Banking & Finance Daily News News

HOLYOKE — Following a unanimous vote from their boards, PeoplesBank and Cornerstone Bank have announced they have entered into a definitive merger agreement to combine their holding companies in a merger transaction.

While the merger agreement between PeoplesBancorp, MHC and SSB Community Bancorp, MHC will unify holding companies, both banks will continue operating under separate names and brands for the foreseeable future. After the completion of the merger, the new, consolidated holding company for both banks will be named PeoplesBancorp, MHC and have approximately $6 billion in assets.

Thomas Senecal will remain as CEO and chairman, and Todd Tallman will become president of the combined mutual holding company. Brian Canina will be the chief operating officer of the holding company and will remain president of PeoplesBank.

Both institutions will benefit from the combined financial strength of two strong community banks coming together to create one of the largest mutual, multi-bank holding companies in the Northeast. PeoplesBank, serving Western Mass. and Northern Conn., and Cornerstone Bank, serving Central Mass., will each continue their normal operations with no disruption to customers. All account information, branch banking, and digital access will remain the same for both banks throughout the transaction.

“This merger of our holding companies will create more financial support for each of our banks, ensuring the kind of sustained strength that our customers have relied on since our founding in 1885,” said Senecal, CEO and chairman of the board of PeoplesBank.

This partnership opens up both banks to future opportunities and market growth. The merger was unanimously approved by the boards of trustees for both holding companies. Completion of the transition remains subject to approval by the corporators of PeoplesBancorp, MHC and SSB Community Bancorp, MHC as well as regulatory approval. Closing is anticipated in the first quarter of 2025.

“We’re excited to be joining forces with another mutual bank serving their communities with the same kind of commitment as us,” said Tallman, CEO of Cornerstone Bank. “While customers won’t see any difference in their day-to-day banking experiences, this merger offers us more scalability and strength, which we can build on in the future.”

Daily News

AMHERST — The Amherst Business Improvement District (BID) has launched a search for a dynamic and visionary leader who is passionate about community development and possesses the skills to build on the organization’s successes as its next executive director. 

The search comes after the recent departure of interim Executive Director Liz Larson. Larson, who previously served as the BID’s director of Operations & Finance, has stepped down to pursue other opportunities. 

Barry Roberts, president of the Amherst BID, expressed his gratitude for Larson’s contributions and his optimism for the future. “We are deeply grateful for the dedication and hard work of Liz Larson, who was instrumental in managing the BID through a period of transition. As we embark on the search for a new executive director, we are excited about the future and the opportunities it holds for our downtown community.” 

The BID’s executive director will be responsible for the administration, operations, and financial management of the organization, managing its programs and services, and responding to stakeholders’ issues and concerns to improve the business climate and vitality of the district. The ideal candidate must have experience in urban planning or economic development and must have a deep commitment to the Amherst community. 

Interested candidates are encouraged to visit www.amherstdowntown.com for more information about the position and application details. 

The Amherst Business Improvement District (BID) is a nonprofit economic-development organization comprised of local property owners dedicated to providing programs and services that supplement those of the town of Amherst. The BID invests its resources to improve downtown Amherst’s vibrancy, sustainability, and economic health through advocacy, events, beautification, marketing, and special projects. 

Daily News

EAST LONGMEADOW — The 2024 Ride-to-Remember kickoff concert and fundraiser will be held tonight, June 20, from 6 to 10 p.m. at East Village Tavern, 53 North Main St., East Longmeadow, and will benefit injured Springfield Police Officer Nestor Santos. 

According to the Springfield Police Department website, Santos was shot in the face and leg on June 5 and taken to a Boston-area hospital with a bullet fragment lodged in his head. He has had one surgery, and doctors were able to save his eye, but he will lose his vision in one eye. He has since been released from the hospital. 

Fundraiser tickets are available at www.eventbrite.com/e/otan-vargas-concert-to-benefitride-to-remember-tickets-918422194507. The event will feature raffles and live music from Otan Vargas, and will be emceed by local comedian Jess Miller. 

There will be Ride-to-Remember sign-ups. Ride-to-Remember will also be selling T-shirts for State Police Trooper Ronnie Gibbons. 

“We all owe our safety to police officers and heroes like Officer Santos,” said John Sullivan, co-owner of East Village Tavern. “It’s our honor and privilege to host this fundraiser to help benefit Officer Santos and his family in this extremely difficult time.” 

Daily News

MONSON — Monson Savings Bank prides itself on sustaining a welcoming, inclusive, and diverse workplace and helping all team members reach their full potential by providing a work environment where all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute to the organization’s success. The bank strives to be a place where people want to work, diversity is welcomed, and individuals feel valued. 

In line with these efforts, Monson Savings Bank recently hosted a Diversity, Equity, Inclusion, and Belonging (DEIB) Summit for its entire team. 

“I hope everyone walks away with a better understanding of the bank’s commitment and efforts relating to DEI. As an organization, we feel good about who we are and the value of our differences,” said Michael Rouette, the bank’s executive vice president and chief operating officer. 

“I want each and every one of our team members to be inspired on their own personal DEI journey, finding their ‘why’ and their purpose. We want them to be confident in their motive for committing to our DEIB journey,” he added, “whether it be because their heart is in it, and they want to make the world a better place, or they want to do their part in forming a stronger, more profitable organization that sustains itself for another 150 years.” 

The bank invited Adriana Vaccaro and Sarai Rivera of Culture Redesigned to be guest speakers at the summit, as well as the Rev. Terrlyn Curry Avery, owner and licensed psychologist at Sacred Intelligence LLC and reverend of Martin Luther King Jr. Community Presbyterian Church in Springfield, as the keynote speaker of the educational event. Additionally, Monson Savings Bank President and CEO Dan Moriarty and First Vice President and Human Resources Officer Dodie Carpentier addressed team members during the program. 

Moriarty, also the recent past co-chair of the Massachusetts Bankers Assoc. DEI Council, emphasized the importance of embracing and implementing DEIB initiatives and values. 

“At Monson Savings Bank, DEIB is not just a concept, it is a core value. We recognize that embracing DEIB is critical to our individual and organizational success, as well as strategically and financially prudent. More importantly, it is just the right thing to do,” he said. “We are aiming to truly make a difference at the bank and in the larger community by embracing DEIB.” 

During the DEIB Summit, Vaccaro and Rivera of Culture Redesigned discussed the basic concepts of diversity, equity, and inclusion and the importance of adding to a positive culture and building trusting relationships. Following their discussion with the Monson Savings Bank team, Avery gave an engaging and thought-provoking motivational speech discussing race and how it plays into everyday interactions, perceptions, and relationships. 

“Thank you so much, Adriana Vaccaro, Dr. Sarai Rivera, and Rev. Dr. Terrylyn L. Curry Avery for coming here to share your insights with us,” Carpentier said. “And thank you to our amazing team for all joining together to embrace this important discussion. It speaks volumes to everyone’s character and the morale of our team that we got together to respectfully listen, ask questions, and learn together.” 

Daily News

LONGMEADOW — Bay Path University recently announced two new dual licensure programs within its MSEd/EdS in special education: dual licensure in severe and moderate disabilities preK-8 and dual licensure in severe and moderate disabilities 5-12. 

Bay Path’s MSEd/EdS in special education is the only program in the region to offer these dual licensure programs, and only one of a handful in the state. Applications are now being accepted for a Sept. 3 start date. 

Both dual licensing programs aim to address the pressing need for qualified special-education professionals capable of supporting students with diverse needs across different educational settings. 

The dual licensure in severe and moderate disabilities preK-8 program is designed to prepare educators to effectively teach students with a range of disabilities, from mild to severe, at the preK-to-grade-8 level. It emphasizes curriculum modifications, applied academics, alternative assessments, transition strategies, and community inclusion. The coursework aligns with the Massachusetts Professional Standards for Teachers and the Council for Exceptional Children’s 2020 standards. The program includes a yearlong practicum and is delivered 100% online through a combination of synchronous and asynchronous classes. 

The dual licensure in severe and moderate disabilities 5-12 program similarly prepares educators for teaching students with disabilities but focuses on grades 5-12. It covers similar content areas, including modifications for general-education curriculum, alternative assessments, and vocational strategies, ensuring comprehensive training for prospective teachers. Like the preK-8 program, it is also aligned with Massachusetts standards and the Council for Exceptional Children’s 2020 standards, includes a yearlong practicum, and is offered entirely online. 

“Educators earning dual licensure are more marketable and can work with all levels of exceptional children in all special-education settings,” said Dr. Kristen Lech, director of Graduate Programs in Special Education. “Our special education programs ensure teacher candidates are competent to engage in evidence-based instructional practices, culturally relevant pedagogy, and the ability to apply principles of Universal Design for Learning within their classrooms. We believe that, when special education teachers are well-prepared in these practices, the opportunity for increased inclusive practices can and should occur for all children with exceptionalities.” 

After successful completion of the program, individuals are endorsed for two separate Massachusetts initial licenses: severe disabilities, all levels, and moderate disabilities preK-8, or moderate disabilities 5-12. The program is 36 credits (MSEd) or 39 credits (EdS). The coursework for both dual-licensing programs cover all the Massachusetts subject-matter knowledge requirements for both licensure areas, and all courses are aligned to the Council for Exceptional Children’s 2020 initial practice-based professional preparation standards for special educators with high leverage practices. 

Cover Story Features

Staying True to Their Routes

 

Melissa and Peter A. Picknelly (far left and right) with fourth-generation company leaders

Melissa and Peter A. Picknelly (far left and right) with fourth-generation company leaders Lauryn Picknelly-DuBois, Alyssa Picknelly-Dube, and Peter B. Picknelly. (Staff Photo)

The past five years have brought a raft of challeges to the world of tourism and transportation.

The biggest one? Survival.

“The worldwide pandemic was tough on our industry, and many other industries,” Peter A. Picknelly, chairman and CEO of Peter Pan Bus Lines, told BusinessWest. “For three years, we had the government using our tax dollars to tell people not to use our service.”

There’s a bit of edge in his voice as he brings up topics like shutting down travel, and then restrictions like social distancing that accompanied its gradual return.

“But we survived, and we’re thriving now. We’ve invested $25 million in new equipment in the last couple of years. We’re modernizing our fleet, which is what our consumer wants; they want a nice, clean, modern bus. And we’re continuing to expand our route structure,” he said, noting that Peter Pan serves about 100 locations in the Northeast and Mid-Atlantic states.

“We listen to our customers — where they want to go — and we expand where it makes sense. We recently expanded to Newark, New Jersey, and a suburb right outside of Baltimore called White Marsh. And we’ve added service on Cape Cod. We’re always looking at new areas.”

But the company is also looking to the future in other ways, most notably some emerging leadership from the fourth generation of this family business launched by Picknelly’s grandfather in 1933.

“You just don’t see workers commuting to work, and if they do, they’re not working Mondays and Fridays. I mean, the full-time office worker is just not rebounding. It’s better than it was, and it will eventually come back, I think, but some businesses are just going to thrive on people that work remotely.”

“I kind of grew up just learning from him and wanting to work here,” said Peter B. Picknelly, one of three children of Peter A. and Melissa Picknelly (the company’s vice president) now working at Peter Pan. A fourth is still in college and mulling career goals.

“I had no doubt in my mind that this is what I wanted to do,” added the younger Peter, who is the company’s director of Safety & Security. “I grew up going to school and trying to better myself so I could then come into the business. That’s what I always wanted to do.”

That’s a story his father can relate to. “I’m the third generation; Peter and his sisters are the fourth,” he said. “But I never forced them into it. When I grew up, some kids wanted to be baseball players or football players. All I wanted to do was follow my father and grandfather. And I can’t tell you how proud I am that our kids chose to do that — but it was their decision.”

Peter A. Picknelly

Peter A. Picknelly, standing before some portraits of his predecessors, says there are very few family-owned bus companies in the U.S. today.
Staff Photo

Other fourth-generation leaders at Peter Pan include Lauryn Picknelly-DuBois, who was promoted two years ago to controller, and Alyssa Picknelly-Dube, who is involved with the Maintenance division. (A fourth child is still in college and mulling career goals.)

“There are very few family-operated bus companies in the United States anymore,” their father said. “Here, the fourth generation is already set, and they’re still in their 20s. I think it assures our employees and our customers that we will be around for a long time. They are doing an amazing job.”

 

All Aboard

They’re doing it at a time when public-transportation demographics might be changing, but bus travel clearly remains important.

Peter Pan specializes in travel that’s longer than a typical work commute, but within 200 miles — a distance that can be covered as quickly as flying, once the airport time is factored in, the senior Picknelly explained.

These days, most travelers are between 18 and 35 years old or over 50, he added. “They may have an automobile, but the bus is more affordable. We go city center to city center. And parking can be extremely expensive in some areas, and hard to find.”

He added that the pandemic hit the work-commuter customer base hard, and it’s still struggling, at around 60% of pre-pandemic volume.

“You just don’t see workers commuting to work, and if they do, they’re not working Mondays and Fridays. I mean, the full-time office worker is just not rebounding. It’s better than it was, and it will eventually come back, I think, but some businesses are just going to thrive on people that work remotely.”

That said, the longer-distance service — say, Boston to New York or New York to Philadelphia — is booming, especially as gas prices have remained high and cities have gone to congestion pricing.

And gas prices do make a difference, he added. “You can instantly see it when gas prices go up. Our cost of operation goes up when fuel goes up — it’s our third-largest cost. But it’s outweighed by the fact that more people seek an alternative. When fuel hits $3, $4 a gallon, you can see an instant surge.”

That said, today’s buses are much more fuel-efficient, Picknelly said, and feature an anti-idling function that shuts them off when they idle at a gate or while parked for more than five minutes (but not while in traffic).

“There are situations when the idling won’t turn off — say it’s middle of winter and it’s freezing, and you want to heat up a little bit. That will override the five-minute idle shutdown,” Peter B. Picknelly said. “Same thing if it’s too hot — to keep the bus cool, it’ll override it.”

Other features of a modern bus include better-designed seats, video and Wi-Fi, and cameras that capture a 360-degree view of the bus for safety purposes.

Peter B. Picknelly

Peter B. Picknelly, director of Safety & Security, is one of three fourth-generation family members so far to have chosen Peter Pan as a career.
Staff Photo

As for those who drive the buses — the current fleet is about 200 vehicles — the younger Picknelly said the workforce crunch was severe a couple of years ago, but hiring has picked up considerably since. “We get a lot of applications every single day, so we’re able to be a little bit more picky when it comes to the driver force.”

His father noted that hiring is easier in some areas than in others. “We’re constantly hiring. But while Cape Cod and Boston are difficult locations, with our driver forces in New York and D.C., we have plenty of applications.”

Peter Pan has been receiving more applications these days from younger people, and the company has brought on employees in the process of getting their commercial driver’s license, and even reimbursed them for it.

“It’s a very good job if you like to drive and you want to deal with people,” Picknelly said. “Our drivers choose what routes they want to operate and when they want to work. Our position is, if you like doing what you want to do, you’re going to do a better job.

“But you’ve got to like to drive, and you’ve got to like to deal with people,” he added. “We can train just about anybody to drive a bus. But you can’t train someone to have good customer-service skills. And wanting to drive is just something you’ve got to have a passion for. Because that’s what we do.”

The younger Picknelly agreed. “It’s good getting these young people on board because most of the time they’re pretty loyal, and they want to stick with the company for a long time. We have people who have been here for so long because they came on when they were younger and were extremely loyal to the company, and that’s what we’re hoping to get now.”

 

Shifting Gears

Looking to the future, Peter Pan continues to find more ways to be the transportation mode of choice for its customers, especially younger riders, and that means making their travel plans easier.

To that end, the company recently announced a new strategic partnership with Trailways, extending its network of destinations, as well as a strategic alliance with Amtrak.

“So you can take a train somewhere, and then they’ll connect to a bus, and we can take you right to the city center,” Peter A. Picknelly said, and from there, rideshares can take over. “We’re also forming alliances with Ubers and Lyfts where you can coordinate being picked up wherever we drop you off, and instantly getting in an Uber and taking it to your final destination. Because of this coordination, more and more people are saying they don’t need to drive, particularly young people that live in the big city.”

“We can train just about anybody to drive a bus. But you can’t train someone to have good customer-service skills. And wanting to drive is just something you’ve got to have a passion for.”

Statistics bear that trend out. Last year, driver’s license applications actually went down, reversing a 50-year upward trend, he noted.

“It’s so convenient. If you go to Europe, taking public transportation is always involved, and you’re seeing more of that here. It’s way more convenient, and with the amenities in the vehicle, you can work or entertain yourself while you’re traveling. You can’t do that when you’re driving.”

Peter Pan also maintains a model of managing terminals — another one of Peter B. Picknelly’s roles — in its destination cities, with amenities like food, restrooms, a service counter, and a pickup area, instead of the model of picking up and dropping off on unattended corners.

“We don’t like picking up on a street corner like some of these other bus companies,” Peter B. added. “We like going into a terminal or a specific designated area, so they can have that one-on-one personal experience with our employees if they have an issue or have any questions or concerns. We’re a customer-driven business, so we like pleasing the customers.”

About 15% of Peter Pan’s business, meanwhile, is charter service to destinations not on the regular route plan.

“Charters are very big, and in the summer, it picks up a lot. There are people who go out to Saratoga Race Course on the weekend; that’s a very popular place. We’ll take them wherever.”

One shift that occurred over the pandemic years has been a move toward online booking, his father added.

“Prior to COVID, about 50% of our riders would buy their ticket a half-hour before departure, in person. Now, 90% of our sales now are in advance. Most people are booking within three days of their trip, online.”

But, as mentioned up top, the biggest story of the pandemic for Peter Pan was … well, simply surviving it, and coming out stronger on the other side, with plans for the future and a band of 20-something Picknellys ready to evolve into stronger leadership roles.

“We’re really proud of all of our staff,” their father said. “Listen, 40% of all bus companies didn’t make it through the pandemic. We did, and we’re thriving. We’ve had to change our focus on longer-distance trips, less commuter-related, more group travel, but we’re doing well.”

Peter B. Picknelly agreed. “In hindsight, COVID was horrible, but it made us think about how we could run things differently here, and it’s been beneficial.”

Features Special Coverage

At a Tipping Point

Paul Kozub with his children

Paul Kozub with his children, from left, Weston, Ela, Augustin, and Vincent, at the distillery in Kamien, Poland, that he acquired in 2019.

When asked about all that has changed since he first started finalizing plans for creating his own vodka label 20 years ago, Paul Kozub chose to start with the personal side of his life.

“Back then, I was a single guy living alone with not many cares in the world; now, I’m married with four kids under the age of 10,” he said, adding that this reality explains why he only visits the distillery he owns in Poland maybe once a year instead of three or four times, as he did earlier, and why he presides over maybe 20 in-store tastings a year instead of the 50 or 60 he was averaging a few years ago.

As for the business side of the equation, there have been equally significant changes. He started with one flavor in one region of the Bay State, the 413. Now, there are 10 flavors, including a lemon that changes colors and a hugely popular double espresso. And they are now available in eight states — the six New England states as well as New Jersey and Texas — although they can be shipped almost anywhere, as we’ll see.

And there’s that distillery in Poland, which Kozub now owns a 51% share in. He made that investment in 2019 in a critical step that saw him move from outsourcing production to overseeing (officially if not literally) every step in the process.

And while there have been huge leaps in overall growth — from 700 to 1,000 cases produced and sold per year early on to more than 20,000 today — there have been myriad challenges as well, everything from a global pandemic to the war in Ukraine (the distillery is only a few miles from the border); from huge swings in the cost of getting containers from Poland to the U.S. ($4,200 per shipment to $16,000 back down to $4,200) to the burgeoning cannabis industry (in states where cannabis is legalized, there is an accompanying decline in alcohol sales, Kozub reported).

But while looking back — and then ahead — Kozub chose to focus mostly on what hasn’t changed. The goal, then and now, has been to become a national and then international vodka label, and in some respects, that’s already been accomplished; he does sell some vodka in Poland, but not much, as V-One’s prices are higher than other brands because of how it’s made.

And while the original goal was to make a living selling vodka, something he could do when he was selling 1,000 cases a year, the overriding ambition has been to continually grow the label by taking it to more markets in more states and, eventually, more countries.

While that hasn’t changed either, this desire to grow has morphed into a critical need — because of that distillery and the importance of keeping it busy.

Kozub summed it all up directly, and poignantly.

“For me, V-One is at a crucial tipping point,” he explained. “We’re either going to stay small — a Massachusetts, Connecticut, Rhode Island business — or we’re going to get bigger, and a lot bigger, as a national brand or even an international brand.

“For me, V-One is at a crucial tipping point. We’re either going to stay small — a Massachusetts, Connecticut, Rhode Island business — or we’re going to get bigger, and a lot bigger, as a national brand or even an international brand.”

“And the decision has kind of been made for me because of the distillery purchase — the capacity that facility has and the need to keep it busy on a daily basis, which it is not right now,” he went on, adding that, with this decision — and a subsequent capital raise involving local investors — Kozub is moving forward aggressively with plans to more than double his current sales force and move into more states, starting with Florida, then New York, then other states on the East Coast.

It’s an intriguing next chapter in a story that has featured a number of plot twists and turns but a continued focus on the proverbial big picture and how to make it become reality.

V-One now boasts 10 flavors

V-One now boasts 10 flavors, and Paul Kozub hints that more additions to the lineup may be coming soon.
(Photo courtesy of Chris Marion)

For this issue, BusinessWest talked at length with Kozub about the latest, quite significant adjustments to the V-One business plan and how they provide more proof — yes, that’s an industry term — of how those original plans haven’t exactly changed. They’ve just been supersized.

 

Proof Positive

By now, most people around here know at least the basics of the V-One story.

With a small, $6,000 inheritance from an uncle and some entrepreneurial vigor that ran in the family (his father started Janlynn Corp.), Kozub put aside a career in banking — he was a commercial lender with TD Bank — to fulfill a long-held dream to launch his own vodka label.

That was in 2005. He started with a small still in his basement and soon made his way to Poland to meet with a world-renowned vodka expert for advice, but also inspiration. He made the critical decision to become the first producer of vodka made exclusively from organic spelt wheat (most other vodkas are made from corn).

Over the next 19 years, V-One has grown and evolved, adding new flavors, winning several awards, expanding its reach across New England and beyond, and increasing the number of cases sold each year. Along the way, there have been several milestones — from the opening of V-One’s world headquarters in the former St. John’s Church on Route 9 in Hadley to a rebranding that saw a new look to the bottles, to the acquisition and subsequent expansion of the distillery in Kamien, Poland, a multi-million-dollar investment fueled by a desire to take more control of the process.

“I’ll make this analogy … instead of buying milk from the store, we now own the cow. We need to keep the distillery busier, and we need to essentially double the business that we’re doing now.”

BusinessWest has chronicled the story, and along the way, Kozub has earned two of the magazine’s awards — inclusion in the inaugural 40 Under Forty class of 2007, then being named the magazine’s Top Entrepreneur for 2016.

As he noted at the top, he now has four young children — “life has gotten a little more complicated” — so that means fewer trips to Poland, although he was recently there for some end-of-fiscal-year matters, and more Zoom calls with his master distiller there.

“He has things handled pretty well as far as production goes, so I don’t need to go as much as I used to,” Kozub said, noting, again, that the critical to keep that distillery busy — at optimum output, the facility could increase production 10-fold — has prompted the latest adjustments to the business plan, capital raise, and plans to aggressively move into other states.

Paul Kozub says the need to keep the distillery in Poland busy

Paul Kozub says the need to keep the distillery in Poland busy — busier than it is now — is fueling the company’s aggressive plans for continued growth.

“Before, it was a case of wanting to grow; now, it’s kind of like we have to grow,” he told BusinessWest. “I’ll make this analogy … instead of buying milk from the store, we now own the cow. We need to keep the distillery busier, and we need to essentially double the business that we’re doing now.”

Elaborating, he said he has no real desire to produce other vodka labels in Kamien, only V-One. Which means producing more of it.

“And to do that, we need to put more people, more salespeople, on the street, and tell the V-One story,” he said, adding that this need to hire and ratchet up marketing efforts — although the company still relies heavily on social media — was the impetus for the recent capital raise.

“My next goal is to get V-One in at least five more states in the next 12 to 24 months,” he said, adding that Florida will be the next target.

 

Entrepreneurial Spirit

The Sunshine State should be a natural next step, Kozub went on, noting that, while consumption of vodka in Poland is higher during the colder months of the year — primarily because people there drink it straight — in the U.S., vodka is generally mixed with other ingredients that are put over ice, making it a warmer-weather choice.

“A place like Florida has great, year-round weather for vodka drinking,” he said. “And there’s obviously a lot of vacationing, a lot of people by the pool. You really don’t want to drink heavy drinks when you’re by the pool; you want lighter drinks like a vodka soda or mojito.”

As he noted earlier, entering new states and new markets is difficult — and expensive. With immense competition in the vodka aisle, there is a strong need to build brand awareness and gain a foothold. And this requires boots on the ground, he said, adding that, while V-One works with distributors, those large companies represent literally thousands of different labels.

“You have distributors in each market, but you also want to have someone talking to those bars and restaurants and liquor stores,” he told BusinessWest. “You need to have someone else telling the story because these distributors are selling 3,000, 4,000, maybe 5,000 other items, and they’re pushing the big brands, so the smaller brands just get left by the wayside.

“So you have to put someone in each market to tell your story,” he went on, adding that he is looking to bring on several additional salespeople in the coming months to do this storytelling.

While Florida is the next primary target, the goal, as he mentioned, is to be in a handful of other states within the next year or two.

New York is another primary target, he said, adding that the plan after making some headway in that all-important state is to move down the East Coast, perhaps into Virginia, Delaware, and North and South Carolina.

“We want to keep things on this side of the country for now,” he said, adding that the ability to ship products to different states (35 of them at present) enables V-One to expand its presence in that fashion. It’s a small but nonetheless meaningful arrow in the quiver, but one that is growing steadily and has potential to continue the growth trajectory.

Overall, expansion into a new state comes with a price tag of $100,000 to $250,000 for marketing, additional salespeople, and other expenses, he said, adding that this is just part of the cost of doing business.

And it’s a critical aspect of being at this important tipping point for V-One, as Kozub called it. As he noted, the company has progressed from wanting to grow to needing to grow.

“For me, it’s time to take that next big step,” he said, adding that he’s approaching this next phase for his company the way he has all those that have come before it — with a focus on that original dream of creating a vodka label and then taking it around the world.

Environment and Engineering Special Coverage

Engineering a Youth Movement

Ashley Sullivan, president of O’Reilly, Talbot & Okun.

Ashley Sullivan, president of O’Reilly, Talbot & Okun.

 

Ashley Sullivan can think of plenty of reasons why someone might want to go into engineering.

“It is a very rewarding field where you get to see your work benefit your family and your community,” the president and CEO of Springfield-based O’Reilly, Talbot & Okun said. “And you’re always going to need civil engineers, so there’s job protection there. There’s so much opportunity in the field, whether you want to go into construction or consulting or the regulatory side. There’s a lot of different options, and each individual can find what’s right for them.”

That said, the industry is facing the same headwinds seen in other fields these days, ranging from construction to manufacturing to insurance: retirements outpacing the number of young people coming on board.

“We’ve had a lot of retirements; as quick as I hire, we have people retire or leave the industry,” Sullivan said. “We’re trying to grow, we’re trying to hire, and we make progress one year, and then a few months later, we might fall back. We’re trying to hire about five more by the end of the year, but, just like with everybody else, it’s been very challenging.

“Previously, being a smaller, local firm, we didn’t necessarily compete with the larger firms or state agencies because if somebody liked a small firm, they liked a small firm, versus a larger firm. Now we’re finding we’re going up against those agencies and larger firms,” she went on. “I’m not sure if that’s because of the hybrid or remote potential. We’ve really focused on the ones that want to work near where they live, but now it’s getting hard to do that. There are also a lot of competitive salaries out there, so we’ve had to adjust to that. It’s definitely a challenge.”

Westfield-based Tighe & Bond is at the other end of the hiring spectrum, boasting about 600 employees at 17 locations across the Northeast. The firm is growing significantly at a time when a surge of federal funding — from the $1.2 trillion Bipartisan Infrastructure Law of 2021 to the Inflation Reduction Act and CHIPS Act of 2022 — is creating plenty of opportunity for civil-engineering firms.

“They’re requiring technical talent throughout the country to do all the work that’s coming,” President and CEO Bob Belitz said, noting that the firm has more employees dedicated to recruiting and onboarding than in the past. “We’ve made an investment in that function because it’s such a big part of our business.”

He added that the firm’s broad footprint across the Northeast makes it easier to recruit and retain talent. “Before, if somebody was working for us and got married and moved to New Hampshire, Maine, or New York, they might have to leave us to go work for somebody else because we didn’t have offices there. Now we do. From a growth perspective, it helps to be able to transfer you among other offices.”

Bob Belitz

Bob Belitz says work opportunities for engineering firms are high right now, and so is the need to attract new talent.
Staff Photo

But with some turnover to be expected in a company this size, and with a goal of growing both organically and through acquisitions, Tighe & Bond needs to onboard more than 100 new employees each year, and doing so successfully requires it to stand out from its competitors in a number of ways, Belitz said, from its employee-ownership model to hybrid work schedules; from a strong benefits program to a broad mix of projects.

Sullivan said communicating the culture of a company to job seekers is also critical.

“When we’ve had conversations where we effectively communicate that, people are very interested in working here,” she said, adding that another factor is communicating a clear path to career advancement.

“One of the things I think is so great about engineering — particularly about civil engineering or the environmental engineering that we do — is that we make our community better.”

“I am looking for future business partners. You’re working with the people that are managing the business, you’re getting day-to-day experience in that, and there’s real, clear potential for somebody to be a stockholder, be on the board of directors, and guide the company sooner than they might at a larger company. We can give examples of that. So that’s something that we try to explain. We feel that, if we’re effective in communicating that, we’ll find the right people.”

 

Mission Driven

As a civil engineer teaching at a women’s liberal-arts college, Glenn Ellis, a professor of Engineering at Smith College, said his students often come to the field from a specific mindset — namely, social impact.

“The number-one thing I hear from students is they want to do some good for the world, to make the world a better place,” he told BusinessWest. “They’re very interested in sustainability. That’s the number-one draw for many students as an engineer. And you can really make an impact on all sorts of things.”

That line of thinking resonates with Sullivan. “One of the things I think is so great about engineering — particularly about civil engineering or the environmental engineering that we do — is that we make our community better,” she said. “We’re an important part of that, and you can see it.”

Ellis noted that the industry code of ethics now includes sustainability as a key tenet, which dovetails with what his students are demanding. But he also said young people are drawn to the sheer diversity of engineering and how broadly it impacts the world.

“The more young people know what an engineer is, the more they’re interested in it. Studies show that the reason why way fewer women than men are engineers is not because women leave these programs at a higher rate than men; they leave at the same rate. It’s that they don’t go into engineering programs to begin with.”

And the time to start capturing their interest, he added — not just for engineering but for all STEM fields, where women have been historically underrepresented — is not college or even high school, but middle school.

“I say to a lot of young people, ‘you know, everything you can see has been designed by engineers. Engineers literally designed the entire world.’”

“I think that’s the time to develop a STEM identity. When you ask kids in middle school if they want to be engineers, they say, ‘I don’t know what that is,’ or ‘that’s really boring; you just work on pipes and buildings.’”

Ellis spoke with one young girl who said she wasn’t interested in engineering, but she wanted to work in the medical realm, helping to design artificial limbs that will help people.

“I said, ‘that’s engineering — that’s bioengineering.’ Young people don’t know what engineering is, so you need to introduce them at a young age, show them that it’s not just building bridges and wearing hardhats. This is a creative profession, a collaborative profession. If you want to change the world, this is the place to do it.”

And employers know talented young engineers have options in choosing where to make their mark, so recruitment, onboarding, and benefits are all critical.

“When we think about our benefit programs, we need to think about things that are important to the younger generations,” Belitz noted, and these run the gamut at Tighe & Bond from student-loan assistance to wellness programs to pet insurance, but also include a strong focus on mentorship, learning, and professional-development opportunities, including the addition of a female mentoring program last year.

“We’re also always giving back to our communities, and we try to talk about that as much as we can when we’re recruiting people,” he went on. “Hopefully that total package, along with the work that we have in the backlog, is attractive to the younger and mid-career people, who are the hardest ones to retain.”

O’Reilly, Talbot & Okun, while a much smaller firm, is also in a growth mode.

“There is a lot of work to be done, and the clients need us to get their work done,” Sullivan said, adding that the industry is facing a bit of an experience gap as veterans retire and young engineers replace them.

“We knew this was coming, so you have to invest in your people and make sure that you’re narrowing that gap continuously,” she told BusinessWest. “One of the things that we’ve done — and that I continue to do — is really invest back in people, try to give them the skills and get them the training.

“And not just the technical training, but also business development, project management, and entrepreneurial skills that get you even further,” she went on. “That’s something that I knew I had to do five years ago, and I’ve continued to do that. We just finished a big team training about presentation skills, whether in a small meeting or a large group, but it was also about team building, communication, and all that.”

 

Making a Difference

Ellis said Smith has been graduating a few dozen engineers each year, and they’re entering a market that’s tilted somewhat to job seekers.

Conversely, for employers, “it’s very challenging,” Sullivan said. “It’s just really hard to find people right now. We’ve had some people with a verbal acceptance, and then a few weeks later, they get a counteroffer and stay where they are.”

Meanwhile, Ellis hopes more young people — particularly young women — get the message early on that this is a meaningful, impactful career with plenty of opportunity.

“Women are definitely more attracted to engineering when they can be involved in messy, complex societal issues, which actually is what engineering is all about. It’s all about taking math and science and solving problems for society,” he said.

“I say to a lot of young people, ‘you know, everything you can see has been designed by engineers. Engineers literally designed the entire world. You can go into it and move up in the world and make a difference.’”

Special Coverage Workforce Development

Culture Shift

Nicole Polite, CEO of the MH Group. (Staff Photo)

 

Diversity, equity, and inclusion — commonly known as DEI — has become a well-recognized expression in the world of employment, human resources, and executive suites.

But Nicole Polite prefers the term DEIB, which incorporates the word belonging, and there’s a reason for that.

“The belonging factor is making sure that your employees feel like they’re part of a community or environment where they all feel connected, regardless of race, color, creed, and everything else,” said Polite, CEO of the MH Group, which provides a range of staffing services to client employers. “I’m glad belonging is being emphasized; I believe that’s a key factor. Because if you don’t feel like you belong somewhere, then it’s not a good space for you.”

While the term DEI has become politicized in some corners, Polite doesn’t see the concepts behind it fading in importance.

“We’re not going to move away from it. The world has changed so radically,” she said. “And the employees are the ones driving it. They’re the ones asking, ‘how are you supporting me? How do I belong here? What are the steps you’ve been taking to make sure that there’s representation here?’”

John Henderson, director of Learning and Development at the Employers Assoc. of the Northeast (EANE), agrees.

“In this politically and socially divisive world, how do we create a culture where people feel valued? That stems from the diversity, equity, and inclusion piece,” he said, before explaining what each of those terms means for EANE.

“As employees are more educated, they’re more authentic with themselves. And that creates a culture of self-value for employees, a stronger sense of belonging, which makes it easier for them to be fully engaged with the workforce.”

Specifically, he explained, diversity is about representation — not only in terms of race and gender, but in backgrounds, viewpoints, and experiences.

Then, “when you look at equity, it’s about recognition — recognizing what people need in order to be successful. As a business, what do my people need in order to be successful? And what you need and what I need might be totally different. That’s why equity is so important.”

Inclusion, meanwhile, is about the actions a business takes to make people feel like they’re included.

Dan Moriarty

Dan Moriarty says efforts to create a more diverse, inclusive workplace have to start at the top.
Staff Photo

“All three of those really create a sense of belonging. So it’s diversity, equity, and inclusion, and then you have the B, the belonging piece,” Henderson explained. “If I feel valued, if I feel trusted, if I feel I can be my authentic self at work, I feel like I belong.”

It’s a message more and more companies seem to be getting — and even reaching out for help in implementing, he added. “We do get a lot of calls and do trainings around that piece. We want people to understand that differences bring creativity and increased productivity. And when you foster a culture of respect and people feel that they belong, it increases retention rates, and it makes it easier to recruit people.”

Monson Savings Bank President Dan Moriarty has been actively been involved in DEI strategy for some time, not only at his own institution, but his past co-leadership of an executive council established by the Massachusetts Bankers Assoc. to promote DEI efforts across member institutions.

Adopting some best practices recommended by Mass Bankers, Monson Savings has created a DEI commitment statement, developed and implemented a DEI program that continues to evolve, provided DEI training to board members and employees, identified and monitored key performance metrics, and conducted periodic self-assessments of the program.

In addition, he said, the bank has reviewed numerous documents, including its strategic plan, along with communications, processes, and facilities, to ensure that potential barriers are identified and removed and that DEI expectations are reflected, while also conducting outreach and expanding the bank’s relationships with key community members and organizations.

John Henderson

John Henderson says businesses increasingly want to create a culture where people feel valued.
Staff Photo

“We’ve developed a program which is a lot about education and training, from board members to senior management to the entire staff,” Moriarty said, adding that the bank conducted an employee summit a few weeks ago to discuss topics aroud DEI that some might not be familiar with, and explaining the reasons why they’re important.

“As employees are more educated, they’re more authentic with themselves. And that creates a culture of self-value for employees, a stronger sense of belonging, which makes it easier for them to be fully engaged with the workforce,” he added. “If they feel valued, feel like they belong, they’ll be better employees and better people. I just want to enhance those communications and make DEI more transparent, both internally and externally.”

 

Welcomed, Valued, and Heard

Jackson Davis, who heads up the DEI program for MassMutual, said that organization’s strategy is focused on creating an environment that is equitable and inclusive for its employees, customers, business partners, and the communities it serves.

“When it comes to our workforce, we strive to create teams that reflect our customers and communities, fostering an environment where all employees are welcomed, valued, and heard,” Davis explained. “To do this, we’ve integrated DEI into all that we do, taking specific actions like monitoring and being transparent about our progress in increasing the overall diversity of our workforce, encouraging both a diverse candidate pool and interview panel for open positions, and providing employee benefits and supports that will help us attract and retain a diverse workforce.”

These benefits include a variety of things, from eight employee business resource groups to holistic, flexible benefits that are designed to meet the diverse, evolving needs of employees. And that investment in DEI isn’t just the right thing to do, he added; it pays off in many ways from a business perspective.

“Having a diverse workforce is important because it brings together different perspectives, which in turn can help us solve problems faster, innovate with more success, and go above and beyond for our customers in order to deliver them the best possible experience.”

“Having a diverse workforce is important because it brings together different perspectives, which in turn can help us solve problems faster, innovate with more success, and go above and beyond for our customers in order to deliver them the best possible experience,” Davis noted. “From a customer perspective, having a diverse and inclusive workforce allows us to better understand and meet the needs of those we serve.”

Bob Belitz, president and CEO of Tighe & Bond (see related story on page 20), agreed, noting that the civil-engineering firm’s roster of projects is so broad and affects so many different communities and demographics that it’s important to have team with backgrounds and experiences that are equally varied.

“I think that makes a difference, and we’re really committed to that because of the project portfolio we have,” he said. “We’re also trying to expand the schools that we recruit from, expanding our reach to produce more talent.”

A company that wants to be truly diverse may approach its strategy through many goals, Polite said, from training employees to recognize and prevent unconscious bias in their actions and comments to using gender-neutral language in outward communication, to making sure job postings and promotion opportunities reflect a commitment to diversity.

That doesn’t mean hiring based on checking demographic boxes, she added, but it may mean considering where and how employees are recruited — such as recruiting from a broader range of colleges or partnering with cultural organizations in the community or reaching out to staffing agencies that specialize in DEI.

“I also love it when I see employers have supplier diversity goals,” Polite said. “That tells an employee that they’re committed to diversity; that really shows inclusiveness as a organization. And that makes you, as a minority or someone from a different culture, feel more relaxed. It’s like, ‘OK, there is some commitment here.’ But if you don’t have those types of mechanisms set up, like how do you convey that to the job seeker? How do you convey that to your organization?”

 

Leading by Example

The answer to that question takes many forms, Polite said, but it has to begin at the top.

“You’ve got to start on the leadership level. Starting from the bottom up doesn’t typically work; you have to start from the top down. And you have to have some accountability with your initiatives, too.”

There, she paused for a moment to add that she’s trying to stay away from the word ‘initiatives’ when she talks to clients because it lacks a key sense of permanence.

“We’re trying to weave it into the employer mission, what they do every day. Initiatives change all the time, correct? So we want to make sure we’re not just doing initiatives; what can we can do on a daily basis?”

Henderson also spoke to the importance of executive leadership in crafting effective DEI strategies.

“We know it increases productivity, it increases employee engagement, it increases retention, and it makes it easier to recruit,” he said. “But some companies don’t know where to start; they’ll say to the HR person, ‘hey, create a DEI plan and implement it.’ And then the HR person has that responsibility.

“But it really has to come from the leadership,” he went on. “If the leadership is not a champion for any initiative, including DEI, it’s not going to stick. You can’t change the culture from the middle up or the bottom up. It has to come from leadership. When a leadership team decides it wants to focus on diversity, equity, inclusion, and belonging, that’s a step in the right direction because it has to come from the top, not the middle.”

Moriarty agreed. “It has to start at the top. I had to start by providing leadership, advocating, training for DEI, and actively trying to foster a bank culture where we promote and support an environment where everyone feels valued and respected and has a strong sense of belonging. The goal is to have everyone be their authentic self at work.”

As Polite noted, it’s something companies of all types and sizes are taking seriously.

“I think employers are more committed than they’ve ever been. Even now, we still get a lot of requests for DEI training,” she said, adding quickly that the result must go beyond mere lip service.

“It still goes back to the commitment. As the leader of an organization, you have to draw the line and say, ‘this is what I’m going to commit to.’ A lot of employers have started to engage the topic of diversity and discrimination, and others have been too scared to touch it — not because they don’t believe in it, but they don’t want to offend, and they don’t know how to approach it.”

She recommends connecting with a consultant on hard questions — and, importantly, conducting internal surveys to gauge the workplace culture and reactions to any changes.

After all, Moriarty said, by creating a workplace where all feel welcome, the bank should become a more attractive employer for people from a variety of backgrounds.

“We’re fostering that culture where we can inspire our existing workforce, but also attract the diversity of experience from outside our walls, so they say, ‘hey, Monson Savings Bank is committed. They talk the talk and walk the walk.’”

The end goal, he noted, is a more diverse workplace, a more diverse vendor profile, and a more diverse customer base. “It’s definitely an ongoing journey along the path to do what’s right.”

Accounting and Tax Planning Special Coverage

With Legislation Stalled, 2024 Sees Few Changes

By Kristina D. Houghton, CPA

 

After overwhelming approval by the House Ways and Means Committee on Jan. 19, the Tax Relief for American Families and Workers Act of 2024 was sent to the House under rules that would limit the ability to amend the text but would require approval by two-thirds of the chamber.

After a delay caused by a minor revolt of some GOP members who were trying to get an increase in the state and local tax deduction limit added to the bill as well as modifications of the child tax credit, an agreement was made to consider those in a separate bill in the near future, so the legislation passed by the House is the same version that was passed out of committee.

The bill provides for increases in the child tax credit, delays the requirement to deduct research and experimentation expenditures over a five-year period, reinstates the depreciation and amortization add-back through 2025 for purposes of calculating the business interest limitation, extends the 100% bonus depreciation through 2025, and increases the Code Sec. 179 deduction limitation, among other business-friendly provisions.

“Standard deduction amounts for 2024 have been inflation-adjusted and are higher than they were last year.”

Unfortunately, the Senate never addressed the bill. Due to the large number of provisions that are retroactively applicable to the 2023 tax year, and in some cases even earlier, the original hope was to get the bill passed before the start of the 2024 filing season. Since that deadline has passed, the goal is still to get the bill passed as soon as possible to minimize the administrative burdens on the IRS. There is no current date set for a Senate vote, and with this being an election year, the likelihood is slim.

As a result, planning for 2024 will not be much different than 2023, but let’s summarize the few changes, primarily inflation-related adjustments, effective for 2024. Pay attention to these changes because they can hurt or help your bottom line. Use this information now so you can hold on to more of your hard-earned money when it’s time to file your 2024 federal income tax return in early 2025.

 

Individual Tax Changes

Retirement Savings

Key dollar limits on workplace retirement plans and IRAs increase in 2024. The maximum 401(k) contribution is $23,000. People born before 1975 can contribute an extra $7,500. These limits also apply to 403(b) and 457 plans.

SIMPLEs have a $16,000 cap, plus $3,500 for individuals age 50 and older.

The 2024 contribution cap for traditional IRAs and Roth IRAs is $7,000, plus $1,000 as an additional catch-up contribution for individuals age 50 and older.

The income ceilings on Roth IRA pay-ins are higher for 2024. Contributions phase out at adjusted gross incomes of $230,000 to $240,000 for joint filers and $146,000 to $161,000 for single filers.

2024 deduction phaseouts for traditional IRAs range from adjusted gross incomes of $123,000 to $143,000 for joint filers covered by 401(k) plans and $77,000 to $87,000 for single filers and heads of household. If only one spouse is covered by the plan, the phaseout range for deducting pay-ins for the uncovered spouse is $230,000 to $240,000.

 

Adoption Tax Credit

The adoption credit is taken on up to $16,810 of qualified expenses in 2024. The full credit is available for a special-needs adoption even if it costs less. The credit phases out for filers with modified AGIs over $252,150 and ends at $292,150.

 

Standard Deduction

Standard deduction amounts for 2024 have been inflation-adjusted and are higher than they were last year.

The income-tax brackets for individuals are much wider for 2024 because of inflation during the 2023 fiscal year. Tax rates are unchanged.

 

Capital Gains and Qualified Dividends

The favorable tax rates on long-term capital gains and qualified dividends do not change. But the income thresholds to qualify for the various rates go up for 2024. The 0% tax rate applies at taxable incomes up to $94,050 for joint filers, $63,000 for heads of household, and $47,025 for single filers. The 20% tax rate starts at $583,751 for joint filers, $551,351 for heads of household, and $518,901 for single filers. The 15% tax rate is for filers with taxable incomes between the 0% and 20% break point.

The annual gift tax exclusion for 2024 is $18,000 per donee. That means in 2024, you can gift up to $18,000 ($36,000 if your spouse agrees) to each child, grandchild, or any other person without having to file a gift-tax return or tap your lifetime estate and gift tax exemption. Annual gifts over the exclusion amount will trigger filing of a gift tax return for 2024, but no gift tax will be due unless your total lifetime gifts exceed $13,610,000.

 

Business Tax Changes

Depreciation

First-year bonus depreciation isn’t as valuable in 2024. Last year, businesses could deduct 80% of the cost of new and used qualifying business assets with lives of 20 years or less. This year, the 80% writeoff decreases to 60%.

However, Section 179 expensing is higher. $1,220,000 of assets can be expensed in 2024. This limit phases out dollar for dollar once more than $3,050,000 of assets are put into use in 2024.

Note that the amount of business assets expensed can’t exceed the business’s taxable income. Bonus depreciation doesn’t have this rule.

 

Pass-through Income

A key dollar threshold on the 20% deduction for pass-through income rises in 2024. Self-employed individuals and owners of LLCs, S-corporations and other pass-throughs can deduct 20% of their qualified business income, subject to limitations for individuals with taxable incomes of more than $383,900 for joint filers and $191,950 for all others.

 

Conclusion

It is difficult to do tax planning in anticipation of what might happen in Washington, especially with this being an election year and the great divide on tax policy between the parties. Maybe the best planning would be to plan for possible tax changes in 2025 depending not only on the party that wins the presidential election, but also on the mark-up of the House and the Senate.

It could well be time to accelerate gifting, accelerate income, and postpone deductions. Perhaps with optimism, you can imagine that those postponed R&D and interest deductions will give you a deduction at a higher tax rate, and maybe this can lessen the pain of accepting possible increased tax rates.

Finally, remember that this article is intended to serve only as a general guideline. Your personal circumstances will likely require careful examination and should be discussed with your tax adviser.

 

Kristina D. Houghton, CPA is a partner at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.

Commercial Real Estate Special Coverage

‘We Love Real Estate’

Architect’s renderings of the Clocktower Building and the Colonial Block (below).

Architect’s renderings of the Clocktower Building and the Colonial Block (below).
(Images courtesy of Pickard Chilton)

Colonial Block

Colonial Block

When Ed Woodbury was encouraged by close friend Tim Brangle, president of Chicago Consultants Studio, to closely consider the Clocktower Building project in Springfield, he immediately challenged him to back up that request.

“He said, ‘Ed … you should take a look at this,’” recalled Woodbury, president of Chicago-based McCaffery Interests, which has a wide and deep portfolio of urban development and redevelopment projects, many of them clustered in Pittsburgh, Washington, D.C. and Northern Virginia, and the Windy City, and considers hundreds, if not thousands, of requests for proposals each year. “And I said, ‘why? Why do you think this is for us?’

“He spoke very highly of the city and its leadership, pointed out the inherent attributes of the Basketball Hall of Fame and the casino, and then gave a brief history of how Springfield had turned the corner from previous down times, if you will,” Woodbury said of Brangle, who has consulted with Springfield officials on the design of the casino and economic development surrounding it. “Naturally, none of that was familiar to us, so we looked at it, and the story happened to be true. And we liked that story.”

That’s a brief synopsis of how the Clocktower initiative, which involves three properties owned by the Springfield Redevelopment Authority — the Clocktower Building (113-117 State St.), the Colonial Block (1139-1155 Main St.), and a smaller building on Stockbridge Street — came to be part of that impressive portfolio.

On the McCaffery website, the project is listed among others like in size and character, including 1600 Smallman, the historic renovation of a 1921 structure in the Strip District of Pittsburgh into office spaces with views of the downtown skyline and the Allegheny River, and the Cork Factory project, an award-winning restoration and redevelopment of the Armstrong Cork Factory, also in Pittsburgh (more on that later).

In many ways, the Springfield project, which will add more than 90 units of market-rate housing to the mix, fits right in with these others, said Woodbury, adding that it involves redevelopment of historic properties, but also represents economic development and efforts to revitalize that area of the city.

“This will require multiple sources — you don’t just make one or two phone calls and someone says, ‘yeah, I like that project; I’ll fund it with you. It’s going to take more than a village — it’s going to take a little city.’”

“It’s a neat little project — it’s not big in our world,” Woodbury said of the Springfield initiative. “But I think we’re adding something to the downtown, both by the restoration but also through our development approach and how we look at projects and think about them.

“We don’t look at the buildings themselves,” he went on. “We look at the context of the buildings and where they sit — in this case, across from the casino and across from the MassMutual Center.”

From what he’s heard and seen himself — he’s now visited Springfield a few times — the city is in what he called the early stages of a rebirth, and this project could help bring it to the next stage.

“One of the things that adds to a rebirth is, in some cases, retail, but in a lot of cases, it’s getting people to live back downtown,” he said, “rather than working there, leaving there, and going back to their home in another part of town or one of the suburbs.”

While there are opportunities with this project, with a projected price tag of $55 million to $60 million, there are challenges as well, especially when it comes to funding, said Woodbury, listing the current economy and rising interest rates among those challenges, factors that will require more creativity when it comes to what he called the ‘capital stack,’ or the blend of resources that will be needed to make this project reality.

“This will require multiple sources — you don’t just make one or two phone calls and someone says, ‘yeah, I like that project; I’ll fund it with you,’” he said. “It’s going to take more than a village — it’s going to take a little city.”

Armstrong Cork Factory in Pittsburgh

Ed Woodbury says restoration of the Armstrong Cork Factory in Pittsburgh is one of several projects in the McCaffery Interests portfolio similar to the Springfield undertaking.
(Photo courtesy of Ed Massery)

The company has vast experience assembling needed funding, he went on, adding that he’s confident that the ‘little city’ he mentioned can come together, and that this project will play a significant role in Springfield reaching the next stages of a rebirth.

For this issue and its focus on commercial real estate, BusinessWest talked at length with Woodbury about McCaffery Interests, the Clocktower building project, and how this Springfield initiative fits the company’s mission — “to transform underutilized urban assets into dynamic destinations that serve modern lives as they intersect at work, home, and play.”

 

Landmark Decisions

Woodbury said McCaffery handles a broad range of work, from development to property management. And in that first category, it focuses on both redevelopment of existing (again, usually underutilized) properties to new construction.

But the common denominator, if you will, is that essentially all this work is carried out in cities.

“The focus has always been in urban areas,” he told BusinessWest. “We like the life, the vitality, and even the grit of cities.”

Most projects are in larger cities, including Pittsburgh, Chicago, D.C. and the surrounding area, and, most recently, Denver, where the company has several projects in various stages, including T3 RiNo, a mixed-use, 250,000-square-foot office project in that city’s burgeoning River North (RiNo) District.

“The focus has always been in urban areas. We like the life, the vitality, and even the grit of cities.”

Formed in 1991 by Dan McCaffery (Woodbury said he joined him “almost immediately”), the company’s first signature project was the revitalization of a former Saks Fifth Avenue store on Michigan Avenue in Chicago.

“We renovated it, leased it out, and put in Nike, Sony, and Cole Hahn; it was the height of what we call Main Street retail,” he recalled, adding that the project set the tone for other initiatives to come.

These include restoration of another historic property, 400 Post St. in San Francisco’s Union Square, that was destined to be torn down. “It was a great piece of real estate that had been overlooked for years,” Woodbury recalled. “We said, ‘heck, this is a cool, old building; let’s restore it.’ We put in a Disney store and a Borders Books.”

Reliance Building in Chicago

Restoration and redevelopment of the Reliance Building in Chicago, now home to the Hotel Burnham, is another project in the McCaffery portfolio similar to the one in Springfield.

As he cited those names, he noted that retail has certainly changed over the past few decades and especially the past several years; thus, the company now focuses mostly on mixed-use projects, be they new construction or renovation of existing structures, with retail on the ground floor and residential in the floors above — which is what is proposed for the Springfield project, as we’ll see.

And while McCaffery does most of its work in larger metropolitan areas, the company considers projects in communities across the country.

“We’re opportunity-focused — we search for unique opportunities and chase them,” Woodbury said. “The other thing is, we love real estate — old buildings, new buildings, it doesn’t matter; we love real estate.

“For us, it’s about finding high-quality real estate and exploring and seeing what we can do — with the land or existing properties,” he went on, adding that, with Springfield and its Clocktower Building initiative, what it can do — what it wants to do — is bring that aforementioned mix of uses, specifically retail on the ground floors and residential on the upper floors.

 

Lofty Expectations

Indeed, architect’s renderings of both the Clocktower Building and the Colonial Block portray well-lit shops with sidewalks crowded with passersby, elements certainly missing from the current picture — and missing for the past several years, in fact.

To make those colorful images become reality, McCaffery Interests will call on 34 years of experience with dozens of projects in several different cities and high levels of creativity with putting together a needed funding stack.

As he talked about the Springfield initiative, Woodbury said there are several projects in the portfolio that are somewhat similar — maybe not in terms of overall size and scope, but certainly in terms of restoring landmark properties, using historic tax credits to finance the work, and creating higher levels of vibrancy in downtowns or other key districts.

These include restoration and redevelopment of the Reliance Building in Chicago, now home to the Hotel Burnham, which was built in 1895 and is listed among the 100 most historically significant skyscrapers in the world.

“It’s one of the original high-rises in Chicago and one of the first places where an elevator was utilized in high-rise construction,” he explained. “We renovated it, but didn’t return it to an office building; we converted it to a hotel with restaurants on the ground floor.”

His short list also includes restoration of the Armstrong Cork Factory in Pittsburgh, originally constructed in 1901, and converted into 297 loft apartments, a project that earned several awards, including an Award for Excellence in 2009 from the Urban Land Institute and a Western Pennsylvania Golden Trowel Award in 2007.

“We took a building that was old and abandoned and invested side by side with a great partner in Pittsburgh and put the property on the historic register,” he said, adding that the project is one of the key contributors to growing vibrancy in the Strip District.

Springfield’s Clocktower Building and Colonial Block are similar in that they both boast considerable amounts of history — and have been largely vacant for several years now.

And, in Woodbury’s estimation, they have a future that can be as significant as their past.

“The Clocktower Building has great bones to it, and it’s the same with the Colonial Block,” he said. “The Clocktower Building is older, and some of the renovations over the years have unfortunately disrupted its historic character, but it adds a nice scale to the street — State and Main — which is fun to say, because it’s literally State and Main.

“And the Colonial Block was originally residential on the upper floors, which lends itself nicely to converting it back to that,” he went on, adding that, overall, Springfield is “looking forward being optimistic about what a city can and should be — and those are the kinds of places where we like to work.”

As for the challenges ahead, especially funding, Woodbury returned to that notion of this project needing not a village, but a small city of resources contributing to the capital stack.

“Federal and state tax credits are going to be a big source — they will be the lead bell cow in our funding stack,” he explained. “But there will be some funding needed from the State House, there might be some funding needed from the city, and then there’s obviously some private monies to be put in place as well; all of those food groups will come into play.”

The overall goal is to start construction late this year or early next year, he said, adding that it will be 24 months from when the company submits final drawings until the first tenants — residential and commercial — can move in.

Woodbury is confident this goal can be met, and equally confident that this initiative can do what so many other projects in the McCaffery portfolio have: revitalize not only real estate, but entire neighborhoods and cities.