Transcription
CCLB 08-11-08 A 1 CCLB8/8/20084:18 PMPage 1www.crainscleveland.comAUGUST 11 - 17, 2008Vol. 29, No. 32/ 1.50MIGHTY MINISLATENEWS MEDINA MINIATURECOMPANY PLANNINGBIGGER-THAN-EVERTRADE SHOW.PAGE 3CONVENTION BUREAUSEES FINANCING PERIL While a new conventioncenter/medical merchandise martwould make it easier to marketCleveland to trade groups andtourists, the plan that’s developingto pay for the center could devastate Positively Cleveland, theconvention and visitors bureau.That’s the concern of DennisRoche, Positively Clevelandpresident. The financing planaccompanying the announcementthat the convention center/medmart should be built behind TowerCity Center suggested that oneelement of closing the financinggap for what is now a 536 millioncomplex would be to divert part ofthe current county hotel bed tax tothe project. The move would take 2.5 million a year from PositivelyCleveland’s 8 million budget. Butan agreement between CuyahogaCounty and developer MerchandiseMart Properties Inc., which wouldrun the complex, already divertspart of Positively Cleveland’s shareof the bed tax to make up foroperating losses at the conventioncenter. Mr. Roche said asking hisorganization to take two cuts“would be unacceptable — one orthe other, not both.”— Jay Miller“A lot of our clients aren’t exactly vulnerable people.But I guess this is affecting everyone in terms of spending.”– Sarah Matters (below), owner, Larchmere Oriental RugsNational outfits wastelittle time promotingincentive, addingtheir own deals to itBy STAN BULLARDsbullard@crain.comNATIONAL CITY PREPSMILWAUKEE EXPANSION National City Corp. is planning toexpand its branch network inMilwaukee. The bank said it will add11 new locations over the nextthree years, to bring its total to 35branches in the metropolitan area.The first is scheduled to open inOctober, on the first floor of newWisconsin headquarters for NationalCity. National City entered theMilwaukee market earlier this year.— Arielle KassJESSE KRAMERPARTSSOURCE SECURES 50 MILLION INVESTMENT PartsSource LLC of Aurora hasreceived a 50 million investmentled by Polaris Venture Partners ofBoston and joined by PrimusCapital Funds of Mayfield Heights.The medical equipment partssupplier sought investors so itcould provide its owners a returnon their stock and so it could tapexpertise and connections neededto grow the company and take itpublic within four years, saidPartsSource CEO Ray Dalton, whoremains majority owner. None ofthe money will be reinvested intothe business, which is projected toreceive about 100 million inrevenue this year, Mr. Dalton said.The firms bought more than 30%of the company, including stockfrom Mr. Dalton, some of thecompany’s founding executives,and its 200-plus employees, whoshare a 5% stake.— Chuck SoderGROWINGCONCERNForget taxes and insurance; inflation fearstake over small businesses’ lists of worriesBy KATHERINE FAYInside a small brick storefront, intricately designed and richly coloredcarpets line the walls and are piledacross the wooden floor. WhileLarchmere Oriental Rugs has dozens ofrugs to choose from, what won’t be foundin its shop are many customers.Sarah Matters says this is the slowestsummer she can remember since she andhusband Erdogan Gezer opened theCleveland store in 2001. In tough times,See INFLATION Page 21NEWSPAPER71486 01032632INSIDE: Marketing and customer service are small companies’ top priorities. Page 150Local builderseye tax credit’sripple effectsEntire contents 2008by Crain Communications Inc.Homebuilders value their new,hard-fought federal tax credit forfirst-time homebuyers so much thatthey’re quickly turning the creditinto a marketing centerpiece — andsweetening the financial incentive toboot.Within days of President Bushsigning the housing stimulus packageJuly 30, national homebuilder RyanHomes — the biggest builder inNortheast Ohio by far — launcheda program matching the 7,500tax credit for first-time buyers withthe same amount in discounts forbuyers who use Ryan’s in-housemortgage company.“That’s up to a 15,000 opportunityfor you,” proclaims a Ryan postcardmailed to local prospects before itgets to the zinger: “if you purchasebefore Aug. 31, 2008.” That’s a fullyear before the temporary federalcredit expires — but time is everything to publicly traded companiesand builders with development loansto pay.Likewise, Pulte Homes immediatelylaunched a “Jump-Start” promotionby offering any buyer — even thosenot eligible for the first-time credit —See BUILDERS Page 22Snap-On weighing NE Ohio,Michigan sites for new HQ330 employees in Richfield, Wooster in limboBy CHUCK SODERcsoder@crain.comSnap-On Business Solutions isplanning to consolidate its Northeast Ohio employees into a newheadquarters that most likely will bebuilt within the region but couldend up in Michigan.The company, which provideselectronic parts catalogs and otherservices to the automotive, powerequipment and powersports industries, intends to put the operationscurrently at its Richfield headquarters and its Wooster office in thenew building. The existing Northeast Ohio operations have a total of330 employees.The division of Snap-On Inc.,which is based in Kenosha, Wis., isconsidering two sites in SummitCounty —one in Richfield, the otherin Akron — and two in MedinaCounty, in Brunswick and HinckleyTownship, according to officials fromthose counties.David Foutz, global marketingdirector for Snap-On Business Solutions, would not say what sites thecompany is exploring in Michigan.Snap-On Business Solutions isconsidering Michigan because ithas an office in Livonia and wouldbe closer to large customers such asthe Detroit Three automakers, andbecause another division of SnapOn Inc. is located in Detroit.However, Snap-On BusinessSolutions would rather not leaveOhio, Mr. Foutz said.See SNAP-ON Page 21
CCLB 08-11-08 A 2 CCLB28/8/20081:40 PMPage 1CRAIN’S CLEVELAND BUSINESSWWW.CRAINSCLEVELAND.COMAUGUST 11-17, 2008COMING NEXT WEEKWhat to do with your wealth?Economic conditions arejust right for the transfer ofwealth to children or otherpotential benefactors. Inour periodic Estate Planning section, we examinethe trend, along with bodydonation and ethical wills.700 W. St. Clair Ave., Suite 310,Cleveland, OH 44113-1230Phone: (216) 522-1383Fax: (216) 694-4264www.crainscleveland.comREGULAR FEATURESClassified .20Editorial .10Going Places .12List: Foreign-ownedcompanies .13Stocks.23Experience our ExperiencePublisher/editorial director:Brian D. Tucker (btucker@crain.com)Editor:Mark Dodosh (mdodosh@crain.com)Managing editor:Scott Suttell (ssuttell@crain.com)Sections editor:Amy Ann Stoessel (astoessel@crain.com)Senior reporter:Stan Bullard (sbullard@crain.com)Reporters:Shannon Mortland (smortland@crain.com)Jay MIller (jmiller@crain.com)John Booth (jbooth@crain.com)Chuck Soder (csoder@crain.com)Dan Shingler (dshingler@crain.com)Arielle Kass (akass@crain.com)Designers/reporters:Joel Hammond (jmhammond@crain.com)Kathy Carr (kcarr@crain.com)Research editor:Deborah W. Hillyer (dhillyer@crain.com)Editorial researcher:Kim Ratliff-Null (kratliff-null@crain.com)Cartoonist/illustrator: Rich WilliamsOnline editor:Jeff Stacklin (jstacklin@crain.com)W E A T H E R H E A DE X E C U T I V EMarketing/Events manager:Christian Hendricks (chendricks@crain.com)Marketing coordinator:Laura Franks (lfranks@crain.com)E D U C A T I O NTurns out, one size does not fit all That’s why you get to choose the content andBill Christopher,Executive Vice President,delivery that’s ideal for your organization when youAlcoapartner with Weatherhead Executive Education.“Getting an external view of your organizationEnroll specific individuals in the right combination of our 70 one and two-day programs to develop a specific skill set or round outa competency. Subject areas include:s 3TRATEGY AND )NNOVATIONs 3USTAINABILITYhelps you see things you wouldn’t normally see.Weatherhead custom-designs programs forAlcoa that help us meet our business challengesyear in and year out.”Invest in a package of classes at significant savingsand work with a Weatherhead consultant to determine the best mix basedon your company’s priorities.s !DOPTING A NEW STRATEGIC DIRECTIONs EVELOPING MANAGERS INTO LEADERSs "UILDING CRITICAL ORGANIZATION WIDE CAPABILITIESMichael Waxman-Lenz,CFO,American Greetings Interactive“Weatherhead Executive Education has anexcellent selection of high-caliber programs.From Fortune 50 companies to mid caps, family businessesto non-profits, last year, more than 400 organizations foundthe right fit at Weatherhead Executive Education.What can we do for you?Receptionist:Jodi Stirtmire (jstirtmire@crain.com)Billing:Susan Jaranowski, 313-446-6024(sjaranowski@crain.com)Credit:Todd Masura, 313-446-6097(tmasura@crain.com)Circulation manager:Erin Miller (emiller@crain.com)Customer service manager:Brenda Johnson-Brantley (bjohnson-brantley@ crain.com)Crain Communications Inc.Work with our faculty to design a customized programfrom scratch to address your organization’s specific needs, such as:We can use them as a one-stop-shop fordeveloping our managers, rather thansourcing six different providers to try to getthe same breadth of content.”For open programs, contact James Van Doren at (216) 368-6413.learn moreProduction manager:Craig L. Mackey (cmackey@crain.com)Production assistant/video editor:Steven Bennett (sbennett@crain.com)Graphic designer:Kristen Wilson (klwilson@crain.com)You can choose to:s 0ROJECT -ANAGEMENTs -ANAGING (IGH 0ERFORMANCE 4EAMSAdvertising sales director:Mike Malley (mmalley@crain.com)Account executives:Adam Mandell (amandell@crain.com)Art Bouhall Jr. (abouhall@crain.com)Andrea Rubin (arubin@crain.com)Dirk Kruger (dkruger@crain.com)Nicole Nolan (nnolan@crain.com)Classified advertising manager:Don Schwaller (dschwaller@crain.com)Office coordinator:Toni Coleman (tcoleman@crain.com)Western accounts manager:Ellen Mazen, 323-370-2477(emazen@crain.com)Western accounts assistant:Tara Flash, 323-370-2442(tflash@crain.com)For custom solutions, contact Christina Vellios at (216) eith E. Crain: ChairmanRance Crain: PresidentMerrilee Crain: SecretaryMary Kay Crain: TreasurerWilliam A. Morrow:Executive vice president/operationsBrian D. Tucker: Vice presidentRobert C. Adams:Group vice presidenttechnology, circulation, manufacturingPaul Dalpiaz: Chief Information OfficerDave Kamis:Vice president/production & manufacturingPatrick Sheposh:Corporate circulation directorG.D. Crain Jr.Founder (1885-1973)Mrs. G.D. Crain Jr.Chairman (1911-1996)Subscriptions: In Ohio: 1 year, 59; 2 years, 102.Outside of Ohio: 1 year, 102; 2 years, 180. Singlecopy, 1.50. Allow 4 weeks for change of address.Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-888-909-9111or FAX (313) 446-6777.Reprints: Call 1-800-290-5460 Ext. 183Audit Bureauof Circulation
CCLB 08-11-08 A 3 CCLB8/8/20084:18 PMPage 1AUGUST 11-17, 2008WWW.CRAINSCLEVELAND.COMCRAIN’S CLEVELAND BUSINESS3Duke Realty alters NE Ohio exit strategyAfter failed attempt to shed 14 properties,company offers three North Olmsted sitesBy STAN BULLARDsbullard@crain.comDuke Realty Corp. is reviving in amodest way its effort to exit Northeast Ohio, this time by offering threeNorth Olmsted office buildings forsale rather than its remaining 14office buildings in the region.Duke spokesman Joel Reuteracknowledged last Thursday, Aug. 7,that the company again is marketingthree Great Northern CorporateCenter office buildings through theCleveland office of CB Richard Ellis.The buildings date from the late1980s to 2000 and have a total269,686 square feet of office space.Mr. Reuter said the buildings havean average occupancy of 91%.Denny Oklak, Duke Realty’s CEO,disclosed the offering in a July 31conference call with investors. Mr.Oklak observed that selling smallerpackages of properties is moreeffective due to the national creditcrunch.He did not identify the threebuildings in the conference call, butprefaced his observation by sayinghe is “tired of talking about Cleveland.”Duke’s bid to close the book onits time in Northeast Ohio with asale of its last 14 suburban officebuildings in this market went fornaught last May when a prospectivebuyer failed, after five months oftrying, to obtain enough financingto finalize the deal.Duke already has unloadedits eight office buildings in theeastern suburbs and its industrialproperties to various buyers. TheIndianapolis-based real estateinvestment trust in 2005 disclosedplans to leave the region for fastergrowing markets.Bob Nosal, managing director ofthe Cleveland office of Grubb &Ellis, said offering a smaller groupof properties increases the numberof prospective buyers “by severalmultiples” and boosts the chancethe buyer may be a local investor orinvestor group. The high occupancylevel in North Olmsted also willhelp the buyer secure financingfrom banks, Mr. Nosal said.Mr. Reuter declined to disclosean asking price for the North Olmsted properties. Cuyahoga Countyassigns Great Northern CorporateCenter’s three buildings a marketvalue of 21 million for property taxpurposes.Duke’s other 11 office buildingsin the market are located in theRockside Road office corridor inIndependence and Seven Hills. THE WEEKIN QUOTESMINIATURESTAKE OVERBIG STAGE“I’m much moreconscious of coststhan I used to be.I have new skillsnow in spreadsheetsand pieces per hourand revenue perpiece.”Medina company’s annual Auroratrade show has industry abuzz— Steve Grace, owner, FairmountCleaners. Page OneBy JOHN BOOTHjbooth@crain.comThis weekend, the small stuff will be abig deal in Aurora.The 2008 Aztec International MiniatureTrade Show at The Bertram Innand Conference Center Aug.16-18 could be the most wellattended event in the show’ssix-year history, despite a toughretail environment.“Over 30 brand new customersare coming this year,” said DanHarrell, eastern sales manager forMedina-based Aztec Imports Inc.,which owns and runs the show.Aztec, a designer and seller ofdollhouse miniatures that rangefrom the shrimpiest of shrimpcocktails to replicas of modernappliances and MP3 players,hosted its first miniatures showin 2002. Mr. Harrell said theshow’s creation stemmed from adesire to get back to the truepurpose of such events.“We’re inviting our customers andsharing them with our main competitors,but they’re inviting their customers andsharing them with us,” Mr. Harrell said.See MINI Page 21“A lot of states aregrowing public healthprograms because they realize they haveissues. This is the firsttime life expectancyisn’t increasing likeit did for ourparents.”— Robert Frank, senior vicepresident for academic affairs andprovost, Kent State University.Page 11RUGGERO FATICA PHOTOSABOVE: Dan Harrell, eastern sales manager for Medina-based Aztec Imports Inc., said thesixth year of the company’s annual miniature trade show might be the most well attendedin its history. LEFT: Samples of Aztec Imports’ miniatures.INSIGHT“In the currenteconomy only the bestwill survive. I metwith the staff sixmonths ago andeveryone knows onlythe best employeeswill stay.”CWRU researchers work to speed effect of cancer drugs— Jeff Grano, co-owner, Going tothe Dogs Inc. Page 15Device could hit tumor in minutes, not days“The process was thesame, whether youwere making lightfixtures or statues.Like all Italians, theywere making a fewMadonnas on theside.”By SHANNON MORTLANDsmortland@crain.comLittle hairballs usually don’tconjure up pleasant thoughts, butthey eventually could for somepeople suffering from cancer.Researchers at Case WesternReserve University have created anew nanoparticle device that coulddeliver cancer drugs right to a tumorwithin minutes, insteadof waiting for two days forthe drug to make its waythrough the body beforereaching the tumor.The device is made of Burdagrains of gold in the center,around which researchers have“planted a forest of polymers” thatmakes the device look like a “hairyball,” said Clemens Burda, associateprofessor of chemistry anddirector of the Center forChemical Dynamics andNanomaterials Research atCWRU.The nanoparticle device— which is much smallerin diameter than a humanhair and cannot be seen bythe naked eye — can holdup to 100 drug molecules, Dr. Burdasaid. The device acts as a “Trojanhorse” that takes the drug to the tumor through the blood stream with-in several minutes, he said.The polymers enable the nanoparticles to work better than existingdrug delivery systems because theyprotect the drug until it is uploadedinto the tumor, Dr. Burda said. Theyalso can dissolve in water and do notinteract with proteins in the bloodstream, which allows the device tocarry drugs through the bloodstream and to the tumor faster, hesaid.Many current drugs do notSee DELIVERY Page 22— John Mazzolini, president,Mazzolini Artcraft. Page 18
CCLB 08-11-08 A 4 CCLB48/8/20081:41 PMPage 1CRAIN’S CLEVELAND BUSINESSWWW.CRAINSCLEVELAND.COMAUGUST 11-17, 2008Niederst adds in-demand Strongsville apartments Easy2 aheadFirm likes location, plans to add 30 suitesBy STAN BULLARDsbullard@crain.comAdding an apartment jewel to aportfolio dominated by older or lesswell-located properties, NiederstManagement of Fairview Park hasacquired the Polo Club apartmentcomplex in Strongsville for 20million.The complex at 14440 Howe Roaddates from 1990, is visible from Interstate 71 and is across the street fromthe Westfield Shoppingtown SouthPark mall. David Niederst, CEO of thefamily-owned real estate investmentcompany, said he was attracted to thecomplex because of its high-demandlocation and its strong occupancyrate. Indeed, Polo Club even has a sixperson waiting list.Moreover, the complex boughtfrom Polo Club Apartments LLC, anaffiliate of Realty Investment Co. ofWashington, D.C., also providesNiederst with a new way to burnishthe property. The purchase includesthree vacant acres of apartmentzoned land that Niederst plans todevelop itself with 30 suites, allthree-bedroom units.“This is the first time we’vedeveloped anything from the groundup,” Mr. Niederst said. “It makessense for us because we don’t haveanything real close to it. There are notmany three-bedroom units aroundthere, and the management assuresus they can lease them.”The empty land allows Niederstto add nearly 10% more incomeproducing suites. Polo has 336 suites,according to Gary Cooper, a vicepresident at the Independence officeof the Marcus & Millichap investmentrealty brokerage who represented theseller in the transaction. He said morethan 10 groups bid for the property,which overcame the difficulty ofsecuring financing in the current realestate market.Chris Smythe, president of Cleveland-based Smythe Property Advisors, described 20 million as a“strong price for the property.” Hesaid the price reflects the continuingrebound of the apartment market,as occupancy has risen while thehousing market has soured.Apartment-zoned land at goodlocations is extremely rare in Northeast Ohio, Mr. Smythe said. He addedthat three-bedroom suites are attractive again to developers.“A few years ago, three-bedroomsand townhouse properties hadmore vacancies than other properties because more families couldafford homes,” Mr. Smythe said.“Now, for a small family, two-bedroom apartments don’t work andthey have no place to go. Threebedroom units are attractive again.”The acquisition adds substantiallyto Niederst’s portfolio of more than7,000 units, but Mr. Niederst said hehas not totaled the inventory sinceclosing the Polo Club deal July 29. More time booking business.Less time bookkeeping.Key Business OnlineProductivity, simplified.SMGet back to the business you love by reducing the time you spend on the tasks of accounting andbanking. Key Business Online helps you gain new clarity and control of your company’s cash flow.t Simple dashboard format, designed exclusively for businessest Secure a
the right fit at Weatherhead Executive Education. What can we do for you? Bill Christopher, Executive Vice President, Alcoa “Weatherhead Executive Education has an excellent selection of high-caliber programs. We can use them as a one-stop-shop for developing our managers, r
