Opinion

We’ll admit, we had doubts — many of them.

A resort spa? In Belchertown? At the old state school site?

The concept sounded intriguing, but also somewhat far-fetched, given the geography — Belchertown isn’t easy to get to from anywhere — and also the town’s struggles to find a workable game plan for the school grounds, which have been decaying since the facility closed in 1992. People were talking about everything from a jail to a national music center. But it was all talk.

Roughly two years after the resort spa idea was first put on the table, however plans are coming together for what is to be the largest private development in Western or Central Mass. — ever, with a pricetag that could approach $150 million. A purchase–and–sale agreement on the property was inked last week, another important milestone in the development of the 400-acre site by a Chicago-based outfit called Bridgeland Development, LLC.

The company was formed by Paul McDermott, who has extensive experience working on large-scale developments of this type. His resume includes work on the redevelopment of the Glenview Naval Air Station in Illinois, a $1 billion project; another base-closure redevelopment at the Orlando Naval Training Center; and ongoing development of a 1,200-acre site on the grounds of closed a textile mill complex in Rock Hill, S.C.

McDermott will call on all of those experiences as he develops a vision for the Belchertown State School property, which is a blank canvas that he is starting to color in.

Watching the project take shape will likely be an exciting spectator sport in the Pioneer Valley, although many will do much more than sit and watch. Indeed, the project appears to have captured the imagination of residents and business owners across the region, and if that energy is channeled into the venture, what is now being called the Quabbin Resort Development could be a real spark for this area.

And as we’ve said many times, the region needs one. There hasn’t been much in the way of economic development in the area over the past decade or so, and relatively few new jobs have been added. Instead, many businesses — and people — have left.

Regional economic development leaders are working with their counterparts in Connecticut to market the stretch between Hartford and Amherst as one economic market, known as the Knowledge Corridor. The two states hope to take advantage of the many colleges and universities in the ‘corridor’ and their graduates to lure companies across several sectors. Thus far, it hasn’t happened, and people are still talking about ‘potential’ and the future.

That’s why the Belchertown project is so intriguing — and important; it’s happening.

Plans are still preliminary, but the Quabbin Resort Development could include a destination resort spa with related, wellness-oriented businesses and attractions. The planned mix — again, a work in progress — could include everything from a hotel to an equestrian center; restaurants to hiking trails; senior housing to a micro brewery.

But could it really happen? In Belchertown?

McDermott certainly things so, and his resume and track record show that he can, indeed, take massive, highly complex projects from the drawing board to reality. He believes he can put the pieces together, as evidenced by his company’s financial commitment to the venture.

McDermott told BusinessWest recently that these large-scale development projects succeed through the creation of momentum. It starts with a few key players getting involved, he explained, and soon, as the picture comes together, other parties want to become part of something exciting. It happened in Illinois, at ‘The Glen’ development, and it is happening in Eastern Mass. with the ongoing redevelopment of Fort Devens.

The Quabbin Resort Development has a very long way to go. It will take years, perhaps a decade or more for the vision to completely shape. And who knows what the market will deem economically viable for that site.

But the project has already succeeding in capturing the region’s imagination, and prompting people to think about what can happen in the Pioneer Valley — not what can’t, or probably won’t, happen.

We could use some more of that around here.-

Sections Supplements
Insurance Agency Owner, Alpaca Breeder Is part of the Region’s Fabric

Cindy Moulton St. George has always loved handling claims.

“That’s the most personal aspect of the insurance business,” she told BusinessWest. “It’s when they have a claim that people come to fully understand why they’re paying premiums — to protect their assets; it’s very satisfying work.”

Moulton St. George still gets to process the occasional claim, but she has myriad other responsibilities as president of Moulton Insurance Agency Inc., the business started by her father in 1952. Those duties include managing three offices — in Ware, Palmer, and West Brookfield — and the 13 employees staffing those locations. She’s also constantly surveying the insurance landscape, scouting possible acquisitions — the company has made several over the past few decades — and even monitoring the latest projections for the hurricane season due to start in a few weeks.

“It doesn’t look good for the Northeast,” she said, adding that the severity of a season’s storms, and the projections of same, will impact the price and availability of certain policies. “They’re saying that New England is due.”

And then, there’s the business of alpaca breeding.

It’s one of several specialty areas for the agency, and one that Moulton St. George has learned from the inside out; she and her husband, Roy, started breeding this cousin of the camel and the llama, native to South America, several years ago.

“It was a diversion from the insurance business and a good investment,” she said, adding quickly that it is not a hobby. Instead, it’s a sometimes-intense business with duties that range from tending to the animals to marketing to attending regional and national shows.

While insurance and alpaca breeding are in many ways worlds apart as business ventures, they have many important similarities, said Moulton St. George. She noted that both are largely referral-related and customer-service oriented businesses.

“To be successful at either, you have to take care of your clients,” she said, “That’s the bottom line.”

Policy-making Decisions

Moulton St. George started working in the family business as a teenager; her father would bring papers home from work for her to sort, alphabetize, and file. By her junior year in high school, she was working in the Ware office during vacations, doing more filing before eventually moving on to claims.

She told BusinessWest that her father had laid out succession plans that had her playing a lead role work for the company. Her affinity for the insurance business and desire to be her own boss facilitated the transition of the agency to her control in 1994; one of her brothers, Glen, now manages a real estate agency, Century 21 Moulton, also started by her father.

Moulton St. George remains one of the few female insurance agency owners in the region, status that still leads to a few awkward moments.

“When I first became the agent I was very young (mid 30s),” she explained. “I would go to conventions and people would ask, ‘who do you work for?’ I would say, ‘I’m the who.’

“It still happens on occasion,” she continued. “People will ask for the owner, and they’re a little surprised when I say, ‘that’s me.’”

Such episodes are becoming increasingly rare, because Moulton St. George’s name and rank are becoming well known within the insurance community — and within the Quaboag Valley area as well, where she serves in a number civic- and business-related capacities.

She currently serves as chair of the Business and Development Committee for Baystate Mary Lane, a fund-raising arm for the Ware-based health care provider, and is on the board of directors for the Ware Community Chest. In previous years, she has been heavily involved with the Quaboag Valley Chamber of Commerce.

“I’ve always felt a responsibility to get involved,” she said. “If you’re going to do business in a community, you have to find ways to give back — and there are many of them.”

Her primary mission, however, is to continually grow the 54-year-old family business, which is a challenging assignment at a time of change and, for some, turmoil in the insurance business.

Moulton St. George told BusinessWest that the landscape is constantly changing, with new competition, in the form of banks, and new technology, in the form of the Internet, to cope with.

Consolidation of the industry is ongoing, she explained, adding that she regularly receives inquiries about making — or becoming — an acquisition.
To survive and thrive in such an environment, she said, agencies must focus on customer service, develop strong relationships with carriers, and develop specific niches that can create opportunities in this market and, in some cases, well beyond.

Mouton has several such niches, she explained, listing as one example bed and breakfast operations. The agency has developed a solid working relationship with a carrier that writes policies for such businesses, said Moulton St. George, and, through the Internet and other marketing vehicles, she has fielded inquiries from across the country.

“We just got a call from Hawaii,” she said, noting that those searching for insurance online will be directed to the Moulton Web site by entering the key words bed and breakfast. “We’ve had inquiries from the Midwest, all over; it’s a good niche for us.”

Another is farms, and, more specifically, alpaca farms. They are growing in number, she explained, as the animal becomes more popular in this country and business opportunities — in the form of breeding operations — are created.

Moulton St. George and her husband were encouraged to pursue such an opportunity by someone already in the business, and eventually took the plunge, starting with two breeding females. They steadily grew their herd of Huacayas over the years — although they’ve recently downsized to nine — and have sold dozens to a growing legion of alpaca-breeding entrepreneurs.

And they’re insuring some of these ventures as well; the Moulton agency now has more than a dozen alpaca farms, scattered across the Northeast, as clients.

A Breed Apart

Moulton St. George told BusinessWest that alpaca hair is one of the finest fibers in the world, warmer than sheep’s wool and lighter in weight.

These qualities help explain the animal’s growing popularity and the emergence of alpaca breeding as an often sound financial investment.

By making such a move, she has put her name and her stamp on two successful businesses. And hardly anyone still asks who she works for.

George O’Brien can be reached at[email protected]

Sections Supplements
A Year After Its IPO, United Bank is Branching Out

United Financial Bancorp, the holding company for United Bank, is nearing the end of its first year as a publicly traded institution. The bank is putting some of the $72 million generated from last July’s initial public offering to work in expansion efforts, including two new branches slated to open later this year, and acquisition, in the form of a Northampton-based financial services company. More initiatives to seize market share are in the planning stages.

Richard Collins says he and others at United Bank are still adjusting to life as a publicly traded institution.

“It takes some getting used to — there’s a learning curve,” Collins, the bank’s president and CEO told BusinessWest. The playing field has been altered, starting with new and different layers of regulations, including the dictates of the Sarbanes Oxley Act, that the bank must now comply with. There’s also more scrutiny, he said, noting that it comes in many forms, from Wall Street analysts to depositors who want some help interpreting first-quarter financial statements.

There’s also the $4 million charitable foundation the bank created in association with its IPO, a vehicle to increase its giving within the cities and towns it serves. “It makes us a bigger player in the community,” said Collins.

And then, there’s the matter of where and how to utilize the $72 million in capital generated by last year’s public offering. A strategy is unfolding, said Collins, noting that one of its early elements is an expansion into the Northampton market, the bank’s first major thrust into Hampshire County.

The West Springfield-based institution, has begun work to renovate a former Chinese restaurant on Northampton’s Main Street, said Collins, who called the city a “logical next step” for the bank and the branch there a vehicle to better serve its 600 customers in that city — and grow that number.

The bank also purchased a financial advisory firm in Northampton, the Levine Financial Group, adding $88 million in assets under management in the process.
The push into Northampton is part of a larger strategic plan to build the “franchise,” as Collins called it, into a larger, stronger network of branches, one that will soon stretch from Ludlow to Northampton. The basic plan is to continue to add branches in areas where United does not have a strong presence and that are contiguous to current locations.

The north side of Westfield is an intriguing example, said Dena Hall, the bank’s vice president of marketing and public relations, noting that it builds a bridge of sorts between the bank’s downtown Westfield location and its Holyoke and Huntington locations. The North-ampton branch will extend the network farther north.
Hall said residents of the northern section of Westfield do not have many banking options close to home, and are often inconvenienced by travel to the city’s downtown, where several banks have locations.

“This was something that made sense for us,” she said, noting that the branch, to be located on Southampton Road, will open late this year. “This will enable us to better serve households in that area; it’s a good opportunity.”

BusinessWest looks this issue at how United is crafting a strategy to seize more such opportunities in the months and years ahead.

Taking Interest

Commenting on life as a partially public company — the bank retains more than half the stock issued — Collins stressed repeatedly that the change in format does not fundamentally alter the way the instituition conducts business.

“It doesn’t change the way we run the bank, make loans, or take care of our customers,” he said. “But there is a different mindset now; we have a responsibility to our shareholders. We have to pay attention to thoughts and perceptions of people who bought our shares.

“We have a new set of challenges,” he continued. “That’s fun and it’s exciting; we’re much better capitalized now than we were before, and that gives us the chance to do things that we have been contemplating.”

These include the new branches in Northampton and the north side of Westfield, as well as the Levine Financial Group acquisition, said Collins, noting that the bank’s leaders are working with a team of advisors to identify opportunities and possible geographic targets for further expansion.

As he talked about the elements of the bank’s strategic plan (to the extent that he could given regulations limiting the dissemination of information on public companies), Collins acknowledged that the Western Mass. field is already crowded and that new competitors, such as Connecticut-based Webster Bank (see related story, page 28) are pushing their way into the Western Mass. market.

“But competition is a fact of life in every business and it keeps us on our toes,” he told BusinessWest, adding that United, like every other bank in the region, will be energetic and imaginative in its efforts to grow market share in a region that is seeing very little residential or commercial growth.

“You find ways to be good enough at what you do to have people want to bank with you,” he said. “It’s as simple as that.”

Elaborating, he said the bank, which had assets approaching $1 billion ($947.6 million) at the end of the first quarter, will look to continue to create growth opportunities through a mix of services, physical expansion when and where it’s appropriate, and acquisitions.

By All Accounts

As one example, he pointed to the new branch on Westfield’s north side. United has a strong presence in that city, and has plans to renovate and expand its downtown office there. But the north side is in some ways a separate community, one he characterized as underserved by the banking community.

What’s more, the city will be soon be building a second bridge over the Westfield River that separates the north and south sides, a lengthy project likely to create traffic headaches.

“People are not going to want to cross that bridge if they don’t have to,” said Hall. “If they can stay on the north side to do their banking, they will.”
The Northampton branch and the acquisition of Levine Financial — an expansion of non-banking services — are more examples of seizing opportunities for growth, said Collins, noting that the Northampton market holds significant promise of the bank.

“It’s an obvious next step for us,” he said, noting that it will enable the bank to build on the small base it had there — it has had a loan office in the city in the past — while building visibility for possible further expansion in the Five College area. “We currently do business with nearly 600 households in the Northampton market and with the addition of the clients from Levine Financial Group, we expect increased opportunities to grow our market share and and expand the financial services portion of our business in this market.”

He said the bank will continue to explore opportunities like the Levine acquisition — where a long-time professional with an established client base was in a position to sell his business — in the non-banking-services realm.

Beyond Northampton, Collins said only that additional territorial expansion will happen; where it will take place is still to be determined.

Connecticut is one possible destination, he said, noting that United, like other banks based in the region, have long considered that market, just as banks south of the bordered have eyed — and in some cases penetrated — this market.

“We have a presence in Connecticut,” said Hall, noting that residents there are served by some of the bank’s existing branches. “It would another logical step for us to go there.”

The Northampton and second Westfield branches will give the bank 13, said Hall. In addition to the Ludlow, Holyoke, downtown Westfield, and Huntington locations, United also has branches in West Springfield (where it also has its corporate headquarters and operations center as well as its Financial Services Group), and also East Springfield, Longmeadow, downtown Springfield, Indian Orchard, Sixteen Acres, Feeding Hills.

Further expansion will come where it makes sense, said Collins.

“We can, and will, find new areas where our brand of banking with be well-received,” he explained. “There are opportunities for us to grow.”

The Bottom Line

Returning to the learning curve that has accompanied the bank’s transition to a publicly traded company, Collins said there is indeed a heightened level of scrutiny — on the part of competitors, market analysts, and even some of the bank’s smallest depositors, for whom the acquisition of a few shares may have been their first and only stock purchase.

“They’re not shy about telling us what they’re thinking,” he said of depositors. “They’re taking this very seriously, and they should; they’ve acquired a financial asset that want, and expect, to appreciate.

“People are watching us,” he continued, with a look that blended satisfaction with a touch of anxiety. “They’re watching us more closely than ever.” And based on the first year’s activities, and the promise of more to come, such individuals should have plenty to watch.

George O’Brien can be reached at[email protected]

Sections Supplements
Commercial Lender’s Career Has Been a Learning Experience

Maria Goncalves says she got into banking, and specifically commercial lending, pretty much by accident.

Finding herself unemployed after studying psychology and social work in college, the Ludlow native sought to capitalize on two summers of work as a bank teller at the now-defunct Ludlow Savings Bank. She responded to a Shawmut Bank help-wanted ad detailing two opportunities for trainees — one in retail, the other in commercial lending.

“When I was offered a position, I thought it was the retail job,” she told BusinessWest. “But it wasn’t. And when I looked at the two gentlemen across the table from me, I said ‘with all due respect, why would you want to hire me when I only took one economics course in college and really know nothing about business?’
“They said, ‘you have the skill set we look for in commercial lenders,’” she continued. “They told me I had the science background, which meant I had analytical ability, and that I had the people skills, which is the other half of the equation. They said, ‘ don’t worry about the rest, we’ll teach you.’”

They did — the bank financed her MBA at UMass — and more than 20 years later, the pupil is now the teacher.

That’s one of her many responsibilities as senior vice president, Commercial Loans, for TD Banknorth Massachusetts. She currently manages a large portfolio of public and private companies operating in several industries, and also mentors junior lenders and is a team leader responsible for coordinating sales and marketing initiatives.

It’s certainly not the career she envisioned while studying psychology, biology, and social work in college, but in some ways it makes sense. Indeed, when asked about her career choice and success in the commercial lending field, Goncalves said those Shawmut bank managers who interviewed her had it right; while the technical aspects of this profession are certainly important, commercial lending is a blend of people skills and analytical thinking.

“You have to be able to communicate and listen,” she said of the former, putting heavy emphasis on that second verb. “And you have to be able to talk to all kinds of people — from the CEO on down to the bookkeeper and the marketing person.

“You also need to have an analytical mind,” she continued, “and be able to read through and understand business plans and numbers, and be willing to learn about different kinds of businesses; you have to be a person who’s curious by nature — and I am.”

Points of Interest

Indeed, when asked what she enjoyed about her work in commercial lending, Goncalves repeatedly came back to the word diversity.

She used it to describe the many types of transactions that come across her desk, the circumstances of the companies or non-profits involved, and the wide variety of business sectors she has worked with.

Elaborating, she borrowed and effectively modified the old cliché ‘jack of all trades, master of none.’

“I know a little about nearly every kind of business,” she explained. “I don’t know everything about any of them, but I’ve learned a little about a lot of industries.”
The process of learning about businesses — and the art and science of commercial lending — began with an extensive, two-year training program with Shawmut. When completed, she started her career in banking as a credit analyst and eventually progressed to commercial lending.

She worked in Shawmut’s Holyoke office, focusing on small-business lending, and later in its Springfield facility with a portfolio that included mostly larger companies. In late 1991, she left to take a similar position with Bay Bank, and was then caught up in the wave of mergers and acquisitions that swept the industry. Bay Bank was bought by Bank of Boston, which was then acquired by Fleet, and Goncalves was part of the divestiture of some Fleet operations to Sovereign Bank.

She handled commercial lending there until early 2001, when she got a phone call from Frank Barrett — then regional president of Banknorth and one of those Shawmut managers who interviewed her all those years ago — and eventually accepted an invitation to join the team at Banknorth.

Today, her portfolio of clients is diverse, but includes mostly larger, mature businesses with extensive banking needs.

When asked to describe her work, Goncalves said commercial lending is an exercise in analyzing risk, one that involves crunching numbers — often very large numbers — but also assessing people and their ability to carry out what’s on the pages of a business plan.

The role commercial lenders assume, she told BusinessWest, is a blend of business analyst and devil’s advocate.

“You want to be supportive, but you’re not a ‘yes’ person,” she explained, adding that often, her work doesn’t come down to simple ‘yes’ or ‘no’ answers, but rather finding often-imaginative ways to meet a client’s needs.

In the process of doing so, Goncalves said she’s met a number of interesting people and been witness to — and in some ways part of — some intriguing business success stories.

Indeed Goncalves told BusinessWest that one of the many rewards from her work is being part of business growth and economic development in the Pioneer Valley. The financial solutions she helps devise for companies often enable them to expand and add jobs.

“That’s one of the more exciting aspects of this work,” she said. “Watching businesses take that next step — be it adding some new equipment or acquiring another company — is very rewarding.”

While being part of the process to grow and strengthen the region’s business community, Goncalves is also active with a number of area organizations and non-profit agencies. And she brings to that work a blend of her background in financial services and her passion for social services.

She acts as treasurer of the Center for Human Development, for example, and also serves as president of Microtek, a Chicopee-based agency that employs developmentally disabled individuals to conduct cable assembly.

Recently, she was named to the Board of Directors for Springfield Technical Community College, an assignment that brings a new and different challenge she looks forward to.

“I’ve never done anything in higher education, so this will be good for me,” she explained. “And based on my first Finance Committee meeting, I’ve got a lot to learn.”

Extra Credit

Learning has been something Goncalves has been doing ever since she entered the banking field — by accident.

She’s learned how to do her job, while also coming to understand how thousands across their region do their jobs — while often devising financial solutions to help them do it better.

In that respect, she my indeed be a jack of all trades, but by all accounts, she’s certainly mastered one.

George O’Brien can be reached at[email protected]

Opinion
Higher Education Must Remain ‘Affordable’

Community colleges across the country promise access to higher education at an affordable price. These two-year institutions are low in cost and high in value. They are academically supportive, offer flexible class schedules, and respond quickly to the needs of the surrounding community and its employers.

However, the first part of that promise – affordability – is endangered in Massachusetts.

A recent study by MassINC (the Mass. Institute for a New Commonwealth) reveals that the state’s enviable array of private four-year colleges are rapidly rising in price – with tuition now accounting for 33% of a family’s income, as opposed to 25% in 1992-93. Our four-year public colleges are reflecting a similar increase — from 18% to 21% of a family’s income.

As Massachusetts residents turn to community colleges, the traditionally most affordable sector of higher education, where more than half of our residents begin their college careers, they discover that these costs are also rising. For these students, who are often the first in their families to attend college, and generally hold down a part-time or even full-time job, any increase in fees can mean the difference between going to college and going without.

Community colleges are still an unbeatable value, frequently charging only one-tenth the cost of private colleges. Community colleges are the entry to rewarding careers and a low-cost foundation toward a bachelor’s degree.

At this crucial time for the Massachusetts economy — when large numbers of taxpayers are moving out of state for perceived better opportunities and when our innovation economy and current industry are dependent on educated employees — the governor and our Legislature must follow through on the plan to adequately support public higher education.

Our public higher education institutions, once described as state-supported, have for the past decade been more accurately described as state-assisted. Massachusetts, as a high-income state, has the ability to do more for public higher education, but actually ranks 49th in the country in per-capita support for its public institutions.

As a result of the significant decline in support, our annual state appropriation barely covers the cost of employee payroll. This leaves the colleges to find their own operating funds. One result is that maintenance is generally deferred – leaving power plants, buildings, and equipment to continue to deteriorate. And last year, our energy costs rose by a combined total of nearly $1 million at STCC, HCC, and GCC.

Our colleges have become more nimble and creative in pursuing grants and private funding. Capital and major gift campaigns, once the province of private institutions, are increasingly common at state institutions. And as a last resort, colleges have been forced to raise their fees, supplementing inadequate state aid by increasing direct costs to the group that can least afford them – our students. This trend must be reversed.

Our state legislators worked diligently this year to create a seven-year plan to fill the identified funding gap in our public institutions. A joint task force studied the needs for our state and drew up a comprehensive plan which, as the Public Higher Education bill, was passed by the House and moved to the Senate. We urge the Senate to meet the challenge of passing Bill 2380, to carry out this plan and adequately fund the institutions that represent the future success of our young people and our commonwealth.

“Higher education is the gateway to the American dream,” says Ian Bowles, president and CEO of MassINC. “But its cost is accelerating much faster than income … as a region that is struggling with a high cost of living and the out-migration of young families, we should make this challenge a priority.”-

Robert Pura is president of Greenfield Community College, and chairman of the Massachusetts Community Colleges Presidents’ Council; William Messner is president of Holyoke Community College; Ira H. Rubenzahl is president of Springfield Technical Community College

Departments

The following building permits were issued during the month of May 2006.

AMHERST

Amherst-Colonial Village LLC
81 Belchertown Road 33
$13,000 — New vinyl siding,
shutters and gutters

Amherst Commercial LTD Partnership
388 Northampton Road, Bldg. 2
$28,000 — Re-roof, install drip
edge and ice and water shield

Elysium LLC
100 University Dr.
$10,000 — Interior alterations

GPT-RG Amherst LLC
422 Belchertown Road 147-162
$18,252 — Re-roof

Planet Beach Tanning Salon
181 University Dr. B
$30,000 — To build out interior
space for tanning spa

EAST LONGMEADOW

Strawberries
446 North Main St.
$50,000 — Interior alterations

HOLYOKE

Holyoke Mall Co.
50 Holyoke St.
$155,000 — Remodel Vitamin
World

NORTHAMPTON

City of Northampton
137 High St.
$15,000 — Construct Handicap
Ramp – Buildings M & Q

Guerra Claudio
12 Crafts Ave.
$8,760 — Construct awning in
alleyway

Cooley Dickinson Hospital Inc.
30 Locust St.
$395,000 — Building for woodfired
heat plant

Hampshire Franklin & Hampden Counties
Fairgrounds – 54 Fair St.
$9,000 — Interior alterations

Service Properties Inc.
82 Conz St.
$4,000 — Erect shed for
landscape equipment

SPRINGFIELD
Christ Church Cathedral
37 Chestnut St.
$60,000 — Renovate men’s and
women’s rooms

Salvation Army
285 Liberty St.
$74,675 — Interior renovation

WEST SPRINGFIELD

Famous Footwear
935 Riverdale St.
$160,000 — Renovate retail
space

Sections Supplements
Franklin Medical Center Expands its Horizons

Greenfield Savings Bank (GSB) recently pledged $500,000 to Franklin Medical

The population of Franklin County hovers around 72,000, but it’s growing.

Staff at Franklin Medical Center in Greenfield see that growth firsthand, introducing about 400 babies to the region each year. That statistic sends a very clear message: Franklin County is changing, and its time for FMC, its largest employer and only hospital, to grow up a little.

The facility is currently in the midst of a comprehensive five-year plan drafted by FMC to address issues caused by increased admittance, aging technology, and an increasingly health care-savvy public, which includes three major expansion projects currently underway and a number of safety and quality-improvement initiatives.

But according to Michael Skinner, FMC’s president, the physical changes are paired with the ongoing challenges all community hospitals face, as well as those currently affecting all Massachusetts hospitals in the wake of sweeping health care reform. It’s a balancing act, Skinner said, that is centered on providing the most quality care to the largest amount of people, while still remaining true to the community hospital model.

“What we hear again and again is that people like the fact that they can turn a corner and be greeted by one staff member after another making sure they’re getting the attention they need,” he said. “We don’t want to lose that feel. We want to get better, not necessarily bigger.”

But some growth is inevitable, and currently the hospital is seeing more construction activity than it has in years, simultaneously completing those three major renovation projects totaling $16.3 million and working toward a $5.5 million capital fundraising goal through a campaign dubbed Second Century.

“There are a lot of changes happening at once,” said Skinner, “But I think it’s pretty clear that we’re meeting the vast needs of the community and that’s the goal that we are most focused on achieving.”

Big Fish

Indeed, FMC has a formidable presence in Franklin County. It’s the county’s largest employer, with a workforce of nearly 900 people and a $35 million payroll. Skinner said numbers like these necessitate a very keen sense of responsibility to the community from an economic perspective, as does the hospital’s affiliation with Baystate Health.

“All community hospitals typically have peaks and valleys in terms of patient flow, but being part of the Baystate health care system allows us to access resources that other small community hospitals cannot,” he said. “That’s huge for us, because in many ways our systems, such as those for critical, clinical information, mirror those at the large acute care hospitals like Baystate, and that in turn benefits the well-being of the community.”

Skinner did note that not all challenges of the community-sized hospital are eradicated by such affiliations, however, among them staffing issues.

“We still must work very hard to recruit top-notch, experienced, board-certified physicians, because physicians have a lot of choices,” he said. “So small community hospitals have to pull out all the stops to convince prospects that yes, we provide great care, but there are also advantages to living and working in the community.”

The visible role FMC plays in Franklin County also helps to shape answers to a number of health care delivery-related quandaries that are unique to community hospitals.

“We meet frequently with a lot of other community hospitals, and we do share a lot of the same challenges,” he explained. “There is a sort of fraternity of folks who share strategies; all community hospitals face issues due to our smaller size, and there is an overall change everywhere in how health care is delivered that smaller hospitals must work harder to keep up with.”

Skinner added that those variables led specifically to the current renovations and projects on tap at FMC, and in turn fine-tuning of the Second Century campaign.
Now underway are major improvements to FMC’s emergency department, radiology department, inpatient medical/surgical unit, and the intensive care unit. The project’s $16 million price tag will be offset in part by Second Century funding, and represents the largest expansion effort the hospital has ever undertaken.

“In terms of the emergency and radiology departments, we were at capacity,” said Skinner. “We are adding emergency treatment rooms, expanding from 14 rooms to 20, all of which will be private and allow patients to be seen more quickly and efficiently.

“Without an expansion to the radiology department, we would be hard pressed to get any more patients through the door,” he added, noting that the renovations will also include the installation of a permanent MRI – the hospital currently uses a mobile unit a few days a week – and a brand new CT scanner.

But Skinner also told BusinessWest that in addition to capacity issues, some aspects of the renovations are in response to feedback from the community in terms of comfortable, efficient health care service.

“The renovations to the inpatient rooms are the third component,” he said. “We have quite a few four-bed patient rooms, and in the past, they have created the most dissatisfaction, among both patients, and staff. Now, the rooms will be semi-private – the improvement is another type of rationale that leads to caring for more patients more effectively. With more comfortable facilities, people are more apt to choose us.”

Second Sight

He added further that Second Century is expected to serve as a starting point for continued renovation and expansion in the coming years. While he said it’s not a goal of the hospital to change its community-based model, capital projects will take on a brisk pace over the next few years in order to address immediate needs and those that will be necessitated by aging Baby Boomers.

“We only want to be as large as we need to be,” he said. “But we need to project to the future and how many patients are coming in.”

Skinner added that upgrades in response to a changing health care landscape and the needs of Baby Boomers are a particular challenge for smaller hospitals, because many are still emerging from a school of thought that had them scaling down and reducing beds.

“At one time not long ago people still thought community hospitals would disappear, but the Boomers change that,” he said. “Now, we’re faced with planning delayed expansions because of the old model. We’re rapidly trying to catch up with Boomers. There is a wide range of issues to be addressed over time, and we can’t solve all of them with these three projects. We also can’t tear down our walls and build a brand new, $100 million hospital, so we hope the Second Century campaign will sort of whet peoples’ appetites for more projects and attract their support.”

The public portion of the campaign was launched this April after a ‘quiet phase’ that lasted about a year and centered on garnering contributions from FMC employees, medical staff, and its board of trustees.

“We did that to show to the community how the staff supports the hospital, and why others should as well,” Skinner explained, adding that soon after the public campaign was launched, several pace-setting contributions were made by Franklin County employers and organizations, including Greenfield Savings Bank, Channing Bete, the Rice Family Foundation, Greenfield Cooperative Bank, and MassOne Insurance.

“We’re close to the $4.5 million mark already, Skinner remarked, adding quickly, however, that the homestretch has become the most pressing – and community-oriented – phase of the campaign. “The large givers have made their pledges, but that doesn’t mean that we don’t have a long way to go. The public campaign has shifted to be primarily focused on individual community members, and we’re asking people to play some strong leadership roles in the campaign.”

To that end, Skinner himself has taken to shaking the proverbial trees, through a series of public awareness events. The events are not large or flashy in nature, he explained, but they are frequent, and often effective. To raise that last million or more, Skinner, along with Dr. Jacques Blanchet, FMC’s director of emergency medicine, have been visiting homes to conduct information sessions hosted by residents, and often attended by 20 to 40 friends and neighbors.

Growth Factors

“We’ve done about a dozen of them,” he said, noting that while the presentations center on the ongoing renovations and the Second Century campaign, a give-and-take of thoughts and ideas has become the definitive aspect of the home visits.

“We go in and present the hospital in its best light, but we also ask to hear opinions – the good, the bad, and the ugly,” he said. “A pretty intense dialogue usually occurs, but we are also learning what are we doing well.

“The vast majority of people seem to really love this hospital,” he concluded, “and it’s important for us to hear that and respond to it. We’ve chosen not to get bigger, just better at whatever size we choose to be.”

Jaclyn Stevenson can be reached at[email protected]

Sections Supplements
Franklin County’s Manufacturing Scene Remains Healthy and Diverse
Kathie Williams

Kathie Williams makes delectable treats at her family’s business,

Betsy Peck knows a little about heritage, running a business with her husband, Stephen, that has been in their family for 150 years.

“Our original product was a wood hay rake,” said Betsy, CFO of Rugg Manufacturing in Greenfield. She noted with pride that Rugg still makes similar rakes, along with a wide variety of other tools, such as snow shovels with patented ‘back-saver’ handles – a concept that has been imitated by other shovel makers, but which actually originated at Rugg.

“We’re always looking for new ideas – good, solid ideas, not something flash-in-the-pan that will fade away,” she said. “Something that will help people do a job.”
As a company with a long heritage and largely unchanged product line, Rugg represents just one small piece of a healthy manufacturing scene in Franklin County – one that doesn’t always get the attention it deserves.

Yes, attrition has harried this rural section of Massachusetts as it has everywhere else; there are certainly fewer manufacturers in business today in Greenfield, Deerfield, and surrounding towns than there were a decade ago. But the companies that remain are not only wildly diverse – producing everything from snow shovels and fishing rods to paper and candy – but they have found ways to overcome the challenges facing domestic manufacturers in the 21st century, and even continue to grow despite those obstacles.

“Survival forces you to make certain decisions, and a lot of people don’t survive,” said Kurt Zanner, president and COO of Lamson Goodnow, a Shelburne Falls-based maker of cutlery and kitchen implements. “Too many companies have tried to do things the same old way. They were afraid to take risks, so they didn’t survive.”

This issue, BusinessWest takes a look at a few Franklin County manufacturers that have stood the test of time – in several cases, more than a century – and have continued to be successful through foresight, creativity, and a willingness to change when necessary.

Cutting Edge

Lamson Goodnow has been making knives for the past 170 years, and for most of that time, the company’s main clientele was restaurants, hotels, and other food service providers. But corporate consolidation has eroded that customer base, and Zanner has long known that change was necessary.

“We’re basically a toolmaker, and we’ve always made tools for food services – and that’s still a big part of our business,” he said. “But about 20 years ago, we got more into making kitchen tools for consumers – knives, spatulas, any kind of kitchen instrument you would use to cook with – and now that’s the biggest part of our business.”

Until Zanner joined the company seven years ago, Lamson Goodnow manufactured all its cutlery and kitchen tools under the Lamson Sharp brand. But he has overseen an aggressive expansion in the product lines unprecedented in the company’s long history.

Specifically, Lamson Goodnow has added four other lines to its portfolio during the past six years: it acquired the Tree Spirit line of wood products and the Grind portfolio of stainless steel items, mostly pepper mills. Meanwhile, it created two other lines from within: the HotSpot collection of silicon tools and the TimberGrass line of bamboo items. Significantly, the company no longer manufactures all its products, but instead imports roughly two-thirds of them for distribution.

“When I came here, this was an old company doing a nice mix of business with one brand,” Zanner told BusinessWest. “Since then, we’ve greatly expanded our product assortment, and our customer base has grown as well.”

That’s just smart business, he said, in a manufacturing landscape that has become more challenging, even for long-established companies.

“It has become harder to expand as a U.S. manufacturer in a highly competitive category of business,” Zanner said. “Retailers – our customers – have become fewer and fewer because they’re consolidating, and more products are being imported, so it’s tougher to compete purely as a manufacturer.”

In addition, Zanner said, cutlery is a very specific product line that doesn’t lend itself to much gross-margin improvement; because of competition, Lamson Goodnow couldn’t raise prices. “So we had to find other ways to make money,” he said, which led not only to the development of new lines, but to the launch of two retail locations: a factory outlet store in Shelburne Falls four years ago and a comprehensive kitchen store in downtown Northampton, which just opened in May.

“As the oldest knife maker in the United States – and one of the only ones – we’re a dinosaur in many ways,” he added. “But we’ve figured out that the way to survive is to expand into other products, so we can gain additional customers and sell additional products to the customers we already have. In doing so, we’ve even expanded our labor force: we have fewer in manufacturing, but more overall.”

Sweet Success

Manufacturing of a different sort has created success in Deerfield for Kathie Williams and her parents, Barbara and Gordie Woodward. But they, too, have seen the value in adding a retail component.

The family became the third owners of Richardson’s Candy Kitchen 22 years ago, and since that time, they have seen some very positive shifts in the business landscape along Routes 5 and 10, where the company is located.

“When my parents first bought this business, summertime business was non-existent,” Williams said. “Since Yankee Candle took off, though, our summers are pretty vibrant.”

In fact, the tourist boom in the area – which encompasses businesses as varied as Magic Wings butterfly conservatory, Dr. Spooky’s Animal Museum, and the traditional collection of antique dealers – has pushed Richardson’s to change the way it does business. For example, the candy maker has bolstered its status as a tourist destination by creating space for visitors to watch candy being made. Launching ice cream sales this summer will further strengthen the on-site retail business.

“We get plenty of families in the summer – we’ll see them later in the day after they’ve visited other places,” Williams said. “We’ve seen pretty steady growth over the years, and when we added on two years ago, it gave us more space for customers to move around. People will even call us to ask if candy is being made.”

For some manufacturers, changing with the times means completely reassessing their traditional business model. For example, Erving Paper Mills has thrived in Erving for just over 100 years, making a name for itself with a wide variety of paper products, such as the printed napkins that have long been one of the company’s calling cards.

Paper production has always been a cyclical business, but as the past decade has ushered in both dramatic spikes in the cost of raw materials and tougher environmental regulations – not to mention stiffer competition against cheaper foreign goods – the company has been forced to become a leaner operation, now focusing almost exclusively on producing large paper rolls that are shipped to other manufacturers to create specific products.

According to president and CEO Morris Housen, the move will allow the company to invest aggressively in its paper mill – rebuilding aging infrastructure, upgrading equipment, and enhancing its recycling capabilities – in order to be better positioned for the next generation.

“In downsizing, we’ve been able to focus on the manufacturing of rolls of paper,” said general manager Thomas Newton, who conceded that even long-established companies must stay flexible if they want to survive. “And that’s getting more and more difficult all the time.”

Raking It In

Meanwhile, Rugg Manufacturing – which produces wood and metal products ranging from vegetable crates to roofing brackets – has also learned to adapt to foreign competition, importing many of its materials from overseas, including bamboo rakes and hardwood rake and shovel handles.

In addition, many of the small operations that purchased Rugg’s goods have been bought out and consolidated, so the company has had to adapt to dealing with larger chains, such as True Value, as well as redouble its efforts to market its products to local independent dealers.

“It’s challenging to deal with bigger customers,” Peck said, but she conceded that market changes force all manufacturers to adapt in some way. “So many businesses have moved out of the area or closed altogether. But we love what we do and want to stick it out here.”

“We’ve had to become more creative,” Zanner, of Lamson Goodnow, agreed. “Retailers want to deal with fewer and fewer vendors, so we’ve tried to become a one-stop shop and sell more products as we’ve looked for new customers.” As a result, the company is three times the size it was seven years ago.

“In American manufacturing, I really believe that the last guy standing in any product category will survive,” he added. “We’re pretty close to being the last guy standing.”

As one of many manufacturers still standing in Franklin County, it’s just one more example of modern creativity molded into a heritage of success.

Departments

The following business incorporations were recorded in Hampden and Hampshire counties and are the latest available. They are listed by community.

AGAWAM

Concept Builders Inc.,
1775 Main St., Agawam 01001.
Carlo P. Donavita, 68 Old
Feeding Hills Road, Westfield
01085. A construction company.

Namking Garden Inc.,
115 Southwick St., Agawam
(Feeding Hills) 01030. Kam
Kay Tang, 70 Southwick St.,
Agawam (Feeding Hills)
01030. Restaurant.

Root Technology Inc.,
188 Pine St., Amherst 01002.
Muthoni Magua, same.
(Nonprofit) To provide access
to computer technology to
African youth through
donations of computers and
software to schools.

Belchertown Flag Football League Inc.,
109 Howard St.,
Belchertown 01007. Josh
Kusnierz, same. (Nonprofit) To
create a framework for boys
and girls in Western Mass. to
play flag football games, etc.

BLANDFORD

Music Literacy Inc.,
112 North Blandford Road,
Blandford 01008. Nina Dawe,
same. (Nonprofit) To increase
awareness of the value of
musical educational programs
and technology, fund research
into new ways of teaching
music and into music and the
brain, etc.

CHICOPEE

EJ’s Pizza Cafe Inc.,
140 1/2 Exchange St., Chicopee 01013.
Evelyn Robinson, 57 Felix St.,
Chicopee 01020. Food service.

Sky Dragon Restaurant Inc.,
1995 Memorial Dr., Chicopee
01020. Jin Min Li, same.
Restaurant.

EASTHAMPTON

KSG. Inc.,
121 Holyoke St.,
Easthampton 01027. Scott D.
Akers, same. Pizza restaurant.

HOLYOKE

Ministerio Musical Un Nuevo Renacer Inc.,
14 Quirk Ave,
Holyoke 01040. Edgardo
Santana, same. (Nonprofit) To
make a difference in Christian
communities.

Pereira Mortgage Inc.,
82 Nonotuck St., Holyoke 01040.
Jesus M. Pereira, same.
Mortgages, first and second
liens and construction loans.

INDIAN ORCHARD

No Limit Investment Inc.,
17 Dunhill Ave., Indian Orchard
01151. David Sims, same. Real
estate purchase, improvement
and sales/rental.

LONGMEADOW

Hugh O’Donnell Metallurgical Enterprises Inc.,
389 Converse St.,
Longmeadow 01106. Hugh
O’Donnell, same. To provide
consulting and other services
in the field of metallurgy and
related fields.

LUDLOW

Delisle Management Inc.,
26 Chadbourne Ave., Ludlow
01056. Douglas M. Delisle,
same. Business management
services, coordinating retail
food sale entities.

Hair Gallery & Day Spa Inc.,
345 Holyoke St., Ludlow 01056.
Ann M. Roberts, 424 West St.,
Ludlow 01056. To own and
operate a beauty salon/spa.

PALMER

Computer Training of America Inc.,
1448 North Main
St., Palmer 01069. Thomas M.
Gingras, #2 Woodcrest Dr.,
North Oxford 01537. Computer
training and database
consulting.

Zin Food Corp.,
1432A Main
St., Palmer 01069. Alan R.
Aubin, 29 Highland St., West
Warren 01092. To carry on a
general restaurant, banquet and
catering business.

PLAINFIELD

Ravenwood Freedom Farm and Learning Center Inc.,
63 Hawley St., Plainfield 01070.
Saralinda Lobrose, 122 East
Main St., Plainfield 01070.
(Nonprofit) To provide
educational programs focusing
on the life sustaining
importance of human and
ecological diversity, farm,
nature, and arts-based
programming, etc.

SOUTHAMPTON

Opa Opa Brewing Co. Inc.,
162 College Highway, Southampton
01073. Antonios Rizos, 2 Geryk
Court, Southampton 01073.
Marketing, importing, exporting
and distribution of brewery
products.

RJM Landscaping Inc.,
33 Pomeroy Meadow Road,
Southampton 01073. Richard J.
Miller, same. Landscaping.

SPRINGFIELD

272 Worthington Street Inc.,
272 Worthington St.,
Springfield 01103. Paul V.
Ramesh, 935 Main St.,
Springfield 01103. Restaurant
and bar.

Dong Ting II Inc.,
19 Abbott St., Springfield 01118. Xiao
Ting Dong, same. Food service.
Harry Van Wart Painting Inc.,
160 Cambria St., Springfield
01118. Harry Van Wart, same.
Residential and commercial
painting.

Mason Square Veterans Association Inc.,
59 Tyler St.,
Springfield 01109. Richard
Horace Griffin, 252 King St.,
Springfield 01109. (Nonprofit)
To assist veterans and their
dependents access federal, state,
local and veterans benefits, etc.

NAOS Development Corp.,
100 Wait St., Springfield 01107.
Jae Wook Jee, 525 Hillside
Ave., Palisades Park, N.J.
06650. Bernal E. Ramirez, 100
Watt St., Springfield 01107,
registered agent. To engage in
the construction industry.

RBSGD Unlimited Inc.,
171 Belvidere St., Springfield 01108.
Grace Murray, same. To own
and operate a restaurant.

WESTFIELD

March for Christ — March for Life Inc.,
26 St. Paul St., Westfield 01085. Deborah Olive
Nilesmorgan, same. (Nonprofit)
To organize Christian marches,
gatherings and events for the
sole purpose of Christian
outreach ministry.

WILBRAHAM

Creative Woodworking Corp.,
995 Stony Hill Road,
Wilbraham 01095. Jim
Goodrich, same. Construction.

WEST SPRINGFIELD

Arena’s Fencing Inc.,
168 Windsor St., West Springfield
01089. Mark A. Arena, 127
Coyote Circle, Feeding Hills
01030. To install and deal in
fencing items.

United Charitable Foundation,
95 Elm St., West Springfield
01089. Dena M. Hall, same.
(Foreign corp; DE) To conduct
charitable activities.

Sections Supplements
Business Financing in a Rising-interest-rate Environment

What should small business owners be aware of in seeking to obtain new or alternative financing in a rising-interest-rate environment?

Traditionally, you may generally require three possible financing vehicles for the operation of your business. The first is a revolving working capital line of credit facility, which assists in funding the day-to-day operations of your business. The second is a term loan facility, which may be used to purchase capital equipment, or perhaps fund certain leasehold improvements. And the third is a commercial mortgage loan to fund the acquisition of the real property where your business is operated.

Each of these facilities generally will bear interest at different rates that may be tied to different indexes. And it is critically important that you evaluate the various interest rate options that might be available, with an eye toward the volatility of a particular interest rate mechanism and its potential impact on your company’s projected cash flow, and consequently, profitability.

For example, a revolving line of credit is generally tied to a fluctuating index, usually the specific lender’s base rate, which may or may not be reflective of the national prime rate as published Wall Street Journal. Additionally, it should be noted that the applicable interest rate on this type of credit facility also contains a ‘spread’ that is added to the index, typically .5% to 2%. Such a rate will be ‘floating’ and will increase or decrease with any upward or downward movement in the lender’s base/prime rate.

Considering that the national prime rate has increased 16 times since June of 2003, from a low of 4% to a current rate of 8%, you should seek to have your lender agree to a maximum interest rate cap. While a lender who agrees to such a cap may also insist on a floor, the existence of a cap allows for better strategic business financial planning, as its allows you to accurately determine the maximum amount that would be required to fund this debt, presuming that the cap was met.

In both the term loan credit and mortgage loan credit facilities, you should be sensitive to a number of factors that may make a particular credit facility more or less attractive.

In recent years, most term and mortgage credit facilities, while providing for a 15- to 25-year amortization of the specific debt, contain either a specified review date or dates, (i.e. every five years,) at which time the lender may modify, extend, or terminate the credit facility, or a maturity date, (when the loan balance is due and payable in full,) that is shorter than the stated amortization period. Lenders generally may also be willing to extend both a specified review date and/or maturity date based on your agreement to accept an initial higher rate of interest at the inception of the credit facility as opposed to a lower interest rate that might be quoted for shorter-term money.

A second area of concern to consider, resulting from the credit facility’s shorter review or maturity date, is that each such credit feature will result in a balloon payment being due if either the loan is called at the review date or the loan matures. In both instances you will have been making loan payments based upon an amortization schedule that would only pay out the loan if payments were made over the entire amortization period.

Therefore, you must pay particular attention to such dates and begin the necessary negotiations for an extension of such financing, or perhaps arrange for alternative financing four to six months prior to any such review or maturity date. This is particularly important in a period where interest rates are on the rise. Consider the possible detrimental impact a dramatic increase in interest rates may have on your business’ operations and profitability.

A third area of concern is that of the pre-payment penalty or premium. Many term or mortgage credit facilities may offer what appears to be an extremely favorable fixed interest rate, but may also contain a pre-payment penalty that requires you to pay a fee equal to a percentage of the outstanding principal balance of the loan at the time such a prepayment is made. Generally, such a penalty is not intended to be punitive, but rather seeks to provide the lender with a yield that would not be realized if the debt were paid off during the early years of the loan term.

When discussing the prospective loan terms with your lender, be sure that the imposition of such a penalty will not occur if a prepayment is made from the normal cash flow of your company or if refinanced with the same lender, but only if you elect to move the credit facility to another third-party lender.

Another possible area you may wish to consider in an attempt to facilitate your company’s cash flow while servicing your outstanding debt obligations is that of seasonally adjusted loan payments.

For example, a company that operates a landscaping/garden center or swimming pool installation company might seek to have its regular monthly principal and interest payments required only during traditionally busy months, (i.e. April through September,) when cash flow is strongest, with a reversion to interest-only payments during the late fall, winter, and early spring months, when business volume is understandably down and there is a corresponding reduction in available cash flow.

While it can be somewhat disconcerting to watch the slow and steady rise in short-term, and in some instances, long-term interest rates, there are a number of ways you can seek to mitigate the potential volatility of such rate changes.

Gary Breton, a shareholder with Bacon & Wilson, P.C., is a member of the Banking and Finance Department, whose major emphasis of practice includes representation of financial lending institutions, as well as both individual and business borrowers. He also represents numerous business clients in the startup, purchase and sale of businesses; (413) 781-0560;[email protected]