Appetite for industrial real estate returns

36 Pages·2012·7.06 MB·English

20120514-NEWS--1-NAT-CCI-CL_-- 5/11/2012 3:18 PM Page 1
$2.00/MAY14 - 20, 2012
Appetite for
industrial real
estate returns
Rebound in steel and auto, reshoring efforts
have property owners again in driver’s seat
By STAN BULLARD at the Cresco real estate brokerage
[email protected] in Independence, said he has been
astounded by the number of times
Unlike most people in the real he has callers ask about a building
estate business, Terry Coyne wishes, that was sold or leased recently, es-
in at least two respects, that he could pecially if it just went off the market.
go back a few years to the Great Although Northeast Ohio’s
Recession. industrial real estate market in the
The Newmark Grubb Knight last few years has taken some big
JASONMILLERPHOTOS Frank executive managing director hits, such as closed auto plants in
Dr. J. Eric Jelovsek, medical director of the Multidisciplinary Simulation Center at the Cleveland Clinic, says its “patient recalls industrial buildings he sold Twinsburg and Lorain, it generally
simulators”—seen below and in the background above —are intended to “re-create the cockpit of the aircraft.” at bargain prices a few years ago has bounced back — and quickly —
and would like to have that inventory to the point where industrial space
SMARTER BY now — as well as the ability to sell is becoming tight in a number of
them at higher prices. cities.
“If you have a crane building, I The rebound is due to a combi-
can sell it in the blink of an eye,” Mr. nation of factors. The steel and
SIMULATION Coyne said, referring to factories auto industries are humming again.
that offer large cranes on their ceilings Activity by industrial property users
to move products and equipment has picked up as manufacturers
from one end to the other. bring work home from foreign markets,
Clinic expands lab that uses human-like Likewise, Bob Garber, a principal See INDUSTRIALPage 32
dummies to train staff in real situations
ON THE WEB
Tour the casino!
By TIMOTHY MAGAW than an average home in the Cleve-
[email protected] land area — are part of a multimil- Come along on a tour with Crain’svideo
lion-dollar investment by the Cleve- editor Steve Bennett of Horseshoe Casino
They pee, bleed, cough, land Clinic to better train clinical Cleveland, which opens to the public at
convulse and even scream personnel without the risk of, well, 9:30 tonight. Visit www.Crains
out in agonizing pain, but killing someone. Cleveland.com/casino for the tour.
they’re no dummies. The health system recently opened For more casino views, turn to Page 10 for
OK, maybe they are. 10,000 square feet of space so it can photos of the interior of the new space in the
These rubbery humanoids — or create a slate of medical scenarios — old Higbee’s department store.
“patient simulators” that cost more See DUMMIESPage 8
As electric deregulation takes effect, FirstEnergy, AEP drop gloves
With monopolies out, powers take to other’s back yard to win business business and residential customers the airwaves with a television ad
in the state. that portrayed itself as a pony-tailed
That was when they had monopoly little girl quietly running a 5-cent
By JAY MILLER Power Co. of Columbus and Akron- The two companies, along with territories and had no reason to lemonade stand until an ominous
[email protected] based FirstEnergy Corp. are engaged Dayton Power & Light and Duke fight among themselves. man in a business suit — called the
in a very adult fight over millions — Energy, long have been lumped to- Now, however, deregulation is “infamous middleman” in the
Two of Ohio’s most powerful perhaps billions — of dollars. Each gether as Statehouse powerhouses, taking hold in Ohio, and the power voiceover — comes by, buys her
companies have taken to fighting each wants to come out on top in the able to bend the General Assembly companies are invading each other’s whole pitcher of lemonade and
other like children. At least that’s what battle to sell power to the state’s and the Public Utilities Commission territories and challenging each opens up shop across the street selling
it looks like in the television ads. commercial, industrial and resi- of Ohio to their will when it comes other’s rate plans before the PUCO. lemonade for 25 cents a glass.
But in reality, American Electric dential electric customers. to setting the price of electricity for In mid-April, AEP took the fight to See ENERGYPage 6
0 SPECIAL SECTION
2
7
1 ER Crain’sidentifies and
8 P
37 PA profiles some of the
8 S
0 W region’s top health
47 NE care professionals ■■ Entire contents ©2012
74 by Crain Communications Inc.
Pages H1-H11
Vol. 33, No. 20
0
20120514-NEWS--2-NAT-CCI-CL_-- 5/11/2012 4:11 PM Page 1
20120514-NEWS--3-NAT-CCI-CL_-- 5/11/2012 3:18 PM Page 1
MAY14 - 20, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3
INSIGHT
Shareholder say on exec pay weighs heavy
Compensation votes non-binding, but have consequences if they fail INSIDE:Data from a recent report that lose these things.”
show mostly high approval rates from Required by the Dodd-Frank Wall
shareholders. Page 9 Street Reform and Consumer Protec-
By MICHELLE PARK Born of recent financial reform, cast 47.2 million votes against First- tion Act, the say-on-pay votes take
[email protected] the so-called “say-on-pay” rules Merit Corp.’s compensation plan place every year, two years or three
require public companies to ask their compared to 41.2 million for it. a securities and capital markets part- years. Most companies’ shareholders
It’s a vote most companies only shareholders to vote on compensa- That outcome doesn’t mean the ner at Cleveland law firm Calfee, chose to vote annually.
began holding last proxy season, tion packages for their top five Akron-based bank can’t pay its top Halter & Griswold LLP. Prior to the change, companies
yet its impact is clear, both in the executives. executives what it explained it would “It’s hugely important to compa- needed shareholder approval for
pay perks companies are eliminating In this, the second year of the rules, pay them; say-on-pay votes are nies,” said Mr. Jenkins, who advises certain elements of compensation
and the lengths to which they’re a Northeast Ohio company has non-binding. local public companies on say- packages, but not the packages in
going to explain why they pay their become one of the few to suffer a Still, the votes do put pressure on on-pay. “It’s ‘non-binding,’ but there
executives what they do. no vote: This spring, shareholders public companies, said John Jenkins, are real consequences for companies See SAYPage 9
Food service supplier’s
expansion depends on
last of Clean Ohio funds
Without grant, S.S. Kemp likely will move
By JAY MILLER economic development programs,
[email protected] is expected to create a brownfield
revitalization program in the next
The expansion of a Cuyahoga fiscal year, which begins July 1, but it
Heights food service supply operation doesn’t yet have its financing in place.
is hung up in the complex world of “It’s not looking good right now,”
economic development. said Mark Fishman, president of the
TriMark S.S. Kemp aims to invest 86-year-old S.S. Kemp. He said his
$3.5 million to expand its office and project is competing against several
warehouse at 4567 Willow Parkway. worthy projects for the state brown-
But S.S. Kemp first must compete field money.
for $1.4 million in state grant money If S.S. Kemp does win the grant, it
that would help its developer afford has pledged to add 41 jobs with an
to clean up environmental problems average wage of at least $15.40 an hour.
on a 3.1-acre property that is next to Today, the company employs 133.
its current operation. It’s awaiting a If this project doesn’t receive the
RUGGEROFATICAPHOTOS decision by the Clean Ohio Council, brownfield money, “We’re going to
ABOVE:Jim Dixon rides his bike to work at Frantz Ward from Shaker Heights, using the new Bike Rack facility on East Fourth which is scheduled to meet this have to move; the only question is,
Street to store his ride and shower. BELOW:Dan Menningen works on a Cleveland Police Department bike at the Bike Rack. Friday, May 18, to decide which where would we move to, and I
projects to fund. can’t honestly say right now,” Mr.
Friday’s round of grants would be Fishman said. “We’ve looked at
BIKE BACKERS
the last round of Clean Ohio grants Glenwillow and in other nearby
under existing law governing the counties, or we could consolidate
program. JobsOhio, the nonprofit (with another company operation)
GET A BOOST development organization that is in Pittsburgh.”
taking over many of the state’s See GRANTPage 31
THE WEEK IN QUOTES
Downtown storage facility, city’s cyclist-friendly rules ease access
“The point of this “You throw something
scenario is to let against the wall and
By GINGER CHRIST
[email protected] people get over that see what happens.”
stress.This guy can’t — Nathan Forbes, a principal in
J
im Dixon, an attorney at Rock Gaming LLC, majority
get hurt when you’re
partner in the Horseshoe Casino
Frantz Ward, regularly
sticking tubes down Cleveland. Page 10
trades in his Bostonian
his throat.”
wingtips for a pair of Chuck
Taylor sneakers. — Dr. J. Eric Jelovsek, medical
director of the Multidisciplinary
Mr. Dixon, who works in Key
Simulation Center at the
Tower, commutes daily to down- Cleveland Clinic. Page One
town Cleveland from Shaker
Heights by bike — a 35-minute “In my circle,women “What touches my
endeavor that gives him both exer- country, Cleveland had the largest enjoy craft beer as heart is how deeply
cise and extra cash in his pocket. increase in cycling commuters —
much as vodka or committed Jack is,
Mr. Dixon is one of roughly 1,200 280% — in the past decade, according
wine.” and how willing he is
Cleveland workers, or 0.8% of the to the League of American Bicyclists.
— Marissa DeSantis, Ohio to rearrange his own
work force, who opt for a two- Local riders attribute the rise in
chapter of Girls’ Pint Out.
life to accommodate a
wheeled ride to and from their jobs cyclists to efforts made by the city Page 15
over a four-wheeled drive, according and cycling advocates to encourage patient need.”
to the U.S. Census Bureau’s 2010 cycling. — Health Care Hero nomination
for Jack Kochis, volunteer,
American Community Survey. Those efforts include the Cleveland
Hospice of the Western Reserve.
Of the 70 largest metros in the See BIKINGPage 13 Page H-8
20120514-NEWS--4-NAT-CCI-CL_-- 5/11/2012 10:32 AM Page 1
44 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY14 - 20, 2012
PUBLISHER/EDITORIAL DIRECTOR:
Brian D.Tucker ([email protected])
EDITOR:
Mark Dodosh ([email protected])
MANAGING EDITOR:
Scott Suttell ([email protected])
OPINION
Fresh face
D
avid Gilbert has been the bright, energetic
leader of the Greater Cleveland Sports
Commission for more than a decade. Now
the fresh set of eyes he’s bringing to Posi-
tively Cleveland — the city’s convention and visitors
bureau — should begin to pay off for the travel and
tourism trade in Cleveland and Northeast Ohio.
Mr. Gilbert was named president and CEO of
Positively Cleveland in January 2011, adding those
FROM THE PUBLISHER
duties to his role as head of the sports commission,
which has had great success at attracting amateur
Yet another defeat for political reason
sports events to the region. He judiciously has used
the last 16 months to assess where Positively Cleve-
land was, where it should be going and how to take
it there.
I
am distressed by the defeat of Sen. I recall years ago sitting in a meeting tant. Usually it means the liberal wing of
In a recent meeting withCrain’seditorial board,
Richard Lugar of Indiana. room at a summer business newspaper the Democrats and the conservative wing
Mr. Gilbert said what he found was an organization
Why, you might ask, would a conference in Indianapolis. Sen. Lugar of the GOP. Neither group seems inter-
that was reactive in nature. “There were a lot of
business newspaper publisher from was one of the speakers, and he kept his ested in compromise or bipartisanship
tasks but not a lot of strategy,” Mr. Gilbert said. Ohio care about an 80-year-old politician audience engaged and captivated with for the greater good of the country.
He also discovered a body in need of a spark. So, from the adjacent Hoosier state? Well, his vast knowledge of military issues and It seems to me that our political
he injected new blood into its organizational the answer is complex, and I hope resonates foreign policy. As one of his colleagues in leaders care only about the politics of
structure. Of people in the nine top management with others as well. the Senate said last week after Sen. Lugar getting there, not the hard work of doing
positions at the convention bureau, six have been in Simply put, I am worried lost a primary battle against a something once they’re there. Once
their jobs for 16 months or less. about the state of our politics in BRIAN Tea Party candidate, “When you “they’re there,” it’s about even more
America. Those of you who are TUCKER travel abroad with Dick Lugar politics, as they jockey to see who can
The result of the changes? “The entire energy of the
regular readers of this column and you meet with top officials block the most ideas from the other side.
organization has been ratcheted up tremendously,”
already know that I fret regularly of foreign governments, they So Dick Lugar joins Chris Dodd, Russ
Mr. Gilbert said.
about the fringe elements that turn to you and say, ‘Who are Feingold, Olympia Snowe and other
The new boss also has helped bring about a
seem to be hijacking both of our you again?’” veteran members of the Senate who have
change in focus at Positively Cleveland, including major political parties. The Tea Party types railed been either defeated or just simply grew
among the people who work for it. It’s why Olympia Snowe is against him for not being con- weary of the gamesmanship that rulesin
“Anyone would have said we’re a marketing orga- calling it quits after a distinguished servative enough, which means Washington. Our own George Voinovich,
nization,” Mr. Gilbert said. But that was too narrow Senate career. It’s why Steve they hate that Sen. Lugar’s will- a moderate who never allowed himself
a view in Mr. Gilbert’s mind. LaTourette constantly worries ingness to compromise helped to be bullied by extremists on either side
“We’re an economic development organization,” about his standing as a reasonable forge real legislative accomplishment). of the aisle, said he was glad to be rid
Republican who can work across the aisle The victor, state Treasurer RichardMour- of the games as he retired after a long,
he said, one that should be building a strong travel
(something necessary, given the strong dock, claimed his opponentwas “discon- distinguished career.
and tourism industry that can produce new jobs
labor tradition in parts of his district). nected” from the Republican base. That thinking isn’t relegated to the
and tax revenue.
And it’s why John Boehner has fits as he I shudder when I hear candidates and nation’s capital. It roils around Colum-
“It goes far beyond a marketing campaign,” Mr.
tries to keep his GOP brethren in the fold strategists start talking about their bus and other statehouses as well. It’s
Gilbert said. while the radically conservative Tea party’s “base” because it usually means just sad that the lives of the many are so
Now Mr. Gilbert is prepared to build on this Party types keep rattling his cage. whatever group they feel is more impor- mucked up by the games of the few. ■
foundation, as he outlined last week in presenting a
five-year strategic plan for Positively Cleveland.
THE BIG ISSUE
In putting the together the plan, Mr. Gilbert
wisely is drawing on what has worked at the sports
commission. Pointing to the casino, the new convention center and a few other factors, some people say downtown Cleveland is
For example, Mr. Gilbert wants Positively Cleveland undergoing a renaissance. Do you believe that?
to make it easy for groups to stage their gatherings
here by serving as a provider of what he termed
“best-in-class” meeting and convention services.
People in amateur sports who deal with the sports
commission “know what our organization has the
ability to do” when it comes to hosting events, and he
wants that same reputation for Positively Cleveland.
Mr. Gilbert said Positively Cleveland also will
explore owning and operating some of its own
meetings and conferences, just as the sports com-
BYRON D. VAN IDEN JIM BARES TRACY FOSTER LEO ZLOBINSKY
mission has staged its own events, most notably the
Continental Cup youth sports festival. In that way, Vermillion Broadview Heights Medina Mentor
the convention bureau could generate revenue that Yes. There seems to be a lot I believe that there is an Yeah, I think it’s good. It’s Yes. … Somebody is going to
it could put back into marketing the region. of new business activity moving energy and I think a little bit of growing. My boyfriend works visit the casino, somebody is
With the opening of Cleveland’s Medical Mart & downtown. … I’ve read that excitement downtown. … I was at the convention center going to have conventions. I
apartments are pretty much full. just at the aquarium last week. (construction). It’s brought a lot work for (Greater Cleveland
Convention Center a year away, the fresh face Mr.
… And I like the way the (Down- It was terrific. of jobs. ... We’re moving in the Regional Transit Authority).We
Gilbert is giving Positively Cleveland is positively
town) Cleveland Alliance is right direction. expect more passengers.
opportune. And we’re positively optimistic about
keeping things neat and clean.
the results that should come from its efforts.
➤➤➤➤Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
20120514-NEWS--5-NAT-CCI-CL_-- 5/11/2012 10:33 AM Page 1
MAY14 - 20, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5
LETTER
Proper health habits should be taught early on
700 W. St. Clair Ave., Suite 310,
Cleveland, OH 44113-1230
■I was pleasantly surprised to read these identified diseases — many care is not the answer. Just consider disease, meaning we cannot afford Phone: [phone]
the May 7, Best of the Blogs item, related to lifestyles — account for the U.S. Postal Service, losing money approaching anything close to the Fax: [phone]
www.crainscleveland.com
“The nation comes around to Toby 70% or 80% of health care issues in and for years letting opportunity for social programs in Greece.
Cosgrove’s way of thinking.” the U.S.?” He acknowledged I was customer service escape it. So what We shouldheed the handwriting Publisher/editorial director:
I am not a physician, just an reasonably close. evolved? Federal Express, overnight on the wall. Brian D. Tucker ([email protected])
average American observing the So, to me, the answer is simple: letters and so forth. Editor:
Mark Dodosh ([email protected])
health issues in our country. I took Educate our population beginning How should the Postal Service Michael Pappas
Managing editor:
a step back, especially before the with our children, not merely by balance its budget? Maybe cut back Kirtland
Scott Suttell ([email protected])
health care legislation was passed, giving them a health class, but by service? Eliminate Saturday deliver- Sections editor:
and thought about the health issues continuously educating from first ies? Maybe deliver every other day? Amy Ann Stoessel ([email protected])
affecting the United States. I iden- grade forward; then, encourage Let’s just consider what is WRITE TO US Assistant editor:
Joel Hammond ([email protected])
tified the following: heart disease, changes in behavior. As with life happening in Greece — too much Send your letters to: Mark Dodosh,
Sports
stroke, type II diabetes, obesity, insurance, those who make poor government-provided payroll and editor, Crain’s Cleveland Business, Senior reporter:
cancer and arthritis (joint replace- lifestyle choices should pay more social programs. The end result? 700 W. St. Clair Ave., Suite 310, Stan Bullard ([email protected])
ments), which I discussed with a for health insurance. Social unrest. Cleveland, OH 44113-1230 Real estate and construction
physician and inquired of him, “Do Government control of health The cure is more painful than the e-mail: [email protected] Reporters:
Jay Miller ([email protected])
Government
Chuck Soder ([email protected])
Technology
Dan Shingler ([email protected])
Energy, steel and automotive
Tim Magaw ([email protected])
Health care andeducation
Michelle Park ([email protected])
Finance
Ginger Christ ([email protected])
Manufacturing, marketing and retailing
Research editor:
Deborah W. Hillyer ([email protected])
Cartoonist/illustrator: Rich Williams
Marketing director:
Lori Grim ([email protected])
Marketing/Events manager:
Christian Hendricks ([email protected])
Marketing/Events coordinator:
Jessica Snyder ([email protected])
Advertising sales manager:
Nicole Mastrangelo ([email protected])
Senior account executive:
Adam Mandell ([email protected])
Account executives:
Dawn Donegan ([email protected])
Andy Hollander ([email protected])
Lindsey Nordloh ([email protected])
Office coordinator:
Toni Coleman ([email protected])
Digital strategy and development
manager:
Stephen Herron ([email protected])
Web/Print production director:
Craig L. Mackey ([email protected])
Production assistant/video editor:
Steven Bennett ([email protected])
Graphic designer:
Lauren M. Rafferty ([email protected])
Billing:
Susan Jaranowski, 313-446-6024
([email protected])
Credit:
Todd Masura, 313-446-6097
([email protected])
Audience development manager:
Erin Miller ([email protected])
Crain Communications Inc.
Keith E. Crain: Chairman
We look up to our Rance Crain:President
Merrilee Crain: Secretary
Mary Kay Crain:Treasurer
customers because William A. Morrow:
Executive vice president/operations
Brian D. Tucker: Vice president
mutual respect is
Robert C. Adams:
Group vice president
technology, circulation, manufacturing
a must in any
Paul Dalpiaz: Chief Information Officer
Dave Kamis:
banking relationship. Vice president/production &manufacturing
G.D. Crain Jr.
Founder (1885-1973)
Mrs. G.D. Crain Jr.
You’re the engine of our country’s economy and we believe in Chairman (1911-1996)
treating you that way. Starting with the relationship. That’s why
Subscriptions: In Ohio: 1 year - $64, 2 year - $110.
we offer you a team of specialists right here in your community
Outside Ohio: 1 year - $110, 2 year - $195. Single copy,
who advocate for your financial future and support your business $2.00. Allow 4 weeks for change of address. For
any way we can. You’re a big deal. It’s about time you had a bank subscription information and delivery concerns send
correspondence to Audience Development Department,
that sees you that way. Crain’s Cleveland Business, 1155 Gratiot Avenue,
Detroit, Michigan, 48207-2912, or email to custom-
[email protected], or call 877-812-1588
(in the U.S. and Canada) or [phone] (all other
Visit key.com/bigdeal to learn how we’ll make you a priority. locations), or fax [phone].
Reprints: Call 1-800-290-5460 Ext. 125
Audit Bureau
of Circulation
Banking products and services are offered by KeyBank N.A. Member FDIC and Equal Housing Lender.
20120514-NEWS--6-NAT-CCI-CL_-- 5/11/2012 3:19 PM Page 1
66 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY14 - 20, 2012
Energy: AEP tactics panned AEP argues that the higher charge
accurately reflects its cost — the tra-
ditional argument regulated utilities
would make before the PUCO.
continued from PAGE1 school children. AEP president and CEO Nicholas
This middleman, the voiceover “AEP wants to restrict competition Akins told securities analysts on the
continues, “holds a lot of power, and hide behind ridiculous claims company’s first-quarter conference
pushing a scheme on a government about fair energy and jobs to force call April 24 that it was asking “for
agency to keep their costs down. First- electric prices up and guarantee its what other utilities in Ohio have
Energy Solutions and other suppliers revenue,” the voiceover intones. been previously granted, a fair and
buy electricity at rates that aren’t The two firms also have set up reasonable transition to competition
fair and turn around and resell it for websites to argue their cases. First- that maintains the ability for com-
a profit. And if it continues, it could Energy’s is www.forelectricsavings petitors to compete, but maintains
destroy thousands of Ohio jobs.” .com; AEP’s is www.fairenergyohio.org. the financial integrity of AEP.”
A few days later, FirstEnergy shot FirstEnergy president and CEO
Divergent views on dereg
back with its own ads. One, set in a Anthony Alexander countered a
school gym, shows two men squaring To thwart FirstEnergy, AEP has week later, on May 1, on his company’s
off, each with a red dodgeball in his argued before the PUCO that it should own analyst conference call.
hands. One wears a T-shirt with be allowed to charge power sellers “AEP wants to restrict shopping in
FirstEnergy’s logo on it; the other who want to provide power to cus- its territory by imposing above-market
wears an AEP T-shirt. When the tomers in Central Ohio a capacity capacity charges on competitive sup-
referee blows the whistle to start the charge several times higher than the pliers,” Mr. Alexander told the analysts.
contest, the AEP player runs and price that FirstEnergy and other “These charges would severely limit
hides behind a row of elementary utilities in the region charge. the savings customers in the AEP
territory … would otherwise achieve
from competitive markets and, in
fact, amounts to a windfall for AEP.”
Calling it for one side
Observers watching these giants
battle are siding with FirstEnergy.
Sam Randazzo, a Columbus attorney
who represents Industrial Energy
Users-Ohio, an association of indus-
trial power users, said his organiza-
tion has fought for years to open the
Get the negotiation electric market to competition. He
said AEP was so profitable in the early
2000s that it didn’t hurry to move to
tactics your business
a market system, and now it’s trying
to have it both ways. It wants the
high capacity charge to keep com-
needs to succeed.
petitors out of Central Ohio while it
takes advantage of the low capacity
charge its competitors impose to
invade the rest of the state.
Mr. Randazzo said he also believes
the PUCO has gone along with AEP for
too long. AEP has threatened to move
its headquarters out of Columbus,
and out of state, if it loses this battle.
“For the folks who have been
battling this for some time, we’ve
said this is illegal,” he said of AEP’s
effort to get the PUCO to OK its
high capacity charge so it doesn’t lose
business. “Our view is, that’s what
happens in competitive markets.”
Likewise, David Rinebolt, executive
director of Findlay-based Ohio Part-
ners for Affordable Energy, criticized
AEP for moving slowly to a market
system because its Ohio operation
was very profitable. His organization
represents 60 nonprofit organiza-
tions that help low-income house-
holds reduce their energy costs.
“FirstEnergy made a decision a
decade ago that the future was in
competition,” he said. “But AEP is
going to resist (deregulation) for as
long as they can.”
A decade-plus of change
Until this century, electric utilities
“I was always afraid of pushing too hard when negotiating.
were complete monopolies in their
Now I stand firm to get the better deal.” territories, and they were required to
justify their prices before the PUCO.
— Angelica, Owner Colmex Construction, New Orleans, LA Ohio started down the path of utility
deregulation with legislation passed
by the General Assembly in 1999 that
Knowing when to stand your ground and when to budge can make a
was designed eventually to allow
good deal great. Our program with Cuyahoga Community College gives homeowners and businesses to buy
electric power — the electrons — on
you valuable skills for growing your business, the opportunity to access
the then-new open market for elec-
financial capital and more, at no cost to you. Just ask Angelica. tricity. The utilities would retain their
monopolies in the delivery of power

— the transmission lines and wires
Apply now at gs.com/10KSBCleveland
that carry the power from generating
plants to electric meters — and the
PUCO would continue to regulate
the price of that delivery.
Since 2001, Ohio — with some
stumbles and price freezes — has
moved slowly to this so-called market
system. FirstEnergy was the first of
the state’s four big electric utilities to
©2012 Goldman Sachs. All rights reserved. embrace deregulation. ■
20120514-NEWS--7-NAT-CCI-CL_-- 5/11/2012 4:13 PM Page 1
MAY14 - 20, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7
Women are driving force behind Cleveland Marathon’s growth
Race planners capitalize on rising interest from “Women often would say they don’t have a body for women.”
running. Well, Oprah didn’t.” Mr. Staph said that when the
female runners drawn to boom in half marathon Cleveland marathon’s merchandise
–Ryan Lamppa, media director, Running USA store was getting off the ground,
he’d see a lot of men enter and leave
By JOEL HAMMOND running.
without making a purchase. He
[email protected] According to executive Audain said in a telephone inter- women making up 59% — or about
then instructed his buyer to spruce
race director Jack Staph, view last week from her home in 950,000 — of total finishers.
up the colors and options for women.
The Rite Aid Cleveland women made up 38% of Evansville, Ind. Marketing, too, has played a role,
Since that change was made in 2003,
Marathon turns 35 this the participants in the 2003 Mr. Staph said.
Cross-country growth merchandise sales have doubled.
year, but race officials say event’s 10K and marathon; If you’re a live-TV watcher,
the growth of the event can last year, that number The local trends are reflected you’ve likely seen commercials Reasons aplenty
be traced in part five years jumped to 58%, or 10,614 of nationwide. featuring female runners in hip,
Ryan Lamppa, Running USA’s
further into the past. Staph the 18,300 participants. According to data from Santa colorful new running gear made by
media director, cited other factors
Congress aided the Race officials expect an in- Barbara, Calif.-based Running USA, Nike, Under Armour and others.
for the surge in female runners:
sport’s growth path when it passed crease to 19,000 participants this a nonprofit dedicated to advancing Those include a recent Nike
■The Race for the Cure, a breast-
the Education Amendments of weekend. running in America, women commercial, “I Will Run to You,” in
cancer-fighting event that started in
1972, which mandated equal access “It’s tied directly to Title IX,” Mr. accounted for 10% of the 143,000 which a woman starts on the West
1983 with 800 participants and has
for women to any “education Staph said. “Women could play participants in U.S. marathons in Coast and her boyfriend starts on
grown to 150 races and 3 million
program or activity receiving federal sports in college, so they’d develop 1980. In 1995, that number had the East Coast. In running parlance,
participants. “It exposed the sport to
financial assistance.” The legisla- a competitiveness there, leave jumped to 76,000, or 26% of the the latter “dies” along the way and
millions of women,” Mr. Lamppa said.
tion, known as Title IX, leveled the school, continue to work out, develop 293,000 who ran. ends up in a hospital, while the
playing field at colleges across the a career and say at 31 or 32, ‘Hey, I Last year, women made up 41%, former makes her destination — ■ Training programs that have
United States, providing a new still have this desire to compete.’” or 212,380 members, of the fields at a hospital bed occupied by her pre- eliminated excuses often offered by
avenue for females to get involved Ms. Audain said she came to the the nation’s 367 largest marathons sumed love interest. The message is novices who have said, “I don’t
in sports. United States from her home studied by the nonprofit. (The 720 clear: Women can do this. know where to begin.”
And it’s been a big factor in in New Zealand after the 1980 marathons staged across the U.S. “Now, no one has that excuse,”
Clothes make the marathon
running in Cleveland and nation- Moscow Olympics because she had also represented a new record.) Mr. Lamppa said.
wide. heard that there would be more Yet Title IX by no means is the The push by apparel makers ■ And Oprah Winfrey. Oprah?
Cleveland marathon officials are opportunities for women at longer only reason for the boom. Mr. appears to be working; according Mr. Lamppa cites the iconic talk-
incorporating Title IX and the distances. She went on to win more Staph said the half marathon has to Running USA’s just-released show host’s running of the 1994
growth in women’s running into U.S. road races, 75, than any other been a big driver, in part because Women’s National Runner Survey, Marine Corps Marathon in Wash-
this week’s events, as Joan Benoit runner in the 1980s, and in 1992 it’s less intense both in training and 65% of female survey respondents ington, D.C., as one of the sport’s
Samuelson — the winner of the first founded a women- and children’s- recovery. spent more than $90 on running best marketing tools.
women’s Olympic marathon, in Los only event in Boise, Idaho, that Cleveland first staged a half shoes last year, while 80% spent “It was international news; she
Angeles in 1984 — and Anne Audain, started with 2,400 participants and marathon in 2005, and female par- $100 or more on running apparel in did two shows on it,” Mr. Lamppa
a seven-time winner of the 10-kilo- grew to 17,000 at its peak. ticipation has grown from 875 that the last 12 months. said. “Women often would say they
meter race in Cleveland, each will “The greatest thing about the year to 4,728 in 2011. In a similar “In the past, there was a lot of don’t have a body for running. Well,
appear and speak at various functions. tremendous growth is that women fashion, the number of finishers in black, gray and brown” from apparel Oprah didn’t. Women would say
They’ll do so amid ever-increasing of all shapes and sizes have been half marathons nationwide grew companies, Mr. Staph said. “The they’re too busy. Who’s busier than
female participation in distance welcomed with open arms,” Ms. 16% last year over 2010, with changes have had a lot to do with Oprah?” ■
SOLUTIONS
W O R K E R S ’ C O M P E N S A T I O N
THAT ARE NO ACCIDENT
HMS offers solutions before there’s a problem, which is why we provide:
• Access to registered pharmacists for prescription review
• Aggressive pharmacy review to gain premium savings
• Timely delivery of all medical information for each claim
• Customized return-to-work plans
hmssolutions.com
So when you’ve got questions, remember, you can always count on HMS to find the answers. 2545 Farmers Drive, Suite 400
After all, we’re Health Management Solutions, and we have a name to live up to. Columbus, Ohio 43235
1901 Indian Wood Circle
For details, call Mike Pulsfort at 888-202-3515, Ext. 175, or Laurie Poston at Ext. 176. Maumee, Ohio 43537
Or visit hmssolutions.com.
© 2012 Paramount Preferred Options
20120514-NEWS--8-NAT-CCI-CL_-- 5/11/2012 3:17 PM Page 1
88 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY14 - 20, 2012
Dummies: Simulations allow for experience under less pressure
continued from PAGE1 care rooms, Dr. Jelovsek said the operating room, was supported by a into the issues of clinical care, quality eventually to open the simulation
ranging from the birth of a child to a majority of the learning occurs in gift from the Laryngeal Mask Co., a and education.” center to medical professionals
patient suffering from cardiac arrest the four debriefing rooms where medical airway device company Dr. Stoller and his team launched from outside the Clinic system as a
— all for the sake of hands-on learning. clinicians review what went right and, headquartered in Singapore. an aggressive marketing campaign continuing education resource. Dr.
“The rooms are designed to replicate more importantly, what went wrong “The point of this scenario is to within the Clinic to promote the use Stoller also expects Clinic re-
a number of environments in a hospital during the high-stress simulations. let people get over that stress,” said of the simulation center’s services searchers interested in the impact
setting,” said Dr. J. Eric Jelovsek, The simulation lab is outfitted Dr. Jelovsek, while demonstrating to the health system’s employees. of simulation on clinical care to
medical director of the Multidiscipli- with an audio/visual system that how to insert a breathing tube into The services aren’t just marketed to conduct research in the center and
nary Simulation Center at the Clinic. records the clinicians’ every move one of the dummies. “This guy can’t medical students or physicians, but report their findings in medical
“The idea is to re-create the cockpit during the scenarios, which then get hurt when you’re sticking tubes any Clinic staffers looking to touch journals and other outlets.
of the aircraft.” can be reviewed and accessed from down his throat.” up their patient-handling skills. “This has ripple effects beyond
The Clinic for years has dabbled in anywhere within the Clinic system. (Side note: This reporter took a stab Dr. Stoller expects the Clinic our organization,” he said. ■
medical simulation to train its staff. The idea is “not to just teach an at inserting a breathing tube into one
However, the expanded simulation individual how to take care of a of the high-tech dummies, but felt
center in the basement of Stanley patient, but how to teach a team to as if he caused considerable harm Big Chagrin Blvd. office
Shalom Zielony Plaza on the northwest do it,” Dr. Jelovsek said. to the “patient” as he jammed tubes
portion of the Clinic campus off Euclid During the simulations, a Clinic down its airway. No harm, no foul.)
Avenue represents a shift toward a employee controls the mannequin’s
Growth opportunities
“centralized team approach” that actions, speech and vital signs from building in foreclosure
brings together health care providers an enclosed area adjacent to the With the 10,000-square-foot expan-
from across the enterprise, said Dr. simulation room. While the scenario sion, the Cleveland Clinic now has
James Stoller, chairman of the Cleve- is scripted ahead of time, the teacher about 60,000 square feet dedicated
land Clinic’s Education Institute. leading the scenario can improvise to simulation activities, according By STAN BULLARD share stakes in the property.
“The building and equipment are depending on the trainees’ actions. to Dr. Stoller. For the first quarter of [email protected] Three calls to Rosemont Realty
very cool, but what I regard to be the For instance, if a defibrillator wasn’t this year — the months preceding and two calls and an email to CW-
coolest part is the multidisciplinary used correctly, the teacher can the center’s formal opening this Orangewood Place, one of the Capital Asset Management LLC of
nature of it all,” Dr. Stoller said. “In adjust the heart rhythms — and the month — roughly 1,200 people trained larger multitenant office buildings Bethesda, Md., which serves as a
contrast to some activities already trainees are forced to react. in one way or another in the facilities. along office-rich Chagrin Boulevard, so-called special servicer of the loan,
organized, this was built organically One of the simulation laboratories, “This is so critical to our mission,” has landed in a foreclosure pro- were not returned by Crain’sdead-
as a collaboration.” anchored by a donation from long- Dr. Stoller said. “This is a big under- ceeding in Cuyahoga County Com- line last Friday. A spokeswoman for
time Clinic benefactors Mort and taking, and there’s always a carefully monPleas Court. U.S. Bank referred calls to CWCapital
Behind the glass
Iris November, focuses on man- planned and thought-out strategic Court documents say the owner as the representative of bondholders
While the bulk of the action takes aging airways for pediatric patients. approach to make sure it’s important of the five-story building managed with interests in the loan.
place in the faux operating or critical Another lab, which resembles an to our mission. This is so ingrained by Rosemont Realty Corp. of Santa Although Orangewood Place at
Fe, N.M., have failed to make monthly 3690 Orange Place occupies a highly
payments of an undisclosed amount visible position off Interstate 271, it
on a $9 million loan despite receiving sits on the east side of the busy free-
a demand for payment as far back way while most of the office buildings
as Dec. 14. U.S. Bank serves as in the Chagrin Boulevard market
Oglebay(cid:2)Means(cid:2)Business!
trustee for bond holders in the fore- are on the highway’s west side.
closure case, which was filed May 4. Steve Egar, owner of the Egar
The case was assigned to Judge Associates real estate brokerage in
Carolyn B. Friedland, who had not Beachwood, said he was surprised
acted by last Friday, May 11, on a to hear about the foreclosure filing
request to appoint a receiver to oper- because of the building’s high occu-
ate and sell the property to recoup pancy rate, 85%, which most owners
some of the debt owed. see as well above the break-even point.
The plaintiffs estimate that with late However, Mr. Egar said Orange-
and default fees and prepayment wood is an older building, dating
penalties, the building owner, BIG from 1974, in a hyper-competitive
Orangewood Place, owes a total of market. Moreover, he said, out-of-
More(cid:2)than(cid:2)a(cid:2)hundred(cid:2)years(cid:2)ago,(cid:2)Earl(cid:2)W.(cid:2)Oglebay(cid:2)established(cid:2)a(cid:2)tradition(cid:2)of(cid:2)generous $12.3 million. town developers and owners have
BIG Orangewood’s ownership not fared well in the Cleveland sub-
hospitality(cid:2)at(cid:2)his(cid:2)summer(cid:2)estate.(cid:2)Today,(cid:2)Oglebay(cid:2)Resort(cid:2)continues(cid:2)that(cid:2)tradition(cid:2)with
is not a typical one. BGK Equity, a urbs, where they often must com-
extraordinary(cid:2)facilities(cid:2)and(cid:2)amenities,(cid:2)in(cid:2)a(cid:2)picturesque(cid:2)natural(cid:2)setting,(cid:2)ensuring(cid:2)your(cid:2)next nationally known property investor pete with well-heeled older property
and predecessor of Rosemont Realty owners with substantial equity.
meeting(cid:2)will(cid:2)be(cid:2)both(cid:2)memorable(cid:2)and(cid:2)successful.
as property manager, had been Greg West, an Ostendorf-Morris
Orangewood Place’s sole owner Co. vice president who handles
since the late 1980s. However, in the leasing at Orangewood pooh-poohed
2000s it converted the property to a the significance of the filing.
tenant-in-common form of owner- “It’s business as usual there as far
ship, where several BGK principals as we are concerned,” Mr. West
and nearly a dozen other investors said. ■
13620 ENTERPRISE AVE., CLEVELAND
•271-room(cid:2)Wilson(cid:2)Lodge Check(cid:2)our(cid:2)
•Premium(cid:2)cottages(cid:2)&(cid:2)estate(cid:2)houses web(cid:2)site(cid:2)for(cid:2)
hot(cid:2)dates(cid:2)
•Delicious(cid:2)dining(cid:2)options(cid:2)
&(cid:2)special
•Luxurious(cid:2)spa packages.
•Fitness(cid:2)center,(cid:2)indoor(cid:2)pool(cid:2)&(cid:2)jacuzzi
•Business(cid:2)center
Resort & Conference Center
•22,000(cid:2)sq.(cid:2)ft.(cid:2)of(cid:2)flexible,(cid:2)state-of-the-art(cid:2)meeting(cid:2)space
Wheeling, West Virginia
•Speidel(cid:2)Golf(cid:2)Course(cid:2)featuring(cid:2)2(cid:2)designer(cid:2)courses
Just 3 hours from Cleveland
•Catering(cid:2)options(cid:2)ranging(cid:2)from(cid:2)cookouts(cid:2)to(cid:2)gourmet(cid:2)served(cid:2)in
beautiful(cid:2)banquet(cid:2)rooms(cid:2)or(cid:2)catered(cid:2)outside
•Additional(cid:2)amenities(cid:2)include(cid:2)specialty(cid:2)shops,(cid:2)gardens,(cid:2)a(cid:2)zoo, (cid:135)(cid:3)(cid:54)(cid:36)(cid:47)(cid:40)(cid:3)(cid:50)(cid:53)(cid:3)(cid:47)(cid:40)(cid:36)(cid:54)(cid:40)
tennis,(cid:2)indoor/outdoor(cid:2)swimming(cid:2)pools,(cid:2)pedal(cid:2)boats,(cid:2)fishing, (cid:41)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:70)(cid:87)(cid:29)
(cid:135)(cid:3)(cid:51)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:53)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)
museums,(cid:2)segway(cid:2)tours,(cid:2)miles(cid:2)of(cid:2)walking(cid:2)trails(cid:2)&(cid:2)much(cid:2)more(cid:2) (cid:37)(cid:53)(cid:44)(cid:36)(cid:49)(cid:3)(cid:45)(cid:17)(cid:3)(cid:47)(cid:40)(cid:49)(cid:36)(cid:43)(cid:36)(cid:49)(cid:15)(cid:3)(cid:45)(cid:39)(cid:15)(cid:3)(cid:54)(cid:44)(cid:50)(cid:53)
(cid:135)(cid:3) (cid:22)(cid:15)(cid:22)(cid:21)(cid:19)(cid:3)(cid:54)(cid:41)(cid:3)(cid:82)(cid:81)(cid:3)(cid:17)(cid:23)(cid:25)(cid:3)(cid:36)(cid:70)(cid:85)(cid:72)(cid:86) (cid:21)(cid:20)(cid:25)(cid:17)(cid:27)(cid:25)(cid:20)(cid:17)(cid:24)(cid:22)(cid:27)(cid:19)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)
•Also...we(cid:2)offer(cid:2)great(cid:2)teambuilding(cid:2)opportunities!
(cid:135)(cid:3) (cid:54)(cid:88)(cid:85)(cid:73)(cid:68)(cid:70)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74) (cid:69)(cid:85)(cid:76)(cid:68)(cid:81)(cid:17)(cid:79)(cid:72)(cid:81)(cid:68)(cid:75)(cid:68)(cid:81)(cid:35)(cid:82)(cid:80)(cid:70)(cid:79)(cid:72)(cid:17)(cid:70)(cid:82)(cid:80)
(cid:135)(cid:3) (cid:20)(cid:3)(cid:39)(cid:82)(cid:70)(cid:78)(cid:15)(cid:3)(cid:20)(cid:3)(cid:39)(cid:85)(cid:76)(cid:89)(cid:72)(cid:16)(cid:44)(cid:81)(cid:3)(cid:39)(cid:82)(cid:82)(cid:85)
Visit(cid:2)www.oglebay-resort.com/conferences,(cid:2)email(cid:2)
(cid:135)(cid:3) (cid:20)(cid:22)(cid:182)(cid:3)(cid:38)(cid:72)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:43)(cid:72)(cid:76)(cid:74)(cid:75)(cid:87)
[email protected] or(cid:2)call(cid:2)800-972-1991
(cid:135)(cid:3) (cid:37)(cid:88)(cid:76)(cid:79)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:20)(cid:28)(cid:24)(cid:26)(cid:15)(cid:3)(cid:56)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)
(cid:90)(cid:90)(cid:90)(cid:17)(cid:82)(cid:86)(cid:87)(cid:72)(cid:81)(cid:71)(cid:82)(cid:85)(cid:73)(cid:16)(cid:80)(cid:82)(cid:85)(cid:85)(cid:76)(cid:86)(cid:17)(cid:70)(cid:82)(cid:80)
to(cid:2)start(cid:2)planning(cid:2)your(cid:2)next(cid:2)event.
20120514-NEWS--9-NAT-CCI-CL_-- 5/9/2012 3:44 PM Page 1
MAY14 - 20, 2012 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9
Say: Companies including New software guides Clinic treatment
elements shareholders like
System programmed Intelligence Platform, and to turn it self-taught programmer who created
into a product that could be sold to the system with help from the Clinic’s
to analyze electronic other hospitals. information technology department.
continued from PAGE3
So far, the Clinical Intelligence The Clinical Intelligence Platform
their entirety. records, send alerts Platform has had a big impact on the can be programmed to send all types
Most companies’ compensation Medical Intensive Care Unit, said Dr. of alerts. Say, if a patient with kidney
packages have passed say-on-pay Sasidhar, who specializes in respira- problems meets several criteria,
muster. But passing isn’t enough, By CHUCK SODER tory, allergy and critical care medicine. such as low urine output and a big
Mr. Jenkins said: Companies want [email protected] For the past five months, the unit increase in creatinine in his or her
overwhelming support. has used the system to analyze data blood, the software might recommend
Companies that receive less Dr. Madhu Sasidhar thought the from the Clinic’s electronic medical the patient go on dialysis, if he or she
than 70% approval face the potential job was done. record software to figure out which isn’t undergoing the treatment already.
of being scrutinized by proxy advisory He’d just spoken with a patient patients are ready for physical That flexibility is one reason other
firms such as Institutional Share- who was suffering from kidney failure therapy. The Medical ICU has pro- intensive care units within the Clinic
holder Services, or ISS, which advises and a lung infection. Though she still grammed the Clinical Intelligence are considering using the system.
shareholders on votes such as these. needed to be in the Cleveland Clinic’s Platform to analyze 47 different Other departments could follow,
In the event a company presses Medical Intensive Care Unit, the factors when deciding whether to Dr. Sasidhar said.
ahead with a compensation package dialysis treatments and antibiotics send out an alert for a given patient. The system holds potential for
that lacks strong shareholder sup- seemed to be working. So Dr. Sasidhar The alerts have driven the Medical use outside the Clinic, too, said
port or is opposed by shareholders, continued on his rounds. ICU to put in more orders for phys- Gary Fingerhut, general manager of
such advisers may encourage share- Then, about 15 minutes later, he ical therapy, Dr. Sasidhar said. Now information technology commer-
holders to vote against a company’s LAURENRAFFERTY got an email — from a software pro- the unit is working to put physical cialization at Cleveland Clinic Inno-
directors, Mr. Jenkins said. gram he helped create — suggesting therapists on staff full time instead vations, the hospital’s technology
Lawsuits are another potential the patient start physical therapy. of just ordering them from other transfer arm. The platform gives
consequence. The board and some seemed to reach the wrong conclu- Dr. Sasidhar hadn’t even thought departments. physicians the ability to build com-
officers of banking giant Citigroup sion on the company’s compensa- of that. He ordered therapy. In the past, patients in the Medical plex alerts that “approximate clinical
Inc. — which saw a majority of tion package. “Had it not been for an alert, I ICU probably didn’t get physical reasoning,” he said.
shareholders vote no on its compen- Prepared for shareholders, the would not have done it,” he said. therapy soon enough, Dr. Sasidhar The technology could be licensed
sation package this proxy season — 20-slide presentation noted, among The software could do a lot to said. The alerts have helped the ICU to another company or spun out
have been sued by a shareholder for other things, that the proxy adviser improve the treatment of patients, at refute the traditional notion that into a startup of its own, Mr. Fingerhut
breach of fiduciary duty. analysis “overemphasized short-term the Clinic and other hospitals: Dr. stable ICU patients are too fragile said. If the Clinic creates a startup,
Touchy subject relative total shareholder return Sasidhar and some of his colleagues for physical therapy, which can help Cleveland Clinic Innovations likely
results … while ignoring our strong are working to get other departments patients recover faster, he said. would start assembling a leadership
Given all this, perhaps it’s no RTSR (relative total shareholder at the Clinic to start using the system, “We can actually challenge those team for the company by the end of
surprise that the second year of say- return) results versus peers over the which for now is called the Clinical old concepts,” said Dr. Sasidhar, a the year, Mr. Fingerhut said. ■
on-pay has spurred more disclosures long-term” and “judged our CEO pay
and outreach by companies to deter- decisions against a group that
mine what pay practices turn off includes companies not within our
proxy advisers and shareholders. geographic proximity and with whom
“You’re seeing a lot more effort by we do not compete with for execu-
companies to explain where they’re tive talent.”
coming from on executive compen-
‘A bunch of nonsense’
sation,” Mr. Jenkins said. “Compen-
sation has always been a touchy The increased disclosures that
subject, obviously. I think companies come with say-on-pay are an added
have realized, ‘We’ve got to confront legal and administrative cost to
this head-on.’” every public company in America,
“Shareholders can vote with their feet. If the executives
are being overpaid ... people can sell their shares.
Nobody is forcing them to remain shareholders
forever.”
– Charlie Crowley, managing director, Paragon Capital Group
More than Coffee & Copies
Besides becoming increasingly said Charlie Crowley, managing
transparent, some companies are director of Paragon Capital Group, real
-How to use interns for value
abandoning certain criticized pay an investment banking firm in May-
practices, advisers said. For example, field Heights. In his mind, say-on-
proxy advisers object to tax gross-ups, pay is “a bunch of nonsense.”
wherein a company pays the tax on “Shareholders can vote with their (cid:56)(cid:70)(cid:69)(cid:79)(cid:70)(cid:84)(cid:69)(cid:66)(cid:90)(cid:13)(cid:1)(cid:46)(cid:66)(cid:90)(cid:1)(cid:18)(cid:23)(cid:1)(cid:114)(cid:1)sponsored by NOCHE & Baldwin-Wallace College
an executive’s severance after a feet,” Mr. Crowley said. “If the exec-
change of control occurs. As a result, utives are being overpaid, either in
a number of companies are elimi- absolute terms or in relation to the
nating them. company’s performance, people can
There also are examples of sell their shares. Nobody is forcing
Bridging Three Generations of Talent
companies introducing elements to them to remain shareholders forever.
their compensation packages that Just like pro sports. If you don’t
proxy advisers and shareholders like. like the salaries being paid to pro
- Managing Boomers, Gen X and the
Among them are clawback policies, athletes and the effect that has on
which allow the recouping of com- your ticket prices, you can choose to
Millennials in the same workforce
pensation if it’s found that a company stay away.”
must restate its financials, said Rene Efforts by Crain’s to interview
King, who specializes in executive executives with numerous public
compensation consulting and is a companies in Northeast Ohio on the (cid:53)(cid:73)(cid:86)(cid:83)(cid:84)(cid:69)(cid:66)(cid:90)(cid:13)(cid:1)(cid:43)(cid:86)(cid:79)(cid:70)(cid:1)(cid:19)(cid:18)(cid:1)(cid:114)(cid:1)sponsored by Kent State University
principal in the Chicago office of subject of say-on-pay were unsuc-
Mercer, a human resources consulting cessful.
firm. However, a Progressive Corp.
Mr. King said many companies spokesman said via email that the
(cid:35)(cid:83)(cid:70)(cid:66)(cid:76)(cid:71)(cid:66)(cid:84)(cid:85)(cid:16)(cid:79)(cid:70)(cid:85)(cid:88)(cid:80)(cid:83)(cid:76)(cid:74)(cid:79)(cid:72)(cid:1)(cid:24)(cid:27)(cid:17)(cid:17)(cid:14)(cid:25)(cid:27)(cid:17)(cid:17)(cid:66)(cid:78)(cid:1)(cid:1)(cid:114)(cid:1)(cid:1)(cid:49)(cid:66)(cid:79)(cid:70)(cid:77)(cid:1)(cid:69)(cid:74)(cid:84)(cid:68)(cid:86)(cid:84)(cid:84)(cid:74)(cid:80)(cid:79)(cid:1)(cid:25)(cid:27)(cid:17)(cid:17)(cid:1)(cid:14)(cid:1)(cid:26)(cid:27)(cid:20)(cid:17)(cid:66)(cid:78)
whose shareholders failed to give solid new rules have not had an impact on
support to their plans last year made the big auto insurer based in May- (cid:53)(cid:73)(cid:70)(cid:1)(cid:51)(cid:74)(cid:85)(cid:91)(cid:14)(cid:36)(cid:66)(cid:83)(cid:77)(cid:85)(cid:80)(cid:79)(cid:13)(cid:1)(cid:36)(cid:77)(cid:70)(cid:87)(cid:70)(cid:77)(cid:66)(cid:79)(cid:69)(cid:1)(cid:114)(cid:1)(cid:54)(cid:79)(cid:69)(cid:70)(cid:83)(cid:88)(cid:83)(cid:74)(cid:85)(cid:85)(cid:70)(cid:79)(cid:1)(cid:67)(cid:90)(cid:1)(cid:44)(cid:66)(cid:74)(cid:84)(cid:70)(cid:83)(cid:1)(cid:49)(cid:70)(cid:83)(cid:78)(cid:66)(cid:79)(cid:70)(cid:79)(cid:85)(cid:70)
significant changes and received field Village, and that its executive
highly supportive votes this year. bonus plan was approved by 93% of
Registration & sponsorship information:
Some companies have acted to shareholders in April.
win over shareholders in advance of As for FirstMerit — one of only a
a vote, after proxy advisers encour- handful of companies that have lost CrainsCleveland.com/Breakfast
aged shareholders to vote against their shareholder votes this year — a
their compensation packages. With spokesman said its board “will con-
or 216-771-5388
its April 18 annual shareholders’ tinue to examine and evaluate the
meeting ahead, FirstMerit filed incentive package for next year,
with the Securities and Exchange comparing us to our peers both in
Commission on March 29 a lengthy terms of relative performance and
presentation that began with the the ability to maintain shareholder
assertion that certain proxy advisers value.” ■
20120514-NEWS--10-NAT-CCI-CL_-- 5/9/2012 2:51 PM Page 1
1100 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY14 - 20, 2012
CASINO READY
FOR DEBUT
Get a sneak peek at the city’s newest
attraction, which opens tonight
At a media tour last Wednesday, Nathan Forbes, a
principal in Rock Gaming LLC, majority partner in the
Horseshoe Casino Cleveland, showed off his company’s
$350 million investment in refurbishing 300,000 square
feet on four floors of the landmark Higbee Building and
filling it with 2,100 slot machines, 63 gaming tables and
a 30-table World Series of Poker room.
The casino on Public Square will open to the public at
9:30 tonight, May 14, after a VIP reception, andstay open
24 hours a day, seven days a week thereafter.
Mr. Forbes said his firm believes the casino will
attract about 5 million visitors in its first year and can
capture a large part of what Rock Gaming estimates is
$1.3 billion annually that Ohioans have been spending
at casinos in adjacent states.
On Wednesday, hundreds of workers were scattered
throughout the building, which has a legal capacity of
11,000 people when it’s up and running, putting finishing
touches on the gambling hall and food court and hanging
photos of legendary poker players in the third-floor
poker room. A controlled demonstration of casino oper-
ations, with real money, took place last Thursday for fam-
ily and friends of the casino’s 1,600 employees.
Beyond targeting 5 million visitors in the first year,
Mr. Forbes said his firm has no precise forecast of what
kind of gambling handle and revenue the casino will have.
“You’re limited by the number of machines, you A look at the
don’t know how large the average bet will be, you don’t interior of
know the average time” people will spend in the casino, Horseshoe
he said. “So you throw something against the wall and Casino Cleve-
see what happens.” land, which
The Higbee Building operation is the first phase of opens tonight.
what is planned to be a larger gambling operation that For a video of
would include a new, connected building to the south last Wednesday’s
along the Cuyahoga River. media tour, visit
Mr. Forbes said his firm’s efforts have been focused www.Crains
on getting the Higbee complex open and it doesn’t Cleveland.com/
have a timeline for the second building. He said his firm casino.
is licensed for 5,000 slot machines but only is using MARCGOLUB
2,100 of those licenses in the Higbee Building. It is hold- PHOTOS
ing the rest of those licenses in reserve for Phase 2. ■
How RTA alleviates
Medical Mutual’s
car-related pain:
RTA’s Ready to Ride Program makes it easier than ever for
Medical Mutual employees to avoid traffic and save money
by riding RTA to work. It features:
Two Free Work Personal Trip
Week Passes Transit Planner
Assistant
It’s the perfect prescription to decrease commuting co-pay
and bumper-to-bumper blood pressure.
So who’s next? Ask your employer about RTA’s Ready to Ride Program today.
Get Ready To Ride.
FOR MORE INFORMATION, contact Jim Frick, RTA Sales Director, at 216.781.4764 or [email protected].