March 3, 2010

by Mary Vanac  

CLEVELAND, Ohio — BioEnterprise Inc., the bioscience venture developer in Northeast Ohio, has formalized a partnership with Team NEO to win new medical imaging, neurostimulation, cardiovascular device and orthopedic companies to the region.

Both non-profits work in Northeast Ohio, and sometimes they bump against each other or duplicate efforts, said Annette Ballou, director of strategic marketing and communications for BioEnterprise. So the two organizations developed a strategic plan to jointly attract companies in these four industries.

“We’re going to be the frontrunners,” Ballou said. “We’ll do the cold calls, the meet-and-greets” with out-of-region companies. “We’ll pull Team NEO in when we find a company that’s interested in moving here. BioEnterprise is the industry expert in these areas. We’re not the relocation expert.”

But Team NEO is. “This was the natural progression between two partners that have different areas expertise but a common goal — to advance the region’s economy,” said Carin Rockind, vice president of marketing and communications for Team NEO.

“Collectively, we’ve been able to do a lot together,” Rockind said. Now, it’s time to take the relationship another step. ”Let’s have joint metrics and leverage both of our skills … to increase the number of leads from medical device companies, converting those leads into new company attractions and new job creation,” she said.

Founded in 2002 by the Cleveland Clinic, University Hospitals, Case Western Reserve University and Summa Health System, BioEnterprise forms, develops and recruits bioscience companies. The organization  that now includes the Austen BioInnovation Institute in Akron also helps organizations commercialize their bioscience technologies. Its president and chief executive, Baiju Shah, is known for his tireless networking with venture capitalists worldwide to bring them together with local companies. 

Team NEO, which also goes by the name Cleveland Plus Business, especially outside the region, markets Northeast Ohio and attracts companies here. Started in 2005, the organization uses its economic research to market the region to site selectors, real estate consultants and companies. It also connects relocating companies with state and local incentives, such as tax credits for creating jobs.

In recent years, Team NEO has concentrated on building research in industrial sectors, such as biomedical. The organization also has developed a working relationship with the Global Cardiovascular Innovation Center (GCIC), the state’s only Wright Mega-Center of Innovation that is funded by the Ohio Third Frontier project and led by the Cleveland Clinic. Team NEO’s Tom Sudow is the vice president of attraction who works solely on behalf of the cardiovascular innovation center.

BioEnterprise is involved with the GCIC, too. But while the bio organization might contribute academic, clinical, technology transfer and venture funding expertise to companies launching in the center, Team NEO would supply the site selection, tax incentive, supply chain and workforce talent.

Late last year, the organizations quietly launched a Web page that reflects their joint biomedical company recruitment effort. “We’re looking at this being a model” for partnerships in other industries, Rockind said.

Brian Hicks, called the “chief architect” of the Ohio Third Frontier Project, was interviewed by the Statehouse News Bureau about State Issue 1, the renewal of the Ohio Third Frontier Project.  The interview ran on Ohio public television and radio stations throughout the state. 

Click here for the television show and  here for the radio interview.

Q&A with AEP CEO Michael Morris

Business First of Columbus - by Jeff Bell

With a long history of churning out electricity from coal-fired power plants, American Electric Power Company Inc. is typically viewed by environmentalists as the antithesis of a green energy business.But that’s not entirely accurate anymore. While the Columbus-based electric utility remains firmly committed to coal as its chief energy source, it also is embracing advanced energy technologies such as wind and solar power, energy efficiency efforts and a federal cap-and-trade proposal to curb greenhouse gas emissions from power plants and other big producers of carbon dioxide emissions.In Ohio, AEP has signed power purchase agreements for solar and wind energy in the past year and is seeking a supplier for biomass fuel. It also has launched a demonstration project for its GridSmart energy efficiency program in northeast Franklin County and western Licking County, which has $75 million in federal stimulus funding behind it.On the greenhouse gas front, AEP Chairman and CEO Michael Morris has become a national figure in the debate over how the U.S. should address carbon emissions. Under his leadership, AEP – unlike a number of big business groups – came out in support of the federal Waxman-Markey bill that proposes a cap-and-trade system to reduce carbon emissions.Morris also has been a cheerleader for AEP’s carbon sequestration pilot project at its coal-burning Mountaineer power plant along the Ohio River. Boosted by $334 million in federal funding in December, the project involves capturing and treating carbon dioxide emissions from the plant and then injecting them underground for permanent storage.Morris shared his views on those and other energy issues during a recent interview with Columbus Business First.

Business First: It wasn’t that long ago AEP was saying there wasn’t a lot of potential for wind and solar in Ohio because of the lack of wind and sunshine here. Now AEP Ohio has long-term contracts to buy wind and solar energy. Why the shift?

Morris: It’s pretty straightforward. It’s totally in response to Senate Bill 221 (passed by the Ohio legislature in 2008) that had a requirement to add wind and solar power to the overall portfolio of energy you get. It’s still difficult to develop wind and solar in Ohio, but people are doing it now. We’re encouraged by that and happy to go forward and comply with the laws.I also think it’s safe to say and everyone should be fully aware that (solar and wind) are still extremely expensive forms of electricity. Nonetheless, we’re complying with the requirement.

Q: You and AEP have received national attention for your support of a cap-and-trade system on greenhouse gas emissions. Would you sum up the reasons behind that?

A: We’re big believers that things can be done (on greenhouse gas emissions). This is a technology challenge. The technology is nascent but being developed. We’re also big believers in pushing that technology envelope forward and seeing to it that the technology is available to us.I must admit (the global climate treaty talks in December in) Copenhagen, where we had some hope the world would come to some conclusions, was a little disappointing. It looked a lot like the big, growing manufacturing economies, mostly China and India, tend to do nothing. All of the small countries of the world were simply interested in having funds transferred to them instead of addressing global warming. So I’m a little less sanguine about approaching global warming than I was.We’re proponents of the cap-and-trade bill because it saves our customers a tremendous amount of money. In the Waxman-Markey bill, our carbon footprint is 150 million tons per year. Waxman-Markey gave us free credits for 110 million of those tons. To put a price on it, if you put (the credits) at $10 per ton, it saves our customers $1.1 billion. If you put $20 on it, it saves customers $2.2 billion.

Q: What kind of reaction has AEP’s stand on cap-and-trade received from Wall Street?

A: Wall Street is beginning to understand that carbon for companies like AEP and other coal-centric utilities is not the end of world but in fact an opportunity to put additional capital to work to make certain you have the most cost-effective power plants continuing to run.

Q: Considering the politics in Washington, are there any signs of getting something done on a cap-and-trade bill in the next couple months?

A: Going back to the disappointing results of Copenhagen, I had high hopes of the world coalescing (on climate change). Then we could come back and flesh out the House bill in the Senate and have something the United States could be very proud of. In taking off the rose-colored glasses, Copenhagen was a massive failure. I doubt the Senate has any intention to pick up the ball and run with it.

Q: Why is AEP is so committed to carbon sequestration?

A: Without that technology, you would shut down half of the power plants in the United States, which shuts down the U.S. economy three times over what we saw in 2009 (during the recession).

Q: What led you to be convinced that carbon sequestration has a lot of potential?

A: American Electric Power has been at this 104 years and been pushing the technology envelope forward for every one of those 104 years. This is another one of those areas where somebody had to step up and get this done. In a moment of Churchillian, I said to our team, “If not us, who? If not now, when?” We decided that’s exactly what we’re going to do.Our vendor, Alstom, the French firm, was convinced the chilled ammonia approach would work … The (chemical) equation always made sense scientifically. The real issue was to have the technology to separate all the other pollutants out of the flue gas stream, boost the chilled ammonia into the stream of mostly CO2, then remove the CO2 from that stream so what’s ultimately injected into the ground is basically 100 percent aqueous solution.We felt it all made sense, so let’s go forward and we did. I can’t tell you how pleased I am – it’s all working and working extremely well.

Q: What will carbon sequestration do to electric rates?

A: The way we look at it is that retrofitted carbon capture storage might go as far as doubling the (electric) generation rate. Let’s get this in a context that we’re generating power today at 4 cents (a kilowatt hour), and we will double that to 8 cents (with carbon sequestration). Let’s take that as a foundation, though I don’t think it will go that high. The comparative numbers are solar is north of 20 cents a kilowatt hour, wind is north of 15 cents and nuclear is north of 10 cents. So a retrofitted (carbon sequestration) unit at 8 cents a kilowatt hour will be very competitive going forward.

Q: What is your view of AEP’s GridSmart pilot project in Central Ohio?

A: That is equally exciting. What we don’t know is how interested our customers are in employing energy efficient technology in the way they use our product… With the technology we’re putting out in the marketplace, you will have a running tally of what (electricity) you use … and you could program your dishwasher to never run at any price point above 7 cents a kilowatt hour – or pick a number.So it enables our residential and small commercial customers to select how much energy they want to use and select when they want to use it. Most of our big customers have gone long ago to energy efficiency.

Q: Are you confident GridSmart will be expanded to other states served by AEP?

A: It should. What I worry about – and this is a very honest worry – is this: I have a BlackBerry and I’m relatively good at it, but I can do about 30 percent of what the BlackBerry can do. It has more talent than I know how to use. The concern with GridSmart is that it puts relatively sophisticated equipment in the marketplace and the average customer doesn’t take advantage of it. So regulators, like the Public Utilities Commission (of Ohio), Office of the Consumers’ Counsel and others would say, “Customers are not taking advantage of this, so let’s not spend any more money on it.” My hope is customers see this as a meaningful tool.

Q: Talk about some of the “green things” in your personal life. Do you recycle at home or drive a hybrid?

A: I drive a multiple-fuel car with pretty high percentages of ethanol. I absolutely recycle and try to use less energy – I try to do as I say to do – turning off lights and turning off things that don’t need to be on. I admit I’m one for sitting around in a sweater in the winter and not always taking full enjoyment of air conditioning (in the summer) – although I admit not as much as I could do on that.
 

614-220-5456 | jabell@bizjournals.com

By ARIELLE KASS8:00 am, February 25, 2010

The chief financial officer of PNC Financial Services Group said it’s the bank’s business model that has kept it steady in the face of a financial crisis and dramatic growth, but that it will still be some time before the pain in the economy ceases. CFO Rick Johnson said with the National City Bank acquisition and across its portfolio, PNC is dedicated to maintaining a moderate risk profile and working to constantly improve. Mr. Johnson told members of the CFA Society of Cleveland at a lunch Wednesday, though, that credit utilization remains low and commercial real estate will present a “real challenge for everybody.” “The next shoe is going to drop,” he said. “It’s going to be a slower shoe, but it’s going to come.”

The bank is working to run off its distressed assets and to get rid of deposit customers who were simply rate shopping and who do not intend to have a relationship with the bank. Loans are down $18 billion, Mr. Johnson said, and will continue to be challenged, though not to the extent that they were in 2009.

But PNC has seen a $350 million gain in residential mortgage business with the addition of National City’s division, which Mr. Johnson said the bank — which had outsourced its mortgage division — is committed to keeping.

He said that in addition to fulfilling a customer need, the division allows PNC to further diversify.

Mr. Johnson said repeatedly that the bank is in a good position relative to its peers. PNC paid off more than $7 billion of federal Troubled Asset Relief Program, or TARP, money earlier this month.

He said the bank has its “work cut out” for it as it works to convert National City branches to PNC — Cleveland is set to do so in April — and that National City’s core franchise is strong, though the bank was involved in some peripheral businesses that it “couldn’t get out of.”

While being acquired is never a pleasant experience, Mr. Johnson said, he said he thought it was “going great.”

“We didn’t get everything right, but we got a lot of it right,” he said.

Mr. Johnson said PNC has been looking at Federal Deposit Insurance Corp.-related acquisitions, but has seen few that were interesting.

He said, too, that he thinks capital stress tests were a good thing for banks, even if they result in the industry carrying more capital.

“The banking industry keeps reinventing itself over time,” he said.

Colin McEwen

Thursday, February 25, 2010

President and CEO of BioEnterprise Baiju Shah never stops moving. And neither does BioEnterprise. Shah’s organization has been a part of a growing campaign that – in the last eight years – has developed 120 biomedical companies, attracted $925 million in funding and created more than 2,100 jobs (and counting) in northeastern Ohio.

Shah and BioEnterprise are joined in their biomedical quest by partners Cleveland Clinic, University Hospitals, Case Western Reserve University, Summa Health System and the Austen BioInnovation Institute in Akron. It’s a giant web, Shah says, of organizations and institutions that create the end product: A linking of talent, technology and cash, giving an entrepreneur the best chance at success. Combined, those elements provide a potent recipe for a biomedical force to be reckoned with.

hiVelocity recently caught up with Shah to get the inside scoop on how BioEnterprise is helping to define an industry and a region.

What attracts entrepreneurs in the biomedical industry to northeast Ohio?

I think there are a couple of things. First you’ve got a pretty vibrant entrepreneurial ecosystem of strong and distinct research institutions. You’ve got seed capital organizations, you’ve got venture capital systems and then you’ve got this network that connects the dots. There are really a number of enterprises in Northeast Ohio that can get you connected to give you a chance to be successful. It’s that critical mass. There are enough of these individuals out there to make this work.

You’ve been a little hesitant to take credit for the successes of this biomedical movement.

I don’t think we deserve that credit. It’s all the entrepreneurs. They are the source. We’re just lucky we get to work with them. It’s been a collective push by a number of organizations that has enabled this development in northeast Ohio. The reason I’m hesitant is because you can’t point to one or two organizations. It’s the culture of this region.

What is the culture of this region?

I’m a lifelong Clevelander. It’s changed dramatically here. There are 200 start-up companies in northeast Ohio, working on all kinds of interesting systems. That mass has created a bottom up sense of vibrancy. I used to know all of the start-up companies in Cleveland. Now, there’s so much occurring you can’t keep on top of it all.

How will BioEnterpise fit in with the proposed Cleveland Medical Mart and Convention Center downtown?

We are strong advocates of Medical Mart and Convention Center. I think it really has three benefits in the region. If you think about the small biomedical companies that are emerging, the Medical Mart will give them instant access to the medical marketplace. Secondly, it also becomes an attraction magnet for companies from overseas who are looking to set up sales and operation. And third, we’ll see a lot more company attraction. It will continue to elevate this region’s — and the state’s – reputation as a medical industry leader. It will continue to cultivate interest in this region and in this state.

Ohio has been battling with other states, such as Minnesota, to be at the top of the biomedical start-up market. What gives Ohio an advantage in becoming a leader?

In 2001, we weren’t even in the same league with Minnesota. We’ve now catapulted ahead of everyone else around us. You’ve got incredible strength of universities throughout the state, which is a real network of leadership; a substantial amount of large industries and major anchor companies throughout the state; the third thing – that’s uniquely different in Ohio – is the entrepreneurial ecosystem, from the seed funds to the venture capital funds. That’s what is most envied by other states. It’s what Minnesota craves. Other states call on us to ask how has Ohio catapulted itself in such a short amount of time.

With that kind of success in such a short amount of time, what could happen in say another ten years?

You’re going to see companies becoming leaders within their niches. These venture-funded companies will become grand-slam enterprises. You’re also going to see successful health care entrepreneurs. There’s going to be a whole cadre. increasing four to five fold in the next ten years. There could easily be 50 to 100 healthcare entrepreneurs starting new enterprises. People will invest and reinvest in northeast Ohio. That’s the cycle you’ll see again and again. People hit natural end points and see that they want to do that again.

What’s the key to success?

I think that we are still in a position that we cannot find enough workers for the jobs available. Getting workers trained for these positions – that’s going to be vital. There’s an idea out there that these jobs require a PhD. That’s not the case. These are highly engineered products that we are shipping to places like China and India. That’s the future for us. We need to be able to produce more of these types of positions.

By CHUCK SODER 

2:50 pm, February 23, 2010

Most Ohio voters aren’t familiar with the phrase “Third Frontier.” And those campaigning to renew the state’s technology-based economic development program aren’t about to teach them. The newly formed campaign to renew the Third Frontier initiative are leaving the name of the acclaimed program out of much of the material they will use to convince voters to pass the $700 million bond issue, which will appear on the May ballot. Instead, the material will refer to the renewal as “Issue 1” and will use the tagline “United for Jobs and Ohio’s Future.” Campaign officials, who spoke this morning at an event at the Holiday Inn in Independence, said using the name “Third Frontier” won’t help the campaign effort since so few voters are familiar with it. They cited an Ohio Business Roundtable survey conducted last summer that said about 16% of voters were familiar with the program. But voters don’t need to know the name of the program to get a sense of how important it is to Ohio’s economy, said Rebecca Bagley, president and CEO of NorTech, a technology advocacy group based in Northeast Ohio. “Many of us are going to have to shift how we discuss the Third Frontier because it really is about jobs and Ohio’s future,” Ms. Bagley said.She and several other officials involved with the campaign effort gave marching orders to the crowd, which consisted mainly of people supporting the renewal effort.

Campaign co-chair David Wilhelm, who has managed campaigns for politicians such as former president Bill Clinton and vice president Joe Biden, encouraged the crowd to be aggressive in promoting the renewal effort on their own, citing how the previous $500 million bond issue to support the Third Frontier passed by the “not-so-awesome” margin of 53% to 47% in 2005.

“Do not wait for us,” said Mr. Wilhelm, who also is president of private equity firm Woodland Venture Management in Gahanna. “There are 200 people in this room. There are three or four on the campaign.”

Former state representative Jo Ann Davidson, the other co-chair, emphasized the need to move quickly because an increasing number of voters are voting early by mail.

Campaign officials said they plan to advertise on television and by mail in addition to placing phone calls. They also have set up pages on social media sites such as Facebook and Twitter, and they are encouraging supporters to download the campaign logo from their web site, unitedforjobsohio.com, and to put it in their e-mail signatures.

Crain’s Cleveland Business

By ARIELLE KASS

2:22 pm, February 19, 2010
PNC Financial Services Group is converting National City branches in central and southern Ohio to the PNC name this weekend.

Those branches, from the Columbus area south, will reopen Monday as PNC Bank, as will branches in Kentucky and southern Indiana. Northern Ohio branches will convert April 12, with branches in Chicago and other states to the west converting thereafter.

In November, PNC converted 240 branches in western Pennsylvania, Youngstown and Florida. That conversion affected 1.8 million customers; 1.1 million and 320 branches are affected in the second conversion round.

In the Cleveland market, customers will learn about the changes early next month, PNC retail market manager Richard Lewis said.

PNC bought National City Corp. in October 2008 and since has said that the bank’s progress is exceeding expectations.

Monday, February 15, 2010, 3:14pm  

AEP issues RFP for biomass fuelBusiness First of Columbus 

American Electric Power Company Inc. is seeking companies to deliver blended coal and biomass fuel to five Ohio plants as it works to meet state regulations on electricity generation.  The Columbus-based utility said it’s accepting proposals this month for spot and regular deliveries to its Picway, Muskingum River, Conesville, Gavin and Cardinal plants.  American Electric Power (NYSE:AEP) is looking to connect with companies to deliver waste-to-energy biomass fuels and coal blended with biomass to hit benchmarks as Ohio phases in a new standard for energy use. 

A comprehensive energy law that took effect in 2008 requires that one quarter of all electricity sold in Ohio must come from alternative energy sources by 2025.  Of that, half must be through renewable sources, such as wind and solar power.  More details on the request are available here.

Friday,  February 12, 2010 3:05 AM

By Mark Niquette

THE COLUMBUS DISPATCH

The Ohio AFL-CIO executive board has endorsed a statewide issue on the May 4 ballot to renew the Third Frontier program.

The board, representing 700,000 workers, made the decision at its winter meeting. The ballot issue would authorize $700 million more in bonds over four years to fund high-tech business ventures through the Third Frontier program.

“Third Frontier continues to create jobs and re-invest in our economy, and we will encourage our members to vote for its renewal,” Ohio AFL-CIO President Joe Rugola said in a statement.

Business Courier of Cincinnati - by Patty Tascarella Courier Contributor

PNC Financial Services Group Inc. on Monday said it completed a public offering of 55.5 million shares of common stock, raising approximately $3 billion. Equity underwriters were JP Morgan Securities Inc. and Morgan Stanley & Co. Inc.

Additionally, PNC (NYSE: PNC) subsidiary PNC Funding Corp. completed the public offering and sale of senior notes that raised $2 billion.

PNC had announced plans for the sale of common stock and senior notes last week to help pay back the Treasury Department’s $7.6 billion TARP infusion.

Also funding the payback was the Feb. 2 sale of PNC Global Investment Services to BNY Mellon for $2.3 billion in cash. That transaction is expected to be completed in the third quarter.

Pittsburgh-based PNC is the Tri-State’s third-largest bank with about $5.6 billion in local deposits, according to June 2009 figures from the Federal Deposit Insurance Corp.