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Introducing the new NEO jobs report By SCOTT SUTTELL [email protected]

The world increasingly is filled with quick-to-access data about all sorts of topics. Crain’s is partnering with The Ahola Corp., a payroll and human resources REPORT services company in Brecksville, and local economist Jack Kleinhenz to provide monthly data — and clarity — about a key factor in business deci-

ACE

sionmaking: the size of Northeast Ohio’s work force. It’s called the Ahola Crain’s Employment Report, or ACE Report. The report is derived from actual payroll data — not surveys — collected by Ahola, and it uses an economic model “comprised of economic variables that significantly influence regional employment,” said Kleinhenz, CEO of Kleinhenz & Associates, an economic and business consulting firm specializing in regional economics, market re-

search, forecasting, policy analysis and economic and business modeling. Kleinhenz, who also serves as the chief economist for the National Retail Federation, said the model used for the ACE Report is similar to the one used by the influential ADP National Employment Report, published monthly by the ADP Research Institute in collaboration with Moody’s Analytics. The ADP report, like the ACE Report, is based on actual transactional payroll

data. “The data is giving us a good reading on what’s actually happening in the region,” Kleinhenz said of the ACE Report. The ACE Report will be posted on CrainsCleveland.com on the third Friday of each month. The first installment of the report will be available this Friday, Aug. 15. It will feature data on Northeast Ohio private-sector employment broken down by company size, as well as three-month and six-month

trends. Data also examines employment in goods-producing and service industries. Kleinhenz said the ACE Report model builds on one he developed in 2008, along with fellow local economists Russ Smith and Jordan Vickers, to forecast regional employment by incorporating a forecast of job growth for small and midsize companies. The ACE Report uses employSee ACE REPORT, page 7

Local tech scene is getting quite a jolt By CHUCK SODER [email protected]

TUITION DISCOUNTS ON THE RISE Survey shows steady increase in savings for students at private, nonprofit colleges By TIMOTHY MAGAW [email protected]

ago or so, Bob Helmer Ausualdecade admits it would have been unfor a university president to

education can dwarf what it would cost to attend a state school. At Baldwin Wallace, undergraduate tuition — not counting room and board — is listed around $28,800 for the 2014-15 academic year. At Oberlin College, one of the region’s most elite private schools, that number would hover around $48,000. Kent State’s tuition is See TUITION, page 22

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talk tuition with prospective students or their families. “Ten years ago, I would have spent a lot time talking about the institution,” said Helmer, who has

served as president of Baldwin Wallace University, a private institution, in Berea since 2012. “Today, it’s not unusual for parents meeting me in the hallway to immediately zero in on the cost of education.” Public university presidents could say the same, but that dialogue is amplified at private colleges, where the sticker price of an

The local technology community has been waiting desperately for a day like July 31. That Thursday morning, Oracle Corp. announced it would buy TOA Technologies — a Beachwood software company that easily could have fetched $500 million, according to two outsiders familiar with the industry. And that afternoon, a South Carolina 3D printing company called 3D Systems said it would pay $120 million for Simbionix, a surgery simulation company based in Cleveland. It was an important day for those companies — and many other people in Northeast Ohio’s tech scene. A huge chunk of the cash from the two deals will be distributed to a long list of local people. The founders. Employees who hold stock. And investors who are anxious to finance more local startup companies. July 31 was the kind of day that makes members of the local tech community hold their heads higher, according to Tom Sudow, who used to manage the now-defunct Beachwood business incubator that housed TOA when it was a startup. Sudow said he could feel the excitement a few days later, while attending a monthly meeting that BioEnterprise, a Cleveland-based economic development group, hosts for investors and other people interested in local biomedical tech-

nology startups. “We’ve not had a day in Cleveland like we had last week,” according to Sudow, who works to attract biomedical companies to the region through Team NEO and the Cleveland Clinic’s Global Cardiovascular Innovation Center. One of the biggest winners is Early Stage Partners, which invested in both TOA and Simbionix. And Early Stage, which used to be one of the most active venture capital firms in Northeast Ohio, really needed a win. After 12 years, none of the companies in its portfolio had been sold for a significant profit. So once the Cleveland-based firm finished making investments from its first two funds, it didn’t raise a new one. But the returns generated by TOA and Simbionix could revitalize Early Stage. The firm plans to start raising money for a third fund later this year, according to Jim Petras, managing director. Cash from the deals also will give a boost to other venture capital firms that regularly invest in local companies, such as Draper Triangle Ventures of Pittsburgh and River Cities Capital of Cincinnati. That makes Paul Cohn happy. All three firms received investments from the Ohio Capital Fund, a taxpayer-backed “fund of funds” that invests in venture capital firms that commit to financing companies in Ohio. “That’s three checks back to us

Pages 18-20

Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 32

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By the time single-game tickets go on sale for Cleveland Browns games on Tuesday, Aug. 12, the opportunities to snap up seats to watch Johnny Manziel will be few — and possibly far between. Individual game tickets are being made available about two weeks later than normal for a simple reason. The Browns — helped in part by Manziel, the rookie quarterback who already tops the NFL jersey and players’ association merchandise sales lists — continue to sell season tickets. “A few days ago, I think we sold 120 season tickets,” Browns president Alec Scheiner said of a random weekday at the end of July. The Browns sold 3,000 season tickets in a three-day span after Manziel was drafted in the first round on May 8. That pace was impossible to continue, especially for a franchise with an already-formidable season-ticket base, but the team has continued to ride the wave of Johnny Football-inspired momentum. The Browns have set franchise records for new season-ticket and new suite sales in a season, and training camp in Berea, which for the first time required fans to register online, has exceeded attendance marks. Scheiner, a senior vice president and general counsel for the Dallas Cowboys prior to his December 2012 hiring by then-Browns CEO Joe Banner, compared the build-up to the Browns’ 2014 season to the ’08 Cowboys. That Dallas team was coming off a 13-3 season and had its training camp chronicled by HBO’s “Hard Knocks” series. “Everyone was like ‘Super Bowl, Super Bowl,’ and you just felt it,” Scheiner said of the summer of 2008. “In training camp, you felt the extra energy and pressure. I feel it this year. It’s definitely heightened beyond last year. I was really impressed last year by how passionate our fans are.” The Browns haven’t reached 13 wins since the 1948 team was perfect in 14 regular-season games and defeated Buffalo for the All-America Football Conference championship. Scheiner isn’t predicting double-digit victories for a franchise that hasn’t won more than five games in a season since 2007, but his optimism exceeds that of the hardened fan. “I think people sense that we’re building something,” Scheiner said.

That’s the ticket The physical part of the Browns’ renovations — the first phase of the two-year, $120 million redesign of FirstEnergy Stadium — has reduced the number of available seats to 68,000 from 72,000. Fewer tickets combined with increased demand has meant the Browns have come close to reaching their season-ticket cap. Scheiner said NFL teams typically reserve 5% to 10% of their tickets for

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The look of the west end zone at FirstEnergy Stadium has changed quite a bit since the media was given a tour on June 14. their employees, players (theirs and the visitors), and single-game and group sales. “Let’s say you have about 70,000 capacity, you probably say, ‘Hey, when I get to about 64,000, I’m done (selling season tickets),’ ” Scheiner said. As of last Monday, Aug. 4, the Browns weren’t there yet, but they were close. “The difference is we’ve really had to think about that this year,” Scheiner said of the team’s seasonticket maximum. “What is that number for us? When do we stop? That’s what I don’t think they’ve had here in a long time.” Last week, the Browns gave season-ticket holders a five-day window to buy individual seats for their two preseason and eight regular-season home games. By the time that sale finished, Scheiner didn’t expect many seats would remain when the rest of the tickets are made available to purchase on Aug. 12. “This year, we’ve had so much demand for season tickets, we’ve waited a little (to sell individual seats) because once we go single game, that’s it,” Scheiner said. “We can’t sell any more season tickets because they’ll get scooped up immediately.”

The party is this way The Browns have benefited from the hype in other areas, and they say it’s not just because of the rookie who is both a darling of the team shop and a favorite of TMZ. The team said it sold more merchandise in the first four days of training camp this year than it did in all 13 practices combined in 2013. Sales of team merchandise (gear that doesn’t feature Manziel’s No. 2) have gone up “significantly” in camp, a source said. The Browns have also had yearover-year increases to their digital properties of 135% in video views, 159% in mobile views and 60% in unique visitors to their website from desktop computers. They hope that momentum spills over to the new fan experience elements brought by the first phase of the two-year stadium renovation. The Ford Zone in the northeast corner and the Bud Light Balcony

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on the southeast end of FirstEnergy Stadium will bring an element the team believes was absent from the 15-year-old facility. “I think last year when you went to our stadium, there were very few places that as an ordinary fan, you could say, ‘This is pretty cool,’ ” Scheiner said. The team president said the new party zones behind the massive scoreboards will provide “great views and “really cool amenities.” The team soon will announce another feature geared toward improving the fan experience — a yetto-be-named party festival along Alfred Lerner Way, the street that lines the southeast portion of the stadium. The area will include food trucks, live music and appearances by various Browns alumni. “That is going to big,” Scheiner said. “That’s a big investment by us.” One improvement that won’t be made in the first phase of renovations is to the Wi-Fi and cellular networks at FirstEnergy Stadium. Bloomberg Businessweek reported in January that the NFL had told the teams that weren’t yet Wi-Fi-enabled (a number Bloomberg estimated at 12) that they needed to get up to speed before the 2015 season. Scheiner said the Browns will meet that timeline, since technology upgrades are part of the second phase of the stadium renovations. He’s just not sure if it will be Wi-Fi or a different type of digital upgrade. (Verizon and AT&T are among the companies that have developed multicast technology, which establishes set channels for mobile devices that can broadcast video.) “What we have to determine is whether it’s Wi-Fi or other technology upgrades, and whether they’ll be viable and worthwhile two or three years from now,” Scheiner said. “If the answer’s yes, then we’ll have Wi-Fi. If the answer’s no or maybe, then we’ll just have to think about what other things we should look at.” For Browns fans this season, the upgraded roster — along with the giant new scoreboards, the party decks, the LED boards and the pregame festival — will have to be enough.

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TTI is going for cleaner approach Glenwillow company that manufactures Hoover, Dirt Devil and Oreck products is focusing more on marketing of individual brands By BETH SNYDER BULIK Advertising Age

TTI Floor Care of Glenwillow is the Unilever of the vacuum cleaner industry. Consumers may not be familiar with its corporate brand, but millions of people use its Hoover, Dirt Devil and Oreck products every day. The company already is the revenue leader in the U.S. floor-care market, with a 32% volume market share of an almost $5 billion industry, according to Euromonitor. To expand that share, the company is putting more of a focus on marketing to communicate to consumers the differences among three products that do essentially the same thing. To that end, the company hired its first CMO in March and last month tapped a new agency in Johannes Leonardo. The goal is not to build TTI’s corporate profile, but rather to boost the individual brands under that umbrella, said Liz Cope, the company’s vice president of global marketing. “What’s great about these brands is they’re all in the same category, but they’re really different. They (each) talk to a different consumer,” Cope said. “Our approach to marketing uses the same tools, but the way we talk about what those brands stand for is very different.” Indeed, social is expected to play a big role in the company’s marketing going forward, based on comments by inaugural chief marketing officer Alan Gravely regarding TTI’s agency selection. “Johannes Leonardo has extensive expertise with iconic brands and a philosophy that it’s consumers, not the media, who control the conversation today,” he said. “The idea of the consumer as the medium fits well with our vision for TTI Floor Care as an organization centered around the consumer.” Gravely joined TTI Floor Care, a subsidiary of $4.3 billion Techtronic Industries, four months ago from Yum Brands, where he oversaw Piz-

za Hut and KFC’s global branding as CMO for Yum Brands International. His new role is key, considering the parent company garners 27% of its global revenue from floor care and appliances. (The remainder comes from its power-tool, equipment and accessory products under the Homelite, Milwaukee, Ryobi and AEG brands.) “It’s really about fundamentally understanding your consumer segmentation and managing each brand to a need state,” Gravely said regarding the challenges of managing a portfolio of products in the same category. “This provides clear differentiation not only among your own portfolio but also the competition and therefore in the mind of the consumer.” TTI distinguishes its brands from each other by price, target audience and marketing position. Dirt Devil is the entry-level lower-priced brand aimed at a young audience with a fun and irreverent voice. Hoover plays in the middle-price

range with an older, college-educated and family-minded consumer target. Its message is that it is a classic, trustworthy brand that’s both innovative and modern. Oreck is the higher-priced end of its cleaning line, with a more affluent audience, which puts its brand emphasis on durability with a lightweight design.

Spending rises Even in advance of its agency selection, TTI had begun accelerating marketing. According to Kantar Media, Oreck received $8.2 million in measured media for the first four months of last year compared with $12.5 million in the like period of 2014. Dirt Devil’s measured-media spending between January and April of this year was $2.4 million, a tad more than the $2.3 million the brand received during all of last year. And Hoover’s outlay in the first four months of 2014 was $25.8 million compared with $60 million in all of 2013. Dirt Devil underwent a global

brand refresh this spring. Along with adding new vibrant colors to the iconic red sweepers, simplifying product designs and packaging, the brand’s voice was also tweaked via social-media and public-relations efforts. Its Tumblr page and Twitter account were populated with gifs, offbeat humor and pop-culture references such as a “Piper isn’t the only one rockin’ the orange jumpsuit” gif of a woman in orange vacuuming with her orange Dirt Devil (a nod to “Orange Is the New Black”) and “Happy 10th anniversary Napoleon Dynamite. We wish we could trade you a Hand Vac 2.0 for a sweet drawing of a liger.” The Hoover brand, which Cope defined as a “modernized classic” brand, in May introduced the Air Cordless, a product TTI hopes will redefine the industry. It is Hoover’s first full-size cordless vacuum, a direction which TTI believes the entire upright category is moving. The marketing campaign includes a TV spot using an updated aria from “Madame Butterfly,” and social media built

Renovated Nottingham Place has new owner By STAN BULLARD [email protected]

Call it a case of K&D Group coming in, updating, repositioning and moving on, something still a bit of a rarity in buy-and-hold Northeast Ohio. In 2010, K&D paid $500,000 for the 100-suite Nottingham Place apartments, 19117 Nottingham Road, Cleveland. The Willoughby-based apartment owner and developer recently sold it for an unknown amount to a new investor group, but clearly came out ahead. Doug Price, K&D CEO, said the company sold the building as part of a strategy to raise equity for its next downtown development project.

However, he said K&D had always planned to sell the property after it was upgraded. When K&D bought Nottingham, there were about 15 tenants in one building, copper and pipes had been stripped from a second empty building and a third was also empty. After a substantial renovation, the property is 98% occupied, Price said. “We saved it from being condemned,” Price said. The buyer of the property is Nottingham Place LLC, an affiliate of Wadsworth-based River Street Capital. River Street is operated by partners Gary Skoch and Andrew Shell. It’s the largest property to date for the duo, who have been in real estate investing together a decade.

Skoch said they have bought and sold smaller apartment buildings and continue to own a 56-suite Painesville apartment building and a half dozen houses they rent out in Akron.

“We see it as a stable, cash-flowing property.” – Andrew Shell partner, River Street Capital From a property few would touch, Nottingham is now competitive in more ways than one. Michael Barron, a senior vice president at the Marcus & Millichap brokerage that handled the sale for K&D, said three buyers had vied for the property.

K&D just opened its Residences at 1717 E. Ninth St. and will continue to install new apartments in the former downtown office building for several months, Price said, and is planning to convert the Leader Building, 530 W. Superior Ave., to apartments at some undetermined time. Shell said River Street sees itself owning Nottingham for at least five years. “We see it as a stable, cash-flowing property,” Shell said. None of the principals nor Barron would say how much Skoch and Shell paid for the complex, and land records do not disclose a sale price. However, it had to be more than $1.5 million. Cuyahoga County records show they took out a mortgage of that size to buy it.

around the hashtag #RethinkCleaning. TTI’s biggest competitors in the United States are Bissell, with a 21% market share, and Electrolux’s Eureka with an 11% share, according to Euromonitor. The Dyson brand has a 5.5% market share, good for the No. 6 position in the United States, reflecting slow but steady growth. The challenge for the industry as a whole is to increase sales in a category where the products last a long time. Consumers today are looking for, ‘How can I get the best vacuum I can [afford] and that will last?’ They don’t want to buy a new vacuum every couple of years,” said Debra Mednick, NPD executive director and home industry analyst. That’s where TTI’s newest brand, Oreck (acquired in a July 2013 U.S. bankruptcy auction for about $17.2 million), may find its fit. The brand used first in hotels has built its reputation on durability and light weight. TTI will launch new Oreck products later this year, Cope said.

CORRECTIONS Christine M. Higham, Summit County deputy director, human resources, is president of the Tallmadge Rotary Club. Incorrect information appeared in the Aug. 4 Archer Awards section. Due to incorrect information submitted to Crain’s, the July 28 list of the 100 Largest Northeast Ohio Employers contained incorrect employee numbers for Aultman Health Foundation. Aultman Health Foundation had 4,228 full-time equivalent local employees as of June 30, 2014, and 4,228 employees working in Ohio as of that date. Due to incorrect information submitted to Crain’s, the Aug. 4 list of the Largest Law Firms contained incorrect numbers for Tucker Ellis LLP. Tucker Ellis LLP has nine female partners and four minority partners in Northeast Ohio.

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Then-Cleveland Heights senior Michael Wilson was enrolled in the school district’s engineering technology program in the 2012-13 school year.

Manufacturing industry is building momentum By RACHEL ABBEY McCAFFERTY [email protected]

Though it’s difficult to tell just how many manufacturing jobs were created in Northeast Ohio in recent months, experts watching the industry see reason to be optimistic. John Colm, president and executive director of manufacturing economic development group WireNet, said he’s been seeing a “broad-based” expansion in hiring and investments across a variety of sectors. Although he said the jury’s still out on whether this is more than a cyclical rebound, observers are optimistic about the outlook after a few good months. He noted the automotive, energy, aviation, metal fabrication and machinery industries as those doing especially well. The country added 28,000 manufacturing jobs in July, the U.S. Bureau of Labor Statistics reported on Aug. 1. The BLS said the motor vehicles and parts sector added the most jobs in July, with about 15,000 jobs gained nationwide. Overall, the national numbers in July were a big improvement for the manufacturing sector, which for the past 12 months has added an average of about 12,000 jobs per month, according to the BLS. The most recent state numbers for the Cleveland metropolitan region show manufacturing jobs increasing in May and June after about six months of relatively steady employment. The preliminary Current Employment Statistics numbers show manufacturing jobs in Northeast Ohio rose to 127,200 in June from 125,300 in May. But these figures aren’t without controversy. Earlier this year, a group including representatives from Cleveland State University and regional business attraction group Team NEO highlighted inaccuracies in the data, which is based on samples from a national survey and revised over time. Jacob Duritsky, managing director of research for Team NEO, said the data from the bureau is volatile at the metro level, so the organiza-

tion prefers to use the Quarterly Census of Employment and Wages. But the most recent numbers available from that report are from 2013. Despite that caution, Team NEO sees reason for optimism in the national jobs numbers. “If manufacturing is doing well nationally, we anticipate we’ll feel some of that activity here,” Duritsky said.

Signs of life Team NEO’s most recent economic report for the second quarter of 2014 found manufacturing to be an industry with notable growth, including expansions at companies like Ashta Chemicals Inc. of Ashtabula and Chem Technologies Ltd. of Middlefield. And Duritsky pointed to specific sectors with growth potential, like those related to the Utica shale play. Fluid system component maker Swagelok Co. of Solon has been busy hiring this year. The company has brought 236 new hourly associates on board so far in 2014 and now employs about 5,200 people, said communications manager Theresa Polachek. The hirings were due mainly to growth and some attrition. She said the company needs to hire about 60 to 70 machinists a year, plus other associates. At Cleveland-based E.C. Kitzel & Sons Inc., business has been brisk in the last month, general manager Tom Schumann said. In June, the company added a new full-time employee who had previously been working as a co-op student, bringing the total number of employees to the mid 30s. Schumann said the maker of cutting tools has been seeing a lot of business with its automotive-related customers especially. Overall, Schumann said that through interacting with Wire-Net members, he’s been hearing that conditions are robust in a lot of industries. Hiring is a bit murkier, but he thinks the need for new employees will continue, as he expects more employees in the industry to start retiring. Those impending retirements are one challenge manufacturers still face, especially when coupled

with the so-called skills gap. Manufacturing advocacy group Magnet has been working to address those challenges through work force development programs. Judith Crocker, Magnet’s executive director of work force and talent development, said she’s started to see hiring pick up in the past four to six months, but she believes a big increase is still “brewing” as baby boomers start to retire in greater numbers and manufacturing continues to pick up. Magnet has been working a lot with educators and employers to prepare the next generation to fill in those gaps so it doesn’t turn into a work force crisis, Crocker said. At the ArcelorMittal Cleveland plant, recent and projected hiring is based on attrition and vacancies left by retirement, vice president and general manager Eric Hauge said in an email provided by a spokesperson. Employment has grown steadily since 2009 and 2010, he said, with an increase of 150 after the restart of a steel producing facility in 2012. There has been just a small increase in the first six months of 2014, from 1,882 employees in January to 1,903 at the end of June, Hauge said.

Not like the old days, but … Wire-Net’s Colm said the manufacturing jobs gained don’t compare to those lost in the recession, and he doesn’t expect to see large jumps in the number of new jobs in the region anytime soon. “Manufacturing just is not the job generator it once was,” Colm said. Colm said he wants to see more innovation from policymakers on issues important to manufacturing, such as the trade deficit, if the growth is to be sustained. Duritsky of Team NEO said he doesn’t expect manufacturing jobs to get back to prerecession levels because of productivity increases, but in terms of overall output, manufacturing is going strong, Duritsky said. “It’s as high as it’s ever been,” he said, “and it’s growing.”

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Glenwillow distribution center will add 150 jobs By STAN BULLARD [email protected]

Convenience store supplier CoreMark Holding Co. plans to add 150 jobs as it opens a distribution center in Glenwillow in the former Dots Inc. headquarters and warehouse at 30300 Emerald Parkway. “This is a pretty important geographical expansion for us,” said Milton Draper, director of investor relations at the South San Francisco, Calif.-based company, in a phone interview. “We plan to spend about $16 million on capital expenditures on the property. We have a lot to do as we expect to start receiving product there beginning in October.” It’s also a very big deal for Northeast Ohio. The hulking former Dots property has 180,000 square feet under roof, or a little more than the size of three NFL football fields. Draper said Core-Mark will add a cooler, freezer and extensive racking to adapt the building to its needs. Core-Mark has no distribution centers in this part of the United States, but will move some clients from the Carolinas, Kentucky and Pennsylvania to the new location. A news release Core-Mark issued Aug. 1 stated that the property would serve 1,000 existing customers, and it expects to add another 1,000 customers in the future. Draper said Core-Mark will lease about 180,000 square feet, including a 20,000-square-foot office, in Glenwillow for the new center. Ohio was competing for the center with Michigan, according to a request the Ohio Tax Credit Authority approved on July 28 to provide CoreMark with a 50% credit on state income taxes for seven years based on a payroll of $60 million by 2017. Core-Mark also may claim additional income tax credits if employment exceeds that figure, according to state records. The authority approved the Core-Mark incentive without identifying specifically

where the warehouse would be located in Ohio, saying it is “to be determined.” Legislation was adopted unanimously by Glenwillow Village Council on Wednesday, Aug. 6, to authorize a job creation grant for Core-Mark, according to the village’s agenda. Glenwillow Mayor Mark Cegelka said details for the incentive are still being worked out, but would kick in after a property tax agreement with Dots on the property expires in 2020. “This is not as many jobs as Dots had at its largest, but it’s good to see the building going back into use so soon,” the mayor said. “It’s great that the company is new to the region and not moving from another city here.” Dots opened the warehouse and headquarters in 2011 and filed for Chapter 11 bankruptcy protection on Jan. 20. Premier Industrial Partners of Cleveland developed and leased the property to Dots. Spencer Piczak, president of Premier, said Core-Mark is starting to hold interviews at the building for its job openings. “It’s very satisfying,” Pisczak said of the transaction and new jobs. He said Core-Mark has a long-term lease on the building but declined to disclose additional specifics. Premier found strong interest in the building and had three companies vying for the space, which the developer had been working to fill since early this year. “It was beyond serious interest,” Pisczak said. “We told the three companies that whoever could process the lease and get it over the goal line first gets the building. We told them we would not play them against each other to get a better price. Core-Mark got it done first.” A new Miami Beach-based company owns Dots, the women’s apparel retailer, which now has only one location in Northeast Ohio at Steelyard Commons in Cleveland.

ment data extracted from the U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages and from Ahola jobs data of thousands of local companies. The QCEW, as it is known, is based on a census of 98% of all employers and is considered a more accurate measure of job gains and losses than the government’s monthly federal labor report, called the Current Employment Statistics, or CES. Here’s where it gets a little wonky (assuming you didn’t consider the QCEW/CES talk too wonky): After initial processing of the underlying data, Ahola provides monthly “matched-sample” growth rates of employment computed for a set of nonfarm private industries. Kleinhenz said regressions then are run to predict the current month’s figure for goods and services. With the monthly estimates, adjustments are made to match the industry and size distribution for the sevencounty Cleveland-Akron Metropolitan Statistical Area. Jeffrey B. Ahola, CEO for the last 20 years of a firm his parents started, said the “timeliness and accura-

cy of the data is the key” to the ACE Report’s usefulness to Northeast Ohio business owners and managers. Local companies that are making big decisions about expanding a plant, opening another location or adding to their work force need accurate data that take the economic temperature of the region, he said. The ACE Report will be one element to help do just that, he added. “It’s just such an important information gap we are going to be filling,” Ahola said. “It’s a true litmus test of what’s happening in the local economy. It’s not conjecture.” John Campanelli, publisher and editorial director of Crain’s Cleveland Business, said the ACE Report is “a perfect fit” for Crain’s audience. “Our readers want timely, accurate economic data, and we believe this is going to live up to that promise,” Campanelli said. “The ability to have real, local payroll data as part of a formula and not a survey is so important. … I can’t wait to use the ACE Report to track Greater Cleveland’s continued resurgence.”

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Who’s next?

continued from page 1

firms that regularly invest in local companies, such as Draper Triangle Ventures of Pittsburgh and River Cities Capital of Cincinnati. That makes Paul Cohn happy. All three firms received investments from the Ohio Capital Fund, a taxpayer-backed “fund of funds” that invests in venture capital firms that commit to financing companies in Ohio. “That’s three checks back to us for those investments,” he said. And they’re sizable checks. Cohn isn’t allowed to say how much Oracle, a massive computer technology company, will pay for TOA, which sells software that companies use to manage mobile employees as they go from appointment to appointment. But he couldn’t think of an Ohiobased software company that sold for a higher price. Ray Leach has no inside information, but the president of JumpStart Inc., a nonprofit that works with local startups, estimates that TOA sold for at least $500 million. Maybe $600 million or $700 million. How’s that possible? The company’s revenue grew from $20 million in 2011 to $41 million in 2012. If that growth rate continued, it could have fetched those prices, considering its industry, he said. Companies that sell software via the Internet on a subscription basis are hot these days. So-called “software-as-a-service” companies that grow fast can achieve valuations that exceed their revenue 10 fold, Leach said. That’s not far fetched: Publicly traded software-as-a-service companies that grew revenue by 30% to 40% over a 12-month period had valuations that were 9.2 times

greater than their sales, according to a 2014 report by Software Equity Group LLC of San Diego. That multiple dropped to 7x for companies that grew revenue 40% to 50%, but it shot up to 19x for those with annual growth of at least 50%. Leach’s estimates are probably accurate, if TOA’s revenue continued growing by 30% to 40% annually, according to a model used by Dominic Brault, an investment banker at Carleton McKenna in

“We’ve not had a day in Cleveland like we had last week.” – Tom Sudow Team NEO, GCIC

a classical musician. One caveat: Many tech entrepreneurs start off as software developers. And the software team at TOA — which employed 73 people in Beachwood and roughly 470 worldwide at the start of the year — is based in Ukraine. Likewise, Simbionix’s development team is in Israel. The company was based in Israel before a few Cleveland Clinic officials recruited it to Northeast Ohio, with help from Early Stage Partners. The 30 people who work at Simbionix’s headquarters in the Baker Electric Building on Euclid Avenue are mostly focused on sales and marketing, according to CEO Gary Zamler. He said he expects them to stay with Simbionix, which rarely loses employees.

Cleveland.

A little ‘payback’ Spread the wealth The two acquisitions won’t just create wealth for investors. They also create wealth for the founders and many employees, as both companies offer stock options as a benefit. Some of them probably will make a lot of money, Leach said. He said he wouldn’t be surprised to see a few employees start other businesses with some of that cash, given the experience they’ve gained. And he’s including TOA founders Yuval Brisker and Irad Carmi, given that entrepreneurs often don’t stay with a business for very long after it is acquired. Tom Sudow echoed that comment. “I don’t think Irad Carmi is going to go back to playing the flute,” he said, referring to Carmi’s training as

And he expects the company to stay in Cleveland. After all, Zamler said he just renewed the company’s lease, and he wants to rent more space in the building. Though TOA was bought by a company named Oracle, neither company is saying much about what their future holds. However, Zamler predicted that Simbionix will keep growing with help from 3D Systems. For instance, one 3D Systems product lets doctors print out 3D models of a specific part of a patient’s anatomy. That technology would complement Simbionix’s products, which let doctors operate on virtual versions of real patients. Many of its products are built at Astro Manufacturing & Design in Eastlake.

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Four years ago, I predicted that TOA Technologies was going to be one of the most successful high-tech startup companies in Northeast Ohio. (Go ahead, look it up: http://bit.ly/1ojgJwp) And now Oracle Corp. plans to buy the Beachwood software company for what is probably a huge amount of money. In other words, my opinion matters. And since members of the local tech scene tell me more acquisitions are on the way over the next few years, I’m going to predict which other local companies will be sold for big bucks. You’ll notice a theme: Health care and health information technology. — Chuck Soder COMS Interactive, Broadview Heights — These guys are almost a sure thing. Why? Customers are buying like crazy. COMS makes software that helps nursing homes and other longterm care facilities keep tabs on the many conditions their residents have and the many medications they take. Hard statistics show that the software helps those residents avoid becoming hospital patients. COMS raised $21 million last year.

ViewRay, Oakwood Hills — It seems like this company raises a huge round of venture capital every six months. They’ve created an MRI machine doctors can use while treating cancer patients with radiation. That way, the doc can see a live image of the tumor while applying the radiation. The company moved here from Florida, partly to get access to money from the Ohio Third Frontier economic development program.

OnShift, Cleveland — Like COMS, these guys are going after long-term care facilities. But OnShift sells software used to make sure each one is properly staffed to meet regulations. And it can help them quickly find substitutes for people who call off work. The company said in February that it had raised another $7 million in venture capital and planned to add more people to its staff of 60. At the time, it served 1,100 health care facilities, up from about 500 two years earlier.

Juventas Therapeutics, Cleveland — In general, I see a lot of promise in stem cell technologies, since we already know that the body uses stem cells in the healing process. Juventas has created a drug that tells the body to send more stem cells to the site of an injury. And it might work: The drug showed “therapeutic potential” in a Phase II clinical trial involving 93 heart attack patients.

Explorys, Cleveland — These guys help hospitals mine vast amounts of patient data and use it to improve care and conduct research. It’s one of those “big data” companies, which are popular with investors these days. Explorys has well over 100 employees. It doesn’t have a huge number of customers, but its customers tend to be huge. It’s a Cleveland Clinic spinout.

Athersys, Cleveland — Another stem cell technology! And a risky one: Its first Phase II clinical trial didn’t produce strong results, but it targeted patients suffering from really bad cases of inflammatory bowel disease. I have a feeling Athersys’ therapy will do better in another ongoing trial focused on stroke patients. If the therapy works well, Athersys’ stock price will explode, because stroke patients desperately need more treatment options.

Cleveland HeartLab, Cleveland — This company is another Clinic spinout. It tests blood samples and other specimens to help doctors determine whether a patient is at risk of a heart attack. It was founded in 2009, and when I visited a year later, the company had amassed a 7-foot-high wall consisting of about 3,000 plastic foam boxes full of sample kits waiting to be shipped out to a huge new customer. As of January 2014, they had 120 people.

Honorable mention: You might also want to keep your eye on a few material science companies in the oil and gas business, like MesoCoat of Euclid, Tesla NanoCoatings of North Canton and ABSMaterials of Wooster. And neurostimulation is a promising area, too, so pay attention to Neuros Medical of Willoughby and any company launched by NDI Medical in Highland Hills, such as SPR Therapeutics.

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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED

BERRY INSULATION CO. 1600 E. 25 St., Cleveland ID: 36-4628732 Date filed: July 18, 2014 Type: Employer’s withholding, unemployment Amount: $73,866 TOM PAIGE CATERING CO. 2275 E. 55 St., Cleveland ID: 34-1321475 Date filed: July 18, 2014 Type: Employer’s withholding, unemployment Amount: $63,526

COMPREHENSIVE MEDICAL SERVICES 2000 LLC 24050 Commerce Park, Suite 100, Beachwood ID: 37-1504516 Date filed: July 18, 2014 Type: Employer’s withholding, unemployment, partnership income Amount: $553,892

STAFFING SOLUTIONS ENTERPRISES INC. 5915 Landerbrook Drive, Suite 100, Mayfield Heights ID: 34-1208971 Date filed: July 18, 2014 Type: Employer’s withholding, civil penalty assessment Amount: $58,250

NUSURGE ELECTRIC INC. 8100 Grand Ave., Cleveland ID: 20-8759090 Date filed: July 18, 2014 Type: Employer’s withholding Amount: $474,470

MARLEN MFG & DEVELOPMENT CO. 5150 Richmond Road, Bedford Heights ID: 34-0858233 Date filed: July 18, 2014 Type: Employer’s withholding, corporate income Amount: $50,570

MOBIL MARTIN INC. 1279 W. 73 St., Cleveland ID: 34-1962549 Date filed: July 17, 2014 Type: Employer’s withholding Amount: $108,642 SCOOP SHOPS OF UNIVERSITY HTS INC. 20650 John Carroll Blvd., Cleveland ID: 34-1942935 Date filed: July 18, 2014 Type: Employer’s withholding, unemployment Amount: $77,794 COMPREHENSIVE MEDICAL SERVICES 2000 LLC 24050 Commerce Park, Suite 100, Beachwood ID: 37-1504516 Date filed: July 18, 2014 Type: Unemployment Amount: $76,249 LAKESIDE BUILDING SERVICES INC. 812 Huron Road, E, Suite 407, Cleveland ID: 51-0585756 Date filed: July 18, 2014 Type: Employer’s withholding, unemployment Amount: $74,689

KAREN SKUNTA & CO. 1382 W. 9th St., Suite 201, Cleveland ID: 34-1741349 Date filed: July 18, 2014 Type: Employer’s withholding Amount: $42,376 SKIBA INC. SUBWAY 12598 Rockside Road, Garfield Heights ID: 34-1611668 Date filed: July 18, 2014 Type: Employer’s withholding Amount: $40,904 BROTHERS EQUIPMENT INC. 1335 E. 171 St., Cleveland ID: 80-0412311 Date filed: July 18, 2014 Type: Corporate income Amount: $40,040 CABLING PROFESSIONALS INC. P.O. Box 770284, Lakewood ID: 14-1862921 Date filed: July 18, 2014 Type: Employer’s withholding Amount: $33,939

Date filed: July 18, 2014 Type: Corporate income Amount: $32,104 LIBERTY HARBOR LLC P.O. Box 450, Chagrin Falls ID: 20-3419006 Date filed: July 18, 2014 Type: Partnership income Amount: $30,420 CULTURAL ACADEMY LLC 1428 E. 15 St., Cleveland ID: 27-1244375 Date filed: July 18, 2014 Type: Employer’s withholding Amount: $30,041 GHNEMEH ONE CORP. 25210 Fawn Drive, North Olmsted ID: 26-4654383 Date filed: June 23, 2014 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $6,224 LITTLE HAND DAYCARE II INC. 15721 Waterloo Road, Cleveland ID: 20-3576842 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $6,191 MRSO ELITE LLC ELITE ANSWERING SERVICES 20800 Center Ridge Road, Suite 205, Rocky River ID: 27-0472298 Date filed: June 23, 2014 Type: Unemployment Amount: $6,177 CRYOTHERMIC SYSTEMS INC. 9100 S. Hills Blvd., Cleveland ID: 26-4206474 Date filed: June 20, 2014 Type: Employer’s withholding Amount: $6,125 NADIA 1 INC. RASCAL HOUSE PIZZA 11316 Euclid Ave., Cleveland

ID: 30-0128679 Date filed: June 23, 2014 Type: Unemployment Amount: $6,007 NORTH COAST MOVING INC. 23500 Mercantile Road, Suite H, Beachwood ID: 31-1495213 Date filed: June 23, 2014 Type: Employer’s withholding, unemployment Amount: $5,986 RIDGEWOOD PRESCHOOL INC. 4550 W. Ridgewood Drive, Parma ID: 34-1441380 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $5,231

LIENS RELEASED BEULAH BAPTIST CHURCH 14918 Cardinal Ave., Cleveland ID: 34-1214994 Date filed: Nov. 16, 2011 Date released: June 20, 2014 Type: Employer’s withholding Amount: $62,143 HARD ROCK CRUSHING LTD 30817 Schwartz Road, Westlake ID: 03-0546173 Date filed: Jan. 18, 2012 Date released: July 4, 2014 Type: Unemployment Amount: $7,908 HIGH POINT MARATHON LTD 7411 State Road, Parma ID: 41-2236231 Date filed: Aug. 6, 2013 Date released: June 4, 2014 Type: Employer’s withholding Amount: $9,938 LAKELAND BOLT & NUT CO. 1632 E. 39 St., Cleveland ID: 34-1906221 Date filed: Aug. 2, 2005 Date released: June 23, 2014

Type: Employer’s withholding, unemployment Amount: $11,821 M A Infinity Marketing Inc. 6403 Sylvia Drive, Brookpark ID: 27-0117781 Date filed: April 4, 2014 Date released: June 4, 2014 Type: Employer’s withholding Amount: $5,210 Mr Alberts Mens World 618 Prospect Ave., Cleveland ID: 34-1238031 Date filed: March 12, 2014 Date released: June 23, 2014 Type: Employer’s withholding Amount: $13,652 Savor Inc. Sweet Melissas 19337 Detroit Road, Rocky River ID: 26-1294680 Date filed: Nov. 29, 2012 Date released: June 23, 2014 Type: Employer’s withholding Amount: $19,669 Security Management Group Inc. 6433 Gale Drive, Seven Hills ID: 26-3798129 Date filed: Dec. 31, 2013 Date released: June 4, 2014 Type: Employer’s withholding Amount: $17,311 Sharks Seafood & Deli Inc. 3826 Lee Road, Cleveland ID: 20-4732572 Date filed: Aug. 30, 2011 Date released: June 20, 2014 Type: Employer’s withholding, unemployment Amount: $23,316 William E Crowe M.D. Inc. 6681 Ridge Road, Suite 204, Parma ID: 30-0019966 Date filed: Nov. 3, 2011 Date released: June 20, 2014 Type: Employer’s withholding, failure to file complete return Amount: $30,886

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PUBLISHER:

John Campanelli ([email protected]) EDITOR:

Elizabeth McIntyre ([email protected]) MANAGING EDITOR:

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OPINION

Bloom is off The alarm sounded in Toledo on a humid August weekend. Ohio’s crown jewel was under attack. The culprit? A toxic algal bloom in Lake Erie’s western basin that left the waters near Toledo the color of pea soup — and released a toxin that cut off a half-million people from their water supply for two days. Local, state and federal lawmakers must respond quickly to this wake-up call and protect Ohio’s most precious asset. Any threat to Lake Erie is a threat to the 11 million people who rely on it for drinking water, the business owners whose livelihoods depend on it and the residents who live in its watershed or enjoy it for recreation. This isn’t the first time Lake Erie has been threatened by algal blooms. Decades ago, headlines declared the lake was “dead,” sparking the creation of the Clean Water Act. The United States and Canada spent $8 billion in the 1970s and ‘80s to clean up Lake Erie from phosphorous runoff from sewer overflows, laundry detergents and poorly treated wastewater that fueled the growth of harmful algal blooms. The efforts averted the problem for a while, but by the late ‘90s, the blooms were returning. Experts forecast that this year’s bloom will be the fourth worst since 2002. These aren’t the blooms from back in the 1960s, however. Today, scientists say, the excessive amount of phosphorous running into the lake is caused by fertilizer from changing farming techniques, an increase in heavy rain due to climate change and the presence of invasive species, such as zebra mussels and Asian carp. State and national lawmakers are well aware of the potential and increasing damage caused by algal blooms. In May, Gov. John Kasich signed Senate Bill 150, which sets general fertilizer standards and voluntary training for farmers. And in 2017, the law requires anyone using fertilizer for agricultural purposes to be certified by the Ohio Department of Agriculture. Nationally, Ohio Republican Sen. Rob Portman cosponsored a recently signed bill reauthorizing federal funding to help fight the harmful algal blooms. Portman has said he will push for a $20 million annual appropriation to support the effort. These are good first steps, but more needs to be done. Ohio legislators vowed last week the problem would be a top priority going forward. Their effort must be supported by all levels of government, by environmentalists, by farmers and by everyone affected by the water quality of Lake Erie. Which is to say all of us.

FROM THE PUBLISHER

A better view of NEO jobs data For many of us — perhaps most of us market? — there’s a standing appointment on the The BLS does parse down the nationcalendar at 8:30 a.m. on the first Friday al data and release local jobs numbers, of every month. It’s not a tee time with a but the accuracy of those numbers has client, a breakfast with a partbeen openly and loudly critiner or even a closed-door concized by local economists, edference call with Candy Crush ucators and economic develSaga. opment professionals. It’s the time each month Substantial revisions often when the Bureau of Labor Statake place in the months foltistics releases its monthly lowing these reports. (In a pajobs report. It’s when we find per in April, economists at the out how many jobs were Federal Reserve Bank in added to the national econoCleveland said these monthly my in the previous month and numbers have “substantial erthe new unemployment rate. JOHN rors that undermine the value It’s watched closely. A huge CAMPANELLI of these data.”) number of new jobs is a sign To get good, accurate local the economy is cooking. A disappointing job numbers, we had to wait months unreport means we might be headed for til the release of the Quarterly Census of the rocks. Employment and Wages, which is based The stock market responds to the on actual, comprehensive data — not a news immediately. An unusually good or survey — from the state’s unemploybad report can alter investment stratement insurance system. gies, affect consumer confidence, raise But next week, things are going to speculation of a change in monetary polchange. If all goes according to plan, Friicy or even swing the momentum of a day morning will see the release of the national election. first-ever Ahola Crain’s Employment ReThe report measures an important viport, or ACE Report. (For more coverage, tal sign of the national economy. But see page 1.) what about locally? Do we have a good The ACE Report will be prepared by measure of the pulse of our region’s job renowned local economist Jack Klein-

henz and his team. He is using about a half-dozen data points in his algorithm, including construction data, retail sales, unemployment claims and past observances of the QCEW. Perhaps most important, his formula also includes data, taken anonymously, from approximately 40,000 local paychecks processed by The Ahola Corp, the Brecksville-based payroll and HR services company. Jeff Ahola, CEO of the company founded by his parents, believes the report will become a valuable tool for local economists, business owners, investors, lenders — anyone who cares about the local economy. So, really, this monthly report is for all of us. He sees it as almost a civic obligation. “It’s just too important for us not to share this information,” he told me. I love that kind of thinking. Northeast Ohio’s business community deserves this kind of valuable and timely data. I suspect the ACE Report will quickly become a standing appointment on all of our monthly calendars. (To make sure the Ahola Crain’s Employment Report is in your in-box Friday morning, make sure to sign up for our email newsletters at tinyurl.com/ClevelandJobsReport)

TALK ON THE WEB Re: Popularity of standing desks Love the treadmill desk! I walked four miles today without giving it much thought, while focused on my work. — Lovemybusiness

Re: Remaking West 25th Street MetroHealth’s campus makeover will probably have a similar effect as Cleveland State University’s campus makeover. CSU has gone from a bunker-style campus to an open and inviting campus. As a pedestrian walking through CSU’s campus on Euclid Avenue, I feel safe and

want to spend more time in that area. Chester Avenue on CSU’s campus also now has a similar feel with the completion of the Langston development. CSU’s makeover has inspired other housing projects in the neighborhood. However, the makeover’s transformation has its limits. The immediate area has improved greatly, however, I do not see the whole of Euclid Avenue being transformed by CSU’s makeover. MetroHealth’s makeover will improve West 25th within a half mile north of its campus, but I do not think it will reach as far as the West 25th/Clark Avenue intersection. — 171721 MetroHealth should start by rethink-

ing their campus smoking ban as it has done nothing positive for the adjacent neighborhood. Smoking bans are supposed to benefit the community at large, but clearly this has failed. The overflow of staff and visitors from such a large institution has impinged on our neighborhood in a very negative way, but we are unable to convince anyone of this fact. I highly doubt any staff would be interested in moving here as they show little or no respect for our neighborhood. — Suzanne Davidson I have lived within walking distance of MetroHealth since 1999. Before that I lived in Tremont. I worked at Metro-

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PERSONAL VIEW

Entrepreneurship paths for all Space Beyond Measure By DEBORAH HOOVER

Despite efforts to the contrary, a stubborn gender gap remains in entrepreneurship. Nearly twice as many males as females start their own companies. Some have suggested that closing that gap would represent the final victory of the feminist revolution begun more than a generation ago. According to our colleagues at the Kauffman Foundation, the breakdown of entrepreneurs by gender now stands at about 35% female and 65% male in the United States. These numbers are similar to what we see in Northeast Ohio for female students participating in collegiate entrepreneurship programs — about 35% to 40%. I’ve reflected on this subject recently, having been a part of conversations about this crucial topic as it plays out on college campuses. In June, I attended the University of Massachusetts at Lowell for the Deshpande Symposium on Innovation and Entrepreneurship in Higher Education. Named for an entrepreneur who also created the Deshpande Foundation, it encourages the use of entrepreneurship and innovation as catalysts for sustainable change in the United States and abroad. The symposium brings together leaders working on the front lines of collegiate entrepreneurship, and I served on a panel that explored the challenges that keep women in the minority of entrepreneurs in the U.S. The panelists included Corey Drushal, executive director of Cincinnati- and Cleveland-based Bad Girl Ventures, who observed that the program resonates with female entrepreneurs because it provides an initial safe space where women can explore their entrepreneurial potential with other women, before spreading their wings in the larger community. Dr. Mitzi Montoya, University Dean for Entrepreneurship & Inno-

Hoover serves as president and CEO of the Burton D. Morgan Foundation and is chair of the Fund for Our Economic Future. vation at Arizona State University, said that while ASU tries many approaches to engaging more females through entrepreneurship, the numbers unfortunately remain fixed. She believes our country faces cultural issues that suppress the entrepreneurship bug among females. In other nations the story is different. In Ghana, Ecuador, Nigeria, Mexico and Uganda the ratio of female to male entrepreneurs is roughly equal. And in Panama and Thailand, female entrepreneurs slightly outnumber their male counterparts. In these nations, it may be a matter of basic survival that encourages women to more aggressively pursue their entrepreneurial potential. Closer to home, the JumpStart Higher Education Collaboration Council recently explored the same topic. Panelist Jackie Acho, a consultant who works at the intersection of innovation and inclusion, argued that entrepreneurship represents the best hope for completing the feminist revolution, allowing women to write their own stories and contribute to the multiplicity of voices that breeds the most fertile environment for innovation. Participants at both events challenged panelists, questioning whether female-focused startup support leaves females stranded in some sort of “female ghetto” that ultimately doesn’t advance their cause. But this very point may begin to address the essence of the problem — an acculturation issue that special programs can begin to address. The Blackstone LaunchPad program — now in effect at four area colleges — is a perfect example of

the kind of atmosphere that can guide aspiring entrepreneurs of both genders through entrepreneurial exploration. That begins with a nurturing, confidence-building environment, followed by the increasingly challenging, less-safe real world environment of competitions, pitches and negotiations. So where does all this debate on female entrepreneurs leave us? Women entrepreneurs mainly just want to be entrepreneurs. But the path to success can take many routes — through long hours and hard work, failures and pivots, and possibly ventures bolstered by targeted programs that help women build the networks they need to succeed. Experts at Kauffman observe that more female mentors, role models and female-centered networks are critical for changing these dynamics. Our fertile Northeast Ohio entrepreneurial ecosystem already boasts Bad Girl Ventures, Ladies Who Launch, the Burning River Coffee Community and many programs on college campuses, such as All the CEO Ladies at Kent State University Blackstone LaunchPad. My conclusion from these recent spirited discussions is that to really move the needle, it will take mutually supportive efforts, including female-focused programs that inspire and guide women through the startup process. Some women will navigate that process well on their own; others will thrive on the energy generated through a community of like-minded women. In the end, it’s about options. Starting early with our girls is a fundamental ingredient in helping young women gain confidence and understand they have the power, skills and courage to embark on their own entrepreneurial journey, wherever it may ultimately take them. Because after all, in America, we should all have the ability to write our own stories.

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TALK ON THE WEB (CONTINUED) Health as a data manager and pulmonary tech in the 1980s. I applaud (MetroHealth CEO) Dr. Akram Boutros for trying to change the culture. There have been nurses and environmental service employees who live in the neighborhood, but rarely doctors or administrative staff. Nurses and docs do, occasionally, use the beautiful Riverside Cemetery to take their lunches or walk after their shifts. There is also the problem of staff members who still smoke and who lurk around the perimeters, especially condoned by the administration with an unofficial “smoking shack” just north of the parking garage. — Laura McShane

Re: Struggles of golf business The problem is indicative of a growing trend overall in youth activities. Kids simply do not play sports like they did in my day. I was a child in the ‘80s and ‘90s where I could simply go to the park and play a game of baseball, basketball, street

hockey, football, etc., because my friends would just be there waiting to play. Nowadays, kids do not get organized unless they are enrolled in a group sport. I never wanted to play golf when I was young. Three years ago, a friend I worked with got me out one morning and I was hooked. It was an activity I could play now that I am older and it was challenging and new. But that’s me; I like the challenge of working on my swing and developing my game. I think where the golf courses could be better is in helping amateurs develop their game. Mallard Creek had a pretty good idea of having a golf pro out on Sunday afternoons on their driving range to help with players’ swings. Between clubs, tee times, carts and lessons the cost is expensive. If they truly want more kids out on the course, they need to work on teaching the game and take the loss on spreading their knowledge. Advance coaching and teaching will always be a way to make more money, but if people are frustrated and unable to get help, then they lose out on all the money they

could make.

— Eric Alexander

Re: Prepping for legalized marijuana Makes sense. Do it before medical marijuana comes, too. Notice in Colorado that most marijuana bought at dispensaries there is being bought from medical dispensaries that get to charge much lower taxes. If states with no medical marijuana legalize, the push to legalize medical marijuana will likely die in those states, and there won’t be all those shady barely regulated medical marijuana suppliers or anyone claiming they’re sick when they’re not to get medical marijuana cards. Much of the black market product in Colorado is diverted from the medical marijuana system. Voters added medical pot to the Colorado constitution, which takes away flexibility that lawmakers have to legislate around problems. Every state should legalize as a preemptive strike of sorts, and because it’s coming one way or another anyway. — Bill Griggs

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GOING PLACES JOB CHANGES CONSTRUCTION ALL TOWER CRANE LLC: Sam Moyer to application engineer.

FINANCIAL SERVICE D’AMORE TATMAN GROUP LLC: Ronald G. Calvert to partner.

HEALTH CARE JEFFERSON PRIMARY CARE: Evan C. Howe M.D., to family medicine physician. UNIVERSITY HOSPITALS: Thomas D. Snowberger to chief human resource officer.

LEGAL BROUSE MCDOWELL: R. Scot Harvey to of counsel; Ashton E. McEvoy to associate. DWORKEN & BERNSTEIN CO. LPA: Amanda Ackerman Condon to associate. VORYS, SATER, SEYMOUR AND PEASE LLP; Mark A. Watkins and Michael J. Garvin to partners.

MANUFACTURING A.R.E. ACCESSORIES LLC: Todd Hoffman to president, CEO.

NONPROFIT KOINONIA HOMES INC.: Nancy Disbrow to chief people officer; David Laubenthal to chief administrative officer.

RETAIL STERLING JEWELERS INC.: Judy Fisher to corporate vice president, merchandising; Ellen Mackenzie-Nutter to divisional vice president, merchandising.

SERVICE DAVEY TREE EXPERT CO.: Scott Hyland to director of marketing.

TECHNOLOGY UNITED COMPUTER GROUP INC.: Annemarie Ashcraft to national account manager.

TELECOMMUNICATION COX COMMUNICATIONS: Steve Wild to director of field services and Cleveland market leader.

Moyer

Howe

Harvey

McEvoy

Condon

Watkins

Garvin

Hoffman

Fisher

Mackenzie-Nutter

UTILITY NORTHEAST OHIO REGIONAL SEWER DISTRICT: Benjamin Holbert to outreach coordinator; Mark Lambert to student maintenance assistant; Alan Perkins to health and safety specialist. David Nemchik to industrial electrical instructor and Frederick Speerstra to industrial mechanical instructor, Maintenance University.

BOARDS HEIGHTS YOUTH CLUB: Eric Dillenbeck (Fairmount Presbyterian Church) to president; Gregory Farkas to vice president; Rebecca Storey to treasurer; Samuel R. Smith II to secretary.

Send information for Going Places to [email protected]

NATIONAL ASSOCIATION OF WOMAN BUSINESS OWNERS, CLEVELAND CHAPTER: Elizabeth Radivoyevitch (RAD Graphics Inc.) to president; Megan O’Donnell Patton to president-elect; Donna Metzger to vice president, finance; Ellen Scheer to immediate past president.

AWARDS KENT STATE UNIVERSITY ALUMNI ASSOCIATION: Andy Baskin (WEWS NewsChannel5), John Garofalo Akron

Community Foundation), Lauren Kotmel (Downtown Cleveland Alliance) and Carter Strang (Tucker Ellis LLP) received 2014 Alumni Awards. NATIONAL HEADACHE FOUNDATION: Robert B. Daroff, M.D., (Case Western Reserve University and University Hospitals) received the Lifetime Achievement Award. ROTARY CLUB OF CLEVELAND: David M. Browning (CBRE) received the 2013-2014 Rotarian of the Year Award.

STAY CONNECTED WITH CRAIN’S TWITTER: @CrainsCleveland FACEBOOK: Facebook.com/CrainsCleveland LINKEDIN: linkedin.com/company/crain’s-cleveland-business INSTAGRAM: instagram.com/crainscleveland DAILY E-NEWSLETTERS: CrainsCleveland.com/register

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SMALL BUSINESS Paisley Farm has designs on growth By KATHY AMES CARR [email protected]

didn’t exactly fly for Ken Anderson while working as a comTThenheputeransparks programmer for a mega-manufacturer of welding products. encounter at his own wedding in 1981 with pickled foods entrepreneur James Warner Paisley ignited a different pursuit. Paisley inquired whether the tech-savvy Anderson could assist in computerizing his small business’ payroll on a $36,000 IBM that was as big as a desk. “It had a huge 2 megabyte drive the size of a record player. iPhone pictures are bigger than that today,” Anderson recalled. “I loved technology, and I always saw myself as having a key role in a smaller business, so it just clicked. “So I began working part-time for J.W. at $5 an hour. People thought I was crazy,” Anderson said. Now, more than three decades later, Anderson and his brother, Don, are the driving forces behind Willoughby-based Paisley Farm, which makes and distributes pickled vegetables and relishes to warehouse clubs throughout the U.S., Canada and Australia. The Andersons assumed ownership in 1991 after an otherwise healthy Paisley suffered a heart attack while out walking. “His three children weren’t interested in running the business, so they were going to sell it,” Anderson said. “I remember approaching the estate and saying, ‘I don’t have any money.’ That was a strong opening statement.” But an analysis of the company’s profit-and-loss statement after crossing out superfluous expenditures — like a Mercedes payment and group memberships — revealed the potential to pay for it through five years of profits. “Don is a mechanical whiz and went into the business with me to keep all the same equipment running for those first five years,” Anderson said. “I told the estate that I wouldn’t make any new equipment investments until after the business was paid off.” And pay off it did. Annual sales now are 15 times larger. Production has surged from about 1,500 to 35,000 jars per day. Anderson transitioned from a hand-packed to an automated process that has enabled the company to sign on big-box clients like Costco, BJ’s Wholesale Club and most recently in March, about 1,600 Wal-Mart stores along the East Coast. “We invested in conveyors, filling machines and one-of-a-kind packing machines that look better than hand-packing,” Anderson said. “When I took over, there were 30 people running around a small kitchen, and I could see there was an easier way to streamline our process.” With automation and growth came some sacrifices. The company, for

2ND STAGE

MCKINLEY WILEY

Ken Anderson, above, is one of the driving forces behind Paisley Farm, along with his brother Don.

See PAISLEY, page 16

Some firms hiring with more than just their gut instinct By KIMBERLY BONVISSUTO [email protected]

The interview goes great. The candidate has the perfect resume. The recruiter goes with a gut reaction and hires the candidate. Then the real trouble begins. Poor hiring decisions can be costly — from hiring, training and eventually replacing a wrong hire. Some local companies are turning to psychometric assessments to try to gather objective data on otherwise subjective traits, including personality, attitude, beliefs, abilities and motivation. Among the benefits

touted by these assessments is ease of administration, quick feedback and reduced costs through significant time savings. Dan Courser, CEO of Predictive Synergistic Systems of Pittsburgh, said psychometric assessments measure how people generate and value ideas, how they communicate, someone’s optimal work environment, mental stamina, morale and more. What they don’t measure, he said, is IQ, experience, education, knowledge, skills, interests and values. “We don’t measure ‘can’ someone do the job. We measure ‘will’ they do the job and do it well for a long period of time,” said Cours-

er, whose company has three consultants based out of Northeast Ohio with plans to add four more by the end of the year. The company also is looking at adding a Cleveland office in 2015. He said his company’s instrument — the Predictive Index (PI) — is a behavioral assessment that predicts workplace behavior. The candidate can complete the PI online and at home. It takes about 10 minutes and involves identifying adjectives both the candidate and others use to describe him or her. The second piece of the PI is the PRO (Performance Requirement Options), a job analy-

sis tool that identifies behavioral requirements of a specific job. The PRO and the PI evaluate the fit between the needs of a job and a person’s natural behavioral tendencies.

Right person, right role Performance issues, Courser said, are predictable and preventable. Most companies are good at determining if a candidate can do the job, but half the hires don’t work out because they are placed in the wrong role. “The bottom line comes down to the right See HIRING, page 15

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Rad Air division keys ‘Free’ software can end up costly into hybrid market ADVISER

HEATHER LUTZ

The code that underpins software programs comes in an amazing variety of forms for a vast array of purposes, so writing code can be time-consuming and costly. Developers often look for ways to collaborate. For this, among other, reasons, the open source model was created, but open source code likely is protected by a license. For all its benefits, open source doesn’t necessarily mean free, and it doesn’t mean you can use it without consequences. Failure to appreciate the differences among the licenses could cost your business everything. Sometimes, such as when code is part of a business’s proprietary software, the type of license that governs open source code is crucial. Here’s a look at a few of the most common license types: ■ Far and away the most common free software license, but also potentially the most dangerous for the unwary, is the GPL (General Public License). GPL, like many licenses, comes in a couple of variants. The GPL v.2 claims to guarantee your freedom to share and change free software (free meaning freedom, not zero cost). For software protected by GPL v.2, you can change the code or add your own code, and then distribute the new product for a fee. In exchange, you must provide customers with the complete source code. To understand how that can be dangerous, let’s say your business is built around a new program that organizes media from all of your electronic devices. Unbeknownst to you, instead of starting from scratch, the software developer you hired to write your new program started by using

Heather M. Lutz is a litigation attorney in the Vorys, Sater, Seymour and Pease LLP Cleveland office. code covered by GPL v.2. As a consequence, you are now required to provide the source code to all of your customers who, if they choose, then can use that source code to create a competing product. Adding to your troubles, the GPL specifically states that its code cannot be incorporated into proprietary programs. ■ Apache takes a different approach. The Apache license grants a nonexclusive, no charge, royalty-free, irrevocable copyright license and a patent license. Using our previous example, it would be dangerous to start a business trying to sell a program built on code under the Apache license because it incorporates code for which you can’t charge a fee. You might build a business that charges a fee to support, warranty or accept other obligations, which is permitted under the Apache license.

■ Probably the simplest type of license is the MIT license. At a mere 162 words, the license grants, free of charge, the right to deal with the software without restriction as long as the copyright notice is included in all copies or substantial portions of the software. ■ The Artistic license, favored by PERL developers, attempts to keep artistic control over the software while still allowing the code to be open for development. Under the Artistic license, a developer can distribute a modified version of the original program, either for free or for a fee, as long as the modified version does not prevent the user from installing or running the original version of the software. There are a plethora of additional license types available such as BSD (2-Clause), BSD (3-Clause), CDDL, Eclipse, LGPL and Mozilla. Some licenses are created for specific communities and some licenses are created for a specific purpose. Some code is licensed under a unique license written specifically for that code while other code is made available publicly without any license restrictions. In that circumstance, the code will be subject to ordinary copyright law, which has its own set of rules. The bottom line is open source code isn’t necessarily free and it certainly isn’t without risk. Nevertheless, open source code can be of great value to developers and businesses. The key is knowing what license applies and all of the consequences that follow. Developers should read the license and understand its implications before incorporating any open source code, particularly into proprietary software.

By KATHY McCARRON Tire Business

Rad Air Complete Car Care & Tire Center is getting a foothold in the growing hybrid vehicle market by launching its Cleveland Hybrid division at its 12 Northeast Ohio locations. Each of the locations will feature Cleveland Hybrid signage, and all the technicians have been trained to handle hybrid and electric vehicle (EV) repairs, maintenance and remanufactured replacement batteries, the company said. The Cleveland-based dealership has five master hybrid technicians who have taken an additional 40 hours of hybrid training. “We have been training our staff on hybrid and electric vehicles since 2005,” said Andy Fiffick, Rad Air president. “Hybrid and EV owners can face challenges when attempting to get their cars repaired or find replacement batteries. The goal of Cleveland Hybrid is to offer an affordable alternative to the pricey services offered by traditional dealers.” Rad Air has invested about $100,000 in training and equipment. The company claims Cleveland Hybrid is Northeast Ohio’s first repair shop trained and qualified to maintain, service and repair hybrid and electrical vehicles “at a fraction of the cost offered by other providers.” Currently, Rad Air shops service about two to three hybrid vehicles per week on average, he said.

“In the Cleveland market, the hybrid owners are very far and few between. There are only 2,600 registered hybrids in Northeast Ohio. ...,” Fiffick told Tire Business, a sister publication of Crain’s Cleveland Business. Yet, he added, “there is no doubt that these services are needed in our area,” noting that hybrids “are great for the environment and for gas usage, but getting them serviced has been a real hassle for car owners. “The launching of Cleveland Hybrid provides these car owners a new source for affordable, expert repairs and replacement batteries that will save thousands of dollars. Cleveland Hybrid offers the same benefits as all Rad Air locations.” Fiffick called the Cleveland/Northeast Ohio area “a very small market, but it’s a very niche market because those clients are very, very in tune with their vehicles, what is needed to take care of them and very finicky on who touches their vehicles. It’s almost like a little cult. They ask lots of questions, they know everything about what you’re talking about so you have to talk the talk and walk the walk to be able to deal with them. ... “I think we’re in at the ground floor and we’re going to continue to grow the market as fast as the market will grow.” The next phase for the Cleveland Hybrid operation is to install public EV charging stations within the next six months outside every Rad Air location, he said.

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person in the right role,” Courser said. “It creates alignment to ease operational friction when you have the right people doing the right stuff.” Northwestern Mutual, with offices in Cleveland, Akron, Canton, Findlay, Toledo, Youngstown and Wooster, began using a program from Missouri-based Culture Index Inc. about three years ago and hasn’t looked back. Brian Boucher, district director of Northwestern Mutual’s Cleveland office, said the personality profile assessment changed his world. He said the tool helped the Cleveland office move from being one of the lowest recruiting offices in the central region to No. 1 this year. “Before, we weren’t looking at someone’s inner skill set. We were looking at what they appeared to have,” Boucher said. “If I interview someone and listen to them, they might be good people, but they may not have the skill set needed to do this job.” Boucher said the personality tests aren’t a sole tool for selecting a job candidate — candidates still go through a rigorous interview process — but they allow companies to identify obstacles ahead of time. Predictive Synergistic Systems chief operating officer Beth Friel spent a great deal of her time hiring in a previous position with a social services agency. Implementing psychometric assessments into the hiring process, she said, was a game changer. “A big part of hiring is kind of a wild guess. You think you’ve got the skills right, you seem to like them, the interview went pretty well, you do the reference checking,” she said, adding that sometimes people just don’t work out. “It was different when I started using PI. It was a relief to have some data there so I could quantify my feelings about a particular candidate.”

On-the-job performance Psychometric assessments aren’t just being used in the hiring process. Companies are finding a variety of ways to use the tool, including team building, coaching, conflict resolu-

tion and succession planning. Clark Neft, president of Barth Industries in Cleveland, a 60-person contract manufacturer of metal products, has been using the PI system for about a year for hiring and managing people on his team. He said he originally turned to psychometric assessments to stop rapid turnover in production workers. He then saw benefits to using the tool to learn more about existing employees. “Hiring the right people for the job is important,” Neft said, “but more important is really understanding and managing the people on your team. “We’re all different. We all need to be managed differently.” Shaker Consulting Group in Cleveland offers a Virtual Job Tryout that provides an interactive education and evaluation experience that gives potential job candidates the ability to experience a day in the life in a job. Shaker Consulting vice president Joseph P. Murphy said simulations and multi-method assessments look at the complexity of a job and involve decision making, problem solving, brainstorming, situational judgment, data entry, abstract concepts and delegation. Murphy said the program provides a realistic job preview that balances insights involving challenges and frustrating elements of a job along with the potential rewards and job satisfaction elements. “Clients always learn a great deal about specific behaviors that drive success and performance,” he said.

Poised to grow Predictive’s Courser said the use of psychometric testing will only grow in the future, partially because of the Silver Tsunami that will deplete the work force in the next five years. The aging baby boomers, he said, will transition out of the workplace, leaving large gaps in skilled, qualified labor. That gap will generate an increased interest in instruments that will allow companies to “get it right the first time, stop turnover, improve retention and train them for the long haul.”

COURTESY SHAKER CONSULTING

According to Shaker Consulting, in this exercise a candidate listens to a call and has to update, correct and edit customer details while watching/monitoring a call queue indicator. When the number in the monitor hits a certain point, the candidate has to click a button. This test measures a range of multi-tasking skills. Murphy said psychometric assessments provide three value streams for a business: reduced administrative load by managing can-

didates more efficiently; increased retention by dramatically reducing turnover rates; and quality of hire measured through time proficiency.

“They can consistently hire people more adept at the job and raise levels of performance,” Murphy said.

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TAX TIPS CARL GRASSI

LLCs can add complexities The tax benefits of operating a business as a partnership or as an LLC taxed as a partnership are well known, and a majority of the closely held businesses formed in the past 20 years have been formed as LLCs. The tax benefits, however, come with at least one cost — the relative complexity from a tax and accounting standpoint versus a corporation. These complexities can create traps, in particular when it comes time to buy or sell an LLC interest. One of these complexities relates to the fact that, unlike the gain on the sale of shares in a corporation, a portion of the gain recognized by the seller of an LLC interest will often be taxed as ordinary income due to the “hot asset” rules applicable to partnerships and LLCs. These rules provide that when an owner sells an interest in a partnership, the IRS will “look through” to the partnership’s assets to see if there are any “hot assets” that will require ordinary income recognition. Hot assets generally are those that, if sold separately by the partnership, would generate ordinary income. For instance, if a fixed asset has been depreciated for tax purposes but is sold for an amount greater than its depreciated tax basis, the gain attributable to the depreciation taken is designated as “recapture” and is taxed as ordinary income. If cash basis accounts receivable are sold, the proceeds from this sale are taxed as ordinary income. Deprecation recapture and cash basis accounts receivable are two of the more common hot assets. A common misconception is that this rule will only cause ordinary income recognition to the extent the

Carl Grassi is president of McDonald Hopkins LLC. selling member had a gain on the sale of the equity interest. Unfortunately this is not the case; the seller is treated as having sold his proportionate interest in the hot assets, and the gain (taxed at ordinary income rates) is calculated on that amount. The remaining proceeds from the sale transaction are compared with the seller’s basis to determine any further gain or loss; in some cases, this calculation may result in a capital loss that can’t be used to offset the ordinary gain on the hot assets sale. As an example, assume A and B are equal owners of AB Consulting LLC. B sells his interest, (in which he has a $9,000 basis) to C for $15,000. B might assume he will recognize a $6,000 capital gain on this transaction. As a smaller professional services business, AB Consulting computes its taxes on the cash basis, and has accounts receivable of $14,000. B will therefore be treated as having sold his 50% share of these receivable for $7,000, generating $7,000 of

ordinary income to B, taxed at nearly double the rate of capital gains. The remaining sales proceeds of $8,000 are measured against B’s basis of $9,000, generating a capital loss of $1,000, which cannot be used to offset the ordinary income on the deemed sale of the receivables. B will not only be taxed on more income than he expected, but this income is taxed at ordinary income rates instead of capital gains rates. A tax court case decided last year illustrates another significant problem with these rules when the sale is reported on an installment basis. In that case, a partner sold her interest in a very large accounting firm to a buyer, which had paid for the interest in part with a note payable over five years. When the note was effectively paid, she reported all of the gain as a capital gain. The IRS asserted that a part of the sale price for her partnership interest represented a portion of the accounting firm’s receivables, which was taxable as ordinary income. The IRS further found that this amount could not be reported on the installment basis, and should have been reported entirely in the year of sale. The tax court agreed, finding that the receivables — the hot assets in this case — represented compensation for services provided previously and could not be deferred using an installment obligation. There are some limited exceptions to these rules, and planning techniques do exist to mitigate or sometimes eliminate the problem. These options need to be investigated prior to the transaction’s completion, so involving your attorney or tax accountants early is important.

AUGUST 11-17, 2014

PAISLEY continued from page 13

example outgrew its relationship with neighboring small farm supplier West Orchards LLC, although the Perry Township farm still sells most of Paisley Farm’s jarred goods at its farmers market. “We have such a long history with them. I remember my grandparents supplying them with fruits and vegetables when I was a kid in the 1970s,” said Todd West, the farm’s fifth-generation owner. “We support them because they’re still this incredible local-

ly owned business selling high-quality products all over the world.” Now, the company is looking to expand the line’s geographical footprint with a presence in European markets, and is creating a specialty line of products under the JW Paisley Signature Collection. “We’re still developing those items, and I can’t say too much, but let’s just say that when it comes down to vegetables, the trendy items are those with some heat and spice,” Anderson said.

Q & A: KEN ANDERSON What was the biggest challenge or learning curve associated with buying a company with no up-front cash? The easiest part was being able to develop a turnaround plan based on my knowledge of operating the company under J.W. Paisley for eight years. It was more difficult trying to identify capital to fund the business. I was young, not an experienced business owner and presented a creative deal that was more than two inches thick. It was a challenge to find someone who would even read the proposal beyond the table of contents. But there was a vision, and I could see the potential. Someone else did as well. How do you communicate a change in ownership to customers and ensure them that the brand will remain intact? At that time we had a much smaller customer base than we do today.

As I worked with J.W. Paisley, I developed relationships with our clients. I called on them personally and we were on a first-name basis. When it was time to transition ownership, our customers knew my management style and we had a mutual respect and trust for one another. Our brand was well-established and we were prepared to move forward. What goals did you establish when you took over to move the operation to the next level? We evaluated our expenses, looked to develop efficiencies and freshened our brand. Our capital investments were modest and strategic. We did not spend until we earned. That was the way I grew up. It was a lesson I learned as I watched my father run his barbershop. We set out to expand our customer base. We wanted to maintain our presence in retail and break into the “big-box” industry.

This year, Crain’s Cleveland Business is featuring small businesses and their second-stage journeys. The stories will focus on smaller entities that have moved beyond — or are trying to move beyond — the startup phase. If you have a suggestion for a business or topic related to second-stage growth, contact Amy Ann Stoessel at [email protected].

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R.W. Beckett adds power with energy unit By RACHEL ABBEY McCAFFERTY [email protected]

of storage, and the company broadened its focus.

R. W. Beckett Corp. has been making controls and heating-related systems for nearly 80 years. But the market has changed quite a bit in that time, and the North Ridgeville-based manufacturer has grown and expanded right along with it. So in 2010, the company introduced Beckett Energy Systems, a division of R. W. Beckett being incubated within the larger campus. As the world is moving toward alternative forms of storing energy, the company wanted to take advantage of current trends, said president and CEO Kevin Beckett. Eventually, Beckett said, it could become a “significant” part of the Beckett family of companies. “We’re a bit of a startup in an established business,” said Mark Kasinec, business unit leader for Beckett Energy. Beckett Energy sells lithium-ion battery modules and battery management systems to a variety of customers. While the technology is similar to that used in electric vehicles, Beckett Energy is aiming for lower-volume markets like microgrids or maritime vehicles. They’re used as a substitute for heavier battery systems or to electrify something that hasn’t been electrified before, said Brad Moore, Beckett Energy’s senior business development manager. “I think the applications are endless,” Moore said.

Established source

Power niche Beckett Energy started selling its battery modules in March 2013 and, to date, it has shipped about 300 to 500 modules, Moore said. The competition in the field is pretty fragmented, especially for the niches the company operates in, Moore said. Beckett Energy really thinks there is a “large opportunity” in the growing industry, which Moore said began to really take off after the introduction of the Nissan Leaf electric vehicle in 2010. Beckett Energy’s lithium-ion battery modules are lightweight and

CONTRIBUTED PHOTO

A lithium-ion battery pack for manned underwater vehicles. energy dense at 17.5 pounds, 24 volts and a storage capacity of 1.1 kilowatt hours each. The modules, which have voltage and temperature measurements built in, give customers a low-maintenance product with a long life expectancy, Moore said. Beckett Energy’s battery modules are standardized, which reduces the cost and time that would be needed to create a custom battery. The battery management system Beckett Energy also offers allows them to create battery packs of different sizes, based on customer needs. Vancouver-based Nuytco Research Ltd. was working with Beckett Energy before the modules were being sold, said engineering technologist Mike Reay, and the battery modules already have become the submarine maker’s standard. Before its relationship with Beckett Energy, Nuytco Research used leadacid batteries to power its submarines. The switch allows the submarines to travel lighter and increase power, Reay said, giving the company “enormous operational gains.” Originally, Beckett Energy planned to go into the community energy storage business, Kasinec

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said. The company received a Third Frontier grant in 2009 and planned to focus on energy storage for the power grid going forward. But the increased use of natural gas plants changed the demand for that type

Today, Beckett Energy has about five dedicated employees and shares assembly, engineering and office-related resources with R. W. Beckett, Moore said. Beckett Energy designs the battery modules and assembles them using vendors in the R. W. Beckett supply chain, but it doesn’t make the components for the modules in house. Together, R.W. Beckett and its air and gas subsidiaries have about 500 employees, Moore said. Moore declined to share revenue for either R. W. Beckett or Beckett Energy. Reay said the fact that Beckett was part of an established company, not a tech startup, was attractive to Nuytco. The battery industry is fraught with startups right now, Reay said, which can be unnerving when making a big investment. Companies don’t know which businesses will still be around in a few years. Beckett Energy, on the other hand, was able to offer a “mature, refined” product, even in the early stages, he said.

Beckett Energy is currently focused on selling its current inventory, Moore said, but it’s also looking to develop related products like battery modules in different voltages or a standalone battery module. The latter product would be designed for applications like emergency lighting, where a user may not need a separate battery management system, Moore said. He expects to launch the standalone module in November. James Greenberger, executive director of the National Alliance for Advanced Technology Batteries in Chicago, estimates that interest in the commercialization of lithiumion batteries goes back a bit further to the early ’90s, but his overall message is the same — he expects to see increased interest in how to store more energy in smaller spaces in everything from cell phones to cars to wearable devices. He also thinks Beckett Energy, a member of the alliance, is well positioned to take advantage of energy storage on the grid and off when utility costs drive interest in that direction. “They’ve got the right idea,” he said.

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For an expanded listing, go to crainscleveland.com/MarketingServices

A ADVANTAGE MARKETING INC. 14 W. Main St. Ashland 44805 (419) 281-4762 www.advantagemkt.com Top executive: Kim Spreng, Gary Underwood ADVOCACY & COMMUNICATION SOLUTIONS LLC 1277 W. 104th St. Cleveland 44102 (877) 372-0166 www.advocacyand communication.org Top executive: Lori McClung AESPIRE 151 Innovation Drive, Suite 220 Elyria 44035 (440) 322-5142 www.aespire.com Top executive: Brian Sooy AGC THE CREATIVE ADVANTAGE 1000 Brookpark Road Cleveland 44109 (216) 661-2550 www.visitagc.com Top executive: Candice C. Champion, Jeffrey T. Parsons, Courtney Q. Dolinar, Maribeth A. Reilly AGS CUSTOM GRAPHICS 8107 Bavaria Road Macedonia 44056 (330) 963-7770 www.agscustomgraphics.com Top executive: David Margiotta AKHIA 85 Executive Parkway, Suite 300 Hudson 44236 (330) 463-5650 www.akhia.com Top executive: Janice S. Gusich ALAIRIS INTERACTIVE P.O. Box 1758 Medina 44258 (877) 770-0350 www.alairis.com Top executive: Jason Valore

AMG MARKETING RESOURCES INC. 2530 Superior Ave. E., Suite 601 Cleveland 44114 (216) 621-1835 www.amgmarketingresources.com Top executive: Kip R. Botirius ANGSTROM GRAPHICS 4437 E. 49th St. Cleveland 44125 (216) 271-5300 www.angstromgraphics.com Top executive: Wayne Angstrom ARDENT COMMUNICATIONS GROUP LLC P.O. Box 183 Chagrin Falls 44022 (216) 924-2866 www.ardentcgroup.com Top executive: Jill Arslanian ARRAS KEATHLEY 1151 N. Marginal Road Cleveland 44114 (216) 621-1601 www.arraskeathley.com Top executive: Jim Hickey, Tom Keathley ARTESE COMMUNICATIONS 13629 Cedar Road Cleveland 44118 (216) 932-2168 Top executive: Nicki Artese AZTEK 1100 W. Ninth St., Suite 100 Cleveland 44113 (216) 472-2121 www.aztekweb.com Top executive: John Hill

B B2 DESIGN & MARKETING COMMUNICATIONS LLC P.O. Box 40477 Cleveland 44140 (440) 930-5500 b2dm.com Top executive: Melissa Early Barry BCREATIVE GRAPHIC DESIGN

AND WEB BOUTIQUE 4140 Erie St. Willoughby 44094 (440) 510-8515 www.bcreativenow.net Top executive: Rebecca Marich BFL MARKETING COMMUNICATIONS/GRA GROUP 1399 Lear Industrial Parkway Avon 44011 (216) 875-8860 www.bflcom.com Top executive: Dennis J. Pavan BMA MEDIA GROUP 4091 Erie St. Willoughby 44094 (440) 975-4262 www.bmamedia.com Top executive: Jerrod T. Borkey BOMBA, O’NEIL & CO. 16205 Oakhill Road East Cleveland 44112 (216) 851-6005 www.bombaoneil.com Top executive: Corinne L. Bomba BONNIE KAY UNLIMITED 21075 Farnsleigh Road Beachwood 44122 (216) 751-1934 www.bonniekay.com Top executive: Bonnie Barkley Kay BOOM CREATIVE INC. 1480 Timber Trail Hudson 44236 (330) 963-6181 www.boom-creative.com Top executive: Drew Dallet BROKAW INC. 425 W. Lakeside Ave. Cleveland 44113 (216) 241-8003 www.brokaw.com Top executive: Tim Brokaw, Gregg Brokaw

C C.TRAC INC. 16855 Foltz Parkway

Strongsville 44149-5517 (440) 572-1000 www.ctrac.com Top executive: Susan Williamson

Chardon 44024 (877) 285-5280 www.company119.com Top executive: Christian Klein

CALER & CO. INC. 66 E. Cuyahoga Falls Ave. Akron 44310 (330) 535-8053 www.caler.com Top executive: Steven L. Caler

COSO MEDIA 75 Milford Drive, Suite 110 Hudson 44236 (330) 653-8144 www.cosomedia.com Top executive: Matthew DeWees

CHOCOLATE DOG MARKETING & COMMUNICATIONS 11870 Bean Road Chardon 44024 (440) 285-4111 www.chocolate-dog.com Top executive: Jim Brownlow

COVEY-ODELL ADVERTISING LTD. 330 Schneider St. SE North Canton 44720 (330) 499-3441 www.covey-odell.com Top executive: Rod A. Covey

CINECRAFT PRODUCTIONS 2515 Franklin Blvd. Cleveland 44113 (216) 781-2300 http://cinecraft.com Top executive: Neil McCormick CMP COMMUNICATIONS LLC 4450 Timber Ridge Drive Independence 44131 (216) 524-1140 Top executive: Charlene Paparizos COLEMANWICK LLC 13125 Shaker Square, Suite 202 Cleveland 44120 (216) 991-4550 www.colemanwick.com Top executive: Odell Coleman COLLABORATIVE MARKETING SERVICES LLC P.O. Box 2825 North Canton 44720 (440) 546-1676 www.linksharegrow.com Top executive: Jeri Vespoli COLLECTIVMEDIA 23755 Banbury St., Suite 19 Warrensville Heights 44128 (216) 551-7476 www.collectivmedia.org Top executive: Idris Salih COMPANY 119 115 Wilson Mills, Suite 4

CREATIVE HOUSE STUDIOS INC. 1419 E. 40th St. Cleveland 44103 (216) 225-6593 www.creativehousestudios.com Top executive: Cynthia Graham CREATIVE TECHNOLOGY 137 Heritage Woods Drive Akron 44321 (330) 668-7777 http://creativetechnology.com Top executive: Kelly Seiberling CUNNINGHAM BARON LLC 1900 Superior Ave., Suite 304 Cleveland 44114 (216) 579-6100 www.cunninghambaron.com Top executive: Eric Baron, Ann Marie Cunningham, Pete Zeller

D DAR PUBLIC RELATIONS INC. 30670 Bainbridge Road, Suite 3 Solon 44139 (440) 542-1060 www.darpr.com Top executive: Dannette Render DIX & EATON 200 Public Square, Suite 1400 Cleveland 44114 (216) 241-0405

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www.dix-eaton.com Top executive: Scott Chaikin DONER 1100 Superior Ave. E., 10th floor Cleveland 44114 (216) 687-8521 www.doner.com Top executive: Jennifer Deutsch DORSEY & COMPANY STRATEGIC CONSULTANTS TO MANAGEMENT 3077 Meadowbrook Blvd. Cleveland Heights 44118 (216) 812-8408 www.dorsey-co.com Top executive: Julius C. Dorsey Jr. DYNAMICS ONLINE INC. 23811 Chagrin Blvd., Suite 315 Beachwood 44122 (216) 292-4410 www.dynamicsus.com Top executive: Bruce Newburger

(216) 369-2220 www.fathomdelivers.com Top executive: Scot Lowry FELBER PR & MARKETING 8963 Darrow Road Twinsburg 44087 (330) 963-3664 www.felberpr.com Top executive: Robert Felber THE FERNEWAY CO. 12200 Fairhill Road, Suite E286 Cleveland 44120 (216) 991-9835 www.ferneway.com Top executive: Ferne A. Ziglar FLOURISH INC. 1001 Huron Road E., Suite 102 Cleveland 44115 (216) 696-9116 www.flourishagency.com Top executive: Henry B. Frey

G

E E-BUSINESS EXPRESS INC. 2208 E. Enterprise Parkway Twinsburg 44087 (877) 907-3277 www.e-businessexpress.com Top executive: Greg McNeil EGO TRIP MEDIA 850 Euclid Ave., Suite 805 Cleveland 44102 (216) 313-5006 www.egotripmedia.com Top executive: TiaMarshae E. Sanford ENIGMASOLVE P.O. Box 810 Uniontown 44685 (330) 244-9004 www.enigmasolve.com Top executive: Tim Maloy

F FAHLGREN MORTINE 1100 Superior Ave, Suite 1600 Cleveland 44114 (216) 298-4646 www.fahlgrenmortine.com Top executive: Christy Bykowski THE FAIRMOUNT GROUP LLC 12434 Cedar Road, Suite 7 Cleveland Heights 44106 (216) 229-5220 www.thefairmountgroup.com Top executive: Dawn Hanson FALLS COMMUNICATIONS Terminal Tower, 50 Public Square, Floor 25 Cleveland 44113 (216) 696-0229 www.fallscommunications.com Top executive: Rob Falls FASTSIGNS AKRON 1783 Brittain Road Akron 44310 (330) 630-3500 www.fastsigns.com/129 Top executive: Todd Evans FASTSIGNS DOWNTOWN CLEVELAND 2102 St. Clair Ave. Cleveland 44114 (216) 523-2288 www.fastsigns.com Top executive: Kay Doyle FATHOM 8200 Sweet Valley Drive, Suite 100 Valley View 44125

CRAIN’S CLEVELAND BUSINESS

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GIANFAGNA STRATEGIC MARKETING INC. 1991 Crocker Road, Suite 225 Cleveland 44145-6970 (440) 808-4700 www.gianfagnamarketing.com Top executive: Jean M. Gianfagna GOLDFARB WEBER CREATIVE MEDIA 812 Huron Road, Suite 500 Cleveland 44115 (216) 241-7100 www.gwcreative.com Top executive: Tony Weber, Ron Goldfarb GOLDSTEIN GROUP COMMUNICATIONS INC. 30500 Solon Industrial Parkway Solon 44139 (440) 914-4700 www.ggcomm.com Top executive: Joel Goldstein GRABOWSKI & CO. 10689 Cleveland Ave. Uniontown 44685 (330) 498-0753 www.grabowskiandco.com Top executive: Sue Grabowski GREAT LAKES INTEGRATED 4005 Clark Ave. Cleveland 44109 (216) 651-1500 www.gll.com Top executive: Jim Schultz

H HENNES PAYNTER COMMUNICATIONS 50 Public Square, Suite 3200 Cleveland 44113 (216) 321-7774 www.crisiscommunications.com Top executive: Bruce Hennes, Barbara Paynter HITCHCOCK FLEMING & ASSOCIATES INC. 500 Wolf Ledges Parkway Akron 44311 (330) 376-2111 www.teamhfa.com Top executive: Chuck Abraham HMT ASSOCIATES INC. 151 Orchardview Road Seven Hills 44131 (216) 369-0109 www.hmtassociates.com Top executive: Patti Conti HOME TEAM MARKETING 812 Huron Road, Suite 205

Cleveland 44115 (866) 810-2111 www.hometeammarketing.com Top executive: Peter Fitzpatrick HUGHIE’S EVENT PRODUCTION SERVICES 1260 E. 38 St. Cleveland 44114 (216) 361-4600 www.hughies.,com Top executive: David Wheeler

I I.D.OLOGY 18484 High Parkway Rocky River 44116 (440) 655-8647 www.idology.biz Top executive: Kathleen Haley THE IMAGE GROUP 5405 Valley Belt Road, Suite B Cleveland 44131 (216) 661-1011 www.theimagegroup.net Top executive: Brian Kingsmore, Bruce Felber INNIS MAGGIORE GROUP INC. 4715 Whipple Ave. NW Canton 44718 (800) 460-4111 www.innismaggiore.com Top executive: Dick Maggiore, Kathi Maggiore, Jeff Monter, Mark Vandegrift, Lorraine Kessler INSIVIA 5000 Euclid Ave. Cleveland 44103 (216) 373-1080 www.insivia.com Top executive: Andrew Halko INTERCON GROUP INC. 30675 Solon Road, Suite 201 Solon 44139 (440) 914-4250 www.intercongroup.com Top executive: Marilyn Dachner INTRAPROMOTE LLC 105 Executive Parkway, Suite 406 Hudson 44236 (866) 570-1785 www.intrapromote.com Top executive: Angela Moore, Brent Sharp

K KLEIDON & ASSOC. 3517 Embassy Parkway Akron 44333 (330) 666-5984 www.kleidon.com Top executive: Dennis A. Kleidon KNUDSEN, GARDNER & HOWE INC. 2103 St. Clair Ave. Cleveland 44114 (216) 781-5000 www.kghinc.com Top executive: Tim Knudsen KURT A VALENTA DESIGN LLC 1310 Berkshire Road Stow 44224 (234) 208-9346 www.kurtavalenta.com Top executive: Kurt A. Valenta

L LAKENETWORK P.O. Box 1122 Willoughby 44096 (440) 975-9580

www.lakenetwork.net Top executive: Jerie I. Green LANGER MARKETING & COMMUNICATIONS LLC 321 Florence Court Bay Village 44140 (440) 892-7084 www.langermarketing.com Top executive: Heidi Langer LEHMAN DESIGN LLC 4205 Whipple Ave. NW Canton 44718 (330) 498-0213 www.leslehman.com Top executive: Les Lehman LEVEL SEVEN 4807 Rockside Road Independence 44131 (216) 524-9055 www.lvlsvn.com Top executive: Stuart Taylor LIEFKARSON PUBLIC RELATIONS LTD. 23533 Mercantile Road, Suite 118 Beachwood 44122 (216) 831-3767 www.liefkarson.com Top executive: Sylvia A. Karson LIME CREATIVE LLC 191 Melbourne Ave. Akron 44313 (330) 962-8729 www.lime-creative.com Top executive: Susan Panning LINEAR CREATIVE 4681 Hinckley Industrial Parkway Cleveland 44109 (216) 741-1533 www.linearcreative.com Top executive: Raymond W. Jasinski LINKMEDIA 360 4700 Rockside Road, Suite 310 Independence 44131 (216) 447-9400 www.linkmedia360.com Top executive: Dave Wolf LITTLE JACKET 2026 Murray Hill Road, Suite 103A Cleveland 44106 (216) 373-6979 www.little-jacket.com Top executive: Roger S. Frank Top executive: Kenneth W. Hejduk LMT PRODUCTIONS 1671 Edgefield Road Lyndhurst 44124-9384 (216) 376-9384 www.lmtproductions.com Top executive: Lora M. Thompson LOOK STRATEGIES 3100 E. 45th St., Suite 520 Cleveland 44127 (440) 655-6073 lookstrategies.com Top executive: Steve Corcoran

M MADDOX MARKETING GROUP INC. 964 Gavington Place Akron 44313 (330) 945-6232 www.maddoxmarketing.com Top executive: Rob Maddox MARCUS THOMAS LLC 4781 Richmond Road Cleveland 44128 (216) 292-4700 www.marcusthomasllc.com Top executive: James B. Nash

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MARKETING RESOURCES & RESULTS INC. 118 W. Streetsboro St., Suite 86 Hudson 44236 (330) 656-9793 www.resources-results.com Top executive: Christine Brown MARKETING501 LLC 6893 Chaffee Court Brecksville 44256 (216) 469-7848 www.marketing501.net Top executive: Shirley MacFarland THE MARSHFIELD GROUP 11241 Exmoor Drive Concord Township 44077 (440) 974-8448 www.marshfield.com Top executive: Thomas A. Mitchell MEDIA DESIGN IMAGING 1419 E. 40th St. Cleveland 44103 (216) 539-4634 www.mdifilm.com Top executive: Johnny Wu MELAMED RILEY 1375 Euclid Ave., Suite 410 Cleveland 44115 (216) 241-2141 www.mradvertising.com Top executive: Rick Riley MODERN TECHNIQUE 1050 Lear Industrial Parkway Avon 44011 (440) 497-8547 www.whatsyourtechnique.com Top executive: Kristi S. Blosser

N NEW IMAGE MEDIA INC. 26210 Emery Road, Suite 308F Warrensville Heights 44128 (216) 514-1835 http://newimagemedia.com Top executive: Steve Petti NORTH COAST MINORITY MEDIA & EVENTS 2800 Euclid Ave., Suite 312 Cleveland 44115 (216) 394-0772 www.northcoastminority.com Top executive: Louis Angel Acosta

O ODYSSEY CREATIVE COMMUNICATIONS CONSULTING 2303 Canterbury Road University Heights 44118 (216) 321-1949 www.odysseyccc.com Top executive: Karen Malone Wright THE OPPIDAN GROUP INC. P.O. Box 24399 Cleveland 44124 (216) 771-9988 www.oppidangroup.com Top executive: Tom Andrzejewski OUTERBOX 325 S. Main St. Akron 44308 (866) 647-9218 www.outerbox.com Top executive: Justin Smith

P PECCHIA COMMUNICATIONS LLC 6725 Pheasant Run Drive Canfield 44406

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(330) 720-6912 www.pecchiacomm.com Top executive: Dan J. Pecchia POINT TO POINT INC. 23240 Chagrin Blvd., Suite 200 Cleveland 44122 (216) 831-4421 www.pointtopoint.com Top executive: Mark Goren PR 20/20 812 Huron Road, Suite 780 Cleveland 44115 (800) 920-1623 www.pr2020.com Top executive: Paul Roetzer PRECISION DIALOGUE 905 Corporate Way Westlake 44145 (800) 532-2430 www.precisiondialogue.com Top executive: Jonathan Hill, Dan Rose, Tod Thompson PRECISION MARKET SERVICES P.O. Box 291 Hinckley 44233 (330) 212-5986 www.precisionmarketservices.com Top executive: Melinda Mallari PROFORMA/JOE THOMAS GROUP 13500 Pearl Road, Suite 139-107 Cleveland 44136 (440) 268-0881 www.proformajoethomasgroup.com Top executive: Joe Thomas

www.radiuscleveland.com Top executive: Randy Pindor RAZOR LTD. LLC 13 Waterford Lane Beachwood 44122 (330) 562-9635 www.razor-marketing.com Top executive: C. Peter Cimoroni RH BLAKE INC. 26600 Renaissance Pkwy. Cleveland 44128 (216) 595-2400 www.rhblake.com Top executive: Bruce R. Blake RICHARDS COMMUNICATIONS 8350 Whispering Pines Drive Russell 44072 (216) 514-7800 www.richardsgo.com Top executive: John Richards THE ROGERS CO. 7550 Tyler Blvd. Mentor 44060 (440) 951-9200 www.therogersco.com Top executive: Jeffrey T. Blackwell ROOP & CO. STRATEGIC INTEGRATED COMMUNICATION 3800 Terminal Tower, 50 Public Square Cleveland 44113 (216) 902-3800 www.roopco.com Top executive: James J. Roop

PROXIMITY MARKETING 2947 Interstate Parkway Brunswick 44212 (330) 220-6100 www.proximitymarketing.com Top executive: Mark Priebe

ROSENBERG ADVERTISING 12613 Detroit Ave. Lakewood 44107 (216) 529-7910 www.rosenbergadv.com Top executive: David Rosenberg

PS PROMOTIONS 4425 Mayfield Road South Euclid 44121 (216) 291-0264 www.psprom.com Top executive: Ingrid Rodriguez-Reichert

ROSETTA MARKETING GROUP LLC 629 Euclid Ave., 15th floor Cleveland 44114 (216) 896-8900 www.rosetta.com Top executive: Jason Tabeling

PUMPHREY MARKETING INC. 4853 Galaxy Parkway, Suite A Cleveland 44128 (216) 464-9687 www.pumphreymktg.com Top executive: David C. Pumphrey

Q QUEZ MEDIA MARKETING 1138 Prospect Ave. Cleveland 44115 (216) 910-0202 www.quezmedia.com Top executive: Jose Vasquez

R R SOLUTIONS LLC 33730 Bainbridge Road, 2nd Floor Solon 44139 (440) 735-9280 www.rsolutions.us Top executive: Rob Adelstein RAD GRAPHICS INC. P.O. Box 18820 Cleveland 44118 (216) 371-3003 www.radgraphicsinc.com Top executive: Elizabeth Radivoyevitch RADIUS 10883 Pearl Road, Suite 100 Strongsville 44136 (440) 638-3800

S SAMPSON/CARNEGIE CO. 1419 E. 40th St. Cleveland 44103 (216) 881-2556 www.smarterthinking.com Top executive: Peter R. Sampson THE SEARCH GURU 21887 Lorain Road, Suite 71 Cleveland 44126 (440) 306-2418 www.thesearchguru.com Top executive: Leslie Carruthers SHARK&MINNOW 3351 Daleford Road Shaker Heights 44120 (517) 974-0395 http://sharkandminnow.com Top executive: Eric W. Kogelschatz SINGLETON & PARTNERS 740 W. Superior Ave Cleveland 44113 (216) 344-9966 www.singletonpartners.com Top executive: Renee Singleton SKODA MINOTTI MARKETING LLC 6685 Beta Drive Cleveland 44143 (440) 449-6800 www.skodaminottimarketing.com Top executive: Jonathan Ebenstein

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SKYLINE EVENT SERVICES 8600 Sweet Valley Drive Cleveland 44125 (216) 642-6180 www.skylinees.com Top executive: Kristie Damalas SONNHALTER 633 W. Bagley Road, Suite 4 Berea 44017 (440) 234-1812 www.sonnhalter.com Top executive: Matt Sonnhalter SPARK YOUR BRAND INC. 15 Pleasant Lane Chagrin Falls 44022 (440) 247-1555 www.sparkyourbrand.net Top executive: Randy L. Golenberg ST&P MARKETING COMMUNICATIONS INC. 320 Springside Drive, Suite 150 Fairlawn 44333 (330) 668-1932 www.stpinc.com Top executive: Richard Kenney STERN ADVERTISING INC. 950 Main St., Suite 700 Cleveland 44113 (216) 464-4850 www.sternadvertising.com Top executive: William J. Stern STEVENS STRATEGIC COMMUNICATIONS INC. 1991 Crocker Road, Suite 500 Westlake 44145 (440) 617-0100 www.stevensstrategic.com Top executive: Edward M. Stevens STUDIO GRAPHIQUE INC. 13110 Shaker Square, Suite 101 Cleveland 44120 (216) 921-0750 www.designwithdirection.com Top executive: Rachel Downey STUDIOTHINK 1301 E. Ninth St., Suite 608 Cleveland 44114 (216) 574-9533 www.studiothink.net Top executive: Christine A. Lobas SUBURBAN PRESS INC. 3818 Lorain Ave. Cleveland 44113 (216) 961-0766 www.suburbanpressinc.com Top executive: William C. Mueller SWEENEY 19106 Old Detroit Road, Suite 200 Cleveland 44116 (440) 333-0001 www.sweeneypr.com Top executive: James B. Sweeney SYNERGY MARKETING STRATEGY & RESEARCH INC. 3634 W. Market St., Suite 104 Akron 44333 (216) 431-0008 www.synergyloyalty.com Top executive: Rachel Talton

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THE ADCOM GROUP INC. 1370 W. Sixth St., 3rd floor Cleveland 44113 (216) 574-9100 www.theadcomgroup.com Top executive: Joe Kubic

WDD WE DO DIGITAL 150 Quadral Drive, Suite A3 Wadsworth 44281 (330) 334-3132 www.wddonline.com Top executive: Katie R. Bruno

THE PRODIGAL CO. 42 McClurg Road Boardman 44512 (330) 707-2088 www.prodigalcompany.com Top executive: Jeff Hedrich

WHITESPACE CREATIVE 24 N. High St., Suite 200 Akron 44308 (330) 762-9320 www.whitespace-creative.com Top executive: Keeven White

THINK MEDIA STUDIOS 6140 Parkland Blvd., Suite 300 Mayfield Heights 44124 (440) 995-0600 http://thinkmediastudios.com Top executive: Brian Glazen

WORLD SYNERGY ENTERPRISES 6830 Cochran Road, Unit B Solon 44139 (440) 349-4940 www.worldsynergy.com Top executive: Glenn Smith

THUNDER::TECH 3635 Perkins Ave., Studio 5 Cleveland 44114 (216) 391-2255 www.thundertech.com Top executive: Jason Therrien TO THE POINTE MARKETING 793 Walden Pond Circle Hinckley 44233 (440) 823-5429 www.tothepointemarketing.com Top executive: Alison R. Krejny TRIAD COMMUNICATIONS INC./NEXT LEVEL INTERACTIVE 2006 Fourth St. Cuyahoga Falls 44221 (330) 237-3531 www.triadadv.com Top executive: Rick Krochka TRUE VISION MARKETING 17098 Park Drive Chagrin Falls 44023 (440) 708-0576 www.truevisionmarketing.com Top executive: Natalie M. Remington TWIST CREATIVE INC. 1985 W. 28th St. Cleveland 44113 (216) 631-5411 www.twistcreative.com Top executive: Michael Ozan

V VISUAL MARKING SYSTEMS INC. 2097 E. Aurora Road Twinsburg 44087 (330) 425-7100 www.vmsinc.com Top executive: Dolf Kahle VIVA LA BRAND 24775 Woodside Ave. Cleveland 44122 (216) 548-6780 http://vivalabrand.com Top executive: Laura Sheridan

WREN & ASSOCIATES 2963 Coleridge Road Cleveland 44118 (216) 932-7459 www.patriciawren.com Top executive: Patricia Phares Wren WRITE 2 THE POINT 10306 Mayfield Road Chesterland 44065 (216) 410-2395 www.write2thepoint.com Top executive: Margie Eileen Wilber WRL ADVERTISING 4470 Dressler Road N.W Canton 44718 (330) 493-8866 www.wrladv.com Top executive: C. Todd Locke

Y YOPKO PENHALLURICK 17800 Chillicothe Road, Suite 280 Chagrin Falls 44023 (440) 543-8615 www.yp-pr.com Top executive: Betty Weibel YOUNGSTOWN LETTER SHOP 615 N. Meridian Road Youngstown 44509 (330) 793-4935 www.youngstownlettershop.com Top executive: Jeanne Tuscano

Z ZIG 4401 Rockside Road, Suite 214 Independence 44131 (216) 328-6301 www.zigmarketing.com Top executive: Howard Zoss

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Education council taking on ‘herculean task’ Soon-to-be-renamed NOCHE is growing reach from 16 to 23 counties and changing its focus By TIMOTHY MAGAW [email protected]

Northeast Ohio Council on Higher Education is rewiring itself, and it hopes to do the same with as many schools — and not just colleges — in the region as possible. Under the leadership of its new president, Robert W. Briggs, the local nonprofit focused on boosting educational attainment is expanding its reach to serve not only local colleges and universities, but the entire educational continuum from pre-school through higher education. It’s a dramatic shift that will soon lead to a name change for an organization that launched in 1951 as the Cleveland Commission on Higher Education and has gone through much iteration over the years. The group also expanded its reach from 16 to 23 counties, adding Ottawa, Sandusky, Seneca, Erie, Huron, Crawford and Richland to its fold.

A big piece of the organization’s newly expanded mission will include trying to bring adaptive learning to K-12 schools, and perhaps even colleges, that are willing. Adaptive learning is a teaching strategy that uses computers and big data to deliver students personalized instruction to help them master material at their own pace. The technology, of course, requires lofty investments in broadband, computers and other infrastructure school districts, especially those in high poverty areas, can rarely afford. NOCHE didn’t pin down publicly a fundraising goal, but it has begun to hit up local foundations, corporations and other funders to support its efforts. The organization envisions helping bring high-speed fiber hook-ups, computers and iPads to schools in high-poverty areas and even the students’ homes. “Who knows what the results will be, but in our minds, there is no greater mission,” said Briggs, a vet-

eran nonprofit leader who helped co-found the Fund For Our Economic Future, a collaboration of public and private organizations that raised roughly $100 million to support various economic development initiatives in the region. Briggs said the details of how NOCHE’s adaptive learning program will operate still are being hashed out, though he envisions the organization not so much serving as a spokesman for the methodology but rather as a “master collaborator” to make it happen in area schools. To an extent, NOCHE envisions itself becoming a clearinghouse of sorts for research and best practices when it comes to adaptive learning. Briggs, the immediate past chairman of the John S. and James L Knight Foundation and former president of the GAR Foundation in Akron, also seeks to connect with NOCHE many of his relationships, including OneCommunity, which is expanding ultra-fast broadband and high-speed Internet services in Northeast Ohio. Briggs is a former member of OneCommunity’s

board. “This is a herculean task,” said Roy A. Church, Lorain County Community College president and vice chairman of NOCHE’s board. “He’s been one of the major regional thinkers for a long, long time. The fact that he was willing to turn that experience, expertise and all of those relationships toward this mission was absolutely extraordinary.” NOCHE isn’t abandoning all of its former programs developed under former president Ann Womer Benjamin, who stepped down in December after being elected mayor of Aurora. The organization will continue its work with NEO Intern, which helps place students into internships and co-ops, and the Talent Dividend, a regional college completion initiative driven by a group of business, education, civic and nonprofit leaders. While NOCHE officials stress that those programs have shown success, the organization has faced some stiff challenges in recent years, which its leaders believe could be reversed with the renewed

mission. Around 2010, almost all of the private colleges pulled their membership from the organization. Also, for the last few years, NOCHE’s expenses have exceeded its revenue. In 2012’s tax filing — the most recent information publicly available — NOCHE posted a deficit of more than $140,000, though the shortfall was covered by the organization’s existing assets. “The expanded mission and the focus is going to bring people to the table with an interest of seeing this all get done,” said Robert P. Reffner, NOCHE’s board chairman and vice president and general counsel of FirstEnergy Corp. “They will be interested in paying for it. That could be philanthropy, business and some of the institutions that have left. We are committed to this.” He added, “There isn’t a single agency or single authority with a silver bullet to shoot to fix it all. That’s the challenge with educational attainment. You need a backbone organization. … NOCHE is uniquely positioned to serve in that role.”

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TUITION And while the sticker price seems to go up every year, when adjusted for inflation, private schools’ net tuition revenue hasn’t increased in 13 years, according to the NACUBO report. That doesn’t bode well for an industry whose problems are compounded by a shrinking pool of high school graduates, new competition from online sources and growing skepticism of whether a college degree is worth the investment. “Because tuition goes up, there’s this misperception that we’re recouping all those dollars,” Helmer said. “We take all that money and put it back in student aid.” Some higher ed observers portend this confluence of pressures could lead some smaller colleges to fold or consolidate, although Northeast Ohio’s institutions appear to be on stable fiscal footing — at least for the time being.

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about $10,000 for the year. Rarely, however, do students pay anywhere near those figures, especially at private schools. The cost of attending Baldwin Wallace, for instance, is comparable to Kent State once you factor in the discount rates and other incentives. At Oberlin, about 80% of the school’s students demonstrated need and received some sort of financial aid averaging about $32,000. According to a recent survey of private, nonprofit, four-year colleges by the National Association of College and University Business Officers (NACUBO), the discount rate for first-time, full-time freshmen during the 2013-2014 academic year was estimated to reach 46.4% — the highest recorded rate in the history of the study. Colleges, of course, intrinsically have no qualms about doing everything in their power to make an education possible for cash-strapped students. Still, these considerable discounts put pressure on private schools, which receive no state funding, and forces them to find new ways to drum up revenue to support their operations. Take Oberlin, which as a way to drive in more dollars is increasingly renting out its campus to outside groups to host summer programs.

Getting creative Tom Chema knows all too well the challenges of running a small, private school. For 11 years, he served as president of Hiram College in rural Portage County — a school now with about 1,300 undergraduates. When he stepped in as president in 2003, enrollment was plummeting,

the school’s finances were in the gutter and its endowment was nothing to write home about. For the most part, Chema helped reverse those misfortunes by expanding Hiram’s student base with more adult and online learners and boosting its fundraising efforts. In 2012, Chema set the goal of raising $10 million over two years to increase the school’s endowment. By his retirement in June, Hiram had secured $20 million in cash,

the endowment. With big tuition discounts and a smaller pool from which to recruit, tuition revenue isn’t expected to spike any time soon. Also, families appear to be tapped out in terms of what they’re able to pay for college. “How much do you ask a family to pay that does not impact the decision to enroll?” said Brian Williams, John Carroll University’s vice president for enrollment, “We’re mindful of finding where

“The underlying real story is demographics. It’s quite simple and quite straightforward. The number of 18-year-olds in this country is falling like a rock, and no one seems to recognize that.” – Tom Chema former president, Hiram College pledges and bequests. Still, it’s anything but smooth sailing ahead for Hiram and other schools, although it’s not their fault, per se. “The underlying real story is demographics,” Chema said. “It’s quite simple and quite straightforward. The number of 18-year-olds in this country is falling like a rock, and no one seems to recognize that.” Private colleges’ revenue, for the most part, is driven by three sources: tuition, annual giving and

that line is.” In June, Moody’s Investors Service noted that John Carroll University’s net tuition revenue per student was very low at $12,785 — a figure that was largely influenced by its growing and very high tuition discount rate of 55.8%. John Carroll expects to weather that challenge by increasing the number of students it brings in. This fall, the university expects around 800 incoming freshman, an increase of about 100 students over a few years ago.

Also, the university is in the midst of a $100 million fundraising campaign, toward which it has raised more than $75 million. Local colleges also are drumming up creative ways to at least stabilize tuition revenue. Shortly after Chema took the helm, Hiram launched a tuition guarantee program that locks in a tuition rate for all four years for a student’s education. Plus, with certain caveats, starting in 2012, Baldwin Wallace guaranteed its students will graduate within four years or the college will pick up the tab for the extra time it takes them to finish. Both are worthwhile marketing endeavors to lure prospective students, but they’ve also given the colleges some assurance students won’t abandon their education after only a year. Oberlin College, meanwhile, reports that it’s been able to manage its discount rate perhaps better than some of its peer institutions, mostly highly selective, private liberal arts colleges and universities. The college’s new vice president for finance and administration, Michael Frandsen, said Oberlin is a highly regarded institution globally, particularly its music conservatory, which means “people are willing to pay a higher price, in some cases, to be here.”

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THE WEEK AUGUST 4 - 10 The big story: The Cleveland Indians plan a dramatic overhaul of Progressive Field, the 11tholdest park in Major League Baseball. The renovations — which Tribe president Mark Shapiro said will be “100%” privately financed by Indians ownership and via a partnership with Delaware North — will begin as soon as the 2014 season is finished. They include a major reworking of Gate C, a new two-story bar in right field, an expanded Kids Clubhouse, redesigned bullpens in center field, a new “neighborhood” feel to the Gate C concourse and the unveiling of a Larry Doby statue. The improvements will reduce the capacity of Progressive Field to about 37,000 to 38,000 seats.

Complex deal: Forest City Enterprises Inc. is clearing the decks to sell most of its Tower City Center complex in downtown Cleveland to an unidentified buyer. The Cleveland-based developer said it wrote down the value of three Tower City properties and others it plans to shed on its books by taking a $129.8 million non-cash impairment in its quarter ended June 30. Forest City said it’s in talks with a single buyer for its Skylight Office Tower and Post Office Plaza buildings, and the Avenue shopping center. The iconic Terminal Tower office building is not for sale.

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REPORTER’S NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

John Carroll adds diversity officer to bolster its culture John Carroll University has appointed its first assistant provost for diversity and chief diversity officer. Terry L. Mills will start in the new role on Monday, Aug. 18. He comes from Morehouse College Mills — a historically black college in Atlanta — where he worked the last seven years. Most recently, he served as Morehouse’s dean of research and sponsored programs as well as a professor of sociology. Previously, Mills worked as dean of humanities and social sciences. Before joining Morehouse, Mills held a series of leadership positions at the University of Florida. Upon Mills’ hiring, John Carroll president Rev. Robert L. Niehoff said, “As a campus community, we can celebrate the progress we are making by attracting a very experienced professional to help us achieve our campus culture goals.” The university says Mills will “work with the entire campus community and in close collaboration with colleagues responsible for curriculum development, faculty development and academic affairs, student affairs and student development, human resources, development and alumni relations.” John Carroll, of course, isn’t the first local university to add an official focused on diversity to its administrative ranks. Among those that have taken such a step are Baldwin Wallace University, Cleveland State

University, Case Western Reserve University, Kent State University and the University of Akron. — Timothy Magaw

Hermes stays on its toes, buys three Fleet Feet stores Hermes Sports & Events, which bills itself as Northeast Ohio’s largest sports, road racing and events management company, just got bigger. Hermes has acquired three Fleet Feet Sports stores, a move Hermes president Neal Neroni said will provide runners and walkers the chance to “one-stop” shop. Fleet Feet, which has locations in Northfield and Pepper Pike, is a Carrboro, N.C.-based seller of shoes and apparel that cater to runners and fitness enthusiasts. A Fleet Feet store that will also be under the Hermes umbrella is scheduled to open Aug. 18 at 26149 Detroit Road in Westlake. “We want runners and walkers to be able to shop for shoes and fitness apparel, sign up for Hermes races, pick up race packets and join a training class all in one place,” Neroni said in a news release. Hermes said it will manage 150 road races in Northeast Ohio in 2014, along with 17 Susan G. Komen Race for the Cures around the country. The company said its total race entries increased 16% in 2013, and entries this year are on pace to beat last year’s mark. Its signature local events are the Cleveland Turkey Trot (more than 7,300 runners last year), the St. Malachi’s Run on St. Patrick’s Day (5,000), the Hermes Cleveland 10-Miler and the Winking Lizard A Shot in the Dark. The latter two races each draw about 2,000 participants. — Kevin Kleps

OneCommunity bets region is up for big challenge OneCommunity is issuing a challenge to the many communities that make up Northeast Ohio. The Cleveland-based provider of ultrahigh speed broadband said it has launched the Big Gig Challenge, which will make grant funds available for municipally led, communitywide fiber construction projects. OneCommunity said in a news release that it’s seeking proposals “that establish creative and collaborative expansion opportunities that connect community anchor institutions, government facilities and business districts in an effort to attract and retain the innovative and entrepreneurial businesses of the 21st century.” Up to $2 million in funding will be provided “through a public-private partnership approach with the grant funding accounting for 25 percent of the total project costs for the awarded grantee,” OneCommunity said. “We anticipate that the Challenge Grant will inspire and educate cities about the limitless possibilities available to them through OneCommunity’s network,” OneCommunity CEO Lev Gonick said in the release. “The challenge is for them to get creative and explore and articulate the potential opportunities and relationships that are available utilizing our 40-gigabit connectivity.” To be eligible, municipalities must submit applications to OneCommunity no later than midnight on Oct. 3. For information about the Big Gig Challenge and an application, go here: conncdn.com/one/ — Scott Suttell

A lot on their plate: A joint venture between Solon-based investor J-Dek Ltd. and Clevelandbased real estate developer Stark Enterprises Inc. is starting to pursue the development of a mixeduse project on a parking lot between Quicken Loans Arena and the Prospect Avenue side of the East 4th Street neighborhood. J-Dek got the ball rolling for the development by tying up multiple properties and then bringing in Robert Stark, the high-profile developer of Crocker Park and Eton Collection, as its partner. Stark and Joel Goldman, chief financial officer of J-Dek, have preliminary plans for the sites but declined to discuss negotiations with the would-be seller of the lots, Los Angeles-based L&R Group Inc.

WHAT’S NEW

Excerpts from recent blog entries on CrainsCleveland.com.

Technology to the rescue

Change at the top: Cliffs Natural Resources Inc. named Lourenco Goncalves as chairman, president and CEO after activist investor Casablanca Capital triumphed in a proxy battle. Goncalves was the preferred CEO candidate of Casablanca, a New York-based hedge fund that saw six of its candidates win election to Cliffs’ 11member board. He replaces Jim Kirsch as chairman, a role Kirsch filled since July 2013, and Gary Halverson, who became CEO in February 2014. Cliffs said Goncalves has more than 30 years of experience in the metals and mining industries.

Pay up: C. David Snyder owes his former employees about $143,000. A judge ordered the former CEO of Attevo to put that money back into the now defunct information technology company’s retirement plan. The money had been removed from employee paychecks but never showed up in the defunct company’s retirement plan, the court ruled. And Snyder isn’t the only one on the hook. The court ruled against all of the defendants named in the lawsuit that the U.S. Department of Labor filed in November 2013. They include Snyder and fellow Attevo owner Joseph Burmester, as well as Attevo itself and a few related companies. Westward expansion:

Westlake-based Nordson Corp. agreed to pay $180 million for a Los Angeles company that makes catheters and medical tubing products for cardiology, pulmonology and related applications. The acquisition of Avalon Laboratories Holding Corp. is expected to close this month. Avalon, founded in 1990, has 400 employees at its Los Angeles headquarters and at a plant in Mexico.

BEST OF BLOGS

PRODUCT: EXFIL Ballistic helmet COMPANY: Team Wendy, Cleveland Team Wendy, which makes products that protect against serious and potentially lifethreatening injuries, says the latest model in its EXFIL line is designed for law enforcement and military users. EXFIL Ballistic follows two previous EXFIL bump helmet products: the Carbon, released in 2012, and LTP (lightweight tactical polymer) released in 2013. “We’ve taken the best features of our Carbon and LTP™ bump helmets, as well as our helmet liners and retention systems for standard ballistic helmets, and brought them together into one comprehensive ballistic helmet platform,” said Team Wendy CEO Jose Rizo-Patron in a news release announcing the EXFIL Ballistic. The result, he said, “is a ballistic helmet that is lightweight, customizable and easy to adjust while providing exceptional protection.” The EXFIL Ballistic “is designed to be comfortable during extended use,” according to the company. It comes in two sizes, with weights of 2.6 pounds and 2.75 pounds, and it has a foam liner with customizable comfort pad sets in two thicknesses. A removable center pad accommodates overhead communications headsets. Helmets are available in coyote brown, black and foliage green. Additional colors and hydrographics are available upon request.

The Veterans Affairs health crisis “might be solved with something as simple as putting the right software in the hands of far-flung doctors,” according to Politico.com. And the Cleveland VA might offer a helpful example of how to do it. Part of the $17 billion bill to overhaul the troubled health system “involves much heavier usage of information technology, so that veterans in dire need of health care won’t have to travel long distances or get bogged down with wait times as they try to see a doctor in person.” Telemedicine is being used by the VA nationwide, and there’s evidence it saves money and improves access and care. But its use is spotty. The story noted that the Louis Stokes Cleveland VA Medical Center started using the technology in 2004 and now provides many telemedicine services. “It will definitely contribute to solving the problem” of access to VA services, said David Chmielewski, who coordinates telemedicine at the Cleveland hospital. The VA in Northeast Ohio “began offering a telemedicine audiology clinic through its mobile vet centers this year, and is adding a prosthetic lab,” the website noted. Staff in the mobile centers will be able to connect to the VA hospital’s electronic health record system, allowing them to view and order devices with the click of a mouse.

What are you eating? Yummly, which describes itself as a “digital kitchen and food technology platform,” put Cleveland on its list of the five leasthealthy big U.S. cities, based on eating habits. To determine its ranking, Yummly said it created a “healthy eating score” based on an algorithm for identifying healthy recipes.

The algorithm incorporates factors including recipe nutrition estimates (saturated fat, sodium, sugar, vitamin A), ingredients (number of vegetables, use of red meat, whole grains), and preparation (fried, baked). The company said it “combined this algorithm with search activity from over 100 million users over the last year, yielding billions of data points for estimating demand for healthy recipes in different regions.” Yummly looked at data from 25 cities. The worst eaters, in order, are in St. Louis, Pittsburgh, Cleveland, Charlotte and Dallas. The healthiest: San Francisco, San Diego, Los Angeles, New York and Portland, Ore. The company said users in San Francisco “search for recipes that contain vegetables 30 percent more often than users from Cleveland.”

Drink up Businessweek.com turned to a Cleveland bartender for advice in a somewhat retro lifestyle story. “Woe to the white wine spritzers,” the website wrote. “Many women are now ordering drinks such as straight whiskey or rum to impress co-workers and ‘signify strength, confidence, and toughness to male colleagues,’ according to a study by consulting firm Red Associates.” Kelly Ann Seemann, of Luxe Kitchen & Lounge in Cleveland, suggested a twist on the Boulevardier. Less well known than a Manhattan or Sazerac, this classic will show “you have an appreciation for the art and history of cocktails,” Seemann said. Ready for instructions? 1.5 oz. Bulleit or Templeton rye 1 oz. Cappelletti (or Campari) 1 oz. Carpano Antica Formula sweet vermouth 2 or 3 dashes Angostura bitters (optional) Measure all ingredients into a mixing glass or beaker. Add ice. Stir for 20 to 30 seconds. Strain into a coupe glass. Use a vegetable peeler to cut an orange twist, then squeeze it over the cocktail and drop it in.

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