be involved COME ALONG FOR THE RIDEThese are new members on

the board of Team NEO, the regional business attractiongroup expected to be named today,Aug. 29, the Northeast Ohio regional partner for JobsOhio:

Virginia Albanese, president andCEO, FedEx Custom Critical Inc.;chairwoman of the board of theGreater Akron Chamber of Commerce

Anthony Alexander, president andCEO of FirstEnergy Corp.; member ofthe board of Akron Tomorrow

William Christopher, presidentand CEO of Lakeview Consulting Enterprises, retired executive vicepresident of Alcoa Inc.; chairman ofthe board of the Greater ClevelandPartnership

Lonnie Coleman, president andCEO of Coleman Spohn Corp.; mem-ber of Team NEOs Minority BusinessAttraction Advisory Council

Dr. Achilles Demetriou, chief operating officer of University Hospitals; member of the board ofBioEnterprise, the bioscience businessdevelopment nonprofit

Mark Fleiner, CEO of Rolls-Royce

Fuel Cell Systems; board member ofthe Stark Development Board

Paul Greig, chairman, presidentand CEO of FirstMerit Corp.; memberof the board of Akron Tomorrow

Henry Meyer, retired chairmanof the board and CEO of KeyCorp;board member and immediate pastchairman of the Greater ClevelandPartnership

Timothy Reynolds, president ofTribute Inc.; chairman of the boardof NorTech, the technology econom-ic development organization

Ed Roth, president and CEO ofAultman Health Foundation; chairmanof the Stark Development Board

Robert Smith, president andCEO of Spero-Smith Investment Advisors; chairman of the Cleveland-Cuyahoga County Port Authority

Tom Strauss, president and CEOof Summa Health System; immediatepast chairman of the Greater AkronChamber of Commerce board

Mark Williams, executive vicepresident and director of strategicplanning for KeyBank; vice chairman ofentrepreneurial nonprofit JumpStart

and a consultant on economic devel-opment issues, said keeping publicofficials at arms length in key parts ofthe negotiations with businesseslooking for financial assistance isimportant and the single hardestthing about economic develop-ment. Nonetheless, he understandsthe concerns of public officials.

A board without public experi-ence runs the danger of havingcomplete private sector sensibilities

which could lead (business) peopleto make inadvertent mistakeswhen dealing with the public sector,Dr. Hill said.

Yet Dr. Hill, too, is confident thatTeam NEO can bring the regionsvaried interests together.

When Tom Waltermire getsdone negotiating this, he can nego-tiate the peace in Libya and knowhe can have confidence doing it,Dr. Hill said.


and start renovations this fall. Butthe disagreement between KentState officials and lawmakers hasset the already-delayed plan backeven further.

This has to happen eventually,Dr. Lefton said. Its a matter ofwhen. Were not asking the state formoney. It would be very differentthan if we said we needed $100 million from the state of Ohio.

Fears of a precedentWhile Kent State maintains that

its fees and tuition are lower thanmany other colleges and universities,lawmakers on both sides of the aislearent eager to tack more chargeson to students bills, particularly after the Legislature approved allowing colleges to hike tuition by3.5%.

I believe if students have thatkind of money, they should buytheir own home or invest in Ohiosome other way rather than investin the mortgage of Kent State, saidstate Rep. Chris Widener, a Spring-field Republican serving on thecontrolling board.

Lawmakers are concerned thenew fee Kent State is advocatingcould set a dangerous precedent forspecial fees that other schoolscould follow, ultimately driving thecost of the states public collegesand universities even higher.

There are other universities thatwill come in with similar stories or examples that they should be

exempted as well, said state Rep.Jay Hottinger, a Newark Republicanalso on the board. We dont operatein a vacuum. This is not just a KentState issue.

Kent State faced similar pushbackwhen the former head of the OhioBoard of Regents, Democrat EricFingerhut, stonewalled the proposalbecause of the fee, which the uni-versity would phase in over the nextfew years; it would add $20 percredit hour when fully implementedin fiscal 2016, which begins July 1,2015.

The university seemed to catch a break when Gov. John Kasich appointed Jim Petro, a Republican,to head the Board of Regents; Mr.Petro soon thereafter threw his sup-port behind the proposal.

A spokeswoman for Mr. Petro saidhe was still behind the proposal.

Only one lawmaker on the con-trolling board state. Rep ClaytonLuckie, a Democrat from Dayton told Crains he supported the mea-sure, and only Rep. Widener saiddefinitively that he would vote no.Republican state Rep. John Careyfrom Wellston wouldnt comment,and state Sen. Shannon Jones, a Re-publican from Springboro, didntreturn repeated calls for comment.

Testing the waterDiscussions among lawmakers,

the Kasich administration and KentState officials are ongoing, as all interested parties want to ensurethe proposal has enough support

before coming up for a vote.I suggested to (Kent State offi-

cials) that they find out what level of support is out there, and if that request needs to be modified, itmakes no sense to bring it forward,said Randy Cole, whom Gov. Kasichappointed as president of the con-trolling board in March.

Mr. Cole, who also has a vote,wouldnt comment on whether hesupported the proposal.

Dr. Lefton said further delays couldadd to the cost of the constructioninitiative as buildings continue todeteriorate and the bond marketbecomes more challenging. Thoseadditional dollars, Dr. Lefton said,would be added to the $75 millionin interest costs the university already planned to stomach afterMr. Fingerhut blocked the proposaland a federal stimulus initiativeknown as the Build America Bondsprogram expired; that programwould have lowered the universitysinterest expenses on bonds issuedfor the construction effort.

Dr. Lefton said the university couldmanage the debt if the new studentfee wasnt part of the constructionplan, but ultimately investments in academic areas would suffer because the money would need tocome from somewhere and the uni-versity already took a $13 millionhit in the latest state budget.

(Lawmakers) want to keep qualityhigh, but they cant keep cutting thebudget to the bone, Dr. Leftonsaid.


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Orlando cooks up growth into new markets Baker sees demand for its frozen line climbBy KATHY AMES [email protected]

The aroma of rising yeast andflour greet passersby as OrlandoBaking Co. churns out thousands ofrolls, buns and loaves per hour fromits 200,000-square-foot headquarterson Clevelands near East Side.

But bread isnt the only thing on therise at the fifth-generation business,which has expanded several timessince it opened in Cleveland in 1904.

The 360-employee company plansto take a larger bite out of existingand new markets as demand climbsfor its line of frozen and fresh-bakedstarchy fare.

The bakerys been our secondhome, and were happy to continuegrowing as a Cleveland company,said John Anthony Orlando, execu-tive vice president of operations.

The bread producer, which wasfounded in 1872 in Castel di Sangro,Italy, produces more than 250 vari-eties of breads and distributes itsproducts to restaurants, grocery storesand other retailers in NortheastOhio and throughout the country.

About 65% of its business is insupplying restaurants; the other35% satisfies private label and retailaccounts. It does not disclose sales.

The company, which last yearlaunched the nations first probioticbread, is partnering with the Cleve-land Clinic to unveil a revised ver-sion with no preservatives and lesssugar, said co-president Chet Sonny

Orlando. Orlando Baking is set toroll out the product soon to localstores such as Heinens, Marcs andGiant Eagle, and it will be denotedwith the Clinics Go! healthy foodsprogram, he said.

Then well bring it out nationally,Sonny Orlando said. The probioticbread has been a real success for us.

From one family to anotherThe progress comes as no surprise

to Jeff Heinen, whose family-ownedHeinens grocery stores have hadabout a half-century relationshipwith the Orlando family.

As a family business, weve hadmutual interest in growing andcompeting with large companies to besuccessful, Mr. Heinen said. Wevegrown with them, and it still boilsdown to the customer buying a high-quality product. Our customers havebenefitted from those products.

Orlando Baking in April secured adeal with IHOP restaurants to pro-vide hamburger buns for that chainsmore than 1,500 stores nationwide,said John Anthony Orlando, andBob Evans recently incorporatedOrlando Bakings Ciabatta breadinto its market-fresh sandwiches.

The bakerys products also can befound in some local Walmart stores,but Orlando Baking is working toexpand its presence in the retail giant.

Despite its many and varied rela-tionships, Orlando Baking hasntbeen immune from the economicdoldrums that have plagued many

sectors, including the restaurant busi-ness, which slowed during the reces-sion as consumers reined in spending.

Were affected when the restau-rants are affected by a slowdown inbusiness, John Anthony Orlando said.

Expansion opportunity on holdThe company said it has helped

manage though that slowdown with a more aggressive pursuit of its current accounts, which include the Buffalo Wild Wings and HydePark restaurants.To accommodateOrlando Bakings planned marketshare growth, the company said itplans to expand its freezer andpackaging facility by 30,000 squarefeet to 50,000 square feet.

Most of our fresh products aredistributed throughout NortheastOhio, but our frozen products out-put, which is 60% of our business,continues to grow, John Anthony

Orlando said. That means morecustomers are demanding that moreinventory be on hand.

But plans for the OpportunityCorridor boulevard that would linkInterstate 490 and the citys Univer-sity Circle neighborhood are holdingup the expansion. The current cor-ridor proposal slices through OrlandoBakings parking lot on Grand Avenue, across the street from itsheadquarters.

Its ideal to have the corridorrunning through our property, but not our parking lot, said JohnAnthony Orlando, who is a memberof the Opportunity Corridors steer-ing committee. Were trying towork with the city (of Cleveland)and (the Ohio Department of Trans-portation) to move the corridorsouth of the parking lot.

Wed be ready to expand rightnow if we could, he said.

JASON MILLER

John Anthony Orlando, Orlando Baking Co.s executive vice president of oper-ations, says the company is happy to continue growing as a Cleveland company.

continued from PAGE 1

Care providersoffered optionof bundled payBy RICH DALYModern Healthcare

The Centers for Medicare & Medicaid Services said it expectshundreds of health care providers tohelp test and develop four versions ofbundled payment arrangements thatthe federal agency unveiled last week.

The bundled payments initiative,authorized by the Patient Protectionand Affordable Care Act, aims to encourage clinicians and hospitalsto coordinate care, improve thequality of care and save money forMedicare, according to descriptionsposted on the agencys website.

Many providers are expected toapply to participate in the voluntaryinitiative, despite the risk of losingMedicare funding if spending goalsare not met, because they also mayqualify for additional funding, according to agency officials.

Three of the four models in the ini-tiative will use a retrospective bundledpayment arrangement under whichthe agency and providers set a targetpayment amount for a definedepisode of care. That total target pay-ment will be compared with the totalpayments at the end of the episode ofcare and providers will receive a shareof any resulting savings.

Another model would pay providersprospectively and allow them tochoose the model of bundledpayments that works best for them.

Rich Daly is a reporter with ModernHealthcare, a sister publication ofCrains Cleveland Business.

Kent: Legislators cite danger in precedent



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FROM A BUSINESS OWNERnsights

Elk & Elk pursuing claims of toning shoe injuries Omnipresent personal injury law firm debates benefits, says it has 14 clients who have suffered

By MICHELLE [email protected]

Personal injury law firm Elk & Elkis pounding the electronic pavementin search of people who want to explore whether the makers of theirtoning shoes should foot the bill forinjuries they say the shoes havecaused.

The Mayfield Heights firm hasposted on its website a toning shoeadvisory that states in bold type,Call an Elk & Elk product defectlawyer if wellness shoes have dam-aged your well-being. It also haspublicized its search for injured con-sumers in television commercials.

According to Elk & Elk attorney JayKelley, the firm already has 14 Ohioclients whove suffered what hecalled significant injury, namelyfractures, because they wore theshoes. No lawsuits related to the toningshoes have been filed, though, andMr. Kelley said he doesnt anticipatelitigation before late fall.

According to Mr. Kelley, toningshoes, which are marketed as shoesthat help wearers increase muscletone and burn more calories, dontdo what shoemakers claim they do.

Independent studies have foundno evidence of added benefit towearing toning shoes, Mr. Kelleysaid, citing a study by the AmericanCouncil on Exercise.

The councils study tracked theexercise responses in subjects whowalked on treadmills in traditionalathletic shoes and toning shoes. Theresearchers found that none of thepopular toning shoes they tested Skechers Shape-ups, Reebok Easy-Tone and MBT showed statisticallysignificant increases in either exer-cise response or muscle activation.

There is simply no evidence tosupport the claims that these shoeswill help wearers exercise more intensely, burn more calories or improve muscle strength and tone,the study found.

While he stopped short of callingthe shoemakers liars, Mr. Kelley saidhe believes the products haventbeen tested adequately and thattheres a lack of warning for them.

To him, the liability is in the insta-bility the shoes create, which he saysis leading to fractures and other injuries. And he isnt talking aboutfalls; rather, Mr. Kelley said, peopleare sustaining injuries because theirgait is altered unnaturally, changing

in some cases their bodies alignment.(Customers) are walking in the

shoes the exact way that theyre sup-posed to be used, and theyre break-ing bones, Mr. Kelley said.

Unsafe at any speed?One researcher for the American

Council on Exercise study likewisevoiced concern that extended wearof toning shoes may, in some cases,potentially cause problems for thosewho may already be at risk for lower-extremity issues. But a longer-termstudy would be required to evaluatethat risk more fully, the researchernoted.

Mr. Kelley isnt waiting to renderhis opinion.

They put an unsafe product intothe market, he said. I know theirdefense: Anybody can be injured exercising. But this is something thattheyre selling as new technology.Theyre not shy about these promisesthat theyre making in these com-mercials and advertisements.

Elk & Elks search began when itmet its first client who alleged injuryfrom the shoes. Asked if the firmssearch for others claiming similar injury is opportunistic, Mr. Kelleyreplied, Dont you think its an opportunistic marketing campaignby (the shoe makers)?

Its very easy to convince peopleof things they want to believe, hesaid. We all want to believe thatthere is some magic remedy outthere that will help us get in shape,live longer, live healthier.

Elk & Elk is not planning a class-action lawsuit. Should the firm go tocourt, it would file each complaintindividually, though if there areenough cases around the country,they could be handled via multidis-trict litigation, Mr. Kelley said.

The company, Mr. Kelley said, isfocused primarily on toning shoessold by Skechers, though he declinedto elaborate on why.

Companies respondIn a prepared statement, Leonard

Armato, president of Skechers FitnessGroup, said: While Skechers doesnot comment on pending litigation, thecompany is confident that Shape-ups are safe. Skechers has not had anopportunity to review the plaintiffsallegations, claims, or medicalrecords. However, we can say thatmillions of people wear Shape-upswithout experiencing what the

plaintiff alleges.A Skechers spokeswoman said

numerous studies have found thatthere are benefits to so-called rockerbottom shoes. Researchers, she said,have found demonstrable fitnessbenefits from walking and standingin such shoes, as compared to flat-bottomed athletic footwear, withoutnoting any adverse safety or healthconsequences.

The Skechers spokeswoman alsonoted that the American Council onExercise study was published by an

organization that certifies personaltrainers, which she asserted wouldhave a bias against a shoe that helpsyou work out without going to thegym. Joe Casagrande, president of MBT North America, said that without knowing the specifics of Elk& Elks claims, its hard to have anyresponse. He also said MBT doesnot read the American Council onExercise study as addressing the injury issue because none of theparticipants was reported to havesustained injury.

Claims for unemploymentinsurance risewith layoffsBy STAFFING INDUSTRY ANALYSTS

Initial claims for unemploymentinsurance caused by mass layoffevents where 50 or more workersare laid off from a single workplace and the resulting initial claims forunemployment rose in July fromJune, the U.S. Bureau of Labor Statis-tics reported.

On a seasonally adjusted basis,145,000 initial claims for unemploy-ment insurance related to mass layoffs were filed in July. Thats up1.1%, or 1,556, from June and up4.6% from July 2010. The number ofmass layoff events also rose in July to 1,579, which is a 3.1% increasefrom June and 3.3% increase fromJuly 2010.

The industry with the most initialclaims for unemployment insuranceresulting from mass layoffs in Julywas temporary help services, with18,495, according to numbers thatwere not seasonally adjusted.



Crains honors peoplebehind their people

2011 ARCHER AWARDS: ACHIEVEMENTS IN HUMAN RESOURCES

Crains Cleveland Business for the first time this year honored the regions human resources profes-sionals with its Archer Awards pro-gram.

The winners of the 2011 ArcherAwards were announced at an eventAug. 17 at LaCentre Conference andBanquet Facility in Westlake.

The event was presented byHoward & OBrien Associates andsponsored by Aon Hewitt, Pradcoand Cleveland.com

The honorees, selected by an outside panel of judges, were:Human resources executive of

the year, public company: SteveBecker, Sterling Jewelers Inc. Human resources executive of

the year, private company: TinaMyles, InfoCision ManagementCorp. Human resources executive

of the year, nonprofit: MichelleMeers, Playhouse Square Founda-tion Innovation Award: Bill Busby,

US Endoscopy; Lori Hedrick, Mar-cus Thomas LLC; Zachary Simon,Eaton Corp.; and Patricia Stumpp,Invacare Corp. Lifetime Achievement Award:

Christopher Maurer, FirstMeritBank Rising star award, public:

Leonora Yurichak, CBiz Inc. Rising star award, private:

Megan Busovicki, AdvoCare Group Rising star award, nonprofit:

Lauren Rudman, Greater ClevelandRTA Citizenship award: Daniel

Blain, Jewish Federation of Cleve-land

In all, 33 Archer Award finalistswere selected, with judges takinginto consideration a variety of qual-ities among nominees, includingleadership, best practices, achieve-ments and community involve-ment.

For profiles of finalists and winners, go to www.crainscleveland.com/section/archer11.

ABOVE: Laura Graham, Amanda Gower and Nancy McCarthy, of event sponsorPradco. BELOW: Ricky D. Smith and April Harrison of the Cleveland Airport Sys-tem.

HAL STATA PHOTOS

ABOVE LEFT: The winners and finalistsgather on stage after being recog-nized. ABOVE RIGHT: Bob Becker fromevent sponsor Aon Hewitt addressesthe crowd. RIGHT: Crains publisher Brian Tucker with PlayhouseSquaresMichelle Meers the winner in the human resources executive of theyear/nonprofits category and LeeAnn Howard and John OBrien, ofevent title sponsor Howard & OBrienAssociates.


amounts of money, both the Squareand GoPayment are far better thantraditional payment processing systems, Mr. Larson said.

It is night and day, he said.Among those taking payments on

smart phones are artists, farmers,contractors and even Girl Scouts;their ranks include anyone who sellssomething but either cant afford orwould rather avoid costs associatedwith taking credit cards the tradi-tional way, which often involvesbuying a card reader and payingmultiple fees.

Hip to be SquareWith the Square, GoPayment and

some other mobile payment systems,users receive a free card reader andthen pay a percentage of each salethat they process through the system.For instance, with the Square whichas of Aug. 1 was used to processabout $4 million in transactions perday users pay a 2.75% fee on eachtransaction, and thats it.

Because Mr. Larson typically billsa consulting client after they meet,he rarely uses the GoPayment cardreader, which plugs into the head-phone jack of his Android. Instead,he types the clients credit cardnumber into the corresponding GoPayment software that he down-loaded to the phone. Then the appgives him the option of sending areceipt via email or text.

The Gorilla Group, which usesthe Square system, takes paymentat its monthly events, so the organi-zation uses the card reader. The device has helped the group getpeople through the door faster, Mr.Larson said.

Lori Paximadis, who is co-founderof Cleveland Handmade, said sheknows of six or seven artists andcraft makers who take credit cardsusing the Square.

Ms. Paximadis, who makes hand-made jewelry, is among them. Shereceived a Square reader last October,right around the time when SquareInc., started by Twitter co-founderJack Dorsey, made the device avail-able to the general public.

After a few test runs, Ms. Paxi-madis for the first time used theSquare during a two-day show inAvon Lake this past July.

And it was awesome. It reallywas, she said.

The product hasnt yet convincedMs. Paximadis to abandon her accountwith ProPay, which has paymentprocessing programs tailored forsmall businesses.

Keeping the ProPay account, whichrequires Ms. Paximadis to pay anannual fee as well as fees on trans-actions, gives her a backup in caseshe ends up selling jewelry in a spotwhere her smart phone has troubleaccessing the Internet.

Still, using the Square is stupideasy, she said, noting that she nolonger must enter sales data intoher computer after each show.

Im blown away by it, honestly,she said. Its great technology, andit helps level the playing field a bitfor small businesses.

Security firstProPay also has a card reader that

allows account holders to processpayments via smart phones and theiPad, and other companies offermobile payment systems, too.

For instance, Ed and Adam Ellis,the electricians who own CastleRock Electric LLC of MayfieldHeights, about a month ago startedtaking credit cards on their iPhonesusing a system made by Elavon Inc.,a subsidiary of U.S. Bancorp.

Although he prefers cash andchecks, Ed Ellis said the VirtualMer-chant Mobile system is easy to useand processes payments quickly.He also likes its security features.

We know right away if the card isgood, he said.

Vendors affiliated with the NorthUnion Farmers Market are startingto take payments on smart phones,but most of them are artisans, whotend to sell more expensive itemsthan farmers, said Emma Anderson,general manager for the Cleveland-based nonprofit, which runs severalfarmers markets in Northeast Ohio.People buying food at farmers markets tend to bring enough cashto buy food items, which are less

(The Square) is stupideasy. Im blown away byit, honestly. Lori Paximadis, co-founder,Cleveland Handmade


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continued from PAGE 1 expensive than craft items and are lesslikely to be bought on impulse, shesaid.

Still, the vendors who are using itlike it, Ms. Anderson said.

Even though the Prochko familysells vegetables at about four farmersmarkets in the region each week,they only might process one or twocredit card transactions during thattime via the Square, Kay Prochko said.Even so, the device has worked well,said Ms. Prochko, who helps runCovered Bridge Gardens LLC fromthe family farm in Ashtabula County.Plus, she said she believes con-sumers soon will expect to be able touse credit cards at farmers markets.

We want to be right there and beone of the people with it, Ms.Prochko said.

Sales are cookingThe ability to take credit cards has

meant increased sales for Girl Scouttroops in Northeast Ohio, said SueMajzun, product sales manager forGirl Scouts of Northeast Ohio.

This spring, 150 of the 2,700troops in the 18 counties served bythe organization used Intuits Go-Payment system to sell cookies, Ms.Majzun said. Those who did sawsales increase by 13%, on average making the system well worth the feethe organization paid on each trans-action, she said.

The device was particularly usefulat booths located outside grocery storesand other community locations, thougha few troops did use the device whenmaking door-to-door sales.

Now the organization plans tochoose a mobile payment systemthat all 2,700 troops will be able touse next year, Ms. Majzun said.

A lot of customers just dont carrymoney anymore, she said.

Pay: Technology levels playing field Florida warehouse chainopens doors to NE OhioU-Store-It reduces Cleveland footprint in dealBy STAN [email protected]

StorKwik, a mini-warehouse chainfrom Orlando, Fla., is a new entry inthe Northeast Ohio market afterbuying 10 properties in the regionas part of an 18-property, $43.5 million acquisition from U-Store-ItInc. The other eight properties arein Indianapolis.

Chip Headley, president andchief investment officer of StorKwikparent Flagship Investment Proper-ties Inc., said the Sun Belt companylikes the Midwest as a contrarianplay.

The Midwest has had its hits, butisnt making big swings like otherparts of the country, Mr. Headleysaid.

In the sale, Wayne, Pa.-based U-Store-it said it had sold all five of itsCanton locations and reduced itsexposure to the Cleveland area by30% in terms of square footage. Thefive U-Store-It locations StorKwikacquired in the Cleveland marketare in Cuyahoga and Lake counties,according to the companys website.

Publicly traded U-Store-It said itshed the units to redeploy capital tomore attractive growth markets.

Mr. Headley said StorKwik as asmaller chain can focus closely on its operations and can make improvements to them quickly toincrease revenues. Prior to the U-Store-It deal, StorKwik had 11properties in Florida and California.U-Store-It has 437 units after thesales.

Mr. Headley declined commentwhen he was asked if revenues andstaff morale at the former U-Store-It properties had flagged because ofthe companys corporate headquar-ters move from Cleveland in 2008and the litigious 2007 separation ofmanagement under Dean Jernigan,its CEO, from the Amsdell family ofMiddleburg Heights that had builtthe company and taken it public.

I know both (Mr. Jernigan) and(Robert) Amsdell, Mr. Headleysaid.

Mr. Headley declined to say howFlagship financed its acquisition.However, private equity groupKayne Anderson Real Estate Advi-sors LLC of Armonk, N.Y., said itparticipated in the U-Store-It dealwith Flagship as part of a plan to diversify from prior reliance on off-campus student housing projects.

StorKwik shelled out $10.75 million for the five Cleveland-areaproperties in the Crains circulationarea, according to land records inCuyahoga and Lake counties. Publicrecords show StorKwik through KAFProperties Ohio I LLC paid between$1.4 million and $2.7 million for individual properties in Cuyahogaand Lake counties, according todeeds recorded Aug. 16.

The five former U-Store-It loca-tions that now are in the StorKwikfold are the two Euclid locations,1500 Brush Road and 23640 Lake-land Boulevard, and properties inMentor, 6784 Hopkins Road; Perry,4736 North Ridge Road; andWilloughby, 38255 St. Clair Ave.


Airlines, a part of the Americaneconomy that touches nearlyevery business executive andowner, are in the news again, in

a quirky mix of ways.United Airlines, which is the new

name for the company that has operated ahub here for so long (Continental), saidrecently it will make physicalchanges to its aircraft to helppassengers.

Apparently, the companyplans to retrofit some of itsplanes to increase the space inthe overhead bins, somethingthat probably will delight thebusiness road warriors who cant risk losing their bags orwasting time at baggagecarousels for a one- or two-nighttrip.

Anything that the airlines can do tohelp business folks these days is welcome, including this bigger-binplan. The only problem I have is that itincreases the chances for people toknock me in the head with their thirdcarry-on bag.

You know the type I mean: a womanwith a suitcase, the matching carry-onstuffed to the breaking point and a pursethat could hold the contents of my officedesk. Or the guy who lugs that same suitcase, coupled with a just-as-jammedcarry-on and an overstuffed bag fromthe (fill in a retailer name) shop at their

vacation spot.Couldnt the airlines simply

give us a break on the baggagefees?

Absent that, could they makesure that those of us with one,simple carry-on bag not getsqueezed out by those whoneed a U-Haul?

* * * *AND SPEAKING OF the

airlines, how about the Obamaadministrations mishandling of BoeingCo.s plans to build planes at a secondlocation, in South Carolina? Building thelong-overdue Dreamliner for its airlinecustomers is critical for Boeing, whichwanted a second factory in the U.S. tohandle demand.

Yes, the fact that Boeing built the plant

in the South, in a right-to-work state,does reflect the reality that its massivefactory complex in the Seattle area hasbeen the regular target of contract-timestrikes by its union.

But Boeing didnt plan to eliminatejobs there; the company wanted to meetits customers demand and ensure a flowof some product in the case of a futurework stoppage.

The National Labor Relations Board,with Obama appointees, filed a complaintin April against Boeing, a company thatdidnt move its jobs overseas, like somany other manufacturers.

Boeing is adding jobs, and apparentlytheir sin is that they havent beenadding all of them in a location that can produce gobs of more union duesdollars.

But the company is creating jobs in astate plagued with high unemployment,and has added 2,000 workers at its base in Seattle since it decided to build a second plant in the South.

This president desperately needs to bea jobs creator; the action by the NLRBwont help much.


Not so fastT

he Ohio Turnpike is a valuable east-westcorridor that plays a vital role in keeping thewheels of commerce moving in the BuckeyeState. We do not want to see it put into

private hands under Gov. John Kasich, who seemsinsistent on turning this key transportation link intoa pile of cash.

We opposed the idea of leasing the turnpike whenit was raised in 2009 by Gov. Kasichs predecessor,Ted Strickland, as he struggled to balance the states2010-11 budget. Nothing has changed to make theidea more palatable now.

In our view, the turnpike fits the if it aint broke,dont fix it category of asset. It is a well-maintainedhighway under the oversight of the Ohio TurnpikeCommission. Would a private operator thats con-scious of its bottom line make the investments neededto keep the roadway up to acceptable standards?

Maybe. Maybe not. And if it didnt, would mainte-nance of the roadway suffer while the state sued theoperator to perform as it should?

And what of the economic development role theturnpike has played in fostering business retentionand expansion along the corridor?

When Umberto Fedeli, head of The Fedeli Groupinsurance brokerage in Independence, was chairmanof the Ohio Turnpike Commission, he proudlywould tell the story of how the commission createda turnpike interchange at Archbold, in westernOhio, in order to meet the transportation needs ofSauder Woodworking Co., the big maker of ready-to-assemble furniture thats headquartered there.The commission also invested during Mr. Fedelistenure in two exits at Lordstown to make accesseasy to and from the giant General Motors plant inthat eastern Ohio town.

Its impossible to know how great a role the Lord-stown exits have played in the survival of the assemblyplant through all of GMs struggles. Would it be theproduction home today of one of GMs most popularvehicles, the Chevy Cruze, without the exits? Perhaps.But it hasnt hurt that suppliers dont need to takeconvoluted routes to truck their goods into the plantor that GM readily can move finished product out.

Would a private operator be attuned to the trans-portation needs of key businesses along the route sothat opportunities to aid them by investing in theroadway wouldnt be lost? We somehow think not.

Gov. Kasich nonetheless continues to push theconcept of leasing the turnpike as a way to unlock astream of dollars from what he calls an asset that isseverely underutilized.

For Ohio to sit on an unused asset makes asmuch sense as a company sitting on an unused asset, the governor recently told The Plain Dealer.

There are two flaws in that argument. First, asweve cited above, the turnpike isnt an asset that isunused. Second, once a company sells an asset, it isfreed of future effects on its business should thebuyer prove to be a poor steward of that asset. Ohiodoesnt have the luxury of avoiding any adverse effects from leasing of the Ohio Turnpike.

As our Jay Miller reported in July, Indianas expe-rience with leasing its turnpike hasnt been great.Why risk repeating it in Ohio?

FROM THE PUBLISHER

LETTERS

BRIANTUCKER

Change wont alleviate airline hassles

Veritix, clients limit fans ability to resell Crains Aug. 8, Page 3 story, Clevelandfirm Veritix scores big in sporting eventsales, plans to up the ante, misrepre-sented the Fan Freedom Projects criti-cism of Flash Seats and significantly understated the inconvenience (and, somemight argue, the deceptive marketing)that Veritix and its clients impose onconsumers.

The Fan Freedom Project does not justview Veritix and the Flash Seats resaleplatform as an incomplete solution.Veritix and its clients make it challengingfor fans to give away or sell the ticketsthey have purchased by locking theminto the Flash Seats platform and con-trolling the resale prices that selling fansare permitted to display to purchasingfans. Requiring Cavaliers tickets resellersto post resale prices that are anything

close to face value prices that were paidprior to LeBron James departure is mis-leading, unfair to sellers who simply wantto recoup some of their money, and frus-trating to fans seeking to purchase at fairmarket prices.

Fans believe they own their ticketsand they have the right to choose how totransfer or re-sell them, including tochoose the sales platform and the pro-posed sale price. Until Veritix and itsclients allow fans these choices, theymight as well be Ticketmaster.

Jon PotterPresidentFan Freedom Project

LaTourette protects lakes The Cleveland-Cuyahoga County Port

Authority applauds Congressman SteveLaTourette for his recent stand to protectjobs and commerce on the Great Lakes.

Rep. LaTourette successfully champi-oned an amendment to the U.S. Envi-ronmental Protection Agencys budgetthat would penalize any Great Lakes statethat seeks to impose unworkable ballastwater regulations on commercial vessels.The amendment is targeted at regula-tions adopted by the state of New York,which if left unchanged, will choke offcommerce to Ohios Great Lakes ports.

In late 2008, the New York Departmentof Environmental Conservation steppedinto the complex role of trying to regu-late domestic and international maritimecommerce. State environmental regula-tors sought to prevent the spread of

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

See LETTERS Page 11



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non-native aquatic species in theballast water in commercial vessels.Ballast water is critical to maintainingsafety and stability. Unfortunately,when water is pumped into ballasttanks, small aquatic organisms canbe swept up at the same time andtransported outside their naturalhabitat.

The shipping industry concedesthe role it unintentionally plays inthe movement of species and isworking cooperatively to solve theproblem. Under existing federallaw, all ships must exchange ballastwater while at sea in an effort toflush organisms from ballast tanks.This practice also helps kill anyfresh water organisms by dousingthem with salt water.

To add further protections, theUnited Nations International Maritime Organization worked withscientists and maritime interests tocraft a treaty in 2004 that would require all ship owners to install environmental technology to cleanballast water to a specific qualitystandard. Twenty-eight countriesaccounting for more than a quarterof the cargo shipped worldwidehave signed on.

While the treaty hasnt yet entered into force, signatory coun-tries are complying. We support theInternational Maritime Organiza-

tions approach which has proveneffective and note that the U.S.Coast Guard is expected to issueregulations later this year to legallyimplement it.

This issue is also being addressedin a coordinated and comprehensivemanner by the bi-national BallastWater Working Group, which includesU.S. and Canadian governmentagencies on both sides of the border. The Working Groups mostrecent annual report shows that in2010, 100% of international vesselsbound for the St. Lawrence Seawaywere inspected, with more than94% meeting regulations. In caseswhere the requirements are notmet, the tanks are sealed and inspected again when vessels exitthe seaway to verify that they werenot emptied.

Given New Yorks unworkableregulations, it is important to recog-nize that stringent rules such asthose that govern the Great LakesSt. Lawrence Seaway System haveshown success. Indeed, since 2006,there has been no new establish-ment of an aquatic invasive speciesin the Great Lakes.

While many state governments(including Ohio) have incorporatedthe International Maritime Organi-zation ballast water treatment stan-dard in their environmental regula-tions, New York chose to go to an

THE BIG ISSUEDo you think a college degree today is worth the ever-rising cost it takes to earn one?

TONY DIPIETROBrecksvilleYes, becausethere so manypeople out therecompeting, ifyou have no degree youre ata disadvantage.Any piece of education thatyou can get toenhance youremployability is abenefit.

MICHAELSTEVENSWestlakeOverall yes, butin view of thechanges goingon in our country today,you better bevery specializedin your field.

SUSAN GALLAGHERRocky RiverWithin certain circumstancessome of the degrees areworth it, but overall I feel atthis point that college degreesare more costlythan they shouldbe for what youget out of it.

NANCY ZOLLERLyndhurstIt depends whereyou go to collegeand what you major in.

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

unjustified extreme. With no scientific research to

support its position, New York putin place rules requiring ballast water to be cleaned to a standard100 times more stringent than thatestablished by the InternationalMaritime Organization. But notechnology exists to achieve such astandard. A recent report from theEPAs Science Advisory Board underscored that point, concludingthat such a standard would be impractical to verify based on cur-rently available testing methods.

Yet New Yorks deadline to comply with these unworkablerules is Aug. 1, 2013.

To our disbelief, the state of NewYork not only seeks to regulate commerce to New York ports, butalso ships merely passing throughNew York on their way to ports in

other states as well as Canada. For this reason, shipping traffic toand from Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, NewJersey, Pennsylvania, Ontario andQuebec could all be severely cur-tailed.

The International Maritime Orga-nization standard protects the envi-ronment with a realistic approachthat still allows for commerce andjobs to flourish. New York shouldharmonize its ballast water regula-tions with neighboring states andinternational standards. Doing sowill protect the Ohios commerceand that of the entire Great Lakesregion.

William D. FriedmanPresident and CEOCleveland-Cuyahoga County Port

Authority

LETTERScontinued from PAGE 10 2011 Emerald Awards

receptionCrains Cleveland Business on

Sept. 20 will for the third time honor our regions sustainabilitychampions at the 2011 EmeraldAwards reception, held at the newStudent Center at Cleveland StateUniversity.

The awards identify and detail efforts by companies and individualsto adhere to the triple bottom line profits, people and planet.

The event is sponsored by Fairmount Minerals and Cleveland.com.

For more information, includingdetails on how to register for theevent and past profilees and eventcoverage, visit CrainsCleveland.com/emerald.

COMING UP



GOING PLACESJOB CHANGES

AUTOMOTIVEBEACHWOOD BUICK GMC: MikeCargile to sales consultant.

EDUCATIONBEAUMONT SCHOOL: DeniceTeeples to assistant principal; KaraMetcalf to co-director of admissionsand enrollment.CLEVELAND INSTITUTE OF ART:Chris Whittey to vice president, academic and faculty affairs.NORTHEAST OHIO MEDICAL UNIVERSITY: Timothy R. Ulbrichto director of pharmacy resident education, College of Pharmacy.

FINANCIAL SERVICEGRANT THORNTON LLP: ChadDavies to partner.LINCOLN FINANCIAL ADVISORSCORP.: Jeremy DiTullio to managingprincipal.SKODA MINOTTI: Patrick O.Mullin, Richard Z. Cruickshank Jr.,Timothy A. Heikkila and BrianRosenfelt to principals; Amy J. Gibson and Randall P. Bosley to senior managers; Jeremy M. Long,Dennis Murphy Jr. and Joseph D.Yusz to managers; Patrick Walsh,Michael R. Iosue and MichaelGross to senior staff; Bob Goricki toonline marketing manager; LindaBagley to senior accountant.

HEALTH CARECLEVELAND CLINIC: Dr. ThomasL. Tulisiak to president, Medina Hospital.METROHEALTH: Daniel Lewis tochief administrative officer.PSYCHOLOGICAL & BEHAVIORALCONSULTANTS: Rebecca Cirino,D.O. to medical staff.

LEGALKADISH, HINKEL & WEIBEL: DanielP. Hinkel to associate.NICOLA, GUDBRANSON & COOPERLLC: Nicholas J. Dertouzos andBecky M. Scheiman to members.SCHNEIDER, SMELTZ, RANNEY &LAFOND: Gregory C. Johnson toassociate.

MANUFACTURINGHDT GLOBAL: Jason Chamberlainto president, CEO.

MARKETINGLINEAR CREATIVE LLC: JeffreyLang to project manager.

NONPROFITAMERICAN NATIONAL REDCROSS: Ronald Horvat to divisionfundraising vice president.CLEVELAND FOUNDATION:Elizabeth McIntyre to public relationsofficer; Terry Pederson to writer andeditor.LINKING EMPLOYMENT, ABILITIESAND POTENTIAL: Julia Donovan toemployment services director.LUTHERAN CHAPLAINCY SERVICE:Mark Laskey to executive director.

REAL ESTATETRANSACTION REALTY: DulceyBarr to sales associate.

SERVICEPATTIE GROUP: Hillary Henry togarden and property manager.

ROGERS CO.: Katie Snyder to special event coordinator.SAFEGUARD PROPERTIES: ScottWilson to vice president, propertypreservation; Amitha Rao to director,enterprise information management;Dennis Hoye to corporate controller;Adam Szczesniak to director, infrastructure services.TORCH GROUP: Lee Steinbock toproject coordinator; Joshua Lapineto associate recruiter.

BOARDSMONTEFIORE: Steven S. Willenskyto chair; Patricia M. Inglis, June E.Taylor and Bruce E. Cweiber to vice chairs; Margo Vinney to secre-tary; David B. Orlean to assistantsecretary; Gerald P. Weinstein totreasurer; Idelle K. Wolf to assistanttreasurer; Andrew W. Hoffmann toimmediate past chair; Rhoda Seifertto auxiliary president.MONTEFIORE FOUNDATION:Andrew W. Hoffmann to chair; Susan R. Hurwitz to vice chair; Harriet L. Fader to secretary; MarkA. Mintz to assistant secretary;Phillip S. Sims to treasurer; JeffreyS. Davis to assistant treasurer; Kenneth G. Hochman to immediatepast chair.MONTEFIORE HOUSING CORP.:Ben D. Sheridan to chair; Robert M.Lustig, Daniel E. Rocker DDS andBradley Sherman to vice chairs;Scott H. Polster to secretary; DavidR. Hexter to assistant secretary; AlanB. Blumenthal to treasurer; HarveyA. Siegel to assistant treasurer.

AWARDSAMERICAN CULINARY FEDERATION:Mark Kent (University of Akron) wasnamed a 2011 American Academy ofChefs Academy Fellow.RECOVERY RESOURCES: RaymondJ. Marvar (Tucker Ellis & West LLP)received the Community Challenge Exemplar Award.TRADE, ASSOCIATION AND BUSI-NESS PUBLICATIONS INTERNA-TIONAL: Lois A. Bowers (MedicalEconomics) received a special sectionTabbie Award; Jeffrey Bendix(Medical Economics) received a features Tabbie Award.

Send information for Going Places [email protected].

HinkelLewisWhittey

JohnsonScheimanDertouzos

SnyderLaskeyHorvat

Nursing home kicks off $8M projectEast Side provider focuses on capacity for rehab services,adds to private roomsBy TIMOTHY [email protected]

The Slovene Home for the Aged, anursing home on the border ofCleveland and Euclid, has brokenground on an $8.1 million renovationand construction project to expandits rehabilitation capabilities and itsnumber of private rooms.

Weve been seeing the demandfor more short-term and rehabilita-tion services for a while, but for awhile now weve also been hearing alot from our families about the needfor private rooms, Slovene Homeadministrator Jeff Sas said.

The home, which saw its last bigupgrade in 1982, has 150 beds, noneof which are private. After the addi-tion and renovation project thatsslated to be finished next May, thehome will boast the same number ofbeds, but there will be 88 privaterooms and 31 shared rooms. Also,

Slovene Home will build a rehabili-tation suite.

The project includes a 42,600-square-foot addition that creates anew, 66-bed wing for the home,which sits on Neff Road just off East185th Street on the citys East Side.The project also will include reno-vating a 22-bed wing built in the1960s.

The majority, or about 63%, ofSlovene Homes residents are onMedicaid; about 30% are onMedicare and the rest are privatepayers. As the home offers more rehabilitation services, Mr. Sas saidhe expects to boost its take of dollarsfrom Medicare, which traditionallyhas been a more stable reimburse-ment source than Medicaid.

Medicaid is a very difficult payer, he said. We lose money perday as does every nursing home so you try to use private pay andMedicare to offset some of thoselosses.

Mr. Sas noted, however, that declining Medicaid reimbursementrates werent the primary driver toward offering more rehabilitationservices. That shift stems from thegrowing need for such care, he said.

When Gov. John Kasich presentedhis budget to the Legislature last

spring, many nursing homesaround the state cried foul becauseof the likelihood of steep Medicaidcuts. However, Mr. Sas said SloveneHome has been able to manage itscosts carefully without layoffs to its260-member staff and has beenable to proceed with the buildingproject, which has been financedthrough private donations to thenursing homes foundation.

Slovene Home is in the secondpart of a three-phase constructionproject. The first phase cost $1.4million and included relocatingparking to the north side of thehome and constructing a new entrance canopy.

Mr. Sas said officials at the nursinghome will discuss next month thescope of the projects final phase; itlikely will include renovating some,if not most, of the interior of the existing building.

You have to make your facilityattractive. Weve always been a homethat provided excellent qualitycare, Mr. Sas said. The generationwere taking care of now accom-modations have always been second.Its been the care first. The genera-tion coming down, I think theyre alittle more demanding about the environment and amenities.


PHILANTHROPYI N S I D E

AUGUST 29 - SEPTEMBER 4, 2011 CRAINS CLEVELAND BUSINESS 13

15 CORPORATEFOUNDATIONSFLEX CHARITABLEMUSCLES.

JASON MILLER

Cheryl Garcia (above) and Dana Olesen (below) answer phones at the InfoCision call center training site in Cleveland Heights. So far, theAkron-based firm has hired 14 blind or visually impaired individuals through a job-training partnership with the Sight Center.

A POWERFUL VISIONAkron-based InfoCision, Cleveland Sight Center training

blind, visually impaired individuals to assume call center jobs By AMY ANN [email protected]

Cheryl Garcia just wants to contribute but there are a lot of challenges standing in her way.

I think its hard for people tounderstand, said the Elyria resident. Theydont understand the limits involved.

Ms. Garcia has been legally blind sincebirth; in addition to having been born withcataracts, she has had several retinal detach-ments that ultimately have left her unable to see.

Having a job, it gives me a sense of Im doing something for myself, she said. Ithelps me to feel better about me.

Its an ambition that is a lot more realistictoday thanks to a partnership betweenAkron-based InfoCision and the ClevelandSight Center that is providing training and jobs for those who are blind or visuallyimpaired.

Economiccrunch fuelsnonprofitM&A activityGlut of local organizationsmay lead to more mergersBy CHUCK [email protected]

Nonprofits are going to have to getused to what Teresa Schaffer callsthe new normal.

Over the past few years it has become much more common for nonprofits tomerge or acquire other nonprofits, accordingto several professionals who work with non-profits in Northeast Ohio.

The past year has been particularly busy,said Ms. Schaffer, director of assurance services for accounting firm SS&G FinancialServices Inc. Five of her nonprofit clientshave merged or acquired other organiza-tions since June 2010, said Ms. Schaffer, whoworks from SS&Gs Cleveland office.

Though she isnt expecting the rate ofnonprofit M&A activity to keep increasing,she also doesnt think itll drop anytimesoon. After all, by working together, non-profits often can save money on staffing, realestate and other expenses, all while extendingtheir services, Ms. Schaffer said.

I do think theres going to be a new normalin this industry, she said.

Nonprofits sometimes led by theirdonors are joining forces with other orga-nizations because they see it as a way to getout of a tight spot: Donations are down, endowments are down and governmentgrants are harder to get, but the need for services in many cases has increased.

The big donors are looking at organiza-tions and saying, You need to figure this out,Mr. Schaffer said.

Leading the chargeAmong the donors accelerating the trend

locally is a group of 18 foundations calledthe Funders Collaborative. In April, eightarea nonprofits announced they wouldmerge to become four the result of a pilotproject led by the Funders Collaborative.

The collaborative led by the DeaconessCommunity Foundation of Brooklyn, Ohio,and the Saint Lukes Foundation of Cleve-land started the project in 2009 in response to the economy, said Denise SanAntonio Zeman, president and CEO of SaintLukes.

The collaborative held an educationalworkshop for 76 nonprofits, 17 of which received readiness assessments. From thatgroup came the eight that participated inmergers.

The goal of the pilot was not only to find ahandful of nonprofits that could benefit bymerging or acquiring other groups, but italso was to figure out how the collaborativecould help nonprofits work together more inthe future, Ms. Zeman said.

For one, a professor at Case Western Reserve University is conducting a case

See NONPROFITS Page 16

See VISION Page 14



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PHILANTHROPY

While InfoCision and the Cleve-land Sight Center informally haveworked together on employment inthe past, an agreement announcedearlier this year is taking the rela-tionship a step further.

InfoCision not only contributed$50,000 toward the setup of a callcenter training site at the oldCoventry Elementary School inCleveland Heights (the Sight Centers permanent location isunder renovation), it has a goal inplace to employ 25 people who arevisually impaired by years end.

In turn, the Sight Center is providing general call center andcustomer service training and ongoing employment support ser-vices. The program, intended to bean ongoing InfoCision recruitingsource, additionally is receivingsupport from the Ohio Rehabilita-tion Services Commission.

The relationship got more formal, said Jassen Tawil of theSight Center. In the past we wereresponding to help-wanted ads inthe paper.

So far, 14 blind or visually impaired people have been hiredby InfoCision through the partner-ship, and another five are in training.Once hired, participants can opt towork from home, which helps toeliminate transportation chal-lenges, or at the call center.

From InfoCisions perspective,the partnership is an extension ofa strategy already in place to hireindividuals with disabilities andits one that they say is just as ben-eficial to the more than 4,000-employee teleservices company.

We are hiring tremendouslytalented individuals, said SteveBrubaker, InfoCisions chief ofstaff.

Culture shockAs part of the program, the Sight

Cente

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