Gil Priel and Eli Tene were about to take on not one, but two significant challenges that would literally reshape the way that their business would be run. The fellow principals and managing directors went into the effort with their eyes wide open to the inevitability of bumps along the way.
“It’s not going to be seamless and it’s not going to be smooth,” says Priel, who shares the title of principal and managing director with his partner, Tene. “But we didn’t do it overnight.”
The partners wanted to take a number of different companies that they owned and combine them into one organization under one brand name: Peak Corporate Network. Once that was done, they wanted to implement a customer relationship management system to bring clarity and order to the process of helping clients of the 230-employee company buy, sell and manage their real estate.
“As time went by, we really felt our clients wanted to have our service,” Priel says. “The fact that we had the different companies was just confusing. It was tough to sell.”
The key to a successful transition in both the brand change and the CRM implementation was the attitude with which the partners brought it to their employees.
“It’s important to embrace them, empower them, educate them and make them part of the process,” Tene says. “When we’re changing this atmosphere, people need to understand it’s a partnership between the leadership of the company and the people that work there. That makes the process much easier to go over and makes it much easier to get everybody to work through this in the best interest of the company. That was a challenge we’re still going through.”
With the move to one brand, Priel says the tough part was getting people to look beyond their specialty and push other areas that were now part of their company too.
“They resist the adjustment because they are used to doing things in a certain way and they are afraid that change can reveal weakness,” Priel says. “They have to start thinking and talking about everything that we do together as a big company. They can’t just talk about their specific service.”
When you engage your people in regular dialogue and portray change as being something that you’re going through too, you make it more palatable.
“It’s something that leadership must be part of,” Tene says. “You can’t just implement it without support. It needs to be reinforced from senior leadership.”
As for the implementation of the CRM system, Priel says similar principles apply. Implementing change comes down to helping people feel comfortable with it and helping them see the benefit of it.
“You need to start with baby steps,” Priel says. “Like anything else, what do you need from me? You need to come to those people who need to work with the CRM and you need to show them what it means for them. Why it’s good for you to use. As long as you can explain that and show it and make sure the training process is painless and something they can understand, it should work.
“The initial reaction is, ‘Oh my God, I’m being monitored, where before I wasn’t.’ That’s your hurdle. You say, ‘Yeah, you’re being monitored. But you’re going to know yourself when the last time was you called on this guy. Why has his business gone down this year compared to last year? Maybe you need to go visit him more often.’ It’s being able to prioritize channels and clients and it makes everybody’s work so much easier.”
There may be some people who can’t make the transition to what you’re doing and you need to be ready to accept that. But if you take the mindset that you’re all on the same team working toward the same goal, you’ll stand a better chance at achieving success.
“We see the results,” Tene says. “The sales are jumping.”
How to reach: Peak Corporate Network, (818) 591-3300 or www.peakcorp.com
Don’t give up
When you’re taking on major changes in your business, you’ll undoubtedly face a situation where someone isn’t ready to do what you need them to do. You’d be a pretty cold and heartless person if you just cast them aside without checking first to see if they could help you in other areas.
“Some of the stuff we’ve implemented has shown us that someone might not be right for the position they are in,” Priel says. “So we think and we strategize about how that person has a lot of qualities. Where can we utilize those qualities? We’ve had several people where we’ve moved them from one company to the other or one division to the other and they have succeeded. We’re trying to set people up for success, not for failure. Before we ever fire someone or lay someone off, we think about where he could be useful. What strengths does that person have?”
Andrew E. Brickman says anything is possible if you’re persistent in pursuing your goals.
He’s proven that with the success of Abode Living’s recent development projects, despite a downturned economy that has particularly devastated the real estate market. Only one town home remains for sale of 27 at the upscale 27 Coltman in Little Italy, while the first phase of million-dollar town homes at Eleven Rivers in Rocky River has sold out.
Already on to a new project, Clifton Pointe in Lakewood, the managing partner and director attributes Abode’s success to innovation and quality fostered by a culture of employee empowerment.
Brickman emphasizes that his staff members are partners — not just employees — in the business. He looks to his nearly 200 current project employees to help him continuously improve the company and serve its customers well.
“If you have an opportunity to interact with people at all levels within the organization and you can see what they’re doing and you know what their position entails, you can work with them to help empower them to do a better job,” Brickman says.
To empower employees, ensure your compensation system directly relates to productivity, as opposed to a standard cost-of-living payment system.
“Rewarding people based on merit and productivity versus a fixed rate of compensation is — if practical — a more effective way to create a type of culture that I think will foster the most favorable results,” Brickman says. “I don’t think the fear of losing their job motivates people.
“I certainly believe in a pride of ownership — that if it’s yours, you’re going to generally take better care of it.”
Give employees more responsibility to further their sense of ownership in the company by allowing them the flexibility to make their own decisions, get creative and take risks.
Brickman’s director of branding and marketing developed a charitable partners program that committed Abode to match donations made by customers, suppliers and contractors. Despite the monetary cost, Brickman says the program has resulted in increased exposure to Abode’s target demographic.
“Creating a sense of significance and importance within the employees’ psyche relative to the overall success of the company creates a sense of confidence,” Brickman says. “It further empowers them, makes them feel more responsible and more a part of the organization’s success.”
Promote open communication so that employees feel comfortable sharing ideas and critiques.
“Foster an environment that leads to more people willing to speak up to try and make changes or try and identify problems sooner rather than later,” Brickman says.
“The people that (CEOs) surround themselves with have to be willing to speak frankly and speak their minds so that if they don’t understand the vision of the CEO, it can be refined and it can be improved upon.”
Brickman’s vision is for his employees is to go above and beyond the Golden Rule to satisfy customers, treating customers better than they would want to be treated in the same situation.
Employees who feel personally invested in the success of the company, and thus their performance on its behalf, will actively embrace this vision of excellent service. This benefits the company, as well as its customers and ancillary support.
“A relationship should be a win-win relationship,” Brickman says. “We should try and be focused on how we can help (customers and suppliers) improve themselves and their business. And that’s kind of the culture I’ve tried to create within the organization, one based on optimism, passion and persistence for always trying to do the best that we can.”
How to reach: Abode Living, www.welcometoabode.com or (216) 721-0027
It’s not just about how you can serve your customers; it’s also about how your customers can serve you. Andrew E. Brickman hosts “share its” to get outside input from customers and suppliers before starting a project, ensuring issues are identified and worked out before starting.
“Make these people feel like they’re an important part of the project, that their opinions matter and that we appreciate them taking time out of their busy schedule to weigh in on it,” says Brickman, managing partner and director of Abode Living. “By doing that, you get people who really care, who are sincere and who aren’t just there to say yes to the project.”
Be professional and hospitable by hosting these collaborative meetings at a distinguished venue.
“By hosting it in a fine-dining establishment, we create a certain sense of quality — that we’re committed right down to providing a quality experience for the people who are in attendance,” Brickman says.
Communicate with customers to find out what they value in a product or service to give you an edge over competitors.
“If you don’t have something very special and you can’t relay that to your customers, then you’re going to have a commodity,” Brickman says. “And if it’s a commodity, it’s just a race to the bottom in terms of price.”
How far are you willing to go to sell your brand? Dennis Jarrett is willing to go pretty far to get people to do business with Stratus Building Solutions.
“I often think my partner and I are more tenacious than we are talented,” Jarrett says. “We don’t take no for an answer. I don’t mean in an obtrusive way. If one door shuts, we go to another one or we get in through the window, whatever the case may be.”
While he was joking about climbing through the windows of prospective clients, Jarrett says relentlessness is the name of the game when it comes to building awareness of your brand.
“I know it’s difficult, especially when times aren’t going well,” says Jarrett, co-founder and CEO of the commercial cleaning franchise company. “You get frustrated and you think you’re doing everything. But there’s always a light at the end of the tunnel. There’s always an opportunity.”
Jarrett is an optimist, but he’s also a realist. If you work hard, you can be successful, but you may be pretty worn out when you finally get there. If you’re not willing to put in that effort, it’s probably not going to happen for you.
“It took us a long time to become newsworthy in St. Louis,” Jarrett says. “In the beginning, we were constantly told, ‘Well, we have a lot of stories like that,’ or, ‘It’s not relevant,’ or, ‘We’ll call you.’ What I would do is meet with these people face to face and constantly tell them my story. Take them to lunch, whatever the case may be.”
Jarrett and his partner, Pete Frese, who is a co-founder and president of Stratus, split duties to get their company where they wanted it. Frese handled the internal operations while Jarrett hit the road to drive new business.
“Get a key person, it could be an employee, it could be somebody else, who can help you with some of the key areas that are still big picture,” Jarrett says. “You can’t be in all places at once.”
While that person is monitoring things at home, you need to be out there selling your business.
“Don’t be bashful,” Jarrett says. “The key is diplomatic tenacity. That’s where people fall just short and they are really just around the corner from success.”
The difference maker is often the story you tell when you’re out there working hard to grow your business.
“Everybody has a good story to tell,” Jarrett says. “You just have to prepared to tell it many, many times repetitively to anyone who will listen. You don’t need a large advertising or marketing firm. These are the times where you build relationships with writers and people in the local community that are looking for a story or human interest that is public relations worthy. People look at our press and our brand and think we have this big agency behind us. We’ve never worked with an agency. It’s all been internal. We don’t have a big marketing department. It’s myself and one other person. It’s all grassroots, and if we can do that, anyone can do it.”
Stratus has grown to more than 5,000 franchisees, 60 master licensees and 11 employees who helped the company yield $63 million in 2010 revenue.
“Psychology is a big part of an entrepreneur who makes it,” Jarrett says. “You have to be optimistic, almost blindly. The key is to know there are going to be good days and bad days and you just have to stay at it and on course.”
Once you start to gather supporters and get some good feedback, make sure you share it to help generate even more business.
“That goes back to the perseverance, the patience and the tenacity to build your substance, even if it’s one brick at a time and it seems like it’s taking forever,” Jarrett says. “There will come a pay day.”
How to reach: Stratus Building Solutions, (877) 731-2020 or www.stratusclean.com
You can’t be afraid to reach out for guidance when your business is struggling. It’s not a sign of weakness, rather, it’s a sign of strength that you’re willing to admit when you need help.
“Everybody has a mentor or an adviser,” says Jarrett, co-founder and CEO at Stratus Building Solutions. “Sometimes, the best clarity comes from somebody who is not knee deep into the business. Someone who has done it before and can take a clear, objective look at the business. Listen to people. It doesn’t mean you always take 100 percent of what they say. But there is great feedback out there.”
You need to be strong enough to admit that an idea, maybe even your idea, is not working and it’s time to try something else. Humility is one reason Stratus has grown to $63 million in 2010 revenue.
“You have to have an appropriate mix of ego, because you have to have confidence in your decision making,” Jarrett says. “You can’t be wishy-washy. But you also have to be pragmatic enough to know when you’ve got to change.”
It’s a tough thing for leaders to admit sometimes.
“They believe with all their heart and all their conviction that they are doing the right things,” Jarrett says. “That’s why sometimes, you need to take a look at somebody outside. Sometimes it’s a board, a mentor or a banker. The key is to have some outside clarity.”
As Royce Pulliam walked out of the gym he exercised at more than a decade ago, he was disgusted at its poor condition and told his wife he could do it better. He wasn’t just talking – he bought and opened his first gym in Lexington, Ky., just six months later.
“When I said that to myself and to my wife 17 years ago, I didn’t know what I meant. But I knew I could have a facility that was clean, had good equipment and offered a good service,” Pulliam says.
While those were good starting points, he is now the owner and CEO of Urban Active, a brand consisting of 38 clubs in seven states. Years of subsequent growth have given him greater insight into the needs of a larger company encompassing multiple locations.
The most important component for growth is choosing a successful location. Establish criteria you deem essential and evaluate potential sites against them.
“We look at competition, we look at the education of the demographic in a three-mile ring, we look at population density in that market and we look at income,” Pulliam says.
“Once those four things match up, if the lay of the land changes at all or the design changes, we’re nimble enough that we can work with the model and tweak it. But if it doesn’t fit with the main criteria, we won’t pass it.”
While expanding, maintain strong investment in existing company locations to ensure a solid foundation, and choose new locations with traveling distance in mind.
“We were definitely going to continue to develop out our existing territories, but also to geographically try to expand into neighboring states that were an hour, hour and a half flight time away and easy for our people to get to,” Pulliam says of his initial growth plan.
Another component of growth is the challenge to maintain effective communication with clients.
“We expected all the club-level people to get the information up the ladder, and as we grew, we found that that became more challenging,” he says.
“It was just taking too long and there were too many middle people, and that’s what happens with companies until you go straight out and put yourself out there.”
To improve communication, empower customers to contact senior executives directly through email. Back up the gesture by making sure each concern is addressed.
“(Another CEO told me) ‘It’s a gutsy thing to do but it’s the right thing to do, because everybody needs to have access and you need to know.’”
Although management must strive to be directly informed, growth challenges the ability of executives to control all areas of business. This makes investing in employees instrumental to success, as they will be working directly with customers.
“You’ve got to trust your people. You can train them, you can spend endless hours, but they’ve got to execute,” Pulliam says.
Hire friendly, energetic employees who can set customers at ease. Instruct employees to smile and wear name badges to make them seem more accessible.
“I want our members to be able to walk up to someone and know their name – not have to ask what their names are. We have a lot of members in our facilities and I want them to feel comfortable.”
How to reach: Urban Active, (877) 824-3571 or www.urbanactive.com
Robert Eves has been using a technology for 20 years that is still relevant today and has likely saved him millions of dollars in that same time period.
As founder and president of Venture Corp., a commercial real estate development firm, he began using content management software about 20 years ago as a way to keep all of his contacts, to-do lists and projects organized in one place. As the company grew, it became even more important to the business.
“This is Ground Zero — it’s the base of our operations,” he says. “Everything that we do is controlled by or metered by or recorded by Commence (the software Eves uses). It is, without a question, the most important program that we use in our company, by far. It’s far and away the most important software that we use all day, every day.”
To start, Eves uses it for to-do lists, notes on topics of interest to him, quotes he’d like to remember and other things along those lines. If he needs to schedule a lunch meeting with a co-worker, he can go into the software and put it on the calendar. A second later, it copies over to his Outlook, and a second after that, it copies over to his iPhone. At that same time, it sends a message to the person he’s having lunch with and puts the time on his or her Outlook calendar, as well. Everything is updated for everyone in real time.
It also reduces clutter because he keeps all files and records in the software instead of having manila folders everywhere — in fact, he has the equivalent of about 80,000 manila folders stored in the program.
Additionally, he uses it to target customers and manage the relationships with them. His target client isn’t necessarily someone who’s looking to buy his commercial spaces. Instead, it’s the commercial real estate brokers whom he’s trying to reach, and the software allows him to do just that. He now has more than 210,000 broker contacts in there to customize his searches.
“We can go into Commence and say, ‘Give us all the commercial real estate agents within these ZIP codes surrounding my new project,’” he says. “I enter those search parameters in Commence, and it takes me about 15 seconds, and there on the screen is every broker that fits those qualifications.”
He sends out about 100,000 e-mails a week, and because brokers want to know what’s available for their clients, they’re not going to delete these e-mails, so it’s highly effective marketing.
The program is also helpful for his website. He creates spreadsheets of all the available real estate centers that Venture has available, and these include asking price, square footage, property taxes, acres, how many phases there are and will be, and other numbers along these lines. Using SQL Server technology, the software is connected to the company’s website, so if he makes an update in the spreadsheet in Commence, it’s then updated to the website in real time, so customers always have current information. These updates can be done in real time like Eves does, or they can be programmed to update at a certain time on certain days.
“That kind of connectivity is great,” he says. “We don’t need a programmer, we don’t need anyone to go to change the price — it changes dynamically.”
And not needing a programmer saves big bucks on his IT budget, which can add up very quickly.
“We measure it more in increase in efficiency and productivity,” he says. “I would say that the savings are perhaps millions over the years and certainly many hundreds of thousands in payroll to make changes to it — there are changes to it every day. Just to have it, productivity goes so much higher.”
How to reach: Venture Corp., (415) 464-2000 or www.venturecorporation.com
Set it up
If you want to save money and efficiency by using content management software like Robert Eves, founder and president of Venture Corp., then it’s simple. First, find the software that fits your needs. If you don’t want to deal with IT people, then find one that has templates that can help you get started.
“Use the templates that come with it and then begin to customize them,” he says.
For example, you may have a contacts template, but you may add to it a column to put people’s spouses names, so when you see that person at a function, you can also greet his or her spouse — you remember the name because you had it in the program, which translates through to your smart phone, too. Or maybe you’re a car enthusiast and want to keep track of the type of car all your contacts drive — you can do that through customization.
“If you want your notes to get linked to your to-do list or your to-do list to be linked to your appointments, that’s what a relational database does.”
For Dirk Benthien, the difference between $1.6 million and $16 million is about 2,500 miles.
Benthien, the co-founder and CEO of CPi — Construction Polymers Inc. — relocated his foam insulation business from Moorpark, Calif., to Barberton in 2006. The next year, the company — which had posted 2006 revenue of less than $2 million — soared to $7.2 million. And even before the end of 2008, it had more than doubled its previous year’s revenue as the exploding company moved again, this time to North Canton.
Meanwhile, CPi jumped from five employees — only two of whom made the move to Ohio — to 27.
But initially, the move wasn’t about the revenue; it was all about the customers, many of whom were traveling too far for training with CPi equipment.
“We were losing proximity to our customers, coupled with excessive travel expenses, even difficulty communicating because of time zone differences,” Benthien says. “We spent more and more time flying across the country and not serving customers locally.”
He learned how quickly your business can grow if you choose a location that has you optimally based to best serve your clients. First, find an area that is central to your customer base. Benthien plotted his 500 customers on a map and marked their distribution in a line stretching from Toledo to Atlanta.
Next, track where your competitors are and, more importantly, where they’re not. The presence of many insulation companies in the South sent Benthien north, where he could command the market.
Then, look at the economic market data of different regions to find communities where your business will fit. High unemployment rates, for example, could signal a large pool of potential employees.
But you don’t necessarily need to be downtown to attract attention and employees. CPi got lost in the Los Angeles bustle before Benthien learned that a small company can reap more success in a small town.
To zoom in on a location for your next office, consider the surroundings. You want to be accessible to customers, near freeways or airports. And if you plan on frequently bringing visitors into the office, pick a spot near hotels and restaurants.
Although your employees will be using your new space more than anyone else, you should still set it up with the customer’s convenience in mind.
“We have a nice training center that demonstrates to the customer that we’re serious about the business, that it’s not only about making profit, but it’s about putting it back into the business, investing in services for the customer,” says Benthien, who included in the new building customer perks, such as empty offices with wireless Internet and an observation deck for visitors to scope out equipment.
And while you’re making those customer-focused improvements, don’t let communication lapse. Keep your old lines of communication available while gradually weaning customers off them and over to new ones.
For the first eight months after the move to Ohio, Benthien forwarded the company’s California phone number to the Barberton office through a separate line.
“We knew when someone called the old number, and every time, we told people, ‘Please make note of it; we have a new number,’” he says.
Remember that while you’re taking huge strides to improve your connection with customers, it’s the small steps during that process that they’ll notice the most — such as simply answering their calls.
“We always had the attitude that the phone is ringing, we’re going to talk to the customer now,” Benthien says. “... Once you hang up, then you go back to worrying about getting the telephone installed properly or whatever it may be.
“The building is not going to run away. If you don’t get to it today, the problem’s still there tomorrow. The customer that you chase away today, that’s a loss forever.”
A clean slate
Dirk Benthien learned his relocating lessons when he moved his business from California to Ohio in 2006 — and revisited those lessons for a local move the next year.
After the first move, CPi — Construction Polymers Inc. — swelled from five employees and $1.6 million in revenue to 17 employees and $7.2 million in revenue. Benthien, the co-founder and CEO, used the bigger budget to get an even bigger building.
“Get as much space as you can afford, because once you have it, you will fill it with additional business,” he says.
Budget with building improvements in mind, but be aware it could cost more than you expected. Benthien planned $75,000 for the first move, and it cost $200,000. Have open credit lines for unexpected renovations, because you shouldn’t have to settle for less than you need.
“You have a clean slate, meaning that this is the perfect opportunity to look at ... what is not working well and then address all those issues in the new facility, from enough offices for the employees to proper material flow,” he says.
And although CPi moved again the next year, soon after the move from California, that should be the
exception to the rule. When you move your company, do it with the mindset that you won’t be moving again for a long time.
“You only get one chance,” he says. “If the carpet looks bad, this is the opportunity to do it right. In half a year, it will be more difficult. It’s another interruption, and you will procrastinate.”
How to reach: CPi — Construction Polymers Inc., (330) 861-5200, (877) 300-3150 or www.cpifoam.com or www.ezerosolutions.com
Sky, which through acquisitions and internal growth has gone from assets of less than $5 billion in 1998 to assets of $15 billion today, has operations that stretch from eastern Indiana to western Pennsylvania and include the northern half of Ohio.
While a lot of transactions are handled electronically, paper still goes back and forth between Sky and the Federal Reserve Bank here, so a Northeast Ohio location made perfect sense. It would also help serve a growing local client base.
"We really honed in on Cleveland because of the proximity to the Fed and the proximity to interstate highways that are central to our network," says Dick Hollington, president for the Cleveland region of Sky Bank. "We looked at over 100 sites. We really looked comprehensively throughout Greater Cleveland.
"We really honed in on Brecksville because of the ease of getting to the Fed and the highways, the major postal facility there and the economics of the facility we were able to find that had the capacity to handle our needs and growth."
Sky leased a 30,000-square-foot facility, leaving room for future expansion.
"We'll have about 60 people there," says Hollington. "There is a lot of room for growth. By no stretch of the imagination are we full. I would imagine that we could probably double our capacity at the facility."
Working with local political officials is an unknown factor in any project, but Hollington says Brecksville helped keep it on schedule.
"We had a lot of interaction with Brecksville," he says. "The guys we were dealing with were extremely cooperative and really easy to work with. In November, we started talking to the city, and we were open and operating in May.
"I think one key to working with local officials is to go to them early. I think as soon as you hone in on the particular government in the area you'll be, the sooner you can build a relationship with key people there. Any project like this has real time constraints, and the earlier you form a relationship the better able they'll be able to meet your timetable. No one likes having an emergency dropped on their desk."
Team NEO also helped the company with the project, providing demographic information and feasibility studies that helped narrow the potential sites.
"It's information we probably would have had to have done on our own," says Hollington. With that information already in hand, the company didn't have to spend extra money or take the time to have a study done.
A well-defined plan helped Sky keep the project on schedule and on budget.
"A clear game plan is vitally important," says Hollington. "You have to have the right people involved in the plan. In this case, there are a lot of different areas involved, and you have to have your internal experts involved along the way with a clear game plan to execute.
"We have a very well defined project management protocol within Sky. Every week, the leaders of the core team met to update the status on the tasks that needed to be completed, issues were uncovered that needed to be resolved and we made sure we were meeting the time frame and cost parameters and delivered everything as it should be. That's how we run all of our acquisitions and projects."
How to reach: Sky Bank, www.skyfi.com
Don't forget the people
Opening a new facility like Sky Bank did can present some brick-and-mortar related challenges, but don't forget to plan for the people component as well.
Sky, which has about 60 people in its new operations center in Brecksville, transferred a few veterans but will predominantly be using new hires.
"Hiring and training of people is absolutely critical," says Dick Hollington, regional president for the Cleveland region of Sky Bank. "It takes having people hired in advance, taking time in getting them trained doing simulations and bringing the facility online in a fashion so that everyone is comfortable with their jobs."
Sky's experience with completing a dozen acquisitions over the last seven years helps.
"We learn something in every one," says Hollington. "We game plan on how to bring new people into Sky. We train on our culture, processes and products. It really makes a big difference to have a program in place when you have to do a facility like this. If you haven't done it before, think through what are your most critical issues and what's the most important thing you can do to get your people up to speed quickly. Most people think the real estate portion is a big deal, but the people side can be more important and harder than just making the equipment work."
Commercial property owners in Cuyahoga, Lake, Lorain, Portage and Stark counties received a triennial update of property reassessment in the mail in December. Every six years, Cuyahoga County does appraisals -- the last one was in 2000 -- and reassessments are done every three years.
Kieran Jennings, partner with Siegel, Siegel, Johnson & Jennings LPA, says the fundamentals surrounding real estate value (net operating income, occupancy and other key financial factors) have declined since peaking in 2000. By increasing assessments established in 2000 the county may be over assessing taxpayers in a declining market.
"I can't imagine the county ever decreasing their tax base on an overall reappraisal. The fact that they only raised it a few percentage points lets us know, and the counties also know, that there has been basically no appreciation in the market for 2003 in Cuyahoga County," Jennings says.
However, even with a slowing in commercial property market values, he suspects many owners could be overassessed in this year's tax bill.
If commercial property owners believe their assessments are too high, they have the option of filing a complaint with their county's Board of Revisions. The deadline is March 31, after which an owner forfeits the right to appeal for 2003.
Once the complaint is accepted, commercial property owners must produce evidence that the assessment is incorrect and proof of the property's actual value.
The property owner is not the only one who can dispute a valuation. In Cuyahoga County, it is almost a given that the Board of Education will file a counter complaint to protect the current assessment, and may even seek to increase the value of the property after further review.
"Three months from now, you might get a letter from the Board of Revisions saying the Board of Education has filed a complaint against your valuation, and you're going to need to defend that," Jennings says.
Jennings says commercial property owners should know whether they are truly overassessed before filing a complaint.
"Once you file the complaint and the board files the countercomplaint, you would need the board to withdraw their complaint for you to actually back out of the case," he says.
Decisions can be appealed to the Board of Tax Appeals in Columbus, where it could take years to be resolved.
Owners need to be aware of the value of their real estate. Some believe valuations will naturally go up with each new assessment, but that's not always the case.
"It's not true that property -- commercial property especially -- always increases over time," Jennings says. "Industrial property quite often can decrease over time. There's a lot of obsolescence in older building."
If commercial property owners have reassessment questions, Jennings suggests consulting a qualified appraiser or property tax attorney who can look at the reassessment from an unemotional, third-party perspective.
"The reason you want to hire someone like that is that when all is said and done, you need someone not only who can tell you what the value of the property is, but who can testify, and the two do not always meet," Jennings says. HOW TO REACH: Siegel, Siegel, Johnson & Jennings LPA, (216) 763-1004 or www.siegeltax.com; Cuyahoga County Auditor's Office, (216) 443-7010 or auditor.cuyahoga.oh.us/auditor/repi/default.asp
A major uh-oh
Commercial property owners in Cuyahoga, Lake, Lorain, Portage and Stark counties have until March 31 to file a reassessment complaint with their county's Board of Revision. Kieran Jennings, partner with Siegel, Siegel, Johnson & Jennings LPA, warns that the complaint form is "riddled with technical pitfalls."
Improperly filed complaints are thrown out, and property owners are not permitted to refile within the three-year period of the assessment unless the property was sold, there was a casualty loss, there was a 15 percent change in occupancy or there was substantial improvement to the property.
"If you file it on time but fail to do it properly, not only do you lose the ability to contest for the year that you filed and got dismissed on, but you can't file for 2004 or 2005. It's a serious thing to screw up a complaint," Jennings says.
Some common mistakes to avoid:
* Using the wrong filing name. In a 1999 case, a company with the legal name Burger King Corp., Buckeye Superior/Euclid Inc. filed only as Buckeye Foods Inc. The complaint was thrown out because there was no entity named Buckeye Foods.
* Filing the complaint if you're not an attorney. The Sharon Village Ltd. v. Licking County Board of Revision case of 1997 determined that filing a complaint is a practice of law. "Your president can't sign this form. The attorney's going to sign it," Jennings says. "If you don't do that, it will get thrown out as jurisdictionally defective."
Jennings warns not to misjudge the complexity of the form. It appears to be simple to fill out, but any mistake will render it void.
Moving is no easy task, and it’s even harder when you have to continue working during the process.
That’s the first thing Chris Suchan says he would do differently next time he has to relocate his business set aside time to prepare the new location and organize the move.
“We didn’t stop working, and that was a big problem,” says Suchan, president of Legacy Innovation & Design Inc., a residential design and construction company. “The place we moved into, we basically had to build our office. We should have just set aside a week or two with no work, just knocked it out and got it done, but we had to keep going. We had stuff scheduled and couldn’t stop. That was the biggest headache we had.”
Because the new location wasn’t completely ready, Suchan didn’t have an office to work in, which meant he had to use his own house to do paperwork and run daily operations.
“It would have been better to have this built, move our office in one day and be done,” he says. “Instead, I have a fax machine and phone out here, and the rest of the office is in my house until this is built. It would have made more sense, but you can only do what you can do at the time. I had a big box in my truck with all the paperwork we had to have every day, and I just stayed in touch with everyone, all of our customers and vendors, and made sure they knew where stuff went.”
Suchan’s company has two components one does countertops, and one does remodeling and custom cabinets. He moved the countertop business overnight and kept it going, which benefited the business but made life somewhat difficult.
“The countertops are our bread and butter,” he says. “The fact that none of our customers were without what they ordered was good. While we should have shut down, it was probably better but it was just harder on us. We had everything out on time and kept income coming in.”
The company moved from a 2,000-square-foot space in Berea to a 5,000-square-foot spot in Bedford Heights. To find that location, Suchan said he and his partner looked at about 10 locations and decided on Bedford Heights because of its proximity to Interstate 480 and Interstate 271, as well as the number of other shops in the area.
“We are more centrally located now to get us to the east and west side easier from the shop,” he says. “There are other shops around here, too, so when people get backed up, they look for different shops to do their work. We are closer to that, so maybe we can get in on some of that.”
Although the location cost more than others they looked at, Suchan says it’s worth the extra money to better serve his business.
“It wasn’t enough to say no,” he says. “It still fit in to what we could afford, so it made sense.”
HOW TO REACH: Legacy Innovation & Design Inc., (216) 898-1238 or www.legacy-innovation.com
Alleviate moving pains
Moving your business presents a lot of headaches, but www.123movers.com offers some tips to alleviate the pain.
Prepare for the move. To save time, make sure you are familiar with your new location and offices. Take measurements of the new rooms to make sure your old or new desks, chairs, filing cabinets, etc., fit inside your new space.
To make sure that everyone knows his or her new dimensions, create a floor plan before the move. This plan should include, by floor, location of employees, furniture, plants and whatever else you are bringing to your new location. Make sure that every employee receives a copy of this plan, and post it in the building on moving day.
Correspond with everyone. Make sure that everyone employees, landlords, movers, renters, etc. is aware of every detail. They need to know the exact moving plan before the actual move. The fewer questions on moving day, the better.
To help the movers, use colored labels. All of the furniture that belongs on one floor can be labeled a certain color. Label colors and numbers for each employee, and place labels in a spot that is easily visible to the movers.
Get rid of garbage. Make sure that you throw away as much garbage as possible before the actual moving day. It is possible to get permission from the city to have industrial-size trash containers placed in front of the building if you have an excess amount of garbage to throw away.
The Corps previously required that real estate developers replace an equal number of wetlands acres for every one disturbed by a building project. The Ohio EPA, on the other hand, categorized each type of wetlands destroyed, and at times, required developers to replace more acreage than was lost.
But on Christmas Eve, the Corps of Engineers and the U.S. EPA issued a joint memo which appears to say that the Corps will follow the EPA's lead and start to crack down on developers when it comes to protected lands.
The memo, called a Regulatory Guidance Letter, said the Corps will start to analyze the function of the wetlands -- what the wetlands do on the site, how they perform and what function they perform in the ecosystem or the watershed.
"This is a big shift in policy," says Robert Karl, a senior attorney and member of the environmental group at law firm Ulmer & Berne LLP. "The Corps is looking not simply at doing a mathematical calculation as much as a scientific analysis. They're no longer looking at 'one-for-one' anymore."
The recent guidance letter is not officially law, but it's a good indication of what the law will say in the coming years, Karl says.
"It's like an evolving policy," says Karl, formerly an environmental enforcer in the Ohio Attorney General's office. "It looks at the court cases that have come down, it looks at the policies. It guides its regional officers how to interpret the law."
Previously, when a building project disturbed wetlands, regulators said the developer could preserve other wetlands to make up for the loss. However, regulators are now dismissing preservation, which is usually less costly for the developer, and focusing instead on creation of new wetlands in exchange for those destroyed.
Preservation is now reserved for only "exceptional circumstances," according to the guidance letter.
"This is much more strict," Karl says. "You're starting to see the federal government moving away from things that a couple years ago they said were OK."
What this means for business owners is most likely a more costly and longer building project, if the development is located on wetlands, due to the closer scientific analysis.
"For now, I would tell my clients to proceed as they have before," Karl says. "Submit your application, but call (U.S. Army Corps of Engineers) Buffalo District, which controls Northeast Ohio, and see what they're thinking." How to reach: Ulmer & Berne LLP, (216) 621-8400