Crain's Cleveland Business

By MICHELLE [email protected]

After a half decade of big, yearlydeclines in home equity lending,growing numbers of homeowners

are using their homes as piggybanks again, and bankers expecttheir ability and desire to tap theirequity to keep growing.

Nationwide, it was a long, steadydescent for this breed of lending:

New home equity loans and lines,plus new draws on lines of credit,dropped 17.5% in 2007, another18.9% in 2008, 28.5% in 2009, 18.2%in 2010 and 17.1% in 2011, accord-ing to SMR Research Corp., a finan-cial services market research firm

in Hackettstown, N.J.By 2011, the annual amount of

home equity originations had declined threefold from its historicpeak in 2006, said Stuart Feldstein,president of SMR.

Now, home equity lending isgrowing locally and nationwide asrising home values mean morehomeowners actually have equity

$2.00/MAY 6 - 12, 2013

Entire contents © 2013by Crain Communications Inc.

Vol. 34, No. 18

07447083781

718 SPECIAL SECTION

INTERNATIONAL BUSINESSFinding an effective global strategy can bepuzzling to some companies ■■ Pages 13-17PLUS: MIXING WITH OTHER CULTURES ■■ STAFFING ■■ & MORE

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Group is takingnegotiatingaway from buying a car.Vice presidentAllison Spitzer,right, and the company have developed computer software thatupdates the purchase and leasingprices every day. PAGE 3

INSIDE

MCKINLEY WILEY

Diamond Services owner JT Diamond, right, with his son, Greg. The elder Diamond said their business was saved from going bankrupt by movie companies.

Fear isn’t as much of a factorHome equity loans are back on the rise,and bankers expect the trend to continue

See FACTOR Page 20

See HOLLYWOOD Page 21

See EMS+ Page 19

CONTRIBUTED PHOTO

A look at Electronic Merchant Systems’ mobile card reader.

Companyis positiveEMS+ iseffectiveLower swipe ratehelps mobile cardreader stand outBy CHUCK [email protected]

Square. PayPal. Electronic Mer-chant Systems?

The provider of payment process-ing services in Independence has released a device that lets peopletake credit cards on a smart phone ora tablet computer.

The device puts Electronic Merchant Systems in competitionwith a roster of companies that havedeveloped mobile card readers. ButCEO Dan Neistadt says there’s plenty of room for one more.

STORIES STRAIGHTOUT OF HOLLYWOODNortheast Ohio businesses are getting superhero-sizefinancial bumps from movies being shot in Cleveland

By JAY [email protected]

JT Diamond loves the movies.And not just the flickeringimages that dance across ascreen in a darkened room.

He likes the part where hesends movie companies invoicesand they pay their bills promptly.

“They basically saved me fromgoing bankrupt,” said the owner

INSIDE: A comparison between thenumber of underwater mortgages perquarter since late 2011. Page 20

20130506-NEWS--1-NAT-CCI-CL_-- 5/3/2013 2:29 PM Page 1

RIG GOSSVice President,

Manager of Commercial Real Estate Lending

(216) 221-7300 [email protected]

KEN STEWARTCommercial Real Estate

(216) [email protected]

BARRY EZELLCommercial Real Estate

(216) [email protected]

BONNY CARROLL Treasury

Management (216) 529-2622

[email protected]

DEBBIE GIRMAN Small Business

Banking (216) 529-2633

[email protected]

ELLEN WALSH Commercial

Lending (216) 221-7300 x5907

[email protected]

22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY 6 - 12, 2013

REGULAR FEATURES

Classified ....................21Editorial ......................10From the Publisher ......10Going Places ...............12Letter..........................10What’s New..................22

COMING NEXT WEEK

Crain’s will look at the business of driver’s educationand how state rules affect itand much more in next week’sSmall Business section.

Getting up to speed

Audit Bureauof Circulation

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Keith E. Crain: ChairmanRance Crain: PresidentMerrilee Crain: SecretaryMary Kay Crain: TreasurerWilliam A. Morrow: Executive vice president/operationsBrian D. Tucker: Vice presidentPaul Dalpiaz: Chief Information OfficerDave Kamis: Vice president/production & manufacturingMary Kramer: Group publisher

G.D. Crain Jr. Founder (1885-1973)Mrs. G.D. Crain Jr. Chairman (1911-1996)

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IT’S NOT OVER UNTIL WE SAY IT’S OVER

The recession officially ended in June 2009, but it doesn’t feel that way to alarge percentage of small business owners in Ohio and nationwide, accordingto the 2013 U.S. Bank Small Business Annual Survey. The survey of 3,210small business owners, including 203 in Ohio, found most are “hesitant tomake a significant investment because of uncertainty toward the economy, orthe potential impact of tax and health care policies,” says Tom Zirbs, regionalmanager for Northeast and Central Ohio at U.S. Bank. Here are results of howthey view the state of the economy:

Believe economy is in recovery 45% 45%

Believe economy is in a recession 45% 43%

Believe it is time for expansion 0% 1%

Unsure 10% 10%

SOURCE: U.S. BANK

Small business owners in ... Ohio U.S.

■ The headline on an April 29, PageOne story about the Cleveland Clinic’sQuality Alliance program mischaracter-ized the nature of the physician group.The roughly 5,100-member alliance iscomprised of private practice physiciansand the Clinic’s own medical group. Thestory also misspelled the name of JoeMartone, director of public relations forBuffalo Medical Group.

■ Owens & Minor DistributionInc., which plans to move its hospitalsupply distribution center from Glenwil-low into the city of Cleveland, will servethe University Hospital Health Sys-tem and Summa Health System’sRobinson Hospital in Ravenna fromthe new building on South Marginal Drive. An April 29, page 3 story statedincorrectly that Owens & Minor alsoserves the Cleveland Clinic and all ofthe seven-hospital Summa system.

CORRECTIONS


By STAN [email protected]

With construction crews thismonth finishing Ernst & YoungTower, the first new multitenant of-fice building in downtown Cleve-land in two decades, the minds ofreal estate experts are turning to

when the next one might start andhow big it might be.

The short answer to the first partof the question is that there proba-bly won’t be another 20-year gapuntil a new downtown office build-ing goes up.

However, any new building likelywill be smaller than the downtown

skyscrapers of years past. Think of itpotentially as a suburban officebuilding on steroids. It could be just250,000 square feet, which is abouthalf the size of 23-story Ernst &Young Tower or a quarter the size of57-story Key Tower.

Surprising leasing success atErnst & Young Tower has given

oomph to the idea of the nextdowntown office building.

David Browning, managing direc-tor of real estate broker CBRE GroupInc., estimates the 487,000-square-foot tower will open at 80% leased.The Wolstein Group and FairmountPartners of Cleveland, developers ofthe Flats East Bank Neighborhoodwhere the building is located, acknowledge a 65% occupancy rateso far, but real estate insiders expectmore tenants to lease space soon.

MAY 6 - 12, 2013 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3

INSIGHT

Ernst & Young Tower is raising the barBuilding’s success in securing tenants is expected to spark moreoffice development downtown, though likely on a smaller scale

SETTING THE STANDARDA look at the office buildings along

the Cleveland skyline that command thehighest rent per square foot:Building x-Price % LeasedErnst & Young Tower $32 61.1Key Center Tower $28 95.1200 Public Square $25 80.0One Cleveland Center $22 78.5Fifth Third Center $21 78.2North Point Tower $21 77.8

■ x-Per square foot■ Source: Jones Lang LaSalleSee TOWER Page 7

THE WEEK IN QUOTES“There are a lot of merchants out there.There are a lot ofwould-be merchantsthat this product trulyappeals to. There’senough there to goaround.”— Dan Neistadt, CEO, ElectronicMerchant Systems. Page One

“This (movie) industry has its ownlegacy and culture.You’ve got to figureout how to speak thatlanguage.”— Ivan Schwarz, president,Greater Cleveland Film Commission. Page One

“Culture is an iceberg.… The more thingsyou see — the food,the language, thedress — you’ll start tosee more of it.”— Jerry Torma, director of international HR and compensation, Nordson Corp.Page 13

“It’s not just the bigcompanies anymore;everybody is competing on a global market.Getting a work forceready to do their workand compete with aglobal perspective iscritically important toa lot of businesses inNortheast Ohio.”— Larry Miller, longtime humanresources executive, and president, French-AmericanChamber of Commerce. Page 17

JANET CENTURY

Spitzer Auto Group vice president Alison Spitzer says information, not negotiation, is the critical tool at the company’s car dealerships.

Old Detroit is the domain of Spielberger


After five years of gazing at themthrough the windows of his store-front office in Rocky River, John D.Spielberger recently shelled out

$1.1 million — in cash — for threebuildings on the north side of OldDetroit Road.

The buildings, which date fromthe 1920s and ’30s, joined eight otherstructures Mr. Spielberger’s JDSProperties Inc. has acquired over

the last 13 years; they include all theold buildings on the south side ofOld Detroit in a part of Rocky Riverthat has become a trendy enclave

for restaurants, art studios, galleriesand women’s boutiques.

Salmon Dave’s, the high-profileseafood restaurant, is in one JDSBuilding.

Adesso, a retailer of stylishclothes for men, is in another.

Studio St. Marie, a self-described“modern millenery” that sells newand vintage hats, is in a third.

With recent purchases, investor now ownsmost of business-laden road in Rocky River

See SPIELBERGER Page 11

See HAGGLE Page 8

ON THE WEB For a photogallery of the JDSProperties in Rocky River, go to:

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NO NEEDTO HAGGLE

Spitzer is eliminatingcar price negotiations with

software it’s selling to others

By RACHEL ABBEY [email protected]

Spitzer Auto Group has expanded its inventoryby adding a new product to its portfolio: com-puter software.

The Elyria-based dealership group had createdfor internal use Paymint, a software program thathelps calculate and quickly update monthly leaseand loan payments for vehicles in its inventory.However, Spitzer recently formed a holding company,CopperCloud LLC, to sell Paymint to other car dealers.



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Volume 34, Number 18 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for com-bined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite310, Cleveland, OH 44113-1230. Copyright © 2013 by Crain Communications Inc. Periodicals postage paidat Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send addresschanges to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

Aclara’s parent behind layoffsEsco: Cuts protect profits amid uneven demandBy CHUCK [email protected]

Aclara Technologies is shutting itsmanufacturing operations in Solonbecause its parent company wantsto “protect and expand” Aclara’sprofit margins in an environmentwhere projects are being delayed,according to the parent’s CEO.

Aclara, which makes automatedmeter-reading equipment and relatedsoftware for utilities, plans to lay off79 manufacturing employees by theend of March 2014.

The cuts are part of a “profit improvement plan” underway atEsco Technologies Inc., a St. Louiscompany that makes products forutilities, fluid control systems andradio frequency shielding and testequipment.

Other companies within Escohave cut costs as well, but Aclaraneeded to make cuts to address itsown challenges, according to state-ments from Esco CEO Victor Richey.

The market for advanced meteringequipment “is not as robust today asit was a year ago,” Mr. Richey said

during an April conference callabout the profit improvement plan.

“We, along with all of our com-petitors, are experiencing projectpushouts and delays of both newand existing customers,” he said. “Ithink this remains a good market,and I’m happy with our positioning,and quite frankly, with our pipeline.We remain frustrated with the inertiawe’re all experiencing.”

Aclara plans to cut its local workforce to about 160 from 240 today,said Aclara president Brad Kitterman.The company’s office work force inSolon will be retained.

The work likely will be moved toone of the contract manufacturersAclara works with today, Mr. Kittermansaid. Those companies have plantsin the United States, Mexico, Asiaand other parts of the world, he said.

A matter of moneyUsing contractors to build Aclara’s

automated meter readers shouldcost less than producing them in-house, Mr. Kitterman said. Theiroverhead costs are more manageablebecause they’re spread across a larger

number of products, and contractmanufacturers tend to have moreautomated production lines, he said.

Aclara’s footprint in Solon will be“much smaller” when the manufac-turing space closes, according to astatement from the company. Aclarahas yet to decide what it will do withthe remaining seven years on itslease, Mr. Kitterman said, addingthat he didn’t know how big themanufacturing space was in terms ofsquare feet.

The entire Solon operation, withthe office, measured 111,000 squarefeet in 2009, according to a Crain’sstory published that year.

Esco bought the local operationsof Aclara in 2006.

Sales of Aclara’s meter readingequipment were in the $100 millionto $150 million range in 2010, upfrom $30 million to $40 million in2006, according to a Crain’s storypublished in November 2010. Thatgrowth helped the company expandits Solon work force to roughly 300people in November 2010 from 175at the start of 2008, the story stated.

The 300-employee figure likely in-cluded temporary employees notcounted among the 240 peopleAclara employs today. ■

Notre Dame pursues cash, big goalsBy TIMOTHY [email protected]

Notre Dame College’s enrollmenthas been on the way up for much ofthe last decade, and its fundraisingappears to be following suit.

Over the last year, the small, privatecollege in South Euclid has secured ahandful of significant gifts, including

its largest ever last December — amore than $2 million commitmentover 10 years from its caterer, Nor-mandy Catering in Wickliffe.

Notre Dame president AndrewRoth told Crain’s that the college wasin the quiet phase of a $10 millionfundraising effort — an effort that, ifsuccessful, could boost its endow-ment and bulk up its academic andfinancial aid programs. During thelast 15 months, Notre Dame hasbrought in $4.4 million toward itsgoal, with a few million dollars of additional gifts in the pipeline.

“This is the most successfulfundraising the college has everdone in its history,” said Dr. Roth,who has had the helm of the institu-tion since 2003.

A priority of the fundraising cam-paign will be continued renovationsto the Regina High School property,which the college acquired in early2011 for about $2 million from theSisters of Notre Dame, the Catholicorder that operated the former highschool. The property, which sits oneight acres, is located on SouthGreen Road and now serves as thelandlocked college’s new front door.

Notre Dame plans to renovateparts of Regina that house the col-lege’s burgeoning nursing program,which launched about seven yearsago and has been major fuel for theschool’s enrollment growth. Therenovations will include new labsand faculty offices.

Also, the college plans to renovatespace in the building for its academicsupport center, which serves studentswith documented learning disabilities.

“It’s a quality building, but itneeds some work,” Dr. Roth said.“That’s what this campaign is about.”

A few years ago, Dr. Roth floatedthe idea of constructing another res-

idence hall behind the Regina site,given that the college’s current housingis at capacity. However, he said theRegina renovations remain NotreDame’s top priority, though oncethose are completed over the nextthree years, campus officials wouldtake another hard look at buildingmore housing, which could cost up-ward of $10 million.

Dr. Roth said the college has haddiscussions with private developersabout building the residence hall,which the university would manage.Similar construction arrangementshave grown in favor at the region’spublic universities, such as ClevelandState and the University of Akron.

“Using someone else’s money isalways attractive,” Dr. Roth said.

Growth in cyberspaceNotre Dame has about 1,330 full-

time, traditional-age students oncampus — a number the college hadbeen looking to grow to about 1,500.Given the need for more housing, Dr.Roth said the college is rethinking thatstrategy and instead focusing ongrowing its online presence.

At present, Notre Dame has about400 online students, a number thatDr. Roth would like to see climb to2,000 over the next three to five years.

To facilitate that growth, the collegelast year contracted with The LearningHouse Inc., a Kentucky companythat manages the technical aspectsand marketing for Notre Dame’s on-line degree programs. Dr. Roth saidNotre Dame provides the “academicengine” of the online programs, andLearning House offers the technicalinfrastructure and marketing musclethrough TV and radio spots andsearch engine optimization.

“I’m very optimistic that we willget to that 2,000 mark,” he said. ■


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By SCOTT [email protected]

Some like it hot. But most the-atergoers don’t want to sweatthrough the show, which is part ofwhat makes it such a big deal thatNear West Theatre’s planned $6.8million home — set to begin con-struction this summer — boasts asuper-insulated “passive building”design that will keep the audiencecomfortable while curtailing ener-gy consumption.

There’s no air conditioning inNear West’s home of 35 years, athird-floor space of the St. PatrickChurch social hall at West 38th

Street and Bridge Avenue. So, onwarm days, the performance is hot,and not in a good way.

“There are people who love usbut want no part of a summershow,” said Stephanie Morrison-Hrbek, Near West’s founder and executive director. Of the hyper-en-ergy-efficient, 275-seat theater thatsoon will house Near West at West67th Street and Detroit Avenue inCleveland’s Gordon Square neigh-borhood, Ms. Morrison-Hrbek said,“Our audience is so ready for this towork.”

So are people who are eager to explore the edges of building design for reducing energy use sig-nificantly.

The 24,465-square-foot theaterwill be the first performance hall inthe world to use “passive building”design, said Adam Cohen, who operates a Roanoke, Va.-based con-sultancy called PassivScience andserved as an adviser on the NearWest project, which was designedby Richard Fleischman + PartnersArchitects of Cleveland.

The international Passivhaus organization describes “passivebuilding” as “the fastest-growingenergy performance standard inthe world.” However, nearly all the30,000 to 40,000 residential andcommercial structures using themethod — which, generally speak-ing, involves outstanding thermalperformance, exceptional airtight-ness and mechanical ventilation —are in Europe.

Mr. Cohen says there are fewerthan 300 passive buildings in theUnited States; most are homes andcollege dormitories. A performancehall is more of a challenge for thepassive method, Mr. Cohen said,because it involves “burst levels ofpeople” — actors, the crew and theaudience — and equipment that includes heavy, hot theater lights.The Fleischman design, though,does an excellent job of mitigatingthose issues, he said.

“This is an extremely cool pro-ject,” said Mr. Cohen, who described himself as “a crazy ener-gy guy” driven to prove the UnitedStates can catch up to Europe by reinforcing the idea that “electronswork the same way on both sides ofthe ocean.”

Among the passive building elements in the Near West struc-ture’s design:

■ An 8-inch-thick insulating bar-rier will be laid under the basementslab.

■ A trench of geothermal tubingwill surround the foundation.

■ Walls and roof will be a footthick and almost airtight, with a con-

ventional steel frame surrounded bymore wood framing, gypsum sheath-ing and mineral wool insulation.

■ A “heat recovery ventilation”system will pump fresh air in, staleair out, and, in the process, transferheat between the two.

Savings add upSome of those elements might

sound familiar to anyone who in2011 visited the PNC SmartHomeCleveland, on the grounds of theCleveland Museum of Natural His-tory. That display home sought toshowcase energy-saving architec-tural and design strategies, andmany of those technologies areworked into the design of the the-ater, said Hans Holznagel, NearWest’s chief operating officer.

Mr. Holznagel said the building’spassive design elements are addingabout $600,000 to its cost. Butbased on what Mr. Holznagel calleda “conservative estimate” of 35%energy savings, the theater wouldavoid electricity costs of at least $1.2million over 50 years through theuse of passive design. He said otherpassive technology experts projectenergy savings of 44%, which wouldavoid $1.5 million in expenses overthe same period.

Mr. Cohen goes further and saidthe building eventually could hit50% in savings — a figure madepossible as LED lighting replacesstandard theatrical lamps.

When the theater is completed,Near West plans to prototype certi-fication for the building from Pas-sivhaus Institute U.S.

On top of the theater’s passivedesign elements — literally, on topof — will be a 75,000-watt generat-ing system powered by solar panelsinstalled on the building’s south-sloping roof. Mr. Holznagel said aninvestor will buy and own the solarpanel system and will sell that elec-tricity to Near West for 1 cent lessper kilowatt-hour than the cost ofelectricity drawn from the utilitygrid.

Mr. Holznagel said Near Westhas the investor in place but is notyet allowed to discuss details of thatelement of the plan.

Plans call for construction to begin in late June or early July, afterCleveland Public Power removes atransformer on the 0.64-acre site.Near West expects its first perfor-mance in the building to take placein fall 2014.

Financing for the project is com-ing through the $30 million GordonSquare Arts District capital cam-

paign.Judi Feniger, the new president

of the Gordon Square Arts District,said about $26 million has beenraised to date in the campaign,which has aided the renovation andreopening of the Capitol Theatre,renovations to Cleveland PublicTheatre, the Near West buildingand streetscape improvements.

Near West has reached 87% of itsportion of the goal within the capi-tal campaign, which concludesDec. 31. Mr. Holznagel said NearWest then plans more fundraising.

A big gift to the project — $2 mil-lion — came from the Chuck andChar Fowler Family Foundation.Other donors that earmarked con-tributions to the Gordon Squarecapital campaign for Near Westwere the Gund Foundation; Tomand Sandy Sullivan; Eric Kennedy;and Jim and Anne Schoff.

Community valuesBenefits of the new theater build-

ing aren’t all about energy savings.Ms. Morrison-Hrbek said the

building will give Near West flexibil-ity in staging shows, because the275 seats will be in movable sec-tions. That feature will allow thetheater to be converted to thrust orproscenium stages, or even theaterin the round.

There are other advantages, too.In the current theater space, there’sno elevator or backstage fly spacefor hauling scenery — two issues resolved in the new structure. Alsoa benefit: Performers will havebathrooms dedicated specificallyfor their use, so they “don’t have tobreak the fourth wall” by minglingwith audience members during intermission, Mr. Holznagel said.

Near West has been built by the-ater professionals who overseehuge casts — sometimes 30 or more— of volunteer actors, many ofthem youth. In its mission state-ment, Near West says it “builds lov-ing relationships and engages diverse people in strengtheningtheir sense of identity, passion andpurpose, individually and in com-munity, through transformationaltheater arts experiences.”

The values expressed by the newbuilding fit well with that mission,Mr. Holznagel said.

“Our mission has to do with love,inclusiveness, continuity; ‘environ-mentalism’ isn’t explicitly one ofthem,” he said. “But it’s consistentwith what we do … and we love thatwe’re doing something environ-mentally friendly.” ■


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Tom Gustafson, a principal ofColliers International’s Clevelandoffice, said he and other downtownoffice brokers have been motivatedby Ernst & Young’s success to scoutlocations for other office buildingsin an effort to sway real estate developers.

Rico Pietro, a partner at theCushman & Wakefield Cresco bro-kerage in Independence, said Ernst& Young Tower shows the marketwhat new space can look like. Theexcitement associated with a blankcanvas for a company in a newbuilding has been missing for along time, he said.

The other factor that could drivea new building is that Ernst &Young Tower is achieving strongrents for the downtown Clevelandoffice market. The developer ac-knowledges a stated asking rate of$30 per square foot, and brokerssay tenants are signing deals atrates close to that figure.

New price pointsDeirdre McGuane, research di-

rector at broker NAI Daus in Beach-wood, recently tweeted that Ernst &Young Tower is setting a new pricelevel that shows tenants are willingto pay more for downtown officespace to support new construction.

Previously, the best upper-endrents in downtown generally havebeen about $20 a square foot, Ms.McGuane said. Key Tower, whichdominates the skyline, has com-manded rents that towered overthe city for years. The asking rate atKey Tower is about $27 to $29 asquare foot.

Two developers that are pursu-ing concepts for new office build-ings in Cleveland see positives inthe leasing news Ernst & YoungTower is generating.

Greg Geis, an owner of Streets-boro-based Geis Cos., said in anemail: “The market wants efficientnew space. We believe the water-front is the location for a companythat wants to make its presenceknown.”

Geis Cos. is pursuing potentialanchor tenants for a proposed office building on the west end ofBurke Lakefront Airport near NorthCoast Harbor. It also is construct-ing the new Cuyahoga County of-fice building at East Ninth Streetand Prospect Avenue.

Mr. Geis said he is too busy toelaborate on his viewpoint.

Likewise, Tony Panzica, CEO ofPanzica Construction Co. in May-field Village, said, “I’m encour-aged.”

That’s because the leasing actionat Ernst & Young Tower showscompanies again have an appetitefor new office space after the reces-sion and are willing to move to getit, Mr. Panzica said.

Mr. Panzica notes that he andjoint venture partner Peter Rubin,CEO of Cleveland-based developerCoral Co., have attached an askingrent of $32 a square foot for officespace atIntesa, a proposed office,apartment and parking complexthey want to build at University Cir-cle. The project would have about120,000 square feet of offices.

View from the FlatsScott Wolstein, a partner in Ernst

& Young Tower, is the only devel-oper active downtown who partici-pated in the 1990s office-buildingboom as he labored on what is nowthe US Bank Centre at Playhouse

Square. In an interview, Mr. Wol-stein noted that he still has officespace to lease at Ernst & YoungTower. The office building and adjoining Aloft Hotel are the open-ing salvos of a larger Flats East Bankproject.

Recent announcements fromFlats East Bank have been focusedon a second phase consisting of 200apartments and more retail spaceon the site — not another officebuilding. The next phase consists ofapartments, Mr. Wolstein said, because that fits the concept of 24-hour use at the reimagined Flats.

Still, Mr. Wolstein said Flats EastBank has locations where it couldadd at least four more office build-ings atop parking garages on the

24-acre site; it also has ground-lev-el parcels. If a prospective tenantwants to support a build-to-leasestructure that it primarily will occu-py, he said Flats East Bank wouldconsider.

“We could do that for a tenantwho wants their name on a build-ing,” Mr. Wolstein said, “but itwould be difficult to do muchmore.” That’s because lenders remain cautious about speculativeoffices, multiple sources say.

Robert Roe, managing partner ofJones Lang LaSalle’s Cleveland office, has leased space on behalf ofclients at Ernst & Young Tower andoversees tenant representativeswho have done multiple dealsthere. The Flats building benefits

from an efficient design that allowstenants to move into new space, hesaid, but to lease less space thanthey occupied previously so theykeep a lid on their costs.

“This is not a fluke,” Mr. Roe saidof the building’s space filling up. “Itshows the benefit of a new officebuilding in a market that has nothad a new building for 20 years.Corporations are also serious aboutseeking space that meets green requirements.”

Smaller may be betterMany prospects for a future

building are law firms, Mr. Roesaid, though the principals of theirpartnerships are unlikely to want tosign personally to lease space in

another new office building. Cor-porations or national tenants suchas Ernst & Young and Wells Fargo,he said, are more likely to pay higherrents than locals.

Robert Redmond, a managing director at the Cleveland office ofMohr Partners, said he thinks the diminishing number of large corpo-rations based here and shrinkingneeds for office space as more work-ers telecommute means businessesmay find virtue in smaller buildings.

“Bragging about getting the nextbuilding that’s the tallest tower between New York and Chicago isnot going to happen anymore,” Mr.Redmond said. “Something200,000 to 400,000 square feetwould be ideal.” ■


Tower: Wolstein says Flats East Bank has plenty of room for more

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Dealerships in Arizona, Oregonand Texas already have expressedinterest, said Victor Vella, co-founder ofPaymint and e-com-merce director for Spitzer.

“It’s definitely been an amazingexperience,” Mr. Vella said.

Spitzer’s management teamkeeps track of competitors’ pricingand reviews prices daily, updatingthe vehicle prices listed online.Each store has an employee whothen checks the software everymorning, Mr. Vella said. If there is achange, the employee quickly canprint out a new windshield sign list-ing the vehicle’s overall cost,monthly loan payment and month-ly lease payment.

The pricing model puts con-sumers first by helping customersfind a vehicle that fits their needsand their budgets, members ofSpitzer’s leadership team say.

“The customers love it,” said Geoff Sansavera, general manager

of Spitzer Motor City on BrookparkRoad in Brook Park.

Spitzer’s software also makes iteasy for a dealership to break downprices, simplifying a process thatcan be a daunting task in a lot withhundreds of cars.

“They’ve taken it to another level,” Mark Rikess, CEO of RikessGroup, said of Spitzer’s commit-ment to transparency.

Mr. Rikess started Rikess Groupin the early 1990s to encourageauto dealerships to move awayfrom negotiation-based sales. Theconsulting firm has helped about150 dealerships make that transi-tion so far, Mr. Rikess said.

Shifting sales gearsSpitzer did away with negotia-

tions at its dealerships about threeyears ago, vice president AlisonSpitzer said, and began workingwith Rikess Group last summer tostrengthen and standardize its salestraining.

Training is critical to this shiftingindustry, Ms. Spitzer said. Informa-tion is the tool now, not negotia-tions, and the sales focus is onhelping customers find the vehiclethat fits them best. Spitzer even hasmoved away from commission-based sales to a flat compensationrate for employees, so salespeoplereceive the same paycheck whetherthey sell the most or least expensivecar on the lot.

The company began puttingmonthly loan costs on vehicles lastDecember, and added lease costsin January, Ms. Spitzer said. So far,10 of Spitzer’s 16 stores are onboard, including most of the North-east Ohio locations.

The Paymint program, whichMs. Spitzer said has both web-based and software components,has gone through beta testing andnow is offered to other dealerships.

Ms. Spitzer said she sees the newholding company, CopperCloud, asa think tank that can capitalize on

changes in the car business. Shesaid dealerships have been pushedto move away from negotiations inrecent years, especially for usedcars. There’s no cushion for dealerswho want to mark up the prices,she noted.

“The information is out there foranyone to see,” Ms. Spitzer said.

A 100% changeBased on what Mr. Rikess said,

the change in the purchasingprocess is especially relevant whendealers consider up-and-comingconsumers.

Millennials — which Mr. Rikessdefined as consumers born between 1980 and the mid-’90s —spend about nine hours research-ing vehicles online and on socialmedia before buying a car, he said.They buy about 20% to 25% of vehi-cles and shop for even more, including the research they do onbehalf of family members. Studieshave shown that growing marketdoesn’t like haggling, he said, andthey’re accustomed to buyingeverything online.

Mr. Rikess also said womenaren’t fans of negotiating.

Lou Vitantonio, president of theGreater Cleveland Automobile

Dealers Association, said the auto-mobile business has “absolutely,100% changed” because of the In-ternet. He said the shift sped upwhen pricing started to show uponline about 10 years ago becausepeople could compare prices ontheir own.

Customers can look up more information than ever, Mr. Vitanto-nio said, and dealerships have ex-panded the ways they reach con-sumers, from conducting videotours to offering live chats and textmessages. Consumers expect a response far more quickly now, hesaid.

Ms. Spitzer said her companyheard complaints from competi-tors when Spitzer started puttinglease prices on vehicles. Ms. Spitzerbrushed off those concerns, sayingcustomers are likely to experiencesticker shock anyway. Why not takecare of that up front, she said.

Mr. Vella said putting the leaseprices on vehicles has led to an in-crease in the numbers of leasessigned at Spitzer Motor City, wherethe buy and lease pricing first rolledout.

Those numbers more than dou-bled in March 2013 from March2012. ■


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Two local real estate develop-ment firms have joined forces toundertake something new, buildinga Cambria Suites business-orientedhotel in Avon on Detroit Road nearstate Route 83.

Ceres Enterprises LLC of West-lake, a hotel and nursing home developer run by father and sonFrank and David Crisafi, and OrleanCo. of Beachwood, an apartmentand real estate company led by sec-ond-generation developer DavidOrlean, have formed Avon HotelLLC for the $10 million project.They plan to start construction thissummer and open next spring.

The hotel would be the secondCambria Suites in the region, join-ing one in Green in Summit Coun-ty. Choice Hotels International, aRockville, Md.-hotel franchisor, developed the select service hotelchain to draw business travelers.

Frank Crisafi, Ceres CEO, saidCambria Suites are designed to“have a boutique hotel’s style butthe price of a Marriott.” The Avonhotel will have an estimated averagedaily room rate of $110.

The firms formed the partnershipbecause each brought something tothe transaction.

Ceres, which owns four hotels buthas built several times that number,holds the Cambria franchise for theAvon site and will serve as the hotel’sdeveloper and operator.

Orlean brings to the party a two-acre site on the north side of its

Avon Marketplace, a cluster of retailstores and buildings on the 35500block of Detroit. Kenneth Lurie, Orlean’s chief operating officer, saidadding the hotel will make theproperty a mixed-use center and already has boosted interest in remaining sites.

“We liked that the Crisafis don’tjust develop the hotel,” Mr. Luriesaid, “They operate it. They don’tturn it over to a management com-pany.”

The Cambria Suites in Avon is thesecond for Ceres, which has ownedone in Noblesville, Ind., that it builtin 2009.

One thing missing is highway vis-ibility. Frank Crisafi said the devel-opers feel a highway location is lesscrucial than in the past because theindustry is moving toward a lifestylemodel, with patrons using onlinereservations to find locations withmultiple restaurants nearby.

Besides, David Crisafi said, “Wedon’t just wait for the 1-800 line toring. We go out and sell to area busi-nesses.” The Avon inn will have a3,000-square-foot conference cen-ter because the Crisafis believe ithelps win business bookings.

The project has received approvals to proceed from Avon’splanning commission. Avon MayorJim Smith said the hotel will findcustomers in the city’s growing industrial district. ■

Cambria Suites findsa new home in AvonConstruction for$10 million projectbegins this summer

“We liked that theCrisafis don’t just developthe hotel. They operateit. They don’t turn it overto a management company.” – Kenneth Lurie, chief operatingofficer, Orlean Co.



Front-page headline last Wednes-day: “Ohio Republicans intro-ducing ‘right to work’legislation today.”

Inside headline the nextmorning: “GOP leaders quicklykill legislation to make Ohio a‘right to work’ state.”

And who says the General As-sembly can’t get things done?

Keith Faber, the Celina Republican who’s president ofthe Ohio Senate, put the kiboshon this ill-fated idea just hoursafter two of his party’s lawmakers intro-duced the legislation, saying, “The onlypurpose this discussion serves right nowis to generate a bunch of breathlessfundraising appeals from the Ohio Democratic Party.”

I can only presume that the governorand House speaker, both Republicans,were shaking their heads last Wednesdayas Democrats quickly organized a rallyoutside the Statehouse.

As introduced, the so-called “Work-place Freedom” measure would prohibitany requirements that employees join or

pay dues to any organization and that“each employee must be fully free to

decide whether to associate, or-ganize, designate a representa-tive or join or assist an employeeorganization.”

Like other states in this partof the country that have enactedsimilar laws, Ohio then wouldhave prohibited the forcing ofemployees to pay union dues.Current law enables them to reject union membership butthey are still required to pay

union dues.But this time, in such a short window

of time after the GOP’s stinging defeat inthe fight over Senate Bill 5, Republicanleaders wanted no part of another battle.Reasonable people can agree to disagreeover whether it helped or hurt Ohio’seconomy at this point in its history, butthere’s no arguing the attitude of voters.

Last year’s SB5-inspired electionshowed that Ohio’s labor forces still canmuster some firepower, and voterssoundly defeated an effort to restrict col-lective bargaining for public employees.

Gov. Kasich was a strong advocate of thereform, and since that defeat has beencareful not to wade back into such potentially turbulent waters.

So was this just a publicity ploy byReps. Kristina Roegner and Ron Maag,who introduced this legislation? Hard toknow. What is clear, however, is thattheir contention that the proposed legis-lation was “pro-worker” had littlechance, at least in how most people con-sider such terminology.

“We are standing up for workingOhioans because we believe that everyemployee should have the right for them-selves whether to join a union or not,”Rep. Roegner was quoted as saying. Well,they do, either at the time of the firstunionization vote or when they decide totake a job at a unionized company.

Organized labor is at full retreat in thiscountry, and economic forces could oneday change things for Ohio if it’s surround-ed by right-to-work states and starts losingemployers. But for now, cooler heads pre-vailed in the state GOP leaders, who clear-ly — and quickly — decided they’d savetheir powder for other fights. ■


Do or die

Kill all the school boards.” That was thesuggestion from the Center for AmericanProgress’ Matt Miller in 2008 as he outlined his vision for remaking how we

govern education. It was a striking statement then,and it still is. But it’s also not nearly as far-fetched asit might sound.

The above paragraph is from the start of a storyheadlined “Should School Boards be Expelled?” inthis month’s issue of Governing magazine. Thesummary line on the story reads, “Local boardswere designed to take politics out of education. Butincreasing politicization of the boards themselveshas led to calls to eliminate them.”

The story caught our eye not just because of thedysfunction seen in Strongsville, where an eight-week strike by teachers resulted from a determinedschool board locking horns with a resolute teachers’union over a new contract. Our thoughts also turnedto the outrage felt in Medina, where surprising reve-lations about the generous compensation awardedby the school board to superintendent Randy Steppled to the head man going on paid leave.

As the story in Governing relates, advocates of theschool board structure contend it “gives communi-ties a direct voice in governance and that membersare held accountable through the election process.”But there’s an increasing sense among others that itmay be time to eliminate school boards altogether,according to Governing.

“The idea has crossed party lines,” Governingreports. The Center for American Progress — thegroup cited at the top of this piece — “is a generallyliberal institution, but Chester Finn, president of theconservative Thomas B. Fordham Institute and aformer assistant education secretary under President Ronald Reagan, has issued similar decrees,” the story states.

“School boards are an aberration, an anachro-nism, an education sinkhole,” Governing quotes Mr.Finn as saying in 2006. “Put this dysfunctionalarrangement out of its misery.”

The big question is whether the governance of apublic body as important to a community’s well-be-ing as a school district should be left in the hands ofindividuals whose views, agendas and qualificationslargely are unknown to most voters who elect them.

The job of providing proper oversight to a schooldistrict is important, and not just to the families ofstudents who attend a city’s schools. Anyone inStrongsville who either is selling or is thinking aboutselling their home the next few years can’t be hap-py. The black eye left by the major mess of the lasttwo months likely will depress housing values in thecity as families with school-age children think twiceabout moving into the district.

So, where should governance of a school districtbelong? The type of mayoral control that exists inCleveland may be the answer.

At present, school boards are a lot like the oldthree-member board of commissioners in Cuya-hoga County. It’s hard to hold individual membersaccountable for group decisions. Putting the authority —and the accountability — in the handsof one person makes clear where the buck shouldstop.

FROM THE PUBLISHER

LETTER

BRIANTUCKER

GOP backs off ‘right-to-work’ fight

Ditch term limits for state lawmakers■ Thanks to Brian Tucker in his April 29commentary for his astute commentsabout term limits for our federal repre-sentatives in Congress. However, thesame applies for the state Legislature,and the faster we can get rid of that failedexperiment, the better. Consider the fol-lowing:

Term limits reduce institutional mem-ory and strengthen the role of staff,agency bureaucrats and lobbyists. Withcomplex issues of regulatory or tax reform, emerging industries or educa-tion funding, where will voters findsound judgment, historical perspectiveand effective solutions?

Term limits weaken the Legislature asan institution and its ability to developsolutions on its own and challenge,when necessary, the executive branch.

They create opportunities for abuse intrading off legislation for future employ-ment options. Need help in moving overto the administration or support whilepursuing another political office whenthe term limit deadline looms? When alegislator is backed into a corner, judg-ment and obligations to constituents areout the door.

They encourage and reward hyper-partisanship: If you are a young legisla-tor, the fastest way ahead is doing what-ever an organized, entrenched lobbyistgroup tells you, no questions asked.

After all, you may be gone to higher office when things go sour.

They discourage long-term thinkingand planning. A legislator may be longgone when the full budget bill reallycomes due. Besides, you can blamethose left behind with bad implementa-tion, not poor legislative design or plan-ning.

The real voter protection against leg-islative abuse is at the ballot box. Whileyou can’t get rid of bad legislators fastenough, you also can’t hold onto a goodlegislator long enough. A bad idea at thefederal level is just as bad an idea at thestate level. We need to get rid of termlimits for state legislators.

Kevin CroninAttorneyCleveland

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

EDITOR:Mark Dodosh ([email protected])

MANAGING EDITOR:Scott Suttell ([email protected])

OPINION

WRITE TO USSend your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W. St.Clair Ave., Suite 310, Cleveland, OH 44113-1230; Email: [email protected]

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The latest deals solidify Mr. Spielberger’s control ofmost of the art deco part of the city that is in the shadowof the former Westlake Hotel, which he does not own.It’s a luxury residential hotel that was painted a salmoncolor when it went condo in the 1980s.

Workers already are transforming the latest acquisi-tions because the seller, the Otto A. Fuchs Trust, allowedMr. Spielberger access to the buildings prior to the earlyApril closing.

On the second floor of the building at 19064-19106Old Detroit, old office space — some of it empty 30 years— is undergoing conversion into two, two-bedroomlofts with an asking rent likely to be in the range of$1,000 monthly.

JDS Properties owns another 20 apartment suites onthe block, which its website says are full. Mr. Spielberg-er plans to repaint the exteriors, which have some peel-ing paint, in taupe and yellow with a variety of accentcolors. JDS Properties will adorn windows with brightlycolored awnings, some bearing initials of tenants. Thebudget for improvements is about $400,000.

Kory Koran, Rocky River director of economic andcommunity development, said with the latest purchasesMr. Spielberger owns most of the Old Detroit Road sec-tion of the suburb.

Mr. Spielberger “is not shy about investing in hisproperties,” Mr. Koran said. “He fixes them up quicklyand quietly. He’s an outstanding property owner. Wedon’t worry about vacancies there.”

Chagrin Falls WestThe situation today at Old Detroit is far different from

1980, when the suburb worried about the future of theaging commercial district.

At that time, the then-new Detroit Road Bridge shiftedDetroit Road south of the old commercial district. Thestub of the old street became Old Detroit Road. The pri-or span emptied into the block JDS mostly controls now.A stub of the old bridge survived, adorned with an officebuilding named the Bridge Building that was constructedin the 1980s. JDS owns that, too.

Now, there is new life among the old structures, witha look reminiscent of Chagrin Falls.

The city has branded the neighborhood the Old Riv-er Shopping Area, and has accented Old Detroit with antique light poles, signs and sidewalk improvements.Those upgrades are coupled with renovations by JDSand other property owners, who have attracted aneclectic mix of retailers. There are 25 tenants in JDSproperties alone.

Scott Wiles, a vice president and director of the retailgroup at Marcus & Millichap’s Cleveland office, said Mr.Spielberger “is the right guy for those properties” because of his attention to detail and his financialstrength.

Mr. Wiles said the Old River Shopping Area “offers a

nice, unique, quaint shopping experience.”“Retailers see (Rocky River) as an attractive area

exceeding national average incomes and greater-than-normal density,” he noted.

Although JDS owns much of Old Detroit, those prop-erties are just 10% of its portfolio. Its holdings rangefrom standalone stores of national retailers to a 150,000-square-foot shopping center in Appleton, Wis., anchored by a T.J. Maxx.

Self-made manMike Petrigan, an executive managing director at the

Newmark Grubb Knight Frank brokerage, grew up nearMr. Spielberger in Vermilion before Mr. Spielbergermoved to Bay Village.

“When you talk to him, his phone rings constantlywith calls from brokers,” Mr. Petrigan said. “There’s notmuch he doesn’t see. When I think of a self-made man,I think of him.”

Mr. Spielberger has worked full-time at real estate investing since 2005, when he sold C&S Limestone Inc.,a construction materials supplier in Columbia Station,to Columbus-based Kokosing Materials Inc. However,he has been buying properties for 30 years. His son,John Spielberger Jr., now works with as a project man-ager with this father.

Larger projects such as multimillion-dollar shoppingcenters may require bank loans, but with older proper-ties, Mr. Spielberger said he likes to pay cash: it increas-es his flexibility, and there is no loan payment to make.

“It takes a lot of effort to make old properties work,”Mr. Spielberger said. “But when you’re done, you havea good asset — and so does the city. This is also a won-derful market with a city that’s easy to work with.”

Mr. Spielberger’s son has embraced the same localphilosophy. Looking at Old Detroit Road, he said,“There’s always going to be someone who wants to puta little dress shop into Rocky River.” ■

Spielberger: Thanks in large part to JDS,Old River has an eclectic mix of retailerscontinued from PAGE 3

STAN BULLARD PHOTOS

An affiliate of JDS Properties of Rocky River recently purchased these buildings from 19064 to 19106 Detroit Road, fromthe trust of the late Otto Fuchs. They date from 1914 to 1920. For more pictures, see the gallery at tinyurl.com/bv9pbx8.

Consolidated ownership has led over time to a consistentlook on the south side of buildings on Old Detroit Roadfrom the current, newer Detroit Road in Rocky River. Thearea is branded the Old River Shopping Area.



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Marcie Goodman, Executive Director, Cleveland International Film Festival

Sharon Sobol Jordan, President and CEO, Centers for Families and Children

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CONSTRUCTIONALBERT M. HIGLEY CO.: KathyHeflin to chief financial officer;Dionne Kuykendal to subcontractorrelationship advocate; AmandaKline to project engineer; GraceSauline to project controls engineer;Cory Schiebel to safety manager;Zac Burgess to project engineer.GILBANE BUILDING CO.: AmandaEgut to marketing assistant.

CONSULTINGFLASHSTARTS INC.: Jennifer Neundorfer to managing partner,FlashStarts Accelerator Fund.

EDUCATIONURSULINE COLLEGE: Gina Messina-Dysert to dean, School ofGraduate and Professional Studies.

FINANCEFIFTH THIRD BANK, NORTHEAST-ERN OHIO: Charles R. Shaw to senior vice president, wealth management executive.OHIO COMMERCE BANK: SusanW. Chupek to assistant vice president, branch manager.

FINANCIAL SERVICEBEACON FINANCIAL PARTNERS:Kelly Bowman to client relations coordinator.

BOENNING & SCATTERGOOD:Chris Chapman to director andSteve Weigand to analyst, Investment Banking Group.CANDLEWOOD PARTNERS: KateShafer to marketing and communica-tions manager. IPLANGROUP: Whitney Kauffmanto client relationship specialist. MCGLADREY LLP: Daniel Clark todirector, health care advisory services.NYE FINANCIAL GROUP: Dan Griffin to financial adviser; Andrea L.Shanklin to director, client rela-tions/marketing. WELLS FARGO & CO.: Michael P.Shiplett to senior relationship manager, commercial banking.

HEALTH CAREAKRON GENERAL PARTNERSPHYSICIAN GROUP: Dr. WeiquanLu, hematologist/oncologist, to medical staff.FENG CLINIC: Dr. Liz O’ Donnell toprofessional clinical counselor, physical therapist and mental healthand wellness coach.

LEGALBENESCH: Jeffrey J. McCourt toassociate.KADISH, HINKEL & WEIBEL: KarlE. May to of counsel.

MANUFACTURINGLIBRA INDUSTRIES: Carol Brown tohuman resources manager.MIDWEST MATERIALS: Howard J.Lake to regional account manager. RPM INTERNATIONAL INC.: ArturoHernandez to director, global compliance.

NONPROFITGENERATION FOUNDATION: PeterK. Ranney to president. HATTIE LARLHAM: Jackie LoPrestito communications/media relationscoordinator. MORGAN ART OF PAPERMAKINGCONSERVATORY AND EDUCA-TIONAL FOUNDATION: Walter H.Duvall to chief operating officer. NEW DIRECTIONS FOR LIVING:Michael Bloom to executive director.

REAL ESTATETRANSACTION REALTY: DionteWilliams to sales associate.

STAFFINGTORCH GROUP: Lora Zimmermanto senior account manager.

TECHNOLOGYIOTOS: Jim McGreevy to vice president, business development.

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BOARDSLAKE HEALTH FOUNDATION: Patricia A. Kuhar to chair; MarkFosnaught to vice chair; Christopher Cook to treasurer; BethCassella to secretary.METAL SERVICE CENTER INSTI-TUTE, NORTHERN OHIO CHAPTER:Kevin Miller (Olympic Steel) to presi-dent; Gary Wasilewski to first vicepresident; Jack Gilbride to secondvice president; Tony Zingale to trea-surer; Mike Procop to secretary.

AWARDFEDERAL BUREAU OF INVESTIGA-TION: Fred Szabo (Cleveland HopkinsInternational Airport) received the FBI Di-rector’s Community Leadership Award.

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By JENNIFER [email protected]

There’s a cultural lesson to befound in peanut butter.Americans love it, but that

sentiment is not universal outsideour borders. So when Vitamix creates recipe books for itsblenders sold in other countries, itoften omits peanut butter in favorof local specialties, like the redbean paste prepared in manyAsian countries.

“You can’t walk into any exchange in another country andexpect them to perceive things theway you perceive them,” said JodiBerg, president and CEO of Vita-mix, which has distribution centers in 80 countries. “Our pre-sentations are different, our styleis different, what we expect to getaccomplished in a certain periodof time is different.”

Being attuned more to learningthan to selling is critical to navigat-ing the cultural challenges of inter-

national business transactions, sayMs. Berg and other local pros.

“A lot of knowledge is not nec-essary,” said Jerry Torma, directorof international HR and compen-sation for Westlake-based Nord-son Corp. But, he stressed, open-ness is essential.

“Culture is an iceberg,” Mr. Tor-ma said. “The more things you see— the food, the language, the dress— you’ll start to see more of it.”

To encourage that kind of think-ing, he tells every Nordson em-ployee to remember three things.

“There are other time zones

than your own; there are otherlanguages than your own; thereare other currencies than yourown,” Mr. Torma said. “Thatkeeps you open.”

Don’t give them the fingerThere’s a minefield of faux pas

that Americans can make whenworking overseas. In many partsof the world, the Americanthumbs-up is like offering a mid-dle finger, Mr. Torma said. Turnsof phrase like “let’s get the ballrolling” or “you’ll be our guineapigs” can prompt confusion oreven insult.

But many such missteps are for-givable and won’t kill a deal, said

Michael Mayo, a professor of mar-keting at Kent State University.

“People underestimate that ifyou are new to the market, theywill give you a lot of latitude,” Dr.Mayo said. “If you can relax andbe more of an explorer, more curi-ous, that’s something people out-side the U.S. will appreciate.”

For example, Chinese businessculture is built on the concept ofguanxi, said Steven Feldman, aprofessor at Case Western ReserveUniversity’s Weatherhead Schoolof Management and author of“Trouble in the Middle: American-Chinese Business Relations, Culture, Conflict and Ethics.”

INTERNATIONAL BUSINESS

MAY 6 -- 12, 2013 CRAIN’S CLEVELAND BUSINESS 13

14-15 LEARN HOW FOURLOCAL COMPANIES HAVEMADE IT WORK OVERSEAS.

PUTTING THE PIECES TOGETHERWith the right moves

it’s possible to solve theglobal strategy puzzle

FOTOLIA ILLUSTRATION

By KIMBERLY [email protected]

Peter Taunton was running a successful fitnessfranchise operation for three years when hehad a revelation.

“There’s a globalmovement for peopleto try to live a health-ier lifestyle,” Mr.Taunton said. “Everywhere we go there’s thismovement — talk about obesity, living longer andquality of life.”

He opened his first Snap Fitness club in Min-nesota in 2003. Today there are about 2,300 SnapFitness locations — including seven in NortheastOhio — operating in 12 countries with more than 1million members. He is opening clubs in Egypt andis in discussions to open additional locations inRussia, Poland and Europe.

And while the topic of a healthier lifestyle is aglobal one, Mr. Taunton said there are all kinds ofchallenges to setting up a business overseas, in-cluding different banking structures, cultural differ-ences, language barriers and political issues.

See PIECES Page 16

■ Know the market: Will your business be in a competitive position in the targeted market? Is therea demand for that product or service?

■ Infrastructure: Understand the technical, legal and regulatory requirements of operating in aforeign country. Regulatory environments can be difficult to predict and may shift unexpectedly.

■ Cash flow: Understand credit terms and currency exchange rates.

■ Find a trustworthy local representative:Having a local face to a company is critical to maneuver cultural nuances of business.

■ Intellectual property protections: U.S.patent does not apply in a foreign country. A European Union patent allows companies to sellproducts in multiple places.

TOP CHALLENGES OF DOINGBUSINESS OVERSEAS

INSIDE: A list of helpful resources for doing businessoverseas. Page 16

It’s important to find the correct mix with other culturesBusiness tactics and casual conversationthat work here might not internationally

See CULTURES Page 17

INSIDE: Required reading for talkingwith other cultures. Page 17

I N S I D E


HOW THEY DID IT …Voss IndustriesOhio City

Global business has reallytaken off for Ohio City-based Voss Industries Inc.

since the metal fabricator enteredoverseas markets 12 years ago.

The maker of clamps, couplingsand ducting for aerospace, defenseand industrial customers has seenits exports business increase 54% inthe last three years alone, saidDaniel Sedor Sr., president andCEO.

The company’s export sales areup 7% in the first quarter this yearcompared with the like period in2012, and it is likely to climb to 12%by year’s end. Revenue has in-creased about 46% over the lastthree years.

“Our success has come from exploiting our capabilities, but evenmore so because of listening to ourcustomers’ needs and providing solutions,” Mr. Sedorsaid.

The manufacturer generatesabout 40% of its business from theaerospace sector and has rampedup production for aviation giantsBoeing Co. and Airbus, which arereplacing older aircraft with newermodels.

The 300-employee company’sforay into the international marketplace began in 2000 with de-veloping components for Airbusand its suppliers in the UnitedKingdom. Its ability to develop aconcept through design, prototype,testing and production phases ledto its expansion into additionalmarkets, including western Europe, Brazil, Canada and China.

Voss currently is manufacturingcomponents for the Comac C919,the largest commercial airliner thathas been designed and built in Chi-na since the 1970s.

“They’re outsourcing to Cleveland,” Mr. Sedor said.

He said a key part of his opera-tion’s growth has been throughmarket diversification and building relationships. During the recession, when other companiesreined in domestic and overseastravel to curb expenses, Voss forgedahead on fostering face-to-face connections.

“While some (companies)backed off travel and did video

chats or conference calls, we said,‘No, this is working. We shouldn’tstop traveling to save a few dollars,’” Mr. Sedor said. “Youcan’t leave interpretation to emailsand voice mails.”

Direct marketing and client education has paid off in growingits exports business, which currently represents about 20% ofthe company’s overall sales, compared with 5% a decade ago.

— Kathy Ames Carr


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HOW THEY DID IT …Flow PolymersCleveland

Flow Polymers’ products forthe tire industry have enteredmultiple lanes of internation-

al commerce since the Clevelandoperation in 2005 expanded inearnest its geographical footprint.

Exports that year representedabout 12% of overall revenue buthave grown to 45% for the manu-facturer of plastics and rubber additives and dispersions for tire,automotive, industrial and plasticsmarkets. The company’s overallrevenue is up 15% between 2011and 2012.

“For a little company fromCleveland, Ohio, it was a big stepbut a necessary one,” to accom-modate the increasing shift fromdomestic to overseas tire manufac-turing, president and CEO MikeIvany said. “By selling to a majorityof tire companies in the world, wehave a good feel for the market-place, which is important to ourbusiness.”

Flow Polymers’ products areused to improve the durability oftires, reduce energy usage in plas-

tics operationsand improveprocessing andperformance ofa variety of rub-ber and plasticparts.

The 130-employee operation has expanded its additives and disper-sion sales to 32 countries after implementing its “JBRICK” export-ing strategy of shipping to Japan,Brazil, Russia, India, China andKorea.

“China is one of our largest,” Mr.Ivany said. “At this point, half ofthe world’s tires are producedthere.”

The company expects continuedgrowth in Chinese and Japanesemarkets, and recently hired a director of international businesswho will focus on new opportuni-ties in Brazil and India.

“What we’re seeing is an overallglobalization of the automotivemarket,” Mr. Ivany said. “We usedto look at our business accordingto what happens in America. Nowwe think about how the wholeworld is using polymer materials.”

— Kathy Ames Carr

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Voss Industries president and CEO Daniel Sedor Sr., shown last August, says thecompany’s export business has increased 54% in the last three years.



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HOW THEY DID IT …TLC ProductsCleveland

TLC Products is treating newmarkets throughout the worldwith its environmentally

friendly live bacteria products thatclean lakes, ponds, aquariums andwastewater treatment systems.

The Cleveland-based manufactur-er saw an opportunity to cast a widernet beyond its domestic target marketof small retail stores during the reces-sion, when about 20% of those shopswent out of business.

Co-owners John Wong and RichelleBell diversified their reach and madetheir products more efficient to exportby concentrating the liquid to a pow-der, which lowered the weight andprice. They then promoted their pond-treatment products, which represent-ed about 30% to 40% of domestic busi-ness from May through July, intodifferent climates.

“We had better cash flow becauseour product could be used in the dif-ferent seasons,” Mr. Wong said.

The operation expanded into Aus-tralia, then advertised inCommercial News USA, a magazinethat helps American companies findbuyers and distributors for theirproducts and services.

The Ohio Department of Develop-ment saw the ad, Mr. Wong said, anddirected the small business to export-ing resources, which included in 2010a $225,000 line of credit from LorainNational Bank, which was backed bythe Small Business Administration’sExport Express program.

Between 2010 and 2012, TLC Prod-ucts expanded into about 11 coun-tries, including Spain, China, India,Canada and Mexico. Gross sales dou-bled between 2009 and 2012.

“We’re at a very rapid growthpace,” Mr. Wong said. “I wouldn’t besurprised to grow 50% this year over2012, and the lion’s share is exports.”

Indeed, in 2009, export sales rep-resented about 5% of overall busi-ness, and surged to 25% in 2012.

“We have already matched and willexceed that this year,” said Mr. Wong,whose customers range from smallend users to large corporations. “Wewant to double that in a year.”

The 11-employee operation isworking on selling to fish farmsthroughout the world a new productthat consumes ammonia produced by fish.

The U.S. Department of Com-merce’s Gold Key Matching Servicealso has helped the operation invest in new overseas markets byfinding potential distributors, salesrepresentatives and customers, Mr.Wong said. — Kathy Ames Carr

SUBMITTED PHOTO

TLC shows the effects of its bacteriaproduct, which can clean such bodiesof water as lakes and ponds.

HOW THEY DID IT …Checkpoint SurgicalHighland Hills

Participation at medical tradeshows throughout the United States has served as an

entry point into exporting forCheckpoint Surgical, which sells aneuro device that is in demandamong both domestic and foreigndistributors.

The Highland Hills outfit’s glob-al outreach began in June 2012,when two Australian distributorssought out Checkpoint’s stimula-tor/locator, which surgeons use tofind and avoid nerves and to eval-uate nerve and muscle function.

“We have a heavy presence at adozen-plus trade shows through-out the U.S., and we meet theseforeign distributors who then

cold-call us forour product,”said LenCosentino, pres-ident and CEO.

Checkpointsubsequentlyexported itsproduct toSouth Africa,and most recently Canada.

“We get a lot of Canadian sur-geons at trade shows, many ofwhom have worked at U.S. hospi-tals and have used our device.They’ve said to me, ‘Let us knowwhen (the product) is in Canada,’”he said. “We shipped our first order there (last month).”

The 15-employee operationnow is in discussions with distrib-utors in South America and Europe, and is about to enterKuwait.

“And we’ve gotten repeated requests from no less than 12Turkish distributors,” Mr. Cosentino added.

Checkpoint Surgical waslaunched in 2009 as the secondspinoff of Highland Hills-basedventure capital firm NDI Medical.

Checkpoint sold “hundreds” ofdevices in 2010, the year of its pilotproduct launch, and is expectingto sell 10,000 units this year, Mr.Cosentino said.

Year-over-year revenue growthhas doubled in each of the last twoyears.

Although exports remain a fraction of the firm’s overall busi-ness — at about 5% — Mr.Cosentino expects that figure tosurge to 20% in the next three tofour years.

“We haven’t had to make over-seas trips because the distributors

come to us, but as this businessgrows, we’ll need to do that,” hesaid. “Our device is in prominenthospitals throughout the U.S., likethe Cleveland Clinic, (UniversityHospitals), Mayo Clinic and JohnsHopkins.

“That means a lot to these foreign distributors,” he said.

— Kathy Ames Carr

CosentinoSUBMITTED PHOTO

Checkpoint Surgical’s neurodevice


Bob Chalfant, director of theFitzgerald Institute for Entrepre-neurial Studies at the University ofAkron, said companies need tolook at whether there is a marketfor their product: Are people in agiven country buying a product, orwill they?

Eugene Laney, vice president ofInternational Trade Affairs forDHL Express USA, said a big chal-lenge for domestic firms is theyaren’t aware there might be a needor demand for their productabroad. A recent DHL study foundthat small and midsize businessesselling in international marketsare twice as likely to be successfulthan those that operate only within the United States.

“A lot of companies are notaware that 95% of all consumersare outside of the United States,”said Dr. Laney, who is based inWashington, D.C. “As you growyour business, all of your futurecustomers are abroad.”

Buddy upBefore taking the plunge into

the global marketplace, many entrepreneurs say the most im-portant step is finding someonefrom that country to represent the

company and the product. “Having a local representative is

critical. You can have someone inor near the country who can beyour voice while you’re not there,”Mr. Chalfant said.

George Young, a founding part-ner of the Cleveland-based con-sulting firm Kalypso, in 2004 started the company and in 2005opened European operations.

He said the company’s growthin Europe can be attributed tofinding the right person to headup its European operations. Hesaid a business owner has to knowas much as possible when entering a different market orhave someone they know andtrust to lead the company into thatnew market.

“Most of our clients, themselves,are global. It was important evenfrom a very early point in our existence that we had to be able toserve our clients globally,” Mr.Young said, adding that he had aformer client looking to do some-thing different, and there was de-mand for his services in Europe.“He became our lead partner inEurope, and we built thatbusiness around him.”

Mr. Young said “trust” is an in-tangible word, but it’s one of the

most important factors in estab-lishing a business relationshipoverseas.

Snap Fitness’ Mr. Taunton saidhe travels extensively into differentcultures and attends global tradeshows to meet people from everycorner of the world and learn moreabout different markets.

When thinking about global expansion, Mr. Taunton’s adviceis to make that first foray into anEnglish-speaking country.

“It’s one thing to expand intoanother country. It’s another thingwhen you have a complete language barrier,” he said. “Andbe patient because some peoplemove at an entirely different pacethan we do and it’s easy to become frustrated.”

When negotiating leases andlooking at properties, Mr. Tauntonsaid cultural negotiating styles canbe entirely different from whatsomeone is accustomed to in theUnited States.

He also said to do research onother U.S. brands in that country— if there aren’t any in the regionwhere you are looking to expand,there probably is a reason.

“A lot of people think entrepre-neurs are people with high risktolerance. Successful entrepre-

neurs are actually the most riskaverse people on the earth,” Kalypso’s Mr. Young said. “Youdon’t do anything unless youknow it’s going to work.

“It’s the Warren Buffet school ofinvestment — invest in what youknow,” he said.

Baby stepsKarl Schamotta, a senior market

strategist with Western UnionBusiness Solutions and presidentof the Association for FinancialProfessionals Canada, suggests“dipping a toe” into the globalmarket and taking small steps before throwing all of a company’sresources into global sales.

He goes so far as to suggest creating a formal business part-nership with a person located inthe targeted overseas market. Thisstrategy helps a U.S. companymore effectively think in terms ofthe foreign location, giving it aninherent competitive advantage.

“It comes down to how your sellyour product, and the currenciesyou accept when you do sell in thatcountry,” Mr. Schamotta said. “It’simportant to try to put yourself inyour partner’s shoes and under-stand where they are coming frombefore you move forward.”

Mr. Schamotta said the key tooperating and expanding into theglobal marketplace is infrastruc-ture — the ability to move goodsand money.

“Ideally, every small businessshould be accepting foreign cur-rency rather than pricing goods inU.S. dollars for the entire world,”he said, adding that there is riskinvolved when receiving foreigncurrencies. “You’re going to be ina much better competitive posi-tion relative to other Americancompanies selling in U.S. dollars.”

Mr. Schamotta said a prolongedfinancial crisis in the UnitedStates, during which growth ratesand demand have collapsed, iscreating opportunities for small tomidsize businesses to venture intointernational markets, where de-mand is higher for some products.

Technically speakingThe Internet, Mr. Schamotta

said, has played a major role inglobal business, lowering the costof communicating and shipping,which, in turn, lowered the barriers

to entry for midsize companies. “You used to have a situation

where only a large company couldbe a multinational,” Mr. Schamot-ta said. “You had to have infra-structure in place and economy ofscale. What we’re seeing now is achange from a mass producingmodel to a mass customizationmodel. Specialized companies aremaking more specialized productsand being part of the global supply chain.”

Midsize companies are becom-ing the norm, he said, referring tothem as micro-nationals. Thingsbegan to change in the 1990s andgained momentum in the last 10years as e-commerce capabilitiesbecame available to almost anyone.

“Technology has allowed thehomemaker in Peru to be part ofthe global economy to sell tosomeone in the United States, andvice versa,” Mr. Schamotta said.“It’s a remarkable phenomenonthat’s happening. We’re seeing adisintegration of that top-downstructure we had in the globaleconomy.”

Mr. Laney added that the emer-gence of the Internet creates aplatform that bridges the gap be-tween the small business runningout of a Chicago garage and an in-terested Singapore businessman.

“It’s a huge shift going on now,”Mr. Laney said. ■


Pieces: Choosing international rep a critical step

Focus on Education

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continued from PAGE 13■ U.S. Export Assistance

Center of Northern Ohio providescounseling, advice and advocacyto U.S. firms looking to do business overseas. http://export.gov/ohio/northernohio/.

■ U.S. Trade and DevelopmentAgency — www.ustda.gov —links U.S. businesses to export opportunities through funding assistance.

■ Small Business Administra-tion — www.sba.gov — offersloan programs that enable small business exporters to increaseglobal competitiveness.

■ Overseas Private InvestmentCorporation (OPIC) —www.opic.gov — helps U.S. businesses invest overseas.

■ Export-Import Bank —www.exim.gov — is the officialexport credit agency of the United States.

RESOURCES



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It’s a term that describes thenetwork of trusted peers withwhom Chinese like to do business,and earning that trust takes time.

“Many of the major mistakesI’ve seen, sometimes very costly financially, are aggressive, entre-preneur-type executives going inthere and trying to do a dealquickly,” Dr. Feldman said. “It’s arelationship-based culture, and ittakes time to develop over monthsor even years.”

Large Fortune 500 businessescarry a certain amount of inherentguanxi, he said, but not so forsmall businesses.

“For a small business, it’s openseason,” Dr. Feldman said. “Culturally, they don’t attributeimportance to them. … It’s evenmore important to have a goodmiddleman to help this process.”

It does fall to employers to pre-pare their people for such culturalchallenges, but the employee mustbring just as much to the learningprocess, said Jim Kuhn, a long-time expert in international HRwho now runs recruitment firmKuhn Global Talent in Hudson.

“They should be driven person-

ally to quest for this informationthemselves,” Mr. Kuhn said. “Youcan’t pick them based only ontechnical knowledge because theymight not have the right interper-sonal skills.”

The little thingsStart with language. English

may be widely spoken overseas,but “a little bit of language goes along way (in cultural interac-tions),” Mr. Kuhn said. “Write fivewords on the back of your busi-ness card and remember them.”

He works with clients on thecore competencies needed forsuccess in international business,which include cross-cultural agili-ty, resourcefulness, sensitivity andhumility.

It helps to know a bit about howAmericans are stereotyped overseas, Mr. Torma said.

“We are (considered) too re-sults-oriented and not enoughprocess-oriented,” he said. “Weare generally honest and forthright, but we’re a bit too in-formal, too quickly. (We say) ‘Justcall me Jerry!’ Some cultures aren’tcomfortable with that.”

“Think about cultural samenessinstead of differences,” said Dr.Mayo. “Ask, ‘I see you have soccertrophies for your son. What’s it likebeing a soccer dad?’ … Hit onsomething they love and they willspend the next 20 minutes talkingto you about it.”

That’s an easy one for Vitamix— everyone shares a need to eat,said Ms. Berg, and a connection tohow what they eat makes themfeel.

“People want to help you under-stand their culture and who theyare,” she said. “That’s part of human nature.” ■

Cultures: Relationships need to develop continued from PAGE 13

■ “Kiss, Bow or ShakeHands,” Terri Morrison and WayneConaway

■ “Essential Do’s and Taboos:The Complete Guide to International Business andLeisure Travel,” Roger E. Axtell

■ “Trouble in the Middle:American-Chinese Business Relations, Culture, Conflict andEthics,” Steven Feldman

■ CultureGrams online databaseof insider reports on 200-plus coun-tries, www.culturegrams.com

REQUIRED READING

By CHRIS [email protected]

When a company decides toset up shop or do businessin a new country, it must

adapt. And one of the most impor-tant areas it needs to beef up is itsstaff.

Customers expect the companyto have a look and feel that they’reused to, which means a U.S. com-pany will have to ensure any fieldoffice is staffed with employees whomake the customer feel comfort-able — employees who speak thelanguage and understand the cus-toms. The same is true of having adiverse representation presentwithin the company as a whole.

It’s important for employers tohire for those skills, say those whohave worked internationally. If allthings are equal, most employersshould opt for the person who hasmore cross-cultural skills and international experience.

“It’s one of their most importantHR issues: Creating diversity intheir organization so that the orga-nization has the look and feel ofthe company worldwide,” said Larry Miller, current president ofthe French-American Chamber ofCommerce and a longtime humanresources executive who has advised many international com-panies, including Lubrizol Corp.

“Global competitiveness is increasingly important,” Mr. Millersaid. “It’s not just the big compa-nies anymore; everybody is com-peting on a global market. Getting awork force ready to do their workand compete with a global perspec-tive is critically important to a lot ofbusinesses in Northeast Ohio.”

Recruiting the worldEaton Corp., a $22 billion com-

pany with U.S. headquarters inCleveland, does business in 176countries with 50% of its revenuescoming from outside the UnitedStates. That means the chance thatsomeone within the corporationwill interact with someone fromanother country is extremely high.And as such, Eaton goes to greatlengths to find candidates with aninternational mindset.

“With respect to international relations, I think we look at hiringemployees who have the capabilityto learn,” said Deborah Lauer, vicepresident of talent managementand organizational effectiveness atEaton. “We’re very much about being a learning organization andhaving a culture that really supportslearning.”

Popular ways of recruiting suchtalent include reaching out to a vari-ety of groups. Colleges or universi-ties generally have established diver-sity organizations as part of their

campus offerings. Internships alsoare golden in developing young tal-ent toward an international strategy.

“You just have to make a com-mitment to (diversity),” Mr. Millersaid. “You have to make sure thatall of your leaders understand theimportance of that diversity, thatthey buy into it and that they’reheld accountable for it.”

Eaton provides a number ofclasses for its employees to learnabout culture and language. As aU.S. company, there is an expecta-tion that its employees will be ableto communicate in English. Somedepartments overseas have a dayduring which they’ll only speakEnglish to one another.

“Our departments outside of theUnited States, particularly in aplace like China, understand thatthis is important,” Ms. Lauer said.“They are part of an American com-pany and they know that their ca-pability to express themselves hasto be done in English. They know inorder to progress their careers, theyhave to become better at that.”

Experience isn’t everythingAs far as hiring goes, having

international experience andspeaking multiple languages al-ways is a plus. But Rad-Con Inc.’sprimary objective is to hire strongengineers and groom them toward international relations.

To that end, Rad-Con will inviteits international clients to its Cleve-land headquarters for face-to-facemeetings, which ultimately givesnewer employees a global taste ontheir home soil before sendingthem off to do business overseas.

Rad-Con is a global supplier ofindustrial furnaces. The companyhas grown its exports significantlyand now they account for morethan 70% of its business. It routinelysends engineers out of the countryfor three weeks at a time to assist insetting up its equipment.

“We hire people who don’t have(international experience) butcould be good engineers,” said Rad-Con president Chris Messina. “He’llprobably meet the customer firsthere in the U.S. and subsequentlywill go with somebody, one of ourstaff who has experiences. And thenthe third touch he may be soloingon his own over there.”

Language often can be perceivedas the biggest barrier to doing busi-ness internationally. But, at least inMr. Miller’s experience, knowingthe customs and traditions of a for-eign country is far more important.

“A lot of people think it’s allabout language,” Mr. Miller said.“Creating the kinds of relationshipswe need to have inside the company,and certainly between the companyand its customers, requires muchmore careful attention to the relationship to culture.” ■

Global companiesneed diverse staff



CREDIT UNIONSRANKED BY DEC. 31, 2012 ASSETS

Assets (millions)

Rank

NameAddressPhone/Website Dec. 31, 2012 Dec. 31, 2011 % change

Loans(millions)

Dec. 31, 2012

Shares & deposits(millions)

Dec. 31, 2012Number ofmembers Membership groups

Top executiveTitle

1Seven Seventeen Credit Union3181 Larchmont Ave. NE, Warren 44483(330) 372-8100/www.sscu.net

$829.9 $775.7 7.0% $518.9 726.9 70,418Live, work, worship, attend school inTrumbull, Mahoning, Columbiana, Portageor central Stark County communities

Gary SoukenikCEO

2Century Federal Credit Union1240 E. Ninth St., Room 719, Cleveland 44199(216) 535-3200/www.cenfedcu.org

$338.3 $315.0 7.4% $212.2 308.5 27,768Open to federal government agencies andany Northeast Ohio business, association,municipality or educational institution

Sharon Churchillpresident, CEO

3Firestone Federal Credit Union31 Hanna Parkway, Akron 44319(234) 352-1100/www.fofcu.com

$223.2 $233.4 -4.4% $35.7 189.5 12,285 Bridgestone/Firestone employees Wayne A. Chapmanpresident, CEO

4GenFed Financial Credit Union2492 Wedgewood Drive, Suite B, Akron 44312(330) 784-5451/www.genfed.com

$193.6 $182.6 6.0% $129.2 160.1 20,572Lorain, Erie, Summit and Medina counties;Ford, ASW, Reiter Dairy, Quality Mold,Rubbermaid, other local companies

Joyce R. Jonespresident, CEO

5Firefighters Community Credit Union2300 St. Clair Ave., Cleveland 44114(216) 621-4644/www.ffcommunity.com

$193.5 $178.1 8.7% $138.2 169.2 27,507 Open to everyone in Cuyahoga and Lakecounties

Ben Laurendeaupresident, CEO

6CSE Federal Credit Union1380 Market Ave. North, Canton 44714(330) 452-9801/www.csefcu.com

$172.3 $149.4 15.3% $132.4 153.6 34,314 Open to persons who live, work, worship orattend school in Stark County

R. Stanley BarnesCEO

7Cardinal Community Credit Union8500 Westport Drive, Mentor 44060(440) 266-2200/www.cardinalcu.com

$171.0 $156.2 9.5% $117.9 151.1 19,273All who work, live, attend school or worshipin Cuyahoga, Lake, Geauga and Ashtabulacounties

Christine Blakepresident, CEO

8BFG Federal Credit Union445 S. Main St., Akron 44311(330) 374-2990/www.bfgfcu.org

$160.7 $161.8 -0.7% $91.6 144.4 29,046Individuals who live, work, worship,volunteer or attend school in SummitCounty

Michael J. Owenspresident, CEO

9Ohio Catholic Federal Credit Union13623 Rockside Road, Garfield Heights 44125(216) 663-6800/www.ohiocatholicfcu.com

$154.1 $155.9 -1.2% $97.3 140.2 16,781Any person connected with the CatholicDiocese of Cleveland and/or Diocesanparishes, schools, or organizations

Todd R. TurnerCEO

10VacationLand Federal Credit Union2409 E. Perkins Ave., Sandusky 44870(419) 625-9025/www.vlfcu.org

$147.7 $139.3 6.1% $94.0 126.2 16,009 Lives, works, worships or attends school inErie County

Bryan P. MyersCEO

11Associated School Employees Credit Union(1)1690 S. Canfield Niles Road, Youngstown 44515(330) 792-4000/www.asecu.com

$147.1 $144.5 1.8% $59.8 132.5 17,689 Lives, works, worships or attends school inMahoning, Trumbull or Columbiana counties

Michael Kurishpresident, CEO

12Lormet Community Federal Credit Union2051 Cooper Foster Park Road, Amherst 44001(440) 960-6600/www.lormet.com

$146.9 $145.7 0.8% $75.1 128.6 20,047 Lorain County residents Daniel R. Cwalinapresident, CEO

13School Employees Lorain County Credit Union Inc.340 Griswold Road, Elyria 44035(440) 324-3400/www.selccu.org

$139.0 $136.3 2.0% $60.9 127.3 11,736Employees and students of educationalentities in Lorain County, othermiscellaneous employer groups

Brent T. Binkleypresident, CEO

14Ohio Educational Credit Union2554 E. 22nd St., Cleveland 44115(216) 621-6296/www.ohecu.com

$121.5 $118.0 3.0% $86.6 110.5 18,731 Employees, students and alumni of publicand private schools and colleges in Ohio

Jerome R. ValcoCEO

15PSE Credit Union Inc.5225 Regency Drive, Parma 44129(440) 843-8300/www.psecreditunion.org

$115.8 $112.4 3.1% $45.9 103.5 21,674Anyone who lives, works, worships orattends school in Cuyahoga or Medinacounties

Janice L. Thomaspresident, CEO

16Towpath Credit Union(2)2969 Smith Road, Akron 44310(330) 664-4700/www.towpathcu.com

$114.2 $114.0 0.2% $46.6 101.0 20,826Lives, works, worships or attends school inAkron, Fairlawn, Cuyahoga Falls, Bath andtownships of Copley and Richfield

Rose Bartolomuccipresident, CEO

17Stark Federal Credit Union(1)4100 Dressler Road NW, Canton 44718(330) 493-8325/www.starkcu.org

$102.7 $100.7 2.0% $36.4 91.3 13,733 Anyone who lives, works, worships orattends school in Stark or Carroll counties

Nino J. Gemmapresident, CEO

18Best Reward Credit Union5681 Smith Road, Brook Park 44142(216) 367-8000/www.bestrewardcu.coop

$95.5 $95.4 0.1% $30.7 75.8 12,852Live, work, worship or attend school inCuyahoga, Lake, Geauga, Medina, Summit,Lorain and Portage counties

John J. Shirillapresident, CEO

19Golden Circle Credit Union(1)4118 Lincolnway E., Massillon 44646(330) 479-3130/http://goldencirclecu.com

$92.6 $96.6 -4.2% $31.5 76.9 13,147 Live in Stark County Jeffrey J. McClainCEO

20Cleveland Selfreliance Federal Credit Union6108 State Road, Parma 44134(440) 884-9111/www.clevelandselfreliance.com

$89.7 $86.8 3.4% $39.6 75.0 4,167 Ukrainian American community Orest Liscyneskytreasurer, manager

21Lakeview Federal Credit Union2909 State Road, Ashtabula 44004(440) 998-2707 /www.lakeviewfcu.com

$86.3 $79.2 9.0% $48.3 76.1 8,495 Live, work or worship in Ashtabula County Sherry S. Cornellpresident, CEO

22Buckeye State Credit Union155 E. Voris St., Akron 44311(330) 253-9197/www.buckeyecu.org

$82.3 $77.4 6.3% $39.6 73.7 17,465 Community membership in Shaker Heightsand Summit, Stark, and Lake counties

Norma S. PrestonCEO

23Unity Catholic Federal Credit Union5839 Ridge Road , Parma 44129(440) 886-2558/www.unitycatholiccu.org

$70.0 $68.3 2.5% $31.4 63.3 11,665Parishioners, families, students, employeesand organizations within the CatholicDiocese of Cleveland and the Eparchy ofParma

Tamlyn M. Straight-SchervishCEO

24Community First2043 E. Prospect Road, Ashtabula 44004(440) 997-5919/www.hereforeveryoneonline.com

$69.9 $67.8 3.1% $23.5 58.5 6,300 Live, work, worship in Ashtabula County Mike RiestererCEO

25Taleris Credit Union Inc.1250 E. Granger Road, Cleveland 44131(216) 739-2300/www.taleriscu.org

$69.2 $69.7 -0.8% $44.8 56.0 9,736Individuals who live, work, worship orattend school in Cuyahoga County andselect groups and organizations

Robin D. Thomaspresident, CEO

26Medina County Federal Credit Union1353 Reimer Road, Wadsworth 44281(330) 334-1023/www.mcfcu.com

$66.5 $61.8 7.5% $22.7 58.7 7,755 Open to anyone who lives, works, worshipsor educates in Medina County

Bud Herrlechairman

27Community One Credit Union of Ohio6583 Frank Ave. NW, North Canton 44720(330) 305-3050/www.c1cu.com

$66.1 $61.1 8.3% $30.3 60.5 6,135 Serving Stark County Evelyn L. Canterburypresident, CEO

28Eaton Family Credit Union333 Babbitt Road, Euclid 44123(216) 920-2000/www.eatonfamilycu.com

$55.5 $52.1 6.5% $38.6 49.9 13,336 Eaton Corp, City of Euclid, Lake County,Cuyahoga County

Michael LosneckCEO

29Community Star Credit Union832 Cleveland St., Elyria 44035(440) 365-7342/www.commstar.org

$51.1 NA NA NA NA NA Membership is open to the public Ernie Jacksonpresident, CEO

30Emerald Group Credit Union Inc.13201 Granger Road, Garfield Heights 44125(216) 581-5581/www.emeraldgcu.com

$50.4 $48.7 3.5% $32.6 45.2 8,315 Individuals who live, work, worship orattend school in Cuyahoga County

John R. MartinCEO

Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings arecomplete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists areavailable to purchase at www.crainscleveland.com. (1) Information is from the National Credit Union Administration, www.ncua.gov. (2) Information from creditunions.com.

RESEARCHED BY Deborah W. Hillyer


“There’re a lot of merchants outthere,” Mr. Neistadt said. “There’rea lot of would-be merchants thatthis product truly appeals to.There’s enough there to go around.”

Electronic Merchant Systemsstarted offering the EMS+ mobilecard reader to a small group of cus-tomers about six months ago.

The average size of each transac-tion processed with the reader isabout twice what Electronic Mer-chant Systems thought it would be.And that’s good for the company:Part of the 2.25% credit card pro-cessing fee that comes out of eachtransaction goes to Electronic Mer-chant System.

There’s already a lot of demandfor the EMS+ reader among thecompany’s existing customers, according to Mr. Neistadt, who saidthe number of customers signingup to receive readers is “beyondwhat we anticipated.”

There are several other cardreaders on the market. The mostpopular is made by Square Inc., acompany started by Twitter co-founder Jack Dorsey. Intuit, thecompany behind TurboTax, makesGoPayment. Then there’s PayPalHere. Bank of America has MobilePay on Demand. ProPay sells theJak and the Flash. North AmericanBancard has PayAnywhere.

Like most other readers, EMS+works like this: You download anapp onto your smart phone ortablet. You plug the reader into the

headphone jack. You use the app toenter the purchase price and emailthe customer a receipt. And likemany of the other readers, theEMS+ device and the app are free.

So why would a customer chooseEMS+ when they could choose somany other readers?

For one, Electronic MerchantSystems offers the lowest swipe rateof all the companies listed above.For instance, Square’s swipe rate is2.75%. However, some companieslower their rates if customers opt topay other fees.

Electronic Merchant Systemsalso offers customer support byphone 24 hours a day — a service

that some companies are offeringto stand out from Square, which focuses more on answering ques-tions online.

Appeal to the little guyHowever, the company, which

has 250 employees, isn’t aiming totake over the mobile reader marketany time soon. Mr. Neistadt said heexpects EMS+ to account for only asmall portion of Electronic Mer-chant Systems’ sales over the nextfew years, though the company expects the revenue stream to growover time.

Unlike Square — which last yearsecured a $25 million investment

from Starbucks Corp., which usesthe Square reader in its stores —Electronic Merchant Systems plansto grow EMS+ with its resources onhand: It’s marketing the productthrough its existing sales team, andinstead of launching a big market-ing campaign, it’s trying to win newcustomers by targeting groups ofsmall businesses on Facebook,Twitter and LinkedIn.

Because EMS+ and other mobilereaders don’t require businesses topay monthly fees or buy expensiveequipment, they’re particularly appealing to businesses thatprocess relatively few transactionsvia credit card — businesses Elec-tronic Merchant Systems previouslyfound hard to serve.

“For the very, very small mer-chant, we didn’t have the solutionthat would make accepting creditcards a viable option for them,” Mr.Neistadt said.

A disciple in IdahoThey also can be handy tools for

people who want to accept creditcards wherever they go. For instance, the maintenance team atAdvanced Heating & Cooling inMeridian, Idaho, was able to takecredit cards before the companystarted using EMS+, but its membershad to write a customer’s credit cardnumber on the invoice or give thenumber to someone at the office, viaphone. Then the company had tosend the customer a receipt.

Those methods were slow andprone to error, said Alana Lane, of-fice supervisor at Advanced Heat-ing & Cooling. EMS+ also helpedthe company save money on fees— enough that it could add a fourthtechnician.

The EMS+ reader, which is madefor Electronic Merchant Systems bya contractor, didn’t work with theZTE Optik tablets the technicianswere using. Electronic MerchantSystems gave Advanced Heating &Cooling a separate card reader thatcould communicate with the EMS+app wirelessly. That problem hasoccurred with a few tablets, espe-cially older ones, but it is rare andeasy to fix with a separate reader,said Brendan Bowers, social mediamanager at Electronic MerchantSystems.

It didn’t bother Ms. Lane. Shehas told other contractors to useEMS+, and if she has her way, theNational Association of Women inConstruction will use it, too.

“I’m trying to get them signedover to EMS right now,” she said. ■


Gain

the advantage by knowing your customers - be they

companies or individuals - before it’s too late.

CONTRIBUTED PHOTO

Electronic Merchant Systems’ EMS+ mobile card reader charges a processingfee of 2.25% per transaction, which is lower than many of its competitors.

EMS+: Company is targeting small businesses to grow product continued from PAGE 1 “For the very, very small

merchant, we didn’t havethe solution that wouldmake accepting creditcards a viable option forthem.” – Dan Neistadt, CEO, ElectronicMerchant Systems, on the company appealing to merchantsthat process releatively fewtransactions via credit card


against which they may borrow.Though SMR still is calculating

last year’s numbers, the firm esti-mates a 2.3% increase in home equity and related lending in 2012over 2011, Mr. Feldstein said.

“That tiny, tiny increase in homeequity lending doesn’t get us any-where near what it used to be,” hesaid. “It just means there’s been aturning point.”

The April Beige Book report fromthe Federal Reserve Bank tells asimilar story for the Fed’s FourthDistrict, which includes Cleveland.

“Reports on consumer credit …showed a small rise in demand,mainly for home-equity productsand auto loans,” the Fed stated.

The Beige Book also reportedthat sales of new and existing sin-gle-family homes were higher thana year ago and that list prices ofnew homes have edged up 1% to2% this year.

And where there are improvingprices, there is improving equity,sources say.

Roughly 200,000 more residen-tial properties returned to a state ofpositive equity in the fourth quar-ter of 2012, according to the mostrecent report by CoreLogic, a

provider of information, analyticsand business services out of Irvine,Calif.

That improvement marked thefourth consecutive quarter of de-cline in underwater mortgages, orthose where more is owed on theloan than the home is worth.

At the end of 2012, the number ofresidential properties with negativeequity nationwide stood at 10.4million, or 21.5% of all residentialproperties with a mortgage — thelowest it has been since at least thethird quarter of 2009, CoreLogicdata show.

Things are worse in the Cleve-land area, though, where 30.4% ofresidential properties were underwater as of Dec. 31.

‘Fear factor’ liftsDespite more pervasive negative

equity locally, banks operating in

Northeast Ohio are doing morehome equity business.

After years of decline, KeyCorpreported its footprint-wide homeequity loan balance reached $10.2billion in 2012, up 4.9% from 2011.

Its first-quarter 2013 numberswere up 5.2% over last year’s quar-ter, too; by comparison, its homeequity loan balance was down 2.8%in the first quarter of 2012 versusthe year-earlier period, said ToddHays, senior vice president and retail executive for Key in NortheastOhio.

U.S. Bank in Northeast Ohioclosed 54% more home equityloans last year than it did in 2011,said Tom Zirbs, regional managerfor nearly 100 local locations. That54% jump, though, is coming off alow base, a spokeswoman quali-fied.

And while its first-quarter home

equity line of credit originationswere fairly flat at $2 million, FirstFederal of Lakewood closed 2.5times the number of home equityloans in the first three months of2013 than it did in the first quarterof 2012, said Thomas J. Fraser,president and CEO.

At the end of March, home equityloan originations for the year todate at First Federal totaled $10million compared to $4 million forthe like period a year ago, and a lit-tle more than $1 million in the firstquarter of 2011.

“Home values are starting to sta-bilize — and even are on the upswing — and I think people areseeing that there’s equity in theirhomes to borrow and lock in lowrates,” said Ronald R. Webb, FirstFederal senior vice president andchief lending officer.

SMR Research’s Mr. Feldsteinsees reasons other than risinghome prices for the increases inhome equity lending. For one, the“fear factor” is lifting, he said.

“The lenders got afraid of makingthe loans for some time becausethey were losing money on them,”Mr. Feldstein said. “They’d makeinvestor presentations, and the investors would go, ‘Why’d youeven get into that business? What’swrong with you?’

“There was some fear amongconsumers as well,” Mr. Feldsteinadded, citing concerns such as,“Will it (the economy) get worse?How will I ever pay it back? I don’twant to get tossed out of myhouse.”

Now, with increases in home val-ues accelerating and consumers’debt declining, people are increas-ingly confident, he said. Theamount outstanding that peopleowe on home equity loans still isdecreasing even as borrowing picksup, Mr. Feldstein noted, becauserefinanced mortgages remain “allthe rage” and people typically paydown their existing home equityloans in the refinancing process.

Hello, Home Depot?Paying down debt is a common

reason why people are borrowingagainst their homes again, bankerssay. Home equity interest ratestend to be much lower than thoseof credit cards.

Most of all, bankers say home-owners are using their equity to remodel their properties.

As the owner of a company hiredto do such work, Steve Klotzbachsays, “I hear it all the time.”

“They (homeowners) are saying,‘We bought our house, now it’s notworth what we paid for it, now wehave a little equity in it, (so) we’regoing to turn it into what wewant,’” said Mr. Klotzbach, whodoes business as Klotzbach CustomBuilders and Remodelers inFairview Park.

The real surge in remodels beganabout mid-summer 2012, he said.

“I think it’s just going to get bet-ter,” he said of remodeling demand. “I think the days of jump-

ing from house to house just to geta new bathroom or kitchen aregone.”

KeyCorp also sees more smallbusiness clients leveraging theirhome equity to invest in their com-panies, Mr. Hays said.

“The biggest thing we’re hearingfrom customers is they’re feelingmore comfortable with obtainingcredit, where they see the economygoing,” he said.

However, one thing home equityborrowing is not being used for to-day, insiders say, is lavish luxuries.

Lenders are tougher, Mr. Feld-stein said, and they’re looking forpeople with high credit scores.

“With tighter credit standards, Ithink the people who would usehome equity loans for no good rea-son are largely excluded from themarket, which probably was nottrue for a while,” he said.

ATMs no longerNot every bank’s data reflects the

turnaround. Some, including FifthThird Bancorp and LNB BancorpInc., posted another full-year decline in their home equity bal-ances in 2012.

Many, though, expect the growthto spread and continue.

“Equity in the housing stock isrising at a faster pace in 2013 thanit was in 2012,” SMR’s Mr. Feldsteinsaid. Plus, he said, “when mortgageinterest rates rise, everything’s going to change. People will nolonger refinance because hugenumbers of borrowers are lockedinto historically low interest rates.So, if they need cash, they’ll usehome equity loans.

“The home equity loan revivalwe’ve seen so far is quite modest(compared) to what we will seedown the road,” Mr. Feldstein pre-dicted.

A tougher lending environmentalso will push home equity borrow-ing upward, predicted Lou Tisler,executive director of NeighborhoodHousing Services of Greater Cleve-land, a nonprofit that provides pro-grams and services around home-ownership.

“We still see a very constrictivemarket for first mortgages, andtherefore, if you have an equity position, you’ll … have an easiertime accessing a (home equity)loan for $20,000 than you would (amortgage) for $60,000 or $100,000,”Mr. Tisler said.

Still, most lenders don’t expecthome equity lending to catapult tothe levels seen before the credit cri-sis.

“Equity has to rebuild for manyhomeowners since we had such alarge fall,” First Federal’s Mr. Fras-er said. “The pool of eligible prop-erties and borrowers is smaller thanit would have been a decade ago.”

And most dismiss the notion thatbankers will return to the practiceof lending up to 100%, or evenmore, of home values. JamesThurston, a spokesman for theOhio Bankers League, said he’shearing that 85% is the highestmost bankers will go, a figureechoed by local bankers.

Mr. Tisler has heard the same,and he’s glad.

“It makes it a pretty good bet forthe banks, and it’s good for thehomeowner because they’re notoverextending themselves,” Mr.Tisler said. “I think that the banksare working hard to not move backto where your home is your ATM.” ■


Factor: The number of underwater mortgages keeps dropping

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continued from PAGE 1 UNDERWATER AND UPSIDE-DOWNA look at the number of residential mortgages where borrowers owe more on their mortgages than their homes are worth:

Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 % change over four quarters

Nationwide 10.4M 10.7 10.8 11.4 12.1 -14%

Ohio 535,972 511,426 520,357 529,834 573,008 -6%

Source: CoreLogic



of Diamond Services of Westlake,an environmental assessment andcleanup company, about the filmproduction companies he says gavehis young business a critical shot inthe arm.

Diamond Services is one ofdozens of businesses that benefitwhen motion pictures such as Mar-vel Productions’ “Captain America:The Winter Soldier” bring actorsand their entourage to town to film.

With the introduction of the statemotion picture tax credit in 2010,Ohio became a more attractive location for film producers. In itsfirst two years, filmmakers spent$73 million in Ohio, according to aCleveland State University studycommissioned by the GreaterCleveland Film Commission. About25% of that amount was in wages,while hotel rooms, car and equip-ment rentals, location fees and pay-ments for a variety of other ser-vices, such as those from DiamondServices, made up the rest.

In addition to “Captain Ameri-ca,” Summit Entertainment will beshooting a football movie, “DraftDay” in Cleveland this month andin June. In all, according to the filmcommission, the two films will gen-erate 95 production days.

Four years ago, when Mr. Dia-mond lost his job with a companythat did environmental cleanups,he struck out on his own. He ex-pected to make a living doing theinspections property owners andwould-be property owners need touncover the asbestos, mold andother hazardous materials that infect older buildings.

“So when ‘The Avengers’ came totown, they wanted to film in a cou-ple old buildings,” Mr. Diamondsaid. “Movie companies love film-ing in old buildings.”

Marvel Productions, which shotparts of “The Avengers” in Cleve-land in 2011, hired Mr. Diamond toassess one building for asbestos,mold and lead paint. He found avariety of problems.

“So they said, ‘OK, can you cleanthat up and can you get steel platesto cover the holes in the floor?’ ” herecalled in a telephone interviewlast week. “That turned into, ‘Canyou cut a hole in the cement andcan you fix up this muddy spot fora parking lot where we want to parkour trailers?

“So I called up Ontario Stone andgot some gravel and spread itaround with a (tractor), and thisturned into weed whacking, andthen I was pressure washing PublicSquare,” Mr. Diamond said. “I wastheir go-to guy. For the two monthsthey were here, I did $130,000 inbusiness, and it was the shot in thearm that got my business going.”

Last week, Mr. Diamond wasworking around the clock fixing abuilding the producers of “CaptainAmerica” are using to keep theirpyrotechnics safe as they beginshooting later this month. Next upis covering over some graffiti and

pressure washing some concretethat’s covered with slippery moldand moss.

Today, May 6, he said he wouldbe in Detroit to assess the conditionof an old auto plant for a differentfilm studio. One of that film’s pro-duction staffers worked for Marvelwhen “The Avengers” was shootingand remembered him.

“It’s completely changed how Ido business,” he said.

Speak the languageMr. Diamond’s film industry

success certainly is atypical. But it’sa vivid example of the kind ofspending film companies bring totheir location shootings and of thekind of company they like to dobusiness with — those that are will-ing to be on call 24/7 and respondto last-minute requests by saying,“No problem.”

With the filming season begin-ning, the film commission and theCouncil of Smaller Enterprisessmall business advocacy group areholding a free workshop tomorrow,May 7, to help local businesseslearn what it takes to break into pic-tures.

The film companies providework for caterers, dry cleaners andequipment rental companies —and, of course, actors and extras.The film companies also rent cars,stay at hotels and eat in localrestaurants.

“This industry has its own lega-cy and culture,” said Ivan Schwarz,the film commission’s presidentand a former film company loca-tion manager, about the value ofthe workshop. “You’ve got to figure

out how to speak that language.”Kazell Pugh is still learning that

language. His TLC Spring Water Co.has made a few sales to film com-panies and, he said, “We’re tryingto do a lot of business with them.”

The company provides bottledwater to the movie crews.

“It’s in the summer and it’s hotout there, and they need it whenthey need it,” Mr. Pugh said.

While the film companies haveearned a reputation as demandingcustomers, they pay promptly andare less price-conscious than mostbuyers. Mr. Schwarz also noted thatthe structure of the film tax credit en-courages them to spend money withlocal businesses and professionals.

A production company is eligiblefor a tax credit equal to 25% of theproduction expenditures, and a35% credit for wages paid to Ohioresidents up to a preset maximum.An individual production can get amaximum credit of $5 million, andthe state can grant as much as $20million in credits per year.

“It’s a great business opportuni-ty,” said Mr. Pugh, who attends filmcommission events to learn moreabout the business and meet pro-duction crews. “What you reallyhave to do is build a relationship.”

Toss normal out the windowNortheast Ohio has been court-

ing film companies for more than adecade, but the activity got turnedup several notches after the stateLegislature approved the tax credit,which attracts film companies to alocation like bees to honey.

Like any tax credit, the film cred-it is somewhat controversial,

because it offsets state taxes thefilm companies might pay whenthey work in Ohio.

However, Mr. Schwarz arguesthat bringing film production com-panies to Northeast Ohio is helpingto build a local film industry andtraining local people for careers infields such as animation, designand construction and videography.

It’s even paying off for a signmaker, Fast Signs Cleveland.

Vice president Bernard Doyle es-timated his St. Clair Avenue printshop has made signage for eightmovies in the last few years, includ-ing “The Avengers,” Spiderman”and “Against the Ropes,” a boxingmovie that starred Meg Ryan. For“The Avengers,” Fast Signs madesix dated travel posters for a set thatwould stand in for a long-closedtravel agency in Switzerland.

“When they come to town, Ihand them my cell phone andhome phone numbers and I tellthem they can call me 24/7,” Mr.Doyle said. “If they call me at two inthe morning, they obviously needsomething.”

He recalled coming in at 4 a.m.one Saturday and working until 4p.m. so a film company would havethe signs for shooting on Sunday.

“If you want to play in the moviebusiness, a lot of the normal stuffgoes out the window,” Mr. Doylesaid.

The reward comes later.“They pay their bills, which is

great, and they pay a fair price,” Mr.Doyle said. “It’s a great business;it’s a lot of fun. It’s a breath of freshair from ‘No Parking’ and ‘Stop’signs.” ■

Hollywood: ‘Captain America,’ ‘Draft Day’ begin filming here soon continued from PAGE 1

AUCTION

BUSINESS SERVICES

BUSINESS OPPORTUNITIES

PUBLIC NOTICE

BUSINESSFOR SALE

COMMERCIALPROPERTY

RREEAALLTTOORRSSNow is a great time to promote your

Luxury Properties to high-end prospects.

Call 216.522.1383 for more details.

REAL ESTATE CLASSIFIEDPhone: (216) 522-1383 Fax: (216) 694-4264

Contact: Denise Donaldson E-mail: [email protected] Deadline: Wednesdays @ 2:00 p.m.

All Ads Pre-Paid: Check or Credit Card

AUCTIONOWNER RETIRING

AUTO REPAIR & TIRE CO.ABSOLUTE AUCTION

6 ISUZU NPR 14FT BOX TRUCKSOTHER BOX TRUCKS, DUMP TRUCKS, & AUTO FLEET

2007 BOBCAT S175 W/ BUCKET UNDER 1500 HRSNEWER HUNTER ALIGNMENT MACHINE, NEWER CORGHI/COATS

TIRE CHANGERS, NEWER COATS, JOHN BEAN, CORGHI WHEELBALANCERS, APPROX 12 LIFTS, SHOP EQUIP & TOOLS.

EVERYTHING SELLS TO THE HIGHEST BIDDER(S).SOMETHING FOR EVERYONE, DON'T MISS OUT !!

CALL 330-348-7650 OR VISIT WWW.KIKOAUCTIONS.COMSALE STARTS FRIDAY @ 10:00 MAY 10TH, 2013

SITE LOCATION 2266 E AURORA RD (ST RT 82)

TWINSBURG, OHIO 44087

Hotel/MedicalOffice Building Site

15.0+ acresFt. Myers, Florida

Excellent site of 15-plus acreslocated on Metro Parkway in

Ft. Myers, Florida

Site is located next to GulfCoast Medical Center, part of

Lee Memorial Health Systems,a leader in hospital services in

southwest Florida.

Property has been zoned andpermitted for commercial

development.

Price - $8,750,000 ORMinimum 2.0 acres =

$625,000 per acre

Please write to:ATTN: Property Sale

MAR-CO-HIOBox 668

Hartville, OH44632

Requests for ProposalsThe City of Cleveland Heights has issued Requests for Proposals for de-velopment of 5 vacant City-owned properties : Lee Rd b/t Meadowbrook& Tullamore, Euclid Heights Blvd near Lee, SW corner of Cedar &Coventry, Noble Road near Greyton & “Turkey Ridge” site on EdgehillRoad. RFPs at www.clevelandheights.com/index.aspx?page=365 orcontact K. O’Donnell, [email protected] or 216.291.4885.

Seeking to Acquire BusinessesLocally based corporation seeks profitable businesses for sale inNortheast Ohio area with annual revenues between $200,000 and$5,000,000. Ready to pay between $500,000 and $2,000,000 cash.Present management invited to stay if they desire. All discussions willremain strictly confidential. Brokers welcome. Please contact us at216-496-2843.

Thinking of Selling?18 years ExperienceFree Market Analysis

No Upfront Fees

See our listings atwww.empirebusinesses.com

440-461-2202

Mfg Co.: Consumable & Hi-techMetal Products.

Profit $625,000. Ask $3.4M.

Service Bsns in Stark County:Highly-automated. Profit$275,000. Ask $850K.

Don Dreisig - 330-492-6294

Mid Ohio Asphaltand Concrete Inc.Specializing in asphalt, con-crete, and sealcoat work. Wedo commercial and residentialwork. 35 years experience, li-censed, bonded, and insured

330-467-1378 or330-963-4165

CCrraaiinn’’ss EExxeeccuuttiivvee RReeccrruuiitteerr

Citizens Leadership Academy (CLA) seeks an Associate Head ofSchool. The Associate Head of School will be responsible for allbusiness operations associated with running and managing theschool. CLA needs a leader with strong management and admin-istrative experience.

Qualified candidates should send their resumes and cover lettersto [email protected]

BUSINESS SERVICE OWNERS!

Submit your business card to promote your service.

To find out more, contactDenise Donaldson at 216.522.1383

For daily on-line

updates, sign up @

CrainsCleveland.com/Daily

“They pay their bills,which is great, and theypay a fair price.” – Bernard Doyle, vice president,Fast Signs Cleveland, on moviecompanies


A chance to get Smart at a smart price■ The Chapter 11 bankruptcy of ClevelandCorporate Services Inc. has entered its nextchapter: liquidation.

And those who buy Smart-brand white-boards with any regularity know this turn ofevents presents a rare opportunity: In theliquidation auction begun last Thursday,May 2, dealers and end users can snap upSmart inventory at a price not determinedby the whiteboard company.

“Smart (Technologies) controls its prod-uct distribution and its dealers’ gross mar-gin by maintaining strict price lists,” saidAndy Babcock, director of inventory strate-gies for Tiger Group, which is handling theonline-only auction.

“It’s a highly controlled supply chain, lowmargin, and to buy at auction is a uniqueopportunity,” he stated in an email.

Cleveland Corporate Services, which wasin the process of creating a multimillion-dollar headquarters when it filed for bank-ruptcy protection last Nov. 26, specialized inaudiovisual sales and rentals for more thantwo decades. It was among Smart’s largestNorth American distributors.

Live until 10:30 a.m. this Wednesday, May8, the auction involves a range of whiteboardsused in educational settings, as well as com-puters, service vans, office furniture, powertools and other assets of Cleveland CorporateServices. Bidders must register through TigerGroup’s website, www.soldtiger.com.

For those who want to see what’s for sale,a preview is scheduled today, May 6, and to-morrow from 9 a.m. to 4 p.m. at 1821 E. 40thSt. in Cleveland. — Michelle Park

Clinic tapped for its IT prowess, too■ The Cleveland Clinic’s brain power goesfar beyond its medical expertise, as otherhealth systems across the country now areasking the medical behemoth for help im-plementing their own electronic medicalrecords.

Glens Falls Hospital in Eastern New Yorksaid last week it had signed a consultingcontract with the Clinic to help it put inplace the Epic electronic medical recordplatform throughout its system.

Glens Falls Hospital bills itself as thelargest health care provider between Albanyand Montreal

“It’s actually a great relationship, and theycan benefit from our experience,” saidJonathan Straffon, executive director of theClinic’s MyPractice Healthcare Solutions,the group leading the work. “We’re a healthcare provider, not your typical consultinggroup.”

The Clinic was one of the first health caresystems in the country to install the Epicelectronic medical record system, and theClinic is credentialed by Epic to do this sortof work. The Clinic will offer Glens FallsHospital on-site and remote support as thehospital works to fully deploy its electronichealth record.

Mr. Straffon said the Clinic has done big-picture consulting in the electronic medicalrecord realm for other health systems, butthis is the first time it will put its own peopleon the ground to help with an installation.— Timothy Magaw

Pay is looking up for interns■ Rejoice, budding young professionals —Northeast Ohio employers appear to be giv-ing their interns a pay bump in 2013.

The average pay rate for an internship in2013 hovers at $13.27 an hour, up from$12.30 in 2012, according to a recent surveyproduced by the Employers Resource Coun-cil, a human resources service organizationin Mayfield Village, and the Northeast OhioCouncil on Higher Education.

Pay had remained stable from 2011 to2012.

In addition, 85% of organizations with anexisting internship program that respondedto the survey said they plan to maintain orincrease the size of their internship pro-grams in 2013. That’s up slightly from 83%in last year’s survey and 77% in 2011.

Engineering interns, according to the sur-vey, are poised to be the highest paid in2013, with an average hourly rate of $15.51.Internships in the nonprofit and human ser-vices sector weren’t as lucrative, with wagesaveraging $9.21 an hour.

ERC and NOCHE first launched the sur-vey in 2009.

It so happens Crain’s is offering an extended internship to a promisingbusiness journalist. Ifinterested, contacteditor Mark Dodosh at [email protected].

Did we mention it’s paid?— Timothy Magaw

WHAT’S NEW

COMPANY: Buyers Products,ClevelandPRODUCT: Smooth Aluminum BarnDoor Toolboxes

Buyers Products, a maker of products formobile equipment, says its new toolboxescome in both smooth and polished diamond-tread aluminum and feature significant de-sign improvements.

For instance, the toolboxes now have a fullperimeter D-bulb seal that protects againstleaks. The underbody boxes that are 18, 24and 30 inches wide have a single, left-swingdoor with a single point latch, the companysays. Models that are 36 inches or widerhave double barn doors and feature full ac-cess openings with no center post.

A locking three-point, T-handle compres-sion latch with low-friction roller also providessecure storage, according to Brian Smith,marketing manager at Buyers Products.

The toolboxes boast TIG-welded cornersfor optimum finish. They’re available in 0.1-inch thick, polished diamond tread aluminumor 0.125-inch thick smooth aluminum. Over-sized 1/4-inch pins with 1-inch knuckle alu-minum hinges are bolted and riveted for easyservice, the company says.

Visit www.BuyersProducts.com for infor-mation.

Send information about new products tomanaging editor Scott Suttell [email protected].

REPORTERS’ NOTEBOOKBEHIND THE NEWS WITH CRAIN’S WRITERS

THEINSIDER

THEWEEK APRIL 29 - MAY 5

The big story: Gov. John Kasich isn’t letting ahuge defeat in court suffered by the Ohio Bureauof Workers’ Compensation stop him fromproposing a $1 billion rebate of workers’ comppremiums to public and private employers thatpay into the system. Under Gov. Kasich’s propos-al, about 210,000 employers would receive rebatechecks; the rebates would be equal to about 56%of employers’ most recent annual premiums. Thegovernor put forth the rebate proposal despite aMarch 20 ruling by Cuyahoga County CommonPleas Judge Richard McMonagle that a group ofmore than 270,000 Ohio employers that are partof a class-action lawsuit are entitled to $859 mil-lion in premium overpayments.

Community-minded: Lev Gonick wasnamed the new CEO of OneCommunity, a non-profit broadband provider he helped start adecade ago. Dr. Gonick will leave his current position as vice president of information tech-nology and chief information officer at CaseWestern Reserve University. At OneCommunity,he replaces Scot Rourke, who stepped down toreturn to the private sector.

Time for a change: With another money-losing quarter in the books, Diebold Inc.announced what it termed “a multiyear globalrealignment plan” involving near- and long-term actions aimed at reducing its cost structureby $100 million to $150 million. The maker of automated teller machines, bank security equip-ment and electronic voting machines said it expects to reinvest part of the savings “in research, development and the systems and infrastructure necessary to drive long-termgrowth and execute on electronic security and financial self-service strategies.”

Meeting of the minds: Lorain County Com-munity College and Austen BioInnovation Institute in Akron formed a partnership that thegroups suggest will accelerate the commercial-ization of medical technologies. Together, theorganizations will expand access to capital tomove medical discoveries to market by explor-ing the creation of a pre-seed fund, which wouldbe built on the success of LCCC’s InnovationFund, which gives startups grants. The fundwould provide money to qualifying technologiesdeveloped through the research and develop-ment work of the two organizations.

Lights out: Joseph Kaveski is out as CEO ofSolon-based Energy Focus Inc., a maker of ener-gy-efficient lighting products. The company saidMr. Kaveski stepped down as CEO and that direc-tors appointed James Tu — previously the nonex-ecutive chairman of the board — as executivechairman. Energy Focus’ board also appointedEric Hilliard as president, a role he assumes in ad-dition to his current job as chief operating officer.

No lighting up: Smokers need not apply for ajob at the MetroHealth System, as the taxpayer-subsidized health system is the latest employer inNortheast Ohio to pledge not to hire tobaccousers. The new policy doesn’t apply to currentemployees. External job applicants will need toconfirm they don’t use tobacco products whenapplying for jobs at MetroHealth. New hires willbe tested for tobacco use as part of the health sys-tem’s regular pre-employment health screenings.

Going public: John Carroll Universitylaunched the public phase of a $100 millionfundraising campaign, an aggressive push thatalready has brought in $57 million in cash andpledges to the private Jesuit university in Uni-versity Heights. The campaign, dubbed “Forev-er Carroll,” will support scholarships, acade-mics, campus upgrades and outreachopportunities that align with university’s Jesuitheritage.

Excerpts from recent blog entries onCrainsCleveland.com.

Keeping up with the Joneses■ It looks like the Mayo Clinic has a case ofCleveland Clinic/Johns Hopkins envy.

The Wall Street Journal reported that theMayo Clinic, in Rochester, Minn.,“has big plans to join other top-flight medical centers in an expensivefight for well-heeled patients,”but it faces a problem: Its sleepyhometown needs a facelift.

Mayo is proposing to invest $3 billion to $3.5 billion over 20 years totransform its big operation in Rochesterinto a “destination medical center.” But theclinic “thinks Rochester needs some majorupgrading as well,” and Mayo officials“want Minnesota taxpayers to kick in $585million to revamp the city’s infrastructureover 20 years to make Rochester more attractive for development.”

The story noted that Johns Hopkins Hos-pital in Baltimore last year opened a $1.1 bil-lion building partly financed by the presidentof the United Arab Emirates, Sheikh Khalifabin Zayed al Nahyan and New York MayorMichael Bloomberg. The Cleveland Clinic“has spent $712 million on expansion since2011,” and the new facilities have helped at-tract patients from across the world, a Clinicspokeswoman told The Journal.

Make the most of these delays

■ Cleveland Hopkins International Airportwon a little praise in a MarketWatch.comfeature about airports that do a good jobhelping flyers pass the time during flight delays. In a section on fitness, the websitehas this to say:

“Work out the frustration of a delayedflight with a turn at the speed bag or asoothing asana. San Francisco International


BEST OF THE BLOGSand Dallas–Fort Worth International areamong the airports offering free yoga classes,while Minneapolis-St. Paul Internationaland Cleveland Hopkins International offerwalking paths,” according to the story.

“Others, including O’Hare Internationalin Chicago and Detroit Metropolitan WayneCounty, offer day passes to the fitness facil-ities at on-site

airports (aHilton and

Westin, respectively) for

under $20,” Market-Watch.com said.Features at other

airports includeaquariums, casinos, nap rooms and movietheaters.

Gitmo gets more complicated■ Carlos Warner, a federal public defenderin Cleveland, was quoted in a recent Reutersstory about an escalating hunger strike byprisoners at the Guantanamo Bay prisoncamp.

“The U.S. military counted 84 of the 166prisoners as hunger strikers on Monday andwas force-feeding 16 of them liquid mealsthrough tubes inserted in their noses anddown into their stomachs,” Reuters reported.They are protesting their open-ended detention at Guantanamo.

“It’s escalated because the men are des-perate and they’ve hit a breaking point,”said Mr. Warner, who is part of a team rep-resenting 11 Guantanamo prisoners.

“Really what is behind all this is the pres-ident abandoned his promise to closeGuantanamo,” Mr. Warner said. “The menknow that. They’re desperate.”

More than half of Guantanamo’s prison-ers have been cleared for release, Reuterssaid, but Congress has put stringent restric-tions on transfers.


The bar raises again.The all new 2014 Mercedes-Benz E350.

$619All New Redesigned 2014Mercedes-Benz E350 4MATIC® Sedan

©2013 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of all traffic laws at all times. Vehicle shown includes optional equipment available at additional cost.

Prepare for sunshine’s long-awaited return.

Lease a new Boxster for $599/month.

*Financing or leasing through Mercedes-Benz Financial is subject to tier one credit approval. 2014 E350 – 36 months, 10,000 miles per year. 25¢ per mile thereafter. $4,464 due at signing (1st payment $619, acq.fee $795 and down payment $3,050). $250 doc fee, tax and title additional. $54,400 MSRP. No security deposit. In-stock units only or while supplies last. Lease offer expires 5/31/13. Available to qualified customers only. © Mercedes-Benz USA, LLC. †Based on MBUSA YTD regional sales results 3/31/13.

Porsche of North OlmstedA Part of Collection Auto Group 28400 Lorain Road, North Olmsted, Ohio 44070

855-218-1288 Open 24/7 at: www.clevelandporsche.com #1 PORSCHE DEALER IN OHIOFollow us on for additional specials and offers

Mercedes-Benz of North Olmsted is a part of The Collection Auto Group

28450 Lorain Road

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The #1 Volume Mercedes-Benz Dealer in the Central U.S.†

www.mbohio.com28450 Lorain Road 888-450-8064

Mercedes-Benz of North Olmsted

$599 per month for 24 months at 5,000 miles per year, .30¢ per mile after 10,000 miles, $1,494 due at signing (First payment $599, acq. fee $895 and $0 cash down). Tax, title and doc fee additional. Payment or upfront fees do not include sales or county tax. Financing is subject to credit approval. Stock# PD114520. MSRP $55,300. Security deposit waived. Offer good through 5/31/13.

Fleet and Military Offers Available.†

†Available for qualified customers only.

Per month lease for 36 months.

$4,464 due at signing*

(includes $795 acq. fee,

$619 first payment and

$3,050 down payment)

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$1,494 due at signing


BMW Cleveland

The UltimateDriving Machine®BMWCleveland.com

440-542-0600

6135 Kruse Dr. • Solon • (440) 542-0600 • www.DavisAutomotive.com

Lease financing available on 2013 BMW X1 xDrive28i vehicles, at BMW Cleveland on leases assigned to BMW Financial Services NA, LLC/Financial Services Vehicle Trust through May 15, 2013. Loyalty Cash is a $750 credit against the MSRP of the loanor lease on a X1 xDrive28i through May 15, 2013. $750 Loyalty Cash available for returning BMW customers only. Total due at signing $3,658.00 includes monthly lease payments of $359.00 for 36 months, $2,500 down payment, $799 acquisition fee.Based on MSRP of $38,395.00. Excludes tax, title, license and registration fees. Program available to qualified customers and not everyone will qualify. Subject to credit approval At lease end, lessee will be liable for disposition fee ($350.00), any excesswear and use as set forth in the lease agreement and excess mileage charges of $0.20 per mile for miles driven in excess of 30,000 miles. Purchase option at lease end for $22,653.00 excludes taxes.

Say hello to the efficient side of the X1.

It's easy to embrace your green side withfuel-saving technologies like Brake Ener-gy Regeneration, Auto Start-Stop andECO Pro mode. And the best part?

You get great fuel economy without eversacrificing performance.

LeaseFrom:

$359 mo. /36 mo. lease*

BMW Cleveland6135 Kruse Dr. • Solon • 1-866-210-6710www.BMWCleveland.com

The BMW X1 xDrive28i.Sporty. Sophisticated. Eco-Savvy.

240 horsepower, 2.0-liter, TwinPower Turbo, inline 4-cylinder engine, xDrive, intelligent all-wheel drive.

Lease an All New XF AWD starting at599 x 36 months with 2990 down or4235 total out of pocket.

C L E V E L A N D6137 KRUSE DR., SOLON

(440) 542-0601www.jaguarcleveland.com

* 42 month lease/10,000 miles per year. $2,995 down plus bank fee, plates, doc and applicablesales tax. MSRP $59,645 $4,719 cash or trade due at delivery plus tax. With tier 1 credit thruJaguar Financial Services. Good until 5/31/13.

Lease on All New XF AWD starting at599 x 42 months with 2,995 down or4,719 total out of pocket.

RANGE ROVER SPORT

LEAD THE WAYALTHOUGH OTHERS MAYHAVE TROUBLE FOLLOWING.

LLAANNDD RROOVVEERR SSOOLLOONN6137 KRUSE DR., SOLON • 1-866-210-6707wwwwww..llaannddrroovveerrssoolloonn..ccoomm

$$669999 PER MONTH FOR 48 MONTH LEASE*

$3,120 PLUS TAXES, TITLE, LICENSE AND FEESDUE AT SIGNING AND $0 SECURITY DEPOSIT.

* Lease rates shown for Range Rover Sport Sport to qualified buyers through US Bank. $1,995 down plus bank fee, doc fee, license fees and tax. Total due at delivery $3,120plus local taxes. Actual rates and terms may vary. All amounts shown are estimates, retailer sets actual amounts. Lessee responsible for insurance, maintenance, excesswear and excess mileage over 40,000 miles at $0.30 /mile. Based on MSRP of $63,145 (including destination and delivery). Lessee has the option to purchase vehicle at leaseend at price negotiated with retailer at signing. For special lease terms, take new vehicle delivery from retailer stock by 5/31/13. Termination fee may apply. See your LandRover Retailer or call 1-800-FIND-4WD for qualifications and complete details. ©2013 Jaguar Land Rover North America, LLC.


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