How to Save Your Nest Egg From Nursing-home Costs
You have spent the majority of your life working and building your nest egg so that your retirement will be well-funded. Unfortunately, retirement comes at a time when the possibility of catastrophic illness is more likely.
Of all Americans age 65 or older, approximately 43% will enter a nursing home during their lifetime. Given that the average yearly cost of nursing home care is $90,000, and that the average stay will last two and a half years, planning for long-term-care costs is crucial, as these costs will deplete your nest egg at an alarming rate. Planning ahead, which is planning several years prior to nursing-home admission, will mean the difference between spending your nest egg to finance your care and preserving your nest egg for your family.
Long-term nursing-home care is not paid for by Medicare or Medicare supplemental insurance. While Medicare may provide benefits for a short time period, once Medicare benefits end, the nursing-home resident must find another source of payment. Medicaid benefits are available to help pay for nursing-home care, but they are available only after eligibility requirements, which include strict asset limits, have been met.
Recent changes in Medicaid law have significantly reduced last-minute asset-protection opportunities. While there are still a few beneficial options available if you fail to plan ahead, they apply only in very specific situations and are much less fruitful than plans completed several years in advance. The only surefire way to maximize the assets protected for your family is to begin planning at least five years prior to a nursing-home admission.
Obtaining long-term-care insurance can alleviate the draining of assets and provide increased financial stability. Most long-term-care insurance policies will pay for long-term nursing-home care, although some pay benefits only for home care. Benefits are paid according to what is specified in the contract purchased.
A wide range of policies is available, including unique combinations of benefits and pricing structures. For example, some policies will pay for nursing-home, assisted-living, or home-health-care expenses, thus increasing ones long-term care options.
Some policies provide that, if long-term care benefits are not used, the premium may be refunded as a death benefit. In order to purchase long-term-care insurance, you must be insurable, which means that you must not have a health condition that would prevent the insurance company from providing you with insurance.
Assuming you do not purchase long-term-care insurance or that you are already uninsurable, you should consider purchasing assets that will not count toward the asset limit for Medicaid benefits. Non-countable assets presently include an irrevocably prepaid funeral, a burial account of no more than $1,500, a minimal amount of life insurance, a car, and, in some cases, a home. The payment of outstanding debts, such as a mortgage or credit-card balances, can also be beneficial in some cases.
Assuming that five years will pass before your admission to a nursing home, a gifting plan may be considered. When applying for Medicaid benefits, the Division of Medical Assistance will look at the five-year period immediately preceding the application to determine if you made any gifts. If gifts are found within this time period, a penalty period will be assessed, during which time the division will not pay any Medicaid benefits on your behalf. If at least five years and one day have passed since the date of the gift, under the current rules, the gift will not need to be reported when applying for benefits. Hence, no penalty period will be assessed.
A gifting plan may consist of outright gifting to your beneficiaries, usually your children, or to an irrevocable trust that can continue to provide you with income until you pass away. There is danger involved in gifting, as you may be admitted to the nursing home prior to the expiration of the five-year-and-one-day period. You must plan for this possibility before beginning any gifting.
As opposed to a gifting plan, if you are presently being cared for by one of your children, you might consider establishing a paid-care agreement with your child. Rather than gifting assets, you pay your child for the care provided to you according to the terms of the agreement. As you pay for care, you are spending down your assets to purchase the services, as opposed to gifting the assets, and you are also benefiting your child by providing him or her with additional income. These agreements must be reasonable and fair to you and your caregiving child.
The planning strategies mentioned in this article are extremely complex and contain various benefits and detriments. Should you wish to determine which strategy, if any, is best for your situation, it is highly recommended that you seek the advice of your elder-law attorney before you take any further steps. Do so now to avoid paying later. n
Gina M. Barry is a partner with the law firm of Bacon Wilson, P.C. She is a member of the National Assoc. of Elder Law Attorneys, the Estate Planning Council, and the Western Mass. Elder Care Professionals Assoc. She concentrates her practice in the areas of estate and asset-protection planning, probate administration and litigation, guardianships, conservatorships, and residential real estate; (413) 781-0560;[email protected].
Social Media Seminar Will Show How to Tap Online Tools
Tom Lewis says that, while Facebook has definitely expanded beyond the college crowd that spawned it, far too many business owners still believe its usefulness as well as its inherent value is restricted to that narrow constituency.
This is a mistake that could prove costly, said Lewis, president of Needlemine, a marketing consultancy specializing in search engine optimization of Web site content and cost-per-click/AdWords management strategy, and especially if ones competition fully understands how beneficial and cost-effective the free-access social-networking Web site can be in getting a companys message across.
How can any business owner say that he or she doesnt need a place where about 200 million people are actively using it and could come across that business in some way? he said. Whether youre a regional business or an online business, theres a lot of value there; it provides a forum for you to interact with your customers, it offers a community space for your own employees to communicate with each other and your customers, and the fact that its free is whats so fascinating about it.
This is a message that Lewis has spent considerable time before the microphone trying to spread, and hell be back at it June 5 as one of several experts who will be sharing their knowledge of social media and how those in business can use it at a program called Online Impact: Tapping Twitter, Facebook & Other Online Tools to Grow Your Business.
Sponored by BusinessWest and host of other businesses and organizations, the how-to seminar will be staged at the Technology Park at Springfield Technical Community College (STCC) from 8 a.m. to noon.
Those presenting the program are taking the view that, while most in the audience will walk in knowing something about the social-networking sites being discussed, they generally wont know enough about how to fully tap their vast potential, explained Gordon Snyder, director of the National Center for Informational and Communications Technology at STCC, and another of the seminars presenters.
By the time they leave, theyll know much more, he told BusinessWest, and will hopefully be inspired to continue the learning process.
Snyder said he can attest to the benefits of incorporating social-media tools into an organizations pre-established advertising and marketing methods. He told BusinessWest that tools like Twitter have allowed him and his colleagues to inexpensively inform the public about what theyre doing on a real-time basis. The use of these sites has also allowed the center and STCC as a whole to build a strong online reputation, and has made retrieving information about the school a quick and easy task.
Twitter for Business is the title of the breakout session Snyder will lead. It is one of many, and others include: Leveraging LinkedIn for Business, led by Ann Latham, president of Uncommon Clarity; YouTube for Business, led by Dave Sweeney of the Communications Department; This Business Sucks! Enhancing your Business Reputation Online, led by John Garvey, president of Garvey Communications Associates; Facebook for Business, led by Lewis; and Online Advertising for Local Businesses, led by Mary Fallon of Garvey Communications.
The seminar will begin with a panel discussion addressing the impact that social networking has had on the Internet. Contributing panelists will include Snyder, Veronica Cintron of WWLP 22 News, and Garvey.
For the duration of the event there will be a help desk available to assist attendees in getting online during the breakout sessions, and PCs will also be available for attendees to do their own exploring.
The reality that business owners have to face is that these sites are not going to simply disappear and melt into the technological woodwork, said Lewis. Advertising, marketing, and networking through these Web sites may very well be the future of business, and its important for business owners not to get left behind.
It is Snyders hope that the seminar will aid attendees in learning about social-media tools and how to use them in a way that will be most beneficial to their business or organization. After all, technology is only going to continue to grow, and theres no better time than now for businesses to gain their technological footing.
The cost to attend the seminar is $45, with all proceeds going to the Regional Technology Corp. To register, contact Suzanne Parker at (413) 755-1301 or at[email protected].
The seminar is being sponsored by BusinessWest, the Communications Department, Garvey Communications, STCC, NCICT, Needlemine, Uncommon Clarity, and WWLP 22 News.
Why Manufacturing Still Matters
On May 13, Manufacturing Day in Holyoke, the Greater Holyoke Chamber of Commerce, the mayors Industrial Advisory Committee, and Associated Industries of Massachusetts recognized nine local manufacturers, each more than 100 years old. This celebration is a reminder that manufacturing remains a pillar of our economy and a vital step on the ladder of social mobility.
Manufacturing does matter for Holyoke, for Massachusetts, and for the nation. Manufacturing is evolving, and despite fierce competition both domestically and abroad (and often a lack of appreciation by government at all levels), the states manufacturing sector is competitive, and in some sectors growing.
The Mass. Manufacturing Extension Partnership (MassMEP) notes that Census Bureau figures reveal a startling change: for the first time in the states history, small manufacturing enterprises (SMEs) are employing more people than the larger firms of more than 500 employees. In 2002, manufacturing establishments operated by companies employing 500 or more had 167,433 employees in Massachusetts, while SMEs employed 162,917; by 2006, employment by larger manufacturers declined 24% to 127,364, while employment by SMEs declined by less than 10% to 147,816.
The numbers of establishments tell the same story: large employers declined from 738 in 2002 to 624 in 2006, but SMEs remained steady at just under 7,000. As a recent report from Northeastern University, Staying Power: The Future of Manufacturing in Massachusetts, notes, it is remarkable, given the situation facing manufacturing across the U.S., that Massachusetts still sustains a manufacturing base that employs nearly 300,000 people.
So much has public opinion lost sight of the contributions made by manufacturers, however, that few in government, education, or the population at large are aware that the manufacturing sector is the largest contributor to the Massachusetts Gross State Product (GSP). As the financial-services bubble deflates, we should understand that making products produces real wealth, and recognize that we still manufacture many things in the Bay State.
In 2007, the manufacturing sector in Massachusetts contributed $42 billion to the GSP (13.7%), as compared to real estate, rental, leasing ($40 billion), professional and technical services ($35 billion), finance and insurance ($34 billion), and health care and services ($25 billion).
Manufacturing, moreover, has a large multiplier effect, creating economic activity and jobs in other segments of the economy. Without manufacturing, the Massachusetts economy would be about 40% smaller, we would all be poorer, and many of us would be out of jobs or out of the state.
We all know about the problems of the automobile industry, and the current economic downturn has hit most industries hard, but some manufacturing sectors are actually growing in Massachusetts, including pharmaceuticals with 2008 gross sales of $5.9 billion, navigation measuring and control instruments at $8.8 billion, and medical equipment and supplies at $3.6 billion. And since 2001, there has been growth in several other sectors, including food manufacturing, beverages, plastics, and machinery.
Massachusetts SMEs have remained vibrant and competitive although our state ranks in the bottom 10 in perceived economic climate, according to the Gallup Poll, and fourth-worst in cost of doing business, in the Milken Institutes index.
Some of our economic disadvantages are natural; many are self-imposed. To put Massachusetts in a position to generate new jobs when the current recession abates, lawmakers should review every single Massachusetts-only cost of doing business, law, or regulation. They should focus on advancing not only new industries and emerging technologies, but established ones as well. And they should shape policy to encourage graduation from research and development to full-scale manufacturing here in our state. Such an agenda will help ensure the Commonwealths economic future for all of our residents.
Meanwhile, lets tip our hats and congratulate the nine Holyoke manufacturers who have made it in Massachusetts for more than 100 years! v
John Regan is executive vice president of government affairs at Associated Industries of Massachusetts, an employer association of 6,500 Bay State employers. Doris Ransford is president of the Greater Holyoke Chamber of Commerce.
City leaders joined AIC students, administrators, and trustees for the official groundbreaking for new athletic facilities on May 6. John T. Short, vice president for institutional advancement, said the new facilities will accommodate the needs of AIC’s intercollegiate teams, as well as enable the expansion of intramural programs, and allow for greater student and community usage of facilities. The new construction, to total $4.3 million, will include taking out grass and installing artificial turf, lights, new grandstands, and a new press box. The project, financed by Westfield Bank, will be constructed by Mountain View Landscapes and Lawncare Inc., of Chicopee. A large portion of the funding for the project is coming from the AIC students. Darren James, president of the AIC Student Government, said students have pledged $50,000 for the new facility. “The money we donate to the capital campaign will help to facilitate the realization of our long-awaited athletic turf field and track,” he said. Pictured, from left, are Lauren Silva and Darren James, AIC students; Vince Maniaci, AIC President; and Frank Colaccino, chairman of the AIC board of trustees.
The Brattleboro Retreat was honored with the “Best in New England” Lamplighter Award at the spring conference of the New England Society for Healthcare Communications (NESHCO) held May 4-6 in Providence, R.I. The Lamplighter Award represents the top honor among Gold Award winners in more than 50 categories. It went to the Retreat for the organization’s six-minute DVD titled “Helping People Find the Strength.” The DVD, which also won gold in the category for audio/visual presentations, was produced by Sunnyside Films. It was filmed on the Brattleboro Retreat campus and features interviews with many Retreat staff. The Retreat also received NESHCO awards for the following marketing and communications pieces: Gold Award: Design/Printed Pieces (for the 2009 wall calendar); Gold Award: Special Events Communications (for communications pieces in support of the December 2008 fund-raising event featuring the Moscow Ballet performance of the Great Russian Nutcracker in Springfield); Silver Award: Design/Logo (for the institution’s new clock tower logo); Silver Award: Publications/Annual Report (for the “2007 Annual Report to Stakeholders and Friends”); and Award of Excellence: Overall Marketing Campaign (for the Retreat’s 2008 overall marketing campaign). From left, Jeff Whitcomb, president of Communicators Group Inc.; Dr. Robert E. Simpson, president and CEO of the Brattleboro Retreat; and Julia Sorensen, director of Marketing and Communications at the Brattleboro Retreat.
Florence Savings Bank President John Heaps addresses a large audience gathered at a recent press conference at Northampton’s Thorne’s Market, where the bank announced its receipt of a special achievement award from the Small Business Administration for having the highest percentage of SBA loans to women-owned businesses by banks statewide. “Women-owned businesses play a major role in the local economy, and we’re committed to helping them, as well as all local businesses, get the financial resources they need,” said Heaps. The press conference was staged in front of the clothing store Jackson & Connor, one of the women-owned businesses to which the bank has given financing.
Market Business Show
The Affiliated Chambers of Commerce of Greater Springfield staged its annual Market Business Show on May 13 at the MassMutual Center. Thousands of visitors took in more than 150 exhibits featuring companies and institutions across Western Mass. and across every business sector. Here, Ginny Knapp, left, president, and Teresa Utt, sales representative, with Andrew Associates in Enfield, mix and mingle at the event.
John Prenosil, left, principal with Springfield-based JMP Environmental Consulting, and Peter DeMallie, president and CEO of South Windsor, Conn.-based Design Professionals Inc., shared a booth and a conversation at the show.
Unveiling the new look of ERC5 — East of the River Chamber (Hampden, Wilbraham, Ludlow, East Longmeadow, and Longmeadow), are, from left: Jim White of GoGraphix and Whitestone Marketing, creator of the new graphics, branding, and booth design for ERC5; Bill Russo-Appel, director of Marketing and Public Relations at Wing Memorial Hospital and Medical Centers; Beth Pecia, with the Town Planner; Edward Zemba, principal with Robert Charles Photography in East Longmeadow; Amy Scott of the Town Planner; and Charlie Christiansen of East Longmeadow-based Peritus Security Partners.
Helene Curto, left, owner of Wilbraham-based Distinctive Tables, draws in attendees Janet Egelhofer and Maria Burke, both with the Springfield Symphony Orchestra, with one of her unique collections.
Scott Bottino, manufacturer’s representative (second from right), stands with team members representing West Springfield-based Northeast Security Solutions; from left, Joe Jarman, sales representative; George Condon Sr., chief operating officer; and David Condon, account representative.
From left, Edward Zemba, co-owner, and Susanna Zemba, customer relations manager, of Robert Charles Photography in East Longmeadow talk with Melissa Meites and Coty Boyer, both employees of DiGrigoli Salons in West Springfield.
Barry Sanborn, general manager of Proshred Security in Wilbraham, staffs the company’s booth.
Ten POints About: Facebook Privacy
By CHRISTINE PILCH
1. Restrict profile access only to friends. The default is everyone, so your Facebook profile is an open book until you restrict access.
|2. Use groups. Set up groups for different sets of friends. This allows you to control specific data access by group rather than on an individual level.|
|3. Carefully consider who you want to post to your wall and view posts by others. If you have a combination of personal and professional connections, you might not want everyone to see what others write.|
|4. Protect your photos and videos. Avoid embarrassing photo and video flubs by restricting certain individuals and groups from seeing those you post and that others tag with your name, and remember to set album security levels too.|
5. Disable news stories about posting on friends’ walls. Nobody needs to know that you’ve written on a friend’s wall.
|6. Don’t post your relationship status or allow news feeds when your relationship status changes. If you’re happily married, that’s one thing, but if your relationship status is subject to change, you don’t need to broadcast it, thereby causing potential embarrassment.|
|7. Restrict search results information. It’s great to be able to be found by everyone, but strangers don’t need to see your friends and pages you’re a fan of.|
|8. Delete your public search listing. You don’t need to have the personal information in your profile accessed by search engines.|
|9. Check and see how individual friends see your profile. Look at your profile with a critical eye. You will likely find that there are certain aspects of your personal life that you don’t want some friends to see.|
10. Safeguard your personal contact information. Think about who you want to have access to your address and phone numbers.
|Christine Pilch is a partner with Grow My Company and a social-media marketing strategist. She trains clients to utilize LinkedIn, Twitter, Facebook, and other social-media tools to grow their businesses, and she collaborates with professional service firms to get results through innovative positioning strategies; (413) 537-2474; linkedin.com/in/christinepilch; twitter.com/christinepilch; growmyco.com; “Miracle Growth for Your Company.”|
O’Leary Group Respects the Past While Tackling New Trends
Horizon Solutions has offices across the Northeast, from Bangor to Buffalo, as Rob Barcome put it.
So the company decided that Holyoke would be ideal for a central location that will serve as a training mecca for the electrical/industrial distributor.
Its a place where we can train our customers, employees, and vendors on site, with some corporate personnel in another portion of the building, said Barcome, the companys purchasing and inventory control manager. The building, now being completed by the OLeary Group, will house 50 employees and feature a demonstration lab and remote meeting capabilities, among other features.
OLeary was able to be accommodating to us, giving us suggestions as to what would look good and not look good, responding to our changing needs, Barcome said. Seeing something on paper come to fruition was easy.
Thats the goal of every project OLeary takes on, said Michael Byrnes, general manager of the Easthampton-based general contractor, which came under new ownership last year but continues to emphasize its reputation as a one-stop shop for design, construction, and maintenance.
Design-build is simply a process where the builder is the designer, and youre able to take it from paper to brick and mortar with any changes in between, said Kevin Donovan, OLearys director of sales. Its a streamlined process because all the different services are in-house.
That made it easy for us when we needed changes, Barcome said. It wasnt a complicated process; we just got on the phone and made the changes that were necessary.
The project didnt happen overnight, Byrnes explained, noting that the company first contacted OLeary in September 2007.
One holdup was obtaining the property, said Barcome. Once the Kelly Way site came on the market last July, Horizon Solutions bought it, and the project design began the following month. Construction started in January, and despite a series of weather-related obstacles stemming from an unpredictable winter, the building is set to open for business in June.
Because we can design something and build it, we know what it costs; we know what the rough budget is going to be, said Donovan. We do a lot of feasibility up front, and we can make changes without taking the project back to the drawing board two or three months into the process.
In this issue, BusinessWest takes a look at two recent OLeary projects, why the companys use of pre-engineered materials saves money and time, and why its important to stay ahead of construction trends including an increasing focus on green building in order to stay competitive in a shifting marketplace.
Under One Roof
In 2008, ownership of the OLeary Group changed hands, when the company was purchased by a team of three investors. All of them have considerable construction background of 25-plus years, Donovan said. They basically wanted the company to do the same things it had been doing since 1955 under prior ownership.
That means a heavy emphasis on design-build, which essentially brings the design and construction of a project under one roof, and is becoming a more popular model in the industry for several reasons, said Byrnes, from the cost-consciousness rising from the slow economy to a tendency for customers to demand projects completed faster than ever before.
The nice part about the building process is, when customers like Rob come to us, we can tailor the project to meet their exact needs, and it allows flexibility for revisions during the process as a customer further defines their actual building needs, he added. The other thing it does is, it allows for cost control along the way, which is obviously critical in this business environment.
Although OLeary can tackle any type of building, said Donovan, 95% of its projects use pre-engineered metal frameworks manufactured under the Butler name, which provides not only strength but flexibility of design and efficiency during the construction process.
Butler has been involved with pre-engineered building systems since post-World War II, and theyve developed an attractive product line thats one of the best in the pre-engineered building market, said Byrnes, ticking off a series of benefits to property owners, from lengthy roof warrantees to state-of-the-art finishes and exterior wall treatments. They maintain their durability over the years. Weve got buildings still functioning well that were built in 1957.
The ease of construction means more flexibility than other buildings, Donovan added. A pre-engineered building doesnt have to be a metal-sided building. It can have any finish you want on the outside, from clapboard to a log-cabin look.
The fact that pre-engineered components arrive at the site already punched not only saves time, said Byrnes, but it ensures that every piece will have the necessary plumbness and squareness, which eliminates waste. Because of that, you can move more quickly than with traditional welded buildings.
To James Avery, however, none of that mattered as much as timing.
The specifics of the building werent the key to the project; getting it built on time and on budget was, said Avery, owner of Aero Fastener Co., an aerospace-industry distributor, which opened its new site in Westfield in mid-February a date that was set in stone when the construction project began last summer.
We could not be without an approved site; all our qualifications have to be in line for us to ship our parts, he explained. For us to miss the completion date by a week would cost Aero $300,000. So we needed a commitment to getting the building done on time. That was an essential ingredient in picking OLeary. And we were successful; we were operational within five business days of moving in.
Avery had worked with OLearys previous ownership on a massive remodeling of another property, increasing its size from 10,000 to 25,000 square feet, and his recent experience was equally smooth. One of the key factors, he said, was the fact that the companys final price hardly moved from the bid price, as it tends to do with many projects. Other people lowball you at first, he said.
Byrnes said that consistency in pricing speaks to the nature of pre-engineered structures; its easier to anticipate changes using the Butler system, which means fewer surprises for clients.
Because of what they know about the business, it was an easy bid process, said Avery. They didnt come back with any excuses.
Byrnes said the OLeary Group also boasts an extensive service department to maintain buildings it has erected.
Weve been constructing buildings since 1957, he said, and as customers building needs evolve and change, we provide ongoing services and products they need to maintain the function and appearance of their building.
And priorities in the industry are changing all the time, perhaps most notably in a growing emphasis on green building, which considers the overall environmental impact and energy efficiency of a structure.
The Horizon Solutions building boasts several green features, including extra insulation to reduce heating costs; a white, reflective roof that keeps the structure cool during the summer and holds air-conditioning costs down; and sensory lights in many areas that automatically switch off when a room isnt occupied.
Green seems to be the trend; a lot of people are asking for it, given fuel costs and operating costs, Byrnes said, noting that all construction companies have to stay up to date on this trend. In fact, every green feature earns a company points with the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. And LEED isnt only concerned with construction processes; it also promotes healthy lifestyles, which is why bike racks, vending machines that carry healthy snacks, and building locations along bus routes all earn points as well.
But despite shifting trends, some priorities are timeless and cost and speed are certainly among them.
Our bank told us that we should budget 10% to 15% worth of overages, and we came in at 4%, said Avery of his Aero Fasteners project. That was important to them because they didnt want the mortgage to increase very much. In the end, we paid for the overruns with self-funding.
In todays market, you cant have surprises, he added. Its important to know that the costs are going to be fixed.
Because green is important in more ways than one.
Joseph Bednar can be reached at
A Time of Challenge, Opportunity for STCC’s Technology Park
After an unsuccessful bid to land the states backup data center and the departure of long-time tenant Springboard Technologies, managers of the Technology Park at Springfield Technical Community College have a 116,000-square-foot challenge on their hands. Re-tenanting the property known as Building 104 wont happen quickly or easily given the current state of the economy, but those charged with that task see an opportunity to add new jobs and bring stronger fiscal health to the park for the long term.
When the Assistance Corporation that administers the Technology Park at Springfield Technical Community College commissioned a feasibility study on whats known as Building 104 last fall, there were several possible scenarios in play for the structure built at the start of World War II.
Plan A, if it could be called that, would see the 116,000-square-foot facility become home to the states backup data center, an $80 million operation that would store and transfer information on everything from traffic tickets to tax collection and employ hundreds of people. But the tech park site was one of two being considered for the center, and the competition, the former Technical High School, or whats left of it, on Elliott Street eventually got the nod from the state in January.
Knowing this was a possible eventuality, the Springfield-based architectural firm Dietz & Co., which handled the feasibility study, considered other options, including a consolidation of Building 104s long-time occupant, Springboard Technology, into a portion of that structure and subdividing what remained for new tenants.
But when Springboard, which handled contract work maintaining and repairing computer components, and had been struggling for some time, eventually fell victim to the faltering economy earlier this year and informed the Assistance Corp. that it couldnt remain in the park in any capacity, that essentially brought the board to Plan C. This amounts to starting with a clean slate in a building that comprises roughly one-third of the space in the ambitious, 13-year-old technology park created out of several manufacturing complexes in the old Springfield Armory.
The timing could obviously be better for starting anew, said Bob Greeley, president of R.J. Greeley Co., which will be tasked with leasing out the space, noting that the economy has made many companies cautious about moving or expanding. But the space in Building 104 is unique, he said, in that it can handle heavy loads and features redundant power and heavy-fiber connectivity.
This combination should make it attractive to data-center-like facilities and also some manufacturers, he said, noting that, while it may take some time to fill the space, the tech park may likely emerge fiscally stronger from Springboards departure. Indeed, while that company took one-third of the space in the park, it certainly wasnt providing one-third of the revenue, said Greeley, adding that new tenants taking advantage of the buildings highest and best use data storage and high-tech manufacturing could yield substantially higher revenues for the long term.
Paul Stelzer, president of Holyoke-based Appleton Corp., which manages the complex, agreed. He said that, while Springboard was a solid, long-time tenant, it was essentially underutilizing much of the space it occupied.
Looking forward, we see an opportunity for the technology park, he said, adding quickly that seizing on that opportunity wont be easy given the current economy.
In this issue, BusinessWest looks at what will certainly be an intriguing next chapter for the tech park, which was created with the help of the state Legislature to house technology-related businesses and startups, and thus bring new jobs to the region.
While giving BusinessWest a tour of Building 104, Greeley stopped at what was a $5 million clean room built by Digital Equipment Corp. (DEC) when it occupied most of what is now the technology park in the 1980s.
The clean room, later converted for general assembly work by Springboard, is part of the facilitys long history, which dates back to the early 40s, when the Springfield Armory used it for some manufacturing, but mostly warehousing operations. It has held that role for most of the past 70 or so years for the Armory, then Milton Bradley and General Electric, which both occupied the site for many years after the Armory closed in 1967, and later Digital, from which the Springboard operation was spawned.
But it wont be a warehouse in the future, said Greeley, noting that it has much more to offer than high ceilings and several loading docks. Indeed, the buildings redundant power and whats called heavy fiber will make it ideal for technology-related ventures, especially data storage.
Theres a lot of warehouse space on the market in this region, said Greeley, but there isnt any other space like this.
And it this uniqueness that provides a measure of optimism for park administrators as they go about the task of trying to re-tenant Building 104 in the middle of the worst recession in decades.
Tracing the history of Springboard and its influence on the evolution of the park, Greeley said the company, founded by long-time Digital plant manager Tony Dolphin, originally occupied much more space in the park, including part of whats known as Building 111. In the late 90s, park administrators consolidated Springboards operations into 104, thus opening up space to be used as a call center by RCN and, later, by current occupant Liberty Mutual, which arrived last summer.
Springboard has struggled for the past several years, said Stelzer, but the Assistance Corp. and park managers remained committed to helping it remain viable and in the park, albeit in much smaller space.
Springboards difficulties and the increasingly pressing need to find a new, more-stable tenant for 104 prompted the Assistance Corp. to propose that space as a suitable home for the states data center, he continued. When that two-year-long battle was lost, and when Springboard made its departure official a few months ago, park administrators quickly launched an ambitious effort to market the space.
Until a few weeks ago, however, they didnt have much to show prospective tenants, said Greeley, noting that Springboard was still in the process of moving out. With that work now completed, he continued, we can expose the space to the marketplace.
Getting more specific, he said the target audience will be operations that store, process, and transfer information. There are already a few smaller ventures of this ilk in the park, he said. As one example, he cited Crocker Communications, which occupies 5,000 square feet, in which it operates what would be considered a small co-location facility.
Such operations run 24/7/365 and require high levels of redundancy that doesnt exist in most facilities, especially in Western Mass., said Greeley, adding that hes already had some informal inquiries about the site, despite limited marketing to date.
Stelzer told BusinessWest that, while one large tenant is a possibility for the site, it is far more likely that the space will be subdivided into four and possibly more smaller spaces.
There just arent that many 100,000-square-foot tenants out there, he said, adding that the feasibility study indicates that the property can, and probably should, be divided into spaces ranging from 10,000 to 40,000 square feet.
There are some potential tenants currently doing business in the 413 area code, Stelzer continued, but the property will likely be filled with a mix of businesses from this area and other regions, meaning the potential for additional new jobs for the region.
The wild card in the equation, of course, is the economy, which is currently defined by question marks, said Greeley. People dont know what things are going to look like in a few months, let alone a year, he said. This recession is not like other recessions Ive seen; no one can say with any degree of certainty whats going to happen, and this has left many businesses unsure of what to do.
New Lease on Life
One thing is for certain: filling the space in Building 104 is critical to the long-term success of the technology park, say those charged with re-tenanting the property.
Yet, the assignment isnt simply to fill the space, but to find tenants that can make the most of its unique properties, and thus provide better, more-reliable revenue streams for the park.
Time will tell how successful Greeley and others will be in completing their mission, but theyre cautiously optimistic that they can make the most of what they ultimately view as a stern challenge and a unique opportunity.
George OBrien can be reached at[email protected]