Home 2013 April (Page 3)
Opinion
Some Bright Spots for the Region

EditorialBWlogoThere is quite a bit to like about the story surrounding the startup company SolaBlock, profiled on page 30 of this issue.

For starters, this is a venture involving renewable energy, one of the more potential-laden growth areas for this region,  and one where some of that potential is starting to be realized. Specifically, this initiative involves a new take on solar energy; instead of installing panels on rooftops, this company, founded by Patrick Quinlan, will build them right into cinderblocks, and then, hopefully, into walls of all kinds — for commercial and residential buildings, gardens, and even those built to block noise from highways. (There’s considerable potential there, because such walls are not usually obstructed by trees.)

The concept will be put to the test this summer — thanks to a $40,000 state grant — at a small building in the Technology Park at Springfield Technical Community College, just a stone’s throw (literally) from the Scibelli Enterprise Center, where SolaBlock is now a tenant.

And that’s the other aspect of this story that bodes well for this region.

Opened more than dozen years ago now, the Enterprise Center was launched by then-STCC President Andrew Scibelli with the hope that it would eventually become home to hundreds of startups that would generate commerce and, more importantly, create jobs across the region.

But while the center has played host to some success stories — in realms ranging from website design to a cross-border (Connecticut and Massachusetts) phone book that was eventually acquired by one of the larger players in that now-declining market — it has not lived up to its own vast potential.

However, it is enjoying what could be described as a renaissance under director Marla Michel, an executive STCC shares with UMass Amherst. Helped financially by another new tenant (Square One) that doesn’t exactly fit the startup description but needed accessible space after the June 2011 tornado leveled its headquarters building, the center is slowly building the tenant base in its business incubator.

Indeed, it now hosts ventures involved with everything from development of sporting goods to group sales for a wide range of shows and events.

But the center’s mission is obviously to offer much more than square footage to be leased. It also provides a wide range of support services and counseling designed to help fledging operations get off the ground and to that next level.

The center still has a ways to go to become the force within the local economy that its creators had in mind when the facility opened its doors in 2000. But it is certainly moving in the right direction after years of struggle following the Great Recession.

And this bodes well for Western Mass. because, as we’ve said many times, real growth and prosperity in this region is not going to come from a casino or through efforts to attract large employers. It will happen organically, through the development of new concepts and new companies that will create jobs and, hopefully, stay in this region and grow.

It’s too early to say how the SolaBlock concept will fare long-term — this summer’s testing of the product might yield some indication of its potential within the building industry. But at the moment, it’s an intriguing story in its own right, and part of another, more far-reaching story as well.

And they both involve building blocks that may yet change the landscape in Western Mass.

Opinion
Career Readiness Critical for Young People

School to Career Connecting Activities, a collaborative effort between public and private partnerships, is led by 16 local workforce-investment boards in Massachusetts, including the Regional Employment Board of Hampden County (REB).  The initiative provides high-school students with paid internship opportunities in a wide array of occupations and industries, from which students gain exposure to real-world work opportunities and learn professionalism, responsibility, and job-readiness skills that help them become attached to the workforce in the future.

Recent national surveys of employers and human-resource managers have found increasing concerns with the employability and skill deficiencies of young workers.

In 2007, connecting activities leveraged more than $45 million in employer wages, putting more than 17,500 students in internships at 6,500 employer sites. In 2012 alone, with funding at only $2.75 million, more than 9,800 students were placed in internships at 3,500 employer sites. With funding in the state budget for fiscal year 2013 at only $750,000, the program is facing extreme challenges.

In Hampden County, we were able to put 658 students into internships with 258 area employers in various industries, including WGBY, Big Y, Baystate Medical Center, Mercy Medical Center, Giggle Gardens, Holyoke Health Center, Polish National Credit Union, and many more.

The need for increased employment for the state’s teens is greater than in many years. According to a recent study by Northeastern University’s Center for Labor Market Studies, “in 2012, only 26% of the state’s teens found themselves able to obtain employment during an average month.” This was the lowest state teen-employment rate recorded over the past 50 years for which such data exists.  Fewer than one of seven low-income teens in high school in 2011 worked in Massachusetts.

The Center for Labor Market Studies has documented that those students who work during their senior year or in multiple summer jobs over their high-school years are more likely to transition into college or the labor market after graduation. The habits learned in the workplace, such as productivity, teamwork, collaboration, problem solving, management, and initiative, are paramount for the Commonwealth’s youth.

In Hampden County, the REB is working with 18 different schools through four lead school-to-career connecting-activities coordinators, who assist students and the school’s career facilitators to secure employment and optimize learning through internship opportunities. With the decreases in funding since 2007, we unfortunately cannot serve all the students who could benefit from an internship.

Student experiences speak for themselves. At Minnechaug Regional High School in Wilbraham, two youths who participated in the School to Career Connecting Activities Program had plenty to say about their experiences.

A senior named Hannah, who placed at the town’s Engineering Department, said, “I loved my experience. It was a great way to learn about your intended college major [Civil Engineering]. I learned what was like to work in an office and how to use office equipment. I gained a lot of skills working on the computers with different programs. I learned how to interact with customers and employees. I learned how to be more observant and make certain connections. I learned that it is OK to take risks and be wrong and how to voice my opinion and not hide my ideas.

Meanwhile, a senior named Matthew, who placed at FloDesign, an innovative business incubator that specializes in contract engineering and technology commercialization, noted that “my goal of learning about the field and solidifying my decision on becoming an engineer has been met. By working on various projects and doing things actual engineers do, I have learned more than enough to be sure that this is the type of career I am looking for. ”

School to Career Connecting Activities staff are dedicated to providing opportunities for youth to develop their career skills while in school. The investment by the state Legislature in expanding these career-building tools and experience for its youth will help strengthen future employment opportunities for the young people of Massachusetts. This is not only an investment in the students themselves, but also in the Commonwealth’s future workforce and its economic growth potential.

For more information, contact Bill Ward, REB president and CEO, at (413) 787-1547.

 

Joseph Peters is chair of the Regional Employment Board of Hampden County. Andrew Sum is director of the Center for Labor Market Studies at Northeastern University.

Class of 2013 Difference Makers
Highlights from this year’s event

BizDiffMakrsLOGO2011More than 350 people turned out at the Log Cabin Banquet & Meeting House in Holyoke for a celebration of BusinessWest’s Difference Makers for 2013. The photos on the next several pages capture the essence of a special night, which featured entertainment from the Children’s Chorus of Springfield and the Taylor Street Jazz Band, fine food, and memorable comments from this year’s winners, who all conveyed the passion that has made them true Difference Makers. This year’s class, chosen by the editor and publishers of the magazine from dozens of nominations, reflects the many ways in which individuals and groups can make a difference in the community. State Troopers Michael Cutone and Thomas Sarrouf, along with John Barbieri, deputy chief of the Springfield Police Department, were chosen for their work to orchestrate the C3 Policing program in Springfield’s North End. John Downing, president of Soldier On, was selected for the many ways that organization improves quality of life for veterans. Bruce Landon, president and general manager of Springfield Falcons, was chosen for his efforts to keep professional hockey in Springfield over the past 35 years. The Sisters of Providence were chosen for their 140 years of service to the community, especially in the broad realms of healthcare, education, and social service. And Jim Vinick, senior vice president of Investments for Moors & Cabot Inc., was chosen for his work with many area nonprofits, especially the Naismith Memorial Basketball Hall of Fame and the Jimmy Fund.

Sponsored By:
Baystate Medical PracticesFirst American Insurance • Health New England • Meyers Brothers Kalicka, P.C.Northwestern Mutual • Royal LLP • Sarat Ford Lincoln • 6 Pt. Creative WorksDiffernceMakers0213sponsors

For reprints contact: Denise Smith Photography / www.denisesmithphotography.com / [email protected]

Photos From the 2013 Difference Makers Gala
Cover Story
Crumpin-Fox Club Focuses on Providing an Experience

Mike Zaranek

Mike Zaranek says Crumpin-Fox is a thought-provoking golf course, meaning that one needs a game plan to attack it.

Mike Zaranek describes the Crumpin-Fox Club as a “thought-provoking golf course.”

And by that, he meant that one can’t — or shouldn’t — plan on muscling their way around this picturesque track in Bernardston, just outside Greenfield. Rather, they have to think their way around.

“There’s a lot of shot-making that’s involved here,” said Zaranek, the head golf professional, gesturing with his hand to the 18th hole as he looked out on the course from a seat at Zeke’s Smokehouse Grill, the club’s 19th hole. “It’s not a bomber’s golf course where you hit your driver on every hole and try to get it as close as you can to the green. This course makes you think off each tee, and on every second shot as well.”

And just as the player needs a strategic plan for taking on this Robert Trent Jones Sr. creation, Zaranek and the rest of the management team needs one of their own to enable the club to continue growing at a time of stern challenges and mounting competition in the golf industry.

The essence of that plan is to let the course become not merely a destination, but an experience, said Zaranek, adding that it does this naturally, through its views and challenges, both of which create lasting memories.

“Each tee you stand on, and each green you look back to the tee on, is like a postcard,” he explained, adding that this effect is heightened by many changes in elevation and is especially dramatic at fall-foliage time. “There is a uniqueness to it, and that’s what brings people back.”

Repeat business is obviously one of the keys to success for any golf operation, but it’s especially critical for one that charges just under $100 a round for public play — which accounts for roughly 60% of the business at this semi-private course — and is tucked away in one of the most remote areas of the state, just a few miles from the Vermont border.

The Crump’s eighth hole

The Crump’s eighth hole forces the player to make a number of decisions.

Thus, the staff puts the accent on the total experience — from the golf to the meal afterward — and also on both driving first visits (which often prompt return trips) and convincing players that Crumpin-Fox should be a more than a once-a-year course.

“That sentiment is summed up in one of our marketing slogans — ‘minutes away, worlds apart,’” said Zaranek. “We’re a destination, but we don’t want to be just a destination; we’d love to have people visit us two, three, or four times a year. Overall, we want to make this an experience, one that you’ll enjoy and want to mark on your calendar every year.”

For this issue and BusinessWest’s annual Golf Preview, we take an indepth look at what is still a hidden gem, and Zarenek’s efforts to make it less so.

 

On the Hole

The eighth hole at ‘the Crump,’ as it’s called, is certainly one of the more thought-provoking holes on this 7,023-yard layout.

There is water along almost the entire left side of this lengthy par 5 (nearly 600 yards from the tips). And the decision making really begins after the drive, even if it’s a very good one.

The player is faced with the option of hitting a safer mid-iron to a still-relatively wide section of fairway for a third shot of roughly the same length over the lake to a narrow, undulating green, or bringing out more artillery and hitting down to a narrower strip of fairway, leaving just a wedge onto the putting surface.

There are many such decisions to be made on this course, which offers what Zarenek described as a Pine Valley-like feel, if not look, although it has some of that, too.

This is a reference to the George Arthur Crump-designed track in Southern New Jersey that is generally regarded as the world’s most difficult course, and one of its very best. The comparison doesn’t involve degree of difficulty — although Crumpin-Fox is certainly challenging — but rather the notion that every hole is an entity unto its own, with other holes rarely visible from tees, greens, or fairways.

“Each hole is set in its own scenery here — you play that hole, and then you move on to another piece of scenery, and that’s what we mean by a Pine Valley-like course,” Zaranek explained. “You barely see the group in front of you or the group behind you all day.”

The overall tightness of the layout also contributes to that description.

“At one time, especially on the back nine, it was basically the tee, the fairway, about five feet of rough, and then there was brush, the jungle,” he noted, adding that the course has been opened up somewhat over the years, but still demands accuracy. “What you see is what you get in front of you.”

This was the general idea when, in 1969, area businessman David Berelson engaged the services of Roger Rulewich, a noted golf-course architect then with Robert Trent Jones Inc., to locate a parcel for a destination golf course.

The current site in Bernardston was chosen, but the project stalled and didn’t begin to take shape until 1977, when Andy St. Hillaire, owner of Mohawk Plastics, bought the land and project, completed what are now the back nine holes, and built the present clubhouse.

The name Crumpin-Fox, said Zaranek, was derived from some of the old soda bottles found on the property as construction of the course commenced. The Bernardston-based Crump Soda Co. was eventually sold in 1853 to one Eli Fox, he noted, and then renamed the Crump & Fox Soda Co.

In 1987, St. Hillaire sold the club to William Sandri, president of the Sandri Co., which owned a number of gas stations in Western Mass., Vermont, and New York, and would eventually diversify into a number of business sectors, including real estate, clean-energy products, and golf.

The company now has three courses that operate under the name Fox Golf. The others are the Fox Hollow Club in Trinity, Fla., which opened in 1994 — its 18th hole was at one time rated the number-one par 4 in Florida by Florida Golf Central magazine — and Fox Hopyard in East Haddam, Conn., which opened in 2001.

 

Round Numbers

All three clubs operate under the same model — that of a semi-private course that has members but is also open to the public at most times during the week. Zaranek said this model is perhaps the most successful in golf today because it offers both the stability provided by a core of members (that number is roughly 235 at Crumpin-Fox, one Zaranek said he’s comfortable with) and the flexibility and additional revenue opportunities that come with making the course open to the public.

Membership at Crumpin-Fox has been steady, with relatively little fluctuation in the number in recent years despite turbulence in the economy, said Zaranek, adding that the public-play component of the equation has been more impacted by the downturn, as well as a number of other contributing factors.

These include everything from the weather — which has both helped and hurt; the 2012 season began on March 23 (a record for the Crump) after a nearly snowless winter, but the hurricane of 2011 took a heavy toll — to new competition in the destination-course market.

Indeed, while the pace of new-course construction has slowed in recent years, some additions in the eastern part of the state, especially a new cluster of tracks in the Plymouth area, as well as the Ranch in Southwick and some new venues in Connecticut, have had an impact on play in Bernardston, said Zaranek.

“From Route 3 down to the Bourne Bridge, they built 15 or 16 golf courses since 1997, and that took some of the traffic we used to get from the Boston area,” he noted. “We still get some, though, and we’re seeing those numbers climb because people are expanding their visions, and they’ve played all those new courses. People say, ‘have you ever played Crump?’ and once people come out here once, I think they like putting us back on their docket.”

Last year, even with that early start, the club recorded roughly 19,000 rounds between members and guests, he told BusinessWest, adding that, in banner years (such as the late ’90s), volume has exceeded 25,000, and the present goal is to get closer to 22,000.

To get there, the general strategic plan for the course, which hasn’t really changed since it opened, is to convince players from maybe a 75- to 100-mile radius that Bernardston is not that far away, and certainly worth the time and trouble for a course that is unique and challenging.

And this is the message being sent to a host of constituencies, from smaller groups (a foursome or two) to larger entities, such as leagues or clubs, to charitable organizations planning fund-raisers. The club already hosts a number of events, said Zaranek, including a large gathering for Big Brothers Big Sisters and another for the It Takes a Community foundation.

While the Crump name certainly resonates within the Western Mass. market, it is still somewhat of an unknown commodity in other areas, especially with younger golfers, he continued, adding that one of the club’s stated goals is to build brand recognition across the region it serves.

With each of those aforementioned constituencies, the key is providing value — and an experience — that will drive repeat business, Zaranek explained, adding that this goal, or mission, has prompted improvements ranging from extensive renovations to Zeke’s Grill, including the addition of a smoker, to an ongoing facelift in the locker rooms.

“There are a lot of elements that go into making a club successful,” he explained. “And you have to make each guest that comes through feel like a member that day, and make them feel like they had a great experience. And that all has to gel together. We keep trying to improve everything we do every day.”

Long-term, the club is exploring a possible expansion of the clubhouse and perhaps the addition of a large pavilion for outings, he said, adding that many events are currently staged under tents erected on the driving range.

Course of Action

Zaranek said the club has historically strived to be open by Masters weekend, the unofficial start of the golf season for those in the Northeast.

Looking out on a course that still had a number of areas covered by more than a few inches of snow, he said that goal is likely within reach (the Masters is set for April 11-14), but some assistance from Mother Nature will probably be needed.

She has already contributed a dramatic setting that has contributed to those postcards Zaranek described, and given the Crump a strong selling point to draw players for what will likely be the first of several visits.

“It’s one of the most unique, pretty, and, yes, demanding golf courses that you’re ever going to play,” he said in summation. “You don’t go away forgetting many of these golf holes as you play them.”

 

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

Golf Preview Sections
Elmcrest’s Manager Puts Some Imaginative Spins on Golf Operations

Jim Haberern

Jim Haberern says Elmcrest has had to evolve from a somewhat closed society into one that’s much more open.

Jim Haberern called it his “temporary office.”

This would be the small, cluttered desk, chair, credenza, copier, and other pieces of equipment positioned in the center of what he termed the small-events room at the grille, or 19th hole, at Elmcrest Country Club in East Longmeadow, which he serves as manager.

Like the small room that is his permanent office, this space is getting a much-needed facelift. Indeed, as Haberern explained, while the club has undertaken many improvements over the years, some of the features would represent original equipment from when it was built almost 50 years ago.

“We’ve been doing a lot of painting and giving the place a new look,” he explained. “With the changes we’ve made, the room is much more versatile — and it’s also a lot cleaner, because just about everything in here had been here since day one. This was long overdue, and it was the right moment to do it.”

And just as the dance floor, some of the walls, ceilings, and woodwork from the club’s early days have required some change and modernization, so too have some of Elmcrest’s operating philosophies.

As Haberern explained, for decades the club operated as what he called a “closed society.” And by that, he meant the original core of members (only a few of whom remain) and the new members brought in on a steady basis until about 15 years ago, when those individuals started hitting 70 — and not on the scorecard.

As that group of original members dwindled in number, Elmcrest essentially had no choice but to become an open society, or at least one that was far more open than it and most other private clubs in this area have been historically.

And by open, he meant open to both new members of all ages and new ideas for attaining them. These have included many forms of marketing — something most private clubs had never done and some still refrain from — including print ads and sponsorship of a popular Saturday-morning golf show on radio station WEEI. But it also includes hosting more tournaments to introduce more people to the course and its amenities, and then giving participants a gift card good for another round, a practice that has paid off.

“Membership is moving in the right direction,” said Haberern, adding that there have been fairly steady increases over the past several years. “And a big reason for that is that people know who we are now. We were a closed society, and I had to open it up quite a bit.”

His efforts to continually cast a wider net continue with another new initiative aimed specifically at women. Noting that there are many professional women who may want to join a club but are reluctant because of their lack of golf skills, Haberern is putting together a package that would begin with lessons from a professional and eventually ease the individual into a golf membership.

Long-term, said Haberern, the unofficial goal for Elmcrest is to become more of a closed society again, meaning membership numbers closer to the 500 the club once enjoyed than the current 300. That day is still at least a few years away, he noted, adding that the economy is still far from fully recovered from not only the Great Recession, but the years just prior, when the golf industry started a decline that in many ways continues today.

So, for the immediate future, Haberern and his staff will continue to look for ways to be creative and keep this half-century-old club vibrant and on the cutting edge of new ideas on how to attract members and then provide them with value.

 

A Cut Above

Before talking about golf and the business that it is, Haberern wanted to discuss … carpentry.

Not the projects going on around his temporary office, necessarily, but the work of his uncle, Joe Pagos, who started Elmcrest with some business partners in the early ’60s.

Haberern said he started working at the club, and for his uncle, in the mid-’70s, when he was 10, and was soon handling odd jobs ranging from cleaning toilets to washing dishes to mowing greens. While performing such tasks, he did something that would pay dividends years down the road — watch, and, more importantly, listen to Pagos talk about business and serving people.

“Working with my uncle wasn’t easy, especially for a 10-year-old, because he was a very hardworking person and pretty demanding,” Haberern recalled. “But you learned his work ethic, his morals, and how things go. I’d have to say that it was probably the best education I ever had, sitting back or standing behind him and watching his business sense.

“He said, ‘I’m going to teach you everything; just keep your mouth shut and listen,’” he went on. “He taught me everything I needed to know, and mostly what he taught me was to be good to people, because if you are, they’ll be good to you.”

Such lessons served Haberern well when he assumed a leadership role in the family business in 2000. Learning the ropes from the ground up — not to mention all that insight from Pagos — gave Haberern a solid background in all aspects of a golf operation, and likely helped him interpret the warning signs about a decline in the industry that he started seeing as early as 1999.

“I could see then the golf business was heading for trouble,” he said, “and that you were going to have to do something more than open up the doors and expect new members to come in.”

In response to these trends, Haberern started taking the initiative, with some tactics that would have to be considered cutting-edge, if not well ahead of their time, when it comes to private clubs.

This included advertising, and, eventually, his strong presence on the radio, with a golf show that has the Elmcrest name attached to it. Haberern has also given the club a presence at the region’s annual golf expo, a stage usually preferred by public and resort courses open for general play.

“Almost everyone is doing things like that now,” he said of private clubs and marketing in general. “I was doing it five, six, or seven years ago; I’ve also liked to think outside the box.”

Other initiatives include being imaginative when it comes to tailoring membership packages to suit the needs of a specific demographic group, or even an individual.

To emphasize this point, Haberern showed BusinessWest a breakdown of current packages, many with deferred initiation, designed for families, individuals, younger individuals (there are two age groups, 30-35 and 19-29), seniors, juniors (ages 14-19), those on active duty in the military, and even those who live outside the area but have family here and visit frequently.

“I started hitting every demographic group I possibly could — kids under 30, people between 30 and 35 … before, clubs had individual and family memberships; now, I have a long list of them,” he noted. “Most people will fit into one of them, and if not, I can make one up for them.”

A willingness to take on more tournaments (but without negatively impacting members) has also benefited the club, said Haberern, noting that he is now staggering tournaments, starting earlier and ending later (Nov. 10 this year, with the seventh annual Marine Corps Breakfast & Golf Tournament) to achieve that result.

“I took a lot of dead time and filled it in with tournaments,” he said, adding that such outings bring in additional revenue — memberships certainly don’t cover all the costs at a private club — but, perhaps more importantly, also introduce players to the course, its clubhouse, and other amenities.

“Tournaments get people in the door,” he noted, “and that’s when you can give them information about the course and perhaps spark some interest. And with the free round you give them, we get a second opportunity to talk with them about membership or about bringing their own groups down for tournaments.”

The new initiative involving women members is something Haberern has been contemplating for some time, and he’s now ready to pull the trigger and implement it for this season.

“Everyone I’ve talked to about this likes the idea, and they think it will be well-received,” he told BusinessWest. “It’s a transition, from taking lessons to actually playing on a golf course. It should help people in business ease their way into the game and be less intimidated about playing.”

 

Course Correction

Haberern said he’s noted some improvement in the overall climate when it comes to the golf business.

“The economy has recovered somewhat, and people seem more willing to spend money on things like a club membership,” he noted, adding that it will likely be several more years before Elmcrest can be anything approaching that closed society he says it was years ago.

Which means he will continue to push the envelope when it comes to new and different strategic initiatives to brand Elmcrest and bring people to its front door and first tee.

 

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

Construction Sections
SolaBlock Wants to Drive Solar Power Up a Wall

Patrick Quinlan

Patrick Quinlan shows off a SolaBlock prototype.

Solar energy. It’s not just for rooftops anymore.

At least, not if Patrick Quinlan has anything to say about it. A longtime player on the national stage in the renewable-energy arena, he’s now developing some bright ideas in Springfield, as a tenant in the small-business incubator at the Scibelli Enterprise Center (SEC).

His latest project, SolaBlock, is a simple-enough concept: photovoltaic (PV) cells are built into cinderblocks, which are then used to build vertical walls — or laid over existing walls — where they generate energy from the sun.

“We’re so excited about all the possibilities,” Quinlan said. “I walk through the city and look up and say, ‘oh my goodness, that could all be SolaBlock.’ Or I drive down the road and see all the highway walls and say, ‘that could be SolaBlock.’” And the potential is not limited to the U.S., he noted. “We’re thinking globally.”

This summer, thanks to a $40,000 state grant (more on that later), the technology — for which Quinlan holds four patents — will be put to the test on a small building at the Springfield Technical Community College (STCC) Technical Park, which also houses the Enterprise Center.

But he’s already thinking big. Among the capabilities of SolaBlock units, Quinlan says they are expected to:

• ‘Solarize’ residential or commercial building walls, retaining walls, garden walls, or any wall receiving sun for a good portion of the day, and also harvest renewable energy from highway sound walls, bridges, parking structures, railroad rights of way, property walls, or any other conventionally walled location.

Sound walls on highways, in fact, are a particularly intriguing option, because they’re not obstructed by trees in the summertime, yet aren’t totally covered by snow in the wintertime, noted Marla Michel, SEC director. “Trees get in the way of solar, but they’ve already been cleared on highways.”

• Provide critical solar power to unattended buildings, signs, or off-grid buildings that would otherwise be susceptible to vandalism or theft. “We wanted to make it so you couldn’t steal it, couldn’t break it, and it’ll be there for the life of the building,” Quinlan said.

• Provide secure power to critical buildings or shelters that may lose grid power or conventional PV in hurricane-force winds. Quinlan noted that SolaBlock can withstand winds of above 100 mph.

• Enable substantial solar electric generation for buildings sited in complex urban settings. “We’re really interested in the notion that you could have an off-grid, completely autonomous apartment in the middle of New York City, or out in the woods, freed of needing any electricity from the grid,” he said, noting that cities can lose power on a wide scale, as Manhattan did during Hurricane Sandy. “There are a lot of reasons why people want to be green and energy-secure, even in the city.”

• Provide autonomous, solar-powered electric-vehicle charging stations at remote locations.

But the benefits don’t stop with energy conservation and access; SolaBlock can be an effective educational tool as well. “This would be great for schools, because the solar could be at ground level, and kids could walk to it,” Quinlan said, adding that the connections could be viewed indoors throughout the year.

All told, Quinlan and his partners — Jason Laverty, William Stein, and Danielle Thorburn — have high hopes for SolaBlock. To date, those hopes have been founded on untested hypotheses … but that’s about to change.

 

Testing, Testing

Enter the Mass. Clean Energy Center (MassCEC) and the Mass. Technology Transfer Center, which recently awarded a total of $200,000 to five Bay State entrepreneurs as part of the MassCEC Catalyst Program, which aims to fund the commercialization of new clean-energy technologies from startup companies or being spun out of established research institutions.

“The clean-energy innovations developed in Massachusetts are driving the clean-energy sector forward,” said Energy and Environmental Affairs Secretary Rick Sullivan, who chairs the MassCEC board of directors. “There are 5,000 clean-energy companies in Massachusetts, and these types of programs help support and grow this bustling industry.”

The $40,000 grants are intended to help early-stage researchers demonstrate the commercial viability of new clean-energy technology.

This will take place at Building 112 of the tech park, a small brick building used as a maintenance shed. The south and west walls, as well as the roof, will be covered with SolaBlock units, and meters will be installed to measure the energy production of the solar cells and compare the performance of the vertical and roof installations. An Internet connection will allow the public to read those meters and check the progress of the demo over the course of a full year. That project should go online by the fall.

“We’re grateful to the Clean Energy Center for having faith in us in Western Mass.,” Quinlan said, noting that the public often thinks of the Commonwealth’s clean-tech hub in terms of MIT and other Boston-area research institutions. “A $40,000 grant is a really big deal for us. And it’ll all be out there on the Internet for everyone to see.”

Quinlan said SolaBlock’s ‘concrete masonry units’ (CMUs) can be integrated into almost any existing wall specification, since the blocks retain their original insulation, compression, smoke, and fire-rating capabilities. And they’re economically attractive because the expensive metal frames used for both mounting traditional PV materials in a framed module and for mounting the modules to a building are eliminated. There is some additional cost of wiring from block to block, but at a fraction of the cost of the aluminum and steel needed for conventional construction.

He noted, however that the vertically placed blocks are expected to produce around two-thirds of the energy produced by a traditional, tilted PV array — hence the placement on both the walls and roof of the test building, to compare performance. However, he said, energy generation may be augmented by the placement of reflective materials (decorative white stone, for example) in front of the blocks.

Still, while vertical blocks may receive less sunlight than roof-mounted panels, SolaBlock walls can be installed over vast surface areas of a building that would not otherwise be providing electric power, therefore increasing the total energy production by the building — a key feature in achieving certification in the ever-popular Leadership in Energy and Environmental Design program administered by the U.S. Green Building Council.

“The kits have to be high-automation,” Quinlan said, noting that one building fitted with SolaBlock cells might require thousands of blocks.

To that end, Quinlan outlined a business plan in which the company assembles the PV ‘kits’ and ships them to regional partners in the form of masonry-supply companies. SolaBlock has already reached out to Chicopee Mason Supplies in this region.

“They will be manufacturing the modified blocks we’ll be using under an agreement that gives them exclusive license in the region,” he explained. “We are developing a regional distribution partnership with them to distribute the finished material.”

That example will be repeated across the country. “We’ll build all the electronics in Western Mass.,” he continued, “then we’ll ship the electrical parts to our regional contract manufacturers to combine them and sell them regionally using the same model.”

That makes sense, Michel noted, because concrete blocks are typically sold only regionally due to their weight.

“It’s uneconomical to distribute them beyond about 200 miles,” Quinlan added. “More to the point, we discovered that most of the businesses that make concrete products are longtime family businesses in their regions, and we’d rather work with them than compete with them.”

That appeals to Quinlan on a personal level.

“I have an affinity for the trades,” he said, noting that his father was a plumber, and he put himself through college working with him. “SolaBlock is a way for people in the trades to work in the clean-tech arena. It’s not just for the elite. This is basically clean tech for regular people. You build it, it’s green, and it provides energy independence.”

 

The Next Phase

Quinlan, the former associate director of the UMass Wind Energy Center, has plenty of experience in the field of renewable-energy technology development. He worked as a science fellow in the U.S. Congress and as a technology fellow at the White House Office of Science and Technology Policy. He’s also a former employee of the National Renewable Energy Laboratory. “I’ve worked in energy since 1984, in both the technical and policy sides.”

For the current phase of his professional life, “instead of taking a job with someone else, I basically decided to start up new companies,” he said, adding that he wants to be a catalyst to grow the clean-tech industry in the region as a whole, and he sees the Enterprise Center as an ideal home for those efforts.

“I thought, I want to be part of that. I want Scibelli to be my home base for doing this,” he told BusinessWest, noting that, in addition to SolaBlock, he’s launched a second company, Black Island Wind Turbines.

Michel views the startup as an ideal tenant at the SEC. “The state is trying to grow this cluster both in Massachusetts and also regionally, throughout New England. The Enterprise Center has been active in supporting the regional growth of clean tech through support for companies like Pat’s.

“We’re a multi-use facility, but our vision of the tech park is really to have more support for clean tech. It’s a great place to do business,” she added. “And SolaBlock is innovating in an industry that’s hungry for innovation.”

Quinlan said the Enterprise Center has been critical to landing the kind of support — like the MassCEC grant — necessary to take the next step.

“I was drawn to this like a moth to a flame; this is the exact kind of environment I needed to have,” he told BusinessWest. “Without that, it would have been just us trying to do our best, competing with everyone else trying to get the attention of those who could help us. [Michel] has taken half the effort out of that.”

Down the road, if all goes as planned, he expects to begin looking for manufacturing space so SolaBlock can start building the kits. And Quinlan believes a huge market exists for the product — again returning to the appeal of vandal-resistant PV units in urban areas where the risk of theft has hindered consideration of conventional solar systems. Specifically, all electrical equipment of value is located behind the wall, making the systems unattractive for dismantling. Yet, individual concrete blocks can be repaired with a replacement kit.

“We can also use it for brick replacement — replacing bricks on walls,” he said. “It’s pretty weatherproof and vandal-proof. It’s not like regular solar panels where people are afraid to put them up on the chance they could be vandalized or stolen. We have utility customers who are very excited about this.”

So is Quinlan, who believes not just in his idea, but in this region.

“I’m a very strong supporter of Western Mass.,” he said. “I went to school here, and I want to live here. What I want to do is provide a means for myself and my colleagues in clean tech to have a really good quality of life and good occupations right here in the Valley — and that is very possible.”

 

Joseph Bednar can be reached at [email protected]

Construction Sections
Schools Say Green Construction Benefits Students, Teachers

The new West Springfield High School

The new West Springfield High School is expected to be certified as a LEED Silver building when it’s completed.

‘Green’ is definitely the hot trend when it comes to school construction — and a new, comprehensive report suggests that the benefits are wide-ranging.

While businesses of all kinds are increasingly calling for more environmentally friendly, energy-efficient building designs — with many seeking certification from Leadership in Energy and Environmental Design (LEED), a rigorous program of the U.S. Green Building Council — in many ways the education sector has been leading the way.

And, according to a report recently issued by McGraw-Hill Construction titled “New and Retrofit Green Schools: The Cost Benefits and Influence of a Green School on Its Occupants,” schools of all levels — elementary, middle, and high — as well as universities, report significant benefits from studying and working in green buildings — advantages that extend well beyond economics.

It’s an area ripe for study; McGraw-Hill characterizes the education-construction market to be at the “vanguard” of green building, estimating that 45% of total construction starts in the education sector in 2012 had green components — a sharp increase from 15%
in 2008. “And that estimate,” the authors note, “does not even include the full scope of work being done to green existing buildings through retrofits and green operations and maintenance.”

In Western Mass., the trend is pervasive. Many recent and ongoing high-school projects in the region — including new buildings for Easthampton High School, West Springfield High School, Longmeadow High School, and Minnechaug Regional High School, to name a few — feature significant green aspects, from photovoltaic energy production to extensive natural light to a building materials relatively free of toxins and respiratory irritants.

“What is driving this market?” the report asks. “Like
all other sectors, schools are driven by
the goal of saving money and energy. However, this sector is unique among all those studied by McGraw-Hill construction … because the impact of green buildings on the health and well-being of their students is as important as energy in encouraging new green investments. In fact, the level of green work is so high in this sector because many report seeing the financial, health and well-being, and productivity benefits that they seek.”

The new Longmeadow High School

The new Longmeadow High School offers copious amounts of natural light among its features.

Indeed, two-thirds of the surveyed schools report that they have an enhanced reputation and ability to attract students due to their green investments. Meanwhile, 91% of K-12 schools and 87% of higher-education institutions state that green buildings increase health and well-being, while 74% of K-12 schools and 63% of colleges and universities report improved student productivity.

Additionally, 70% of K-12 schools and 63% of universities report that student tests scores increased in the wake of green construction. Employees are happier, too, as 83% of K-12 schools and 85% of university leaders report increased faculty satisfaction as a result of teaching in a green building.

Whatever the metric, there appears to be growing evidence that green building design is more than a fad in the educational world, but a trend with real long-term benefits.

 

Cost and Effect

When deciding to go green at their facilities, many businesses look first at the cost, and that’s no different for municipalities or colleges looking to erect school buildings. And a 2006 study conducted by Capital E, a national clean-energy and green-building firm, argues strongly for the fiscal benefits of such construction.

Its cross-country review of 30 green schools demonstrates that green schools cost less than 2% more to build than conventional schools — or about $3 per square
foot — but provide financial benefits that are 20 times as large. In fact, the report argues, that extra $3 pays off in $71 worth of ancillary financial benefits, from energy and water savings to asthma and flu reduction, to decreased absenteeism and greater teacher retention.

“Greening school design,” notes Gregory Kats, managing principal of Capital E, “provides an extraordinarily cost-effective way to enhance student learning, reduce health and operational costs, and, ultimately, increase school quality and competitiveness.”

He concedes that his report — co-sponsored by the American Federation of Teachers, the American Institute of Architects, the American Lung Assoc., the Federation of American Scientists, and the U.S. Green Building Council — doesn’t quantify every possible benefit of green buildings, including reduced teacher sick days, reduced maintenance costs, reduced insured and uninsured risks, increased state competitiveness, and others.

The recent McGraw-Hill study isn’t all-encompassing, either, but it does delve deeply into the question of how significantly a school designed to reduce its environmental impact on the world
can affect the health and learning abilities of its students, in ways ranging from reducing respiratory illnesses
and absenteeism to improving test scores.

“Given the complexity of interactions between people and their environments, establishing cause-and-effect relationships between an attribute of a green school and its occupants has been a challenge,” the report notes. But it does detail several possible benefits of a greener environment, including:

• Indoor air. Plenty of research exists to demonstrate that the health of children and adults can be affected by indoor air quality, and that increased particulate matter, volatile organic compounds (VOCs), toxins, irritants, and allergens from mold can lead to respiratory illnesses and asthma.

On the other hand, good indoor air quality is typically marked by effective ventilation, filter efficiency, temperature and humidity control, and stricter operations, maintenance, and cleaning practices. For instance, in a 2002 study in Finland, researchers identified an average 15% reduction in the incidence of the common cold in schools that had no moisture or
mold problems. And according to researchers at Lawrence Berkely National Laboratories, when ventilation rates drop below minimum standards, student performance test results drop by 5% to 10%.

“Good ventilation is the most impactful way to protect lung health in a green school, but reducing and preventing the source of indoor air pollutants is another key area,” notes Janice Nolen, assistant vice president of National Policy and Advocacy for the American Lung Assoc., in the McGraw-Hill report.

“Indoor air pollution such as particulate matter, volatile organic compounds, and irritants can originate from various sources indoors, such as building equipment, furnishings, flooring, and cleaning equipment,” she continues. “For example, it is important not to use cleaning supplies within schools that are going to cause irritations and breathing problems such asthma or chronic lung diseases.”

• Lighting. As recently as the 1970s and even the 1980s, the report notes, conventional wisdom held that lack of daylight, while irksome to some students, had no discernible impact on test scores. But since then, studies have shown that daylight can affect student health and learning.

Indeed, 48% of K-12 survey respondents and 56% of university leaders said increased access to natural light and outside views from their classrooms increased student engagement. Among other studies, one conducted by the Heschong Mahone Group in 1999 showed that students in classrooms well-lit by natural sunlight had 7% to 26% higher test scores over the course
of a year, compared with students in windowless classrooms.

• Thermal comfort. Recent research, McGraw-Hill notes, has begun questioning the prevailing thinking that keeping indoor temperature within a narrow band — typically the low to mid-70s — year-round is ideal. One recent study showed that student speed on a standardized test increased as a result of lowering the temperature from 77 to 68 degrees. Meanwhile, research conducted from the 1990s and onward suggest that teachers have a strong preference for personal control over temperature and see it as having an impact on student performance.

• Acoustics. Significant research has been undertaken to study how classroom design impacts the ability of students to hear, pay attention, and absorb information. Outdoor noise can be a negative factor as well; a recent study shows that students in a school under the regular flight path of an airport performed up to 20% lower on a reading test than children in a nearby school.

McGraw-Hill also cites research suggesting that a room’s acoustic and sound-insulation properties have a direct effect on speech intelligibility and, consequently, student learning. Of its survey respondents, 44% of K-12 schools and 51% of university leaders who included improved acoustics in their green projects reported better student attentiveness as a result.

 

Crunching the Numbers

According to the study, 74% of green K-12 schools are attempting to measure the impact of the building design on student health, but only 47% in higher education are doing the same. That might be because K-12 schools can more easily track metrics such as absenteeism, asthma complaints, and visits to the school nurse. Meanwhile, colleges and universities are more likely to glean data from student and staff surveys.

Of the K-12 respondents, 32% of schools said their green-building efforts have reduced absenteeism, while just 2% found an increase; 67% reported no change. However, of the participating schools that achieved the stricter LEED certification, 45% reported decreased absenteeism, and 44% of the buildings that received an Energy Star label reported the same.

The study noted that the connections between green building design and student health and performance are still being developed and aren’t nearly as clear as those that compare physical activity and health. “Studies show that 15% of school-age children are overweight, and this number is three times higher than it was in the late 1970s,” the report notes. “Unfortunately, there is insufficient data to attribute success to any particular solution that relates to school buildings.”

At the same time, McGraw-Hill notes that much more data is necessary to fill in the gaps and presumptions that have arisen around environmentally friendly construction. For example:

• More research is needed into the lack of adequate ventilation in America’s classrooms, even though the codes and practices of the HVAC industry have been around for a long time. More information is needed on how HVAC system designs and maintenance procedures impact air quality. Also, more research is necessary on how materials selection, such as those that include VOCs, affect student health and learning.

• There is a need for more performance-based design guidelines that can reliably produce excellent visual environments in terms of natural light. And, as an emerging technology now making its way into school buildings, light-emitting diodes, otherwise known as LED lights, warrant more intensive research.

• As new technology is developed and low-energy heating and cooling methods become prevalent in high-performance buildings, their potential impacts on student health and well-being need to be researched. At the same time, more information is needed concerning the ideal temperature in a classroom and what level of teacher control is warranted.

• Finally, more information is needed on the factors that go into the acoustic performance of a classroom, and how best to provide for the needs of hearing-impaired children in classrooms.

Still, the education world — and the architecture and construction industries — are taking notice. “Building healthy, high-performance school buildings is now far more fiscally prudent and lower-risk than building conventional, inefficient, and unhealthy school buildings,” Kats argues.

There are educational benefits as well, says Darryl Alexander, health and safety director of the American Federation of Teachers, in the McGraw-Hill report.

“We’ve heard from teachers that green schools have been useful as learning tools and allowed them to incorporate sustainability into the curriculum — teaching them, for example, how to measure and track energy use,” he notes. “Green roofs have allowed them to explain benefits such as reduced energy use, greenhouse gas emissions, and reduced stormwater runoff.”

But perhaps the most significant benefit is healthier — and more focused — children and young adults.

“Teachers, whether they know much about green schools or not, once they enter one of these buildings, they are excited because these schools are quite different from conventional school buildings,” Alexander says. “The natural lighting, the acoustics, the air quality and comfort really allow them to focus on their jobs more easily. It is amazing to watch.”

 

— Joseph Bednar

Accounting and Tax Planning Sections
It’s Not Too Early to Start Thinking About Next Year

Cheryl Fitzgerald

Cheryl Fitzgerald

It’s never too early to start thinking about tax-planning ideas for 2013 for businesses and individuals.
With some of the new Obamacare taxes kicking in for 2013, as well as tax increases from the American Tax Relief Act of 2012, the sooner you start planning, the more you’ll be able to minimize your taxes.
Here are some things to think about.

Businesses
• General depreciation: New assets generally acquired and placed in service before Jan. 1, 2014 continue to be eligible for 50% bonus first-year depreciation.
Start planning for your acquisitions now so that assets that need to be ordered will be received and installed before the expiration of this provision. Buying a used asset does not qualify for the additional bonus depreciation; it must be a new asset, and not just new to you. Section 179 is still available for used assets.
• Qualified leasehold improvement depreciation: Qualified leasehold improvement property placed in service before Jan. 1, 2014 is depreciated over a reduced 15-year period. There are related party limitations, but if improvements qualify, this is a significant benefit over the 39-year life which is scheduled to return on January 1, 2014.
• Business tax extenders: The Tax Relief Act also extended many business-tax credits and other provisions. Notably, it extended through 2013 the research and development credit. Other business provisions extended through 2013 are the work opportunity tax credit, the employer wage credit for employees who are active-duty members of the uniformed services, and numerous other business credits.

Individuals
• Tax rates: 2013 brings us a new rate bracket that begins with the 39.6% rate. The threshold amounts are keyed to taxable income and are: $450,000 for married individuals filing joint returns and surviving spouses, $425,000 for heads of household, $400,000 for single individuals, and $225,000 for married individuals filing separate returns.
Therefore, for those within the new 39.6% range, above-the-line deductions and exclusions — and strategies to maximize them — now become ever-more valuable. At these same thresholds, the top capital-gains rate increases from 15% to 20%.
The Medicare portion of the FICA tax on wages increases from 1.45% (2.9% for self-employed) to 2.35% (3.8% for self-employed) for wages over $200,000. Individuals or couples with multiple W-2s may not have this tax withheld by their employer, but will be subject to the additional tax upon filing their 2013 income-tax return. To avoid a surprise liability on April 15, 2014, individuals with multiple sources of wages may want to consider increasing their federal withholding.
• 3.8% net investment income surtax: For years beginning in 2013, under the Patient Protection and Affordable Care Act of 2010, a new-investment income (NII) surtax applies. The NII surtax on individuals generally equals 3.8% of the lesser of:
• NII for the tax year, or
• The excess, if any, of modified adjusted gross income ($250,000 for filing status of married filing jointly or surviving spouse, $125,000 for filing status of married filing separately, and $200,000 for any other filing status).
NII includes not only interest, dividends, and capital gains, but also income from passive activities such as partnerships and rental real-estate income. One category of income notably excluded is flow through income from an S corporation in which the shareholder actively participates.
This gives a significant advantage to flow through K-1 income over W-2 wages taken by the shareholder, since that is subject to the 2.9% employee/employer combined Medicare tax and the added 0.9% when wages exceed $200,000. Although it appears simple that a shareholder would want to minimize their wages, rules related to reasonable compensation as well as state-tax consideration make this a complex planning area involving the business and individual.
Given that the thresholds are lower for the 3.8% tax than the 20% maximum tax on net capital gains, capital gains subject to the 20% tax invariably will also be subject to the additional 3.8% surtax, while net capital gain subject to the 3.8% surtax will not necessarily be subject to the maximum 20% rate.
Individuals who planned large capital-gain transactions prior to Dec. 31, 2012 most likely benefited from an 8.8% savings. If the sale qualified for installment-sale reporting, this additional tax might be an incentive to elect out-of-installment sale treatment.
• Roth conversions: This lifts most restrictions and now allows participants in 401(k) plans with in-plan Roth conversion features to make transfers to a Roth account at any time.
Those making such conversions may be recognizing a large amount of income that may push them into a higher income or capital-gain threshold bracket and result in the NII surtax applying. Timing conversions, doing them over a period of years, and/or reducing capital-gain recognition events during those years are strategies now worth considering.
• IRA distribution: The Tax Relief Act extends, through Dec. 31, 2013, the provision allowing tax-free distributions from individual retirement accounts to public charities by individuals age 70 1/2 or older, up to a maximum of $100,000 per taxpayer each year. Taking advantage of this provision for charitable giving may also help reduce exposure to one or more of the threshold amounts discussed earlier.
• Phaseout of itemized deductions and personal exemptions: The phaseout of these items are reinstated, but at modified adjusted gross income thresholds of $250,000 for single taxpayers, $275,000 for heads of household, and $300,000 for married taxpayers filing jointly.

Bottom Line
So, as you can see, 2013 tax planning needs to incorporate the interplay that one idea may have on another.
Additionally, it is important to monitor your tax planning as the year goes on instead of waiting until the end of the year. It is never too early to think about these things in order to help minimize some potential taxable transactions that occur throughout the year.

Cheryl Fitzgerald is a senior tax manager with the certified public accounting firm Meyers Brothers Kalicka, P.C. in Holyoke; (413) 536-8510.